Venezuela: A Nuclear Profile

Proliferation Analysis
Summary
Given Venezuela's close collaboration with Iran, those states and companies that would contemplate nuclear cooperation with the Chávez government should consider whether they might help recreate the alarming history of Iran's nuclear program and subsequent international crises.
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Venezuelan President Hugo Chávez has spoken of developing nuclear energy since at least May 2005, but few have taken him seriously. Argentina and Brazil have, for the most part, rebuffed his requests for nuclear cooperation. Yet recent signals of interest by Russia and France may indicate the possibility of nuclear exports to Venezuela, if declining oil prices do not undermine Venezuela's ability to pay. No matter what, all nuclear suppliers should exercise caution as long as Chávez perpetuates his antagonistic role in the region, defiance of international norms and, in particular, efforts to cultivate a closer Venezuelan-Iranian relationship.

In September 2008, Russia proposed building nuclear power reactors in Venezuela and the two countries established a working group. Atomstroyexport, the same company building the Bushehr plant in Iran, confirmed its involvement in negotiations for a nuclear cooperation agreement with Venezuela.[1] Two months later, in a visit by Russian President Dmitry Medvedev to Caracas, a Russian-Venezuelan framework agreement was signed establishing "cooperation in thermonuclear fusion, the safety of nuclear facilities and radiation sources, as well as the design, development, construction, operation and decommissioning of research reactors and nuclear power plants."[2] Continued Russian-Venezuelan negotiations could lead to real projects if Venezuela can afford to build new reactors, which would cost billions of dollars. France has also reportedly expressed willingness to help Venezuela develop nuclear energy, although there are few additional details.[3]

Venezuela's nuclear ambitions complicate an already tense situation. Chávez supports the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia, or FARC), which the U.S. and European Union both designate as a terrorist organization. Under Chávez, Venezuela has increased military expenditures dramatically, including $4.4 billion from Russia in the past four years and a $1 billion loan to help finance programs for "military-technical cooperation."[4] Finally, Chávez's desire to involve Iran in Venezuela's nuclear development has produced wariness in potential nuclear supplier states, including Argentina and Brazil.

Nonproliferation Credentials

On paper, Venezuela's nonproliferation credentials are positive. Venezuela signed the Treaty for the Prohibition of Nuclear Weapons in Latin America (also known as the Treaty of Tlatelolco) in 1967 and acceded to the Nuclear Non-Proliferation Treaty (NPT) in 1975. In 1994, Venezuela abandoned its only known research reactor. If Venezuela is serious about pursuing peaceful nuclear energy, however, it should underline its commitments by adopting an Additional Protocol (AP), joining the Convention on Nuclear Safety, the Vienna Convention on Civil Liability for Nuclear Damage, and the Convention on the Physical Protection of Nuclear Material.[5] Chile and Peru, which have research reactors, adhere to these and other treaties and have ratified an AP to their safeguards agreements with the International Atomic Energy Agency (IAEA). Potential nuclear suppliers should urge Venezuela to do the same. Of the three Latin American countries with nuclear power programs – Argentina, Brazil, and Mexico – only Mexico has signed an AP, but all three countries are parties to most IAEA multilateral agreements in the domains of nuclear safety, security, and liability. Indeed, the prospect of Venezuela acquiring nuclear capabilities should further motivate Argentina and Brazil to set a regional norm of adherence to the Additional Protocol.

Capabilities

Venezuela has no nuclear infrastructure and few specialists outside of the Venezuelan Institute of Scientific Research (Instituto Venezolano de Investigaciones Científicas, or IVIC). The country has one known research reactor, the RV-1 (3 MW), which was purchased from the U.S. General Electric Company in 1956 and subsequently shut down in 1994. Past technical cooperation between Venezuela and the IAEA is minimal. Most recently, in 2007 the IAEA Technical Cooperation Department approved of a project in Venezuela for human resource development and general help in the uses of nuclear science and technology.[6]

Former Venezuelan officials have estimated that Venezuela could have 50,000 tons of uranium, although this amount has not been reliably assessed.[7] Venezuela does not currently mine its uranium, but recent collaboration with Iran in strategic minerals has sparked rumors that Venezuela could mine uranium for Iran.[8] One of the reported elements of the Russian-Venezuelan framework agreement is assistance in uranium development.[9]

Intentions

Many countries in Latin America are almost wholly dependent on hydroelectric power, the supply of which can be erratic in some seasons if there are no provisions to store water. Venezuela has diversified its mix so that it relies on hydroelectric power for about 75 percent of its overall electricity generation, with the remaining 25 percent coming from natural gas, oil, and diesel.[10] (By comparison, Brazil relies on hydroelectric power for 84 percent of total electricity generation.) Venezuela reaps about 90 percent of total export revenues and around one-third of gross domestic product (GDP) from oil.[11] The state-owned Venezuelan Petroleum Corporation (Petróleos de Venezuela, S.A., or PDVSA) is the world's third largest oil company and owns the largest conventional oil reserves in the Western Hemisphere. Diversifying further to incorporate nuclear energy would free up a portion of Venezuela's oil and gas that is now used for electricity.

