The Dawn Of A Civil Nuclear Age In The Gulf
RUSI Analysis, 11 Jan 2012
Iran's pursuit of a nuclear energy programme has created deep tensions both across the Middle East and the West. Despite this, and the Fukushima nuclear disaster in 2011, countries in the Gulf are now embarking on radical nuclear energy programmes with greater cooperation from the West.
By Andrew Francis, RUSI Qatar
In December 2006, the Gulf Cooperation Council (GCC) announced that it was seeking nuclear energy technology and would establish a joint nuclear research programme. The surprise announcement signalled a significant shift in the Gulf States' policies towards nuclear energy. Indeed, the GCC has a long history of nuclear rejection and previously adopted a 'zero nuclear option' where they refrained from using nuclear power for civilian and military purposes. Along with considerations around resource security and climate change, it is Iran's ruthless pursuit of its own nuclear programme that has influenced many in the Gulf to actively seek a nuclear option.
Since this announcement, many GCC states have been busy developing their nuclear plans. In December 2009, for example, the United Arab Emirates (UAE) accepted a bid from a Korean-led consortium for four APR-1400 reactors, with the first expected to be operational by 2017. In November 2011 UAE confirmed that it will select a uranium supplier for its nuclear programme in the first half of 2012, while Saudi Arabia announced in June that it plans to construct sixteen nuclear power reactors over the next twenty years. Kuwait is also considering up to six nuclear reactors, with the first two planned to come online in 2021 or 2022. Even the gas rich Qatar is studying the possibility of adding up to 5,400 Megawatt (MW) of nuclear capacity between 2011 and 2036. It has also signed nuclear Memorandum of Understanding's (MOU) with Russia and EDF Energy, as well as an electricity distribution and transmission deal with French reactor making firm Areva CEPFi.PA.
With the current tensions in the Middle East resulting from Iran's nuclear programme and the Gulf's already vast oil and gas reserves, it is prudent to examine the reasons behind these plans. Perhaps the most glaring explanation is a rapid increase in energy demand. Indeed, according to World Bank statistics, annual population growth in Qatar averaged 15.24 per cent between 2006 and 2010, with UAE averaging a 12.26% per cent. This has led Qatar's electricity demand to rise at an annual rate of 10.5 per cent over the past decade, while the UAE's electricity demand is expected to jump from 15.5 gigawatt electrical (GWe) in 2008 to over 40 GWe in 2020. Despite a lower population growth, Saudi's electricity demand is also growing at 8 per cent a year.
Currently, most of this demand is secured through gas, but UAE and Saudi are facing challenges in securing enough gas to meet demand and prudently realise that remaining fossil fuel reserves should be saved for future generations. Qatar on the other hand sits on the world's third largest natural gas reserves and is the only country in the region not facing shortages. However, the country understands the economic importance of oil and gas reserves - which account for more than 60 per cent of GDP - and is looking to free up its gas reserves for more exports.
According to the International Atomic Energy Agency (IAEA), nuclear energy would be an economically viable alternative for the GCC. One financial attraction is nuclear energy's insensitivity to gas and oil price risks, meaning that nuclear can provide a hedge against increasing oil and gas price volatility. With oil and gas prices rising, nuclear power will also become increasingly competitive. Furthermore, nuclear plants can build up the power generation capacity of GCC states and allow them to trade surplus electricity on the GCC grid.
While the Arab region contributes to less than 5 per cent of global greenhouse gas emissions, findings from the Intergovernmental Panel on Climate Change demonstrate that its arid climate makes it one of the regions' most vulnerable to climate change. Indeed, increasing temperatures, less precipitation, and rising sea levels will seriously impact on a region already suffering a scarcity of food and water though aridity, drought, and water salinity. Climate change could also disrupt infrastructure and tourism - with estimations that Qatar and UAE could lose over 2 per cent of their GDP through a one rise in sea levels. Thus, governments in the region are making environmental conservation a national priority and are turning to zero emitting nuclear power as an alternative to burning fossil fuels. However, the GCC will still need to find ways of reducing emissions from uranium mining and the construction of plants and nuclear waste storage. Further, with nuclear power only contributing to less than 2.2 per cent of world energy; it might require hundreds of plants to significantly reduce global emissions.
