The Telegraph
Since 1st March, 1999
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- Nuclear power matters, and its cost matters

On May 11 and 13, 1998, the Bharatiya Janata Party government exploded five nuclear bombs underground. The explosions registered on earthquake monitoring stations of major powers; the sanctions they imposed made India a nuclear pariah. The United States of America imposed three sets of sanctions. It banned exports of equipment and technology that could be used in a weapons (not just nuclear) programme. It cut off aid to India — which at that time was $140 million a year — and resolved to stop international institutions like the International Monetary Fund and the World Bank from giving any. And it barred US banks from lending to India except for food and agricultural products. The European Union and Japan imposed similar sanctions.

They applied not only to the government, but to companies like Larsen and Toubro that had assisted the government’s nuclear programme, and to Indian citizens. The financial sanctions were immaterial; India did not need aid. But the ban on supply of technology and equipment mattered, for it ruled out many industrial investments that had nothing to do with nuclear technology. The nuclear programme, such as it was, was probably little affected by the sanctions, for India had 31 years’ experience of various sanctions since the first nuclear ceremony of 1974, and its nuclear establishment had worked out ways of making equipment or importing it clandestinely. The Indian press covered with glee the escapades of A.Q. Khan, whom Pakistan used to break nuclear sanctions. Though none of them made headlines, there were Indian A.Q. Khans too. It was the wider impact, on companies unrelated to the nuclear establishment, on students who could not get admission to Western university courses and on scientists who could not visit Western laboratories, that mattered. It was not crippling; but it was an irritant and a nuisance.

The BJP was aware of the handicap; in December, 1998 it made Jaswant Singh external affairs minister to negotiate a reversal of the sanctions. He had interminable conversations with Strobe Talbot, the deputy of Madeleine Albright, Bill Clinton’s secretary of state. But they reached no conclusion. Jaswant Singh had a grand, expansive, princely style, and enjoyed boasting about himself, his country and his culture; maybe he did not get the time to get down to brass tacks. He was replaced by Yashwant Sinha in 2002; Sinha more or less gave up on the negotiations with the US.

Getting sanctions removed was amongst Manmohan Singh’s priorities when he unexpectedly became prime minister in May 2004. He met George Bush three times before anything moved. He impressed Bush with his low-key reasonableness; he convinced Bush that they could do business together.

The process began with the joint statement of our prime minister and the US president on July 18, 2005. On that day, the two made certain reciprocal promises. George Bush promised that he “would... seek agreement from Congress to adjust US laws and policies, and the United States will work with friends and allies to adjust international regimes to enable full civil nuclear energy cooperation and trade with India”. In return, Manmohan Singh promised that India would separate civilian and military nuclear installations and put the former under the safeguards of the International Atomic Energy Agency, explode no more atomic bombs, not export nuclear equipment and technology to non-nuclear states, and adhere to various obligations assumed by members of the Nuclear Suppliers Group although it was not a member itself. In other words, Manmohan Singh asked George Bush to get him membership of the nuclear club, and Bush agreed in return for minimum promises of behaviour worthy of a member.

The agreement, released on August 3, is 6,430 words long. It is called a 123 agreement because there is a section 123 in the Atomic Energy Act, 1954 of the US under which the US signs nuclear cooperation agreements; it has signed over two dozen such agreements with nations such as Ukraine and Morocco. The crux of the agreement is that the US would sell India low enriched uranium. India would set up plants to enrich it, use it in nuclear power stations, and reprocess the used fuel from the plants. The power stations and factories that it builds to process and reprocess their fuels will be placed under the supervision and safeguards of the IAEA.

Now that the agreement is signed with the US, similar agreements with the EU and Japan are most likely. Once they are in place, India can buy standard, run-of-the-mill nuclear power stations from the US, Japan and France, which have set up scores of such plants, and have reliable technologies to build and operate them. It can also buy nuclear fuel from any of them.

India has built nuclear power plants and run them with fuel it has itself manufactured. But they have taken 10 years on the average to build, and cost the earth. India has developed nuclear power technology, but it is simply not good enough to build large numbers of plants or to produce cheap electric power from them; they are useless in resolving the great future energy crunch. What India can do, once agreements with major nuclear powers are in place, is to buy plants and fuels that would minimize costs and delays in construction.

India faces a major problem in meeting the energy requirements of its growing economy. It has large coal reserves, but they are of poor quality and located in the east, far away from the most developed areas. Burning coal is messy, and generates much carbon dioxide. India has little oil, and world oil consumption is fast outstripping supplies; oil in the future is going to be expensive, and scarce. And India’s hydroelectric potential is very limited, and concentrated in the North-east. This is why nuclear power matters, and its cost matters.

Thus India has gained an option in its future energy supplies; what has it given in return' It has accepted the constraints that the nuclear powers have imposed on themselves. Whether this bargain is satisfactory or not is not relevant; it was the only realistic bargain that could have been made. The only question worth asking is whether it was worth making, or whether India should have carried on on its own lonely path.

How worthwhile it was will depend on how cheap nuclear power becomes as a result, and what share of India’s energy consumption it will supply. The answers to these questions lie far in the future; no answers we may give today have any value. It is a gamble; it may fail.

But if it succeeds, India will remember Manmohan Singh as the architect of India’s energy security; and his contribution would eclipse his achievement as architect of India’s economic boom. It is difficult in our fractious democracy for a prime minister to achieve anything in the domestic arena, especially for a reclusive gentleman PM. In the circumstances, it was ingenious of him to home in on nuclear energy and to try and make a difference. If he does eventually do so, he will be remembered as a great prime minister, on par with Jawaharlal Nehru, his hero. If he does not, he will still be remembered for riding in a golf cart with George W. Bush.

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