Venezuela may be interested in using small nuclear power plants in the oil sector. In October 2005, the Argentine daily Clarín broke the news that a Venezuelan delegation from PDVSA had signed a letter of intent to pursue a broad range of energy-related projects, including the installation of a small Argentine-built CAREM (Modular Elements of Central Argentina) reactor in Venezuela's Orinoco Oil Belt for heavy oil exploitation.[12] The reactor would be used to produce high-temperature vapor which could be injected into the ground to liquefy heavy oil. However, the CAREM reactor is still in the prototype stage.[13]

Venezuelan intentions with regard to cooperating with Brazil are murkier. Brazilian officials have suggested that Venezuela sought a nuclear technology transfer from Brazil between May and October 2005, but that the deal was risky for Brazil due to Chávez's support for and inclusion of possible Iranian participation in Venezuela's nuclear plans.[14] It is unclear what that technology would entail, but Brazil has capabilities in uranium enrichment and fuel fabrication. Brazil does not design or produce nuclear power reactors. Edson Kuramoto, president of the Brazilian Nuclear Energy Association, said that Venezuela wanted to "buy technology" rather than "fully cooperate" because it "was lagging far behind Brazil in terms of nuclear research."[15] The director of the Brazilian National Nuclear Energy Commission (CNEN) Odair Gonçalves considered nuclear medicine to be the only field for cooperation with Venezuela.[16]

A Nuclear Illusion?

Venezuela may well be on its way to securing a serious nuclear supplier, but the construction of nuclear power plants is not a given. Nuclear cooperation agreements are framework agreements and do not guarantee exports. Since 2005, more than 30 states have declared plans to build nuclear power plants for the first time.[17] Like Venezuela, these states would require at least 15 years to develop the necessary physical and intellectual infrastructure to operate their first plant safely and securely. Moreover, nuclear power plants are expensive (between $5 billion and $10 billion per plant). The current global economic crisis could exacerbate an already record-high inflation rate over 35 percent in Venezuela and provoke social spending cuts.[18] A declining price of oil will cut into Venezuela's oil profits, potentially curbing large capital investment projects such as new nuclear power plants. Globally, the economic crisis is tightening credit markets, which could also make financing new nuclear power plants difficult.

Cultivating Strategic Alliances

Under Chávez, Venezuela has supported Iran's right to pursue nuclear technology without constraints and helped extend Iranian interests in Latin America. Venezuelan trade with Iran has grown from approximately $1 million in 2004 to over $50 million in 2006.[19] Chávez has personally helped Iran shore up diplomatic and economic ties throughout the region, having brokered introductions between Iranian President Mahmoud Ahmadinejad and newly inaugurated leaders in Nicaragua, Bolivia, and Ecuador in early 2007. Since then, Iran has established or is in the process of re-opening embassies in Chile, Ecuador, Colombia, Nicaragua, Uruguay, and a representative office in Bolivia.[20] Venezuela has also allegedly tried to secretly facilitate arms trades between Iran and Latin American countries,[21] which could constitute a violation of legally-binding UN Security Council resolutions related to Iran's nuclear program.[22] As a consequence of Venezuela's efforts, other Latin American countries have followed its lead in supporting Iran in the Non-Aligned Movement (NAM), the UN General Assembly, and other international fora to derail momentum for further international sanctions.[23]

Given Venezuela's close collaboration with Iran, those states and companies that would contemplate nuclear cooperation with the Chávez government should consider whether they might help recreate the alarming history of Iran's nuclear program and subsequent international crises.


Nima Gerami is research assistant and Sharon Squassoni is senior associate in the Nonproliferation Program at the Carnegie Endowment for International Peace.


Notes

1. "Russia, Venezuela to Cooperate in Building Nuclear Reactors," RIA Novosti, September 29, 2008.

2. "Russia, Venezuela Ink Nuclear Cooperation Deal," RIA Novosti, November 27, 2008.