Moving to nuclear power is also a way of boosting security by diversifying resources. Indeed, because so much of the GCC's electricity generation is based on gas, they have a major security weakness at the heart of their power generation base. Moreover, Qatar has unveiled plans to rely heavily on solar power to desalinate water, but a reliance on this relatively unproven technology also provides risks. Nuclear power can therefore become an additional energy source that can increase flexibility.
Nuclear power can also enhance the prestige of Gulf countries by demonstrating economic and scientific progress that the whole country can be proud of. Some have even argued that the Gulf's moves have been triggered by concerns that the technology gap between Arabs and the rest of the world is widening, and especially to prevent the GCC from trailing Iran technologically when the former has until now maintained a technological advantage in most ventures. Given Iran's weakened leadership and economic collapse, it is possible that the GCC states could use their extensive financial resources and political vision to achieve Arab dominance in the nuclear field.
Geo-strategic factors may also explain this nuclear policy shift. Iran's deceptive nuclear programme and willingness to absorb international isolation and sanctions, has convinced some GCC leaders of the regime's intention to develop a nuclear weapon that will give it a bargaining tool to use against its neighbours. This belief has gained credence in recent weeks by the IAEA's statement that 'credible' intelligence exists to counter Iran's peaceful nuclear protestations. A nuclear Iran is even more worrying to the GCC given the emergence of a pro-Iranian entity in Iraq. Indeed, the departure of US forces may increase Persian influence in the country, with US and Iraqi intelligence officials stating that Iran has supplied Shiite militias in Iraq with weapons. GCC nuclear 'programs', even for peaceful purposes, would also show Iran that the GCC will not scour and hide, while working closely with the IAEA could embarrass Iran politically by demonstrating that a nuclear 'program' can be developed in a transparent manner. Open and cooperative GCC plans could also strengthen relations with the West, leading to lucrative business relationships between the states that supply the reactors and those that receive them. Indeed, we have already seen France and the US offering their nuclear expertise.
It may be politically and economically beneficial for GCC states to create nuclear plants, but they are building their infrastructure from scratch. Thus, countries in the planning stage, such as Qatar, will find many obstacles in their path - leading the IAEA to estimate that it will take around 10-15 years to build a nuclear plant. Billions of dollars in investment will be required over this period, as well as public approval and continued governmental support in the face of unpopular subsidies. Legal and regulatory frameworks will have to be established, as will the nuclear human resources that even a regional education hub like Qatar lacks. The Gulf also lacks identified uranium deposits, while the region's geology, environment, and water intake could also negatively impact on a nuclear plant. Problems may also be found in enabling current electricity grids to support the additional 1,000-1,600 MWh from a large, land-based plant. This lack of resources is likely to force states to contract with established international vendors. However, the rise in nuclear demand could force suppliers to pick projects and potentially favour those in countries with already established nuclear programmes - such as China and India.
The GCC states will also have to be wary of the enhanced security risks inherent with nuclear energy. When we traditionally think of nuclear security we often think of accidents - like Chernobyl or last year's Fukushima disaster - or the disposal of hazardous nuclear waste. However, the GCC states are located in a region rife with tension and revolt. An expansion in nuclear power across the GCC countries could enhance the risks of nuclear terrorism. The lack of high grade uranium may force the industry to rely on Mixed Oxide Fuel (MOX) and plutonium from spent uranium fuel, which is produced in potentially vulnerable reprocessing plants. Some experts have warned that it is impossible to account for more than 99 per cent of the plutonium, meaning that despite safeguards, some could be stolen or diverted without detection. Moreover, the importance of energy infrastructures to modern economies means that they are increasingly becoming terrorist targets. With the nuclear catchword able to produce disproportionate fear, and countries like Qatar redefining their international role, it is likely that these plants will be near the top of a terrorist's target list.
It is even claimed by some analysts that introducing nuclear plants near Iran could further the latter's nuclear programme and herald the beginning of nuclear proliferation in the Middle East. In the short term it seems unlikely that Iran will be too concerned about the GCC's plans given that it will take over a decade for them to develop even basic nuclear technologies. It also seems unlikely that the GCC states will develop their own nuclear weapons given that they are signatories to protocols prohibiting the development of nuclear weapons and would likely receive wide international condemnation. Qatar is also unlikely to jeopardise its evolving commercial links with Iran - epitomised by Qatar Airways' recent route agreement. Instead, the GCC is more likely to strengthen its security ties with the US as a precautionary measure, Washington is also likely to act tough to protect the GCC against Iranian subversion. Increasing business and political links with Russia also gives the GCC an attractive alternative leverage against Iran because the latter relies on the former for military supplies and nuclear cooperation.
Therefore, it is clear that many Gulf States are turning to civil nuclear energy, with a myriad of reasons behind this shift in nuclear attitudes. Although explanations can come in the form of increasing energy demand, the impacts of climate change, and prestige; a key driver is the increasing perception that Iran is developing a nuclear weapon and thus a bargaining tool to use against its neighbours. While some have claimed that these GCC nuclear moves will foster an Arab arms race, based on current evidence it seems unlikely that the GCC states will seek to weaponize their programmes and will instead continue to rely on US nuclear protection. Nevertheless, Gulf States will need to be wary of a new security risk in the form of nuclear terrorism, and may still find challenges in developing the necessary human resources and regulatory frameworks for their programmes - with a sizeable number of plants still a few years away.
Andrew Francis is a researcher at RUSI Qatar, based in Doha.
The views expressed here are the authors own and do not neccessarily reflect those of RUSI
 World Bank, "Population growth (annual %)" http://data.worldbank.org/indicator/SP.POP.GROW
 World Nuclear Association, "Emerging Nuclear Energy Countries", November 2011, http://www.world-nuclear.org/info/inf102.html
 Lindsay Windsor and Carol Kessler, "Technical and Political Assessment of Peaceful Nuclear Power Program Prospects in North Africa and the Middle East", September 2007, http://www.pnl.gov/main/publications/external/technical_reports/PNNL-16840.pdf
 See Roques FA, Nuttall WJ, Newbery DM, de Neufville R, Connors S, "Nuclear power: A hedge against uncertain gas and carbon prices?" Energy Journal, Vol.27, No.4, 2006, pp.1-23.
 Saudi Gazette, 'Qatar considers nuclear energy', 17th October 2010, http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=2010101585333
 See Mahmoud Medany, 'Impact of Climate Change on Arab Countries', 2008, , http://www.afedonline.org/afedreport/english/book9.pdf p. 128-9
 Mostafa K. Tolba and Najib W. Saab, "Impact of Climate Change on Arab Countries", 2009 Report of the Arab Forum for Environment and Development, 2009, p. 55.
 Kurt Kleiner, "Nuclear energy: assessing the emissions", Nature Reports Climate Change, 24 September 2008
 Frank Barnaby and James Kemp, "Secure Energy?: Civil Nuclear Power, Security and Global Warming", 2007, http://www.stormsmith.nl/publications/secureenergy.pdf
 See Nicole Stracke, "Nuclear Development in the Gulf: A Strategic or Economic Necessity?" Insights, Issue 7, December 2007.
 Lara Jakes, "Iranian Influence Seeping Into Iraq", Associated Press, 7 November 2011
 Stracke, "Nuclear Development in the Gulf"
 George Perkovich, "Nuclear Developments in the GCC: Risks and Trends", May 2008, http://carnegieendowment.org/files/perkovich_gcc.pdf, p. 230.
 Barnaby and Kemp, "Secure Energy?"
 See Stracke, "Nuclear Development in the Gulf"
 Perkovich, "Nuclear Developments in the GCC: Risks and Trends", P. 227.
 Matteo Legrenzi, "Balance of Power in the Gulf and GCC Nuclear Proliferation: A Realistic Assessment", 17 April 2008, http://www.cigionline.org/events/public-lecture-balance-power-gulf-and-gcc-nuclear-proliferation-realistic-assessment
 Perkovich, "Nuclear Developments in the GCC: Risks and Trends", P. 237.
Further Analysis: Nuclear Non-Proliferation and Strategy, Global Security Issues, The Gulf Region, Middle East and North Africa