3. "Venezuela, France Eye Nuclear Energy Cooperation," Associated Press, October 2, 2008.

4. Michael Schwartz, "Russia Loans Venezuela $1 Billion for Military," The New York Times, September 26, 2008. Chávez justifies his arms acquisitions as preparation for an eventual U.S. invasion of Venezuela. The purchases include advance fighter jets, submarines, radar and surface-to-air missiles, 100,000 AK-103 assault rifles, and the license to operate two AK-47 (Kalashnikov) rifle factories in Venezuela.

5. See IAEA Office of Legal Affairs.

6. See IAEA Technical Cooperation Program. Also of interest are the nuclear cooperation agreements that Venezuela has concluded with its neighbors. Apart from its past cooperation with the U.S., Venezuela concluded a nuclear cooperation agreement with Brazil in 1983. The then Brazilian military government had presumably acquired the technological expertise to produce nuclear weapons before it lost power in 1985. It is unclear what obligations have been fulfilled as part of that agreement. Full text of the 1983 agreement is available at: http://untreaty.un.org/unts/120001_144071/9/6/00007287.pdf.

7. See, for example, Julio César Pineda, "El laberinto nuclear de Chávez," El Universal, October 11, 2005.

8. Oscar Medina, "Ajedrez nuclear," El Universal, March 19, 2006; and “Iran Pact with Venezuela Stokes Fears of Uranium Sales,” The Washington Times, March 13, 2006.

9. RIA Novosti, November 27, 2008.

10. See Energy Information Administration, "Country Analysis Briefs: Venezuela," U.S. Department of Energy, October 2007, available at: http://www.eia.doe.gov.

11. Ibid.

12. Natasha Niebieskikwiat, "Chávez confirmó que busca un acuerdo nuclear con Argentina," Clarín, October 20, 2005.

13. INVAP S.E., "CAREM Project," available at: http://www.invap.net/nuclear/carem/carem_index-e.html.

14. Andrei Khalip, "Brazil Wary on Nuclear Cooperation with Venezuela," Reuters, May 23, 2005.

15. Ibid.

16. See O Estado de São Paulo, October 16, 2005; also Larry Rohter and Juan Forero, "Venezuela’s Leader Covets a Nuclear Energy Program," The New York Times, November 27, 2005.

17. Sharon Squassoni, "Nuclear Renaissance: Is It Coming? Should It?" Carnegie Endowment for International Peace, Policy Brief No. 69, October 2008.

18. See Mark Weisbrot and Rebecca Ray, "Oil Prices and Venezuela’s Economy," Center for Economic and Policy Research, November 2008, and the references contained therein.

19. Elodie Brun, "La place de l'Iran dans la politique étrangère du Venezuela," Presented at the Woodrow Wilson International Center for Scholars, July 10, 2008.

20. See Islamic Republic News Agency, February 27, 2007.

21. For example, according to Uruguayan parliamentary investigators, a Venezuelan military contractor aided the shipment of some 15,000 rounds of ammunition and 18,000 automatic rifles from an Iranian arms exporter to the Uruguayan government. See "Denuncian triangulación Irán-Venezuela-Uruguay," El País, August 16, 2007; and "Uruguay Caught Buying Iran Arms," The Washington Times, October 12, 2007.

22. According to UNSC Resolution 1747 (March 2007): "Iran shall not supply, sell or transfer directly or indirectly from its territory or by its nationals or using its flag vessels or aircraft any arms or related materiel…all States shall prohibit the procurement of such items from Iran by their nationals, or using their flag vessels or aircraft, and whether or not originating in the territory of Iran."

23. In one notable instance, Bolivian President Evo Morales stated that Bolivia had opened diplomatic relations with Iran partly in response to the petitioning of Venezuela and Cuba. See "Evo Morales: Cuba y Venezuela me enviaron mensajes para acercarme a Irán," El Mundo, November 8, 2007. Although voting records show that Venezuela and Cuba were the only two countries other than Syria to defend Iran against IAEA Board Resolutions in September 2005 and February 2006, Bolivia's Morales and Nicaraguan President Daniel Ortega in particular have since rallied in support of Iran's nuclear activities during NAM and UN General Assembly conferences, as well as in Iran's (failed) bid for a non-permanent seat at the UN Security Council for 2009-2010. Such gestures help to enhance Iran’s international legitimacy while neutralizing U.S., France, and U.K. efforts to sanction Iran for refusing to suspend enrichment and reprocessing-related activities.

End of document

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Source http://carnegieendowment.org/2008/12/18/venezuela-nuclear-profile/2xwc

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