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Cablegate: Brazil: Iaea Dg Elbaradei Addreses Latin America-Europe

VZCZCXRO1370
PP RUEHRG
DE RUEHBR #2335/01 3621910
ZNR UUUUU ZZH
P 281910Z DEC 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 0721
INFO RUEHSO/AMCONSUL SAO PAULO 1384
RUEHRI/AMCONSUL RIO DE JANEIRO 5613
RUEHRG/AMCONSUL RECIFE 7532
RUEHBU/AMEMBASSY BUENOS AIRES 5191

UNCLAS SECTION 01 OF 03 BRASILIA 002335

SIPDIS

SENSITIVE

SIPDIS

PLEASE PASS TO IO, IO/T, ISN/NESS Richard J.K. Stratford; and
DOE/MNSA Adam Scheinman, Richard Goorevich, and Melissa Krupa

E.O. 12958: N/A
TAGS: AORC ENRG IAEA KNNP TRGY BR
SUBJECT: BRAZIL: IAEA DG ELBARADEI ADDRESES LATIN AMERICA-EUROPE
CONFERENCE ON NUCLEAR ENERGY

REF: A) Brasilia 2047; B) Brasilia 2185; C) Brasilia 1721

1. (SBU) Summary: On December 6-7, 2007, Rio based think-tank CEBRI
(Centro Brasileiro de Relacoes Internacionais - Brazilian Center for
International Relations) hosted an international seminar geared
toward promotion of the use of nuclear energy and to enhancing the
nuclear energy dialogue between Europe and Latin America. World
Nuclear Association Director General, John Ritch, opened the seminar
with his pitch for nuclear energy as an answer to threat of global
climate change and to rising energy needs in the developing world.
These themes resonated throughout the two-day conference. IAEA
Director General Mohamed ElBaradei described the virtues of nuclear
energy and the potential safety and security challenges associated
with what he sees as a "major expansion of the use of nuclear energy
in the future, especially among smaller and developing countries."
Brazilian nuclear experts and professionals also described local
capabilities, and plans to construct several new nuclear facilities
by 2030. To this end, foreign investment in the Brazilian nuclear
sector may also greatly increase in the near term. End Summary.

IF THE WORLD WERE A RIVER WE'VE REACHED THE WHITEWATER

2. (SBU) World Nuclear Association (WNA) Director General, John
Ritch, opened the seminar by concluding that "nuclear energy is the
future of mankind and civilization - it is an indispensable asset to
combat an environmental crisis (global climate change) while
simultaneously satisfying rapidly increasing global human demands
for energy." (Note: Full text of Ritch's presentation available in
English at: http://www.cebri.org.br/09_visualizapdf.cfm?n rSecao=4.
End note). Ritch explained that due to "human inventiveness," i.e.,
industrialization and technological advancement, the global
population dramatically increased over the last century alone.
Similarly, IAEA Director General Mohamed ElBaradei opined that
nuclear energy may be a solution to what he described as the great
challenges for contemporary humanity - global climate change,
extreme poverty and "a world hanging in the balance because of the
prevalence of nuclear weapons, especially in the case of
establishing a security agreement in the Middle East."

3. (SBU) With regard to the environment, Ritch stated that "if the
world were a river, we've reached the whitewater." In other words,
we have reached a "point of no return" where human activities are
driving the environment into imbalance. Ritch emphasized that human
activities around the world are contributing to threat of global
climate change and that this threat must be addressed by reducing
anthropogenic greenhouse gases released into the atmosphere.
Nuclear energy, he said, is the answer due to its potential to
produce lower GHG emissions, while at the same time satisfy rising
global energy needs. Moreover, it could also help to fuel the clean
energy revolution by increasing our ability to rely on hydrogen and
battery power. According to Ritch, "the true environmental problem
is that nuclear energy is not growing fast enough."

4. (SBU) Ritch went on to point out that rising global energy needs
and production costs are also of concern - the developed world has
ongoing energy demands, while under developed and developing
countries are in desperate need of energy as they accelerate growth.
In addition to electricity, energy demands in the latter regions
are also rising, e.g., because of the need for governments to
provide potable water to their populations via the energy hungry
desalinization process. According to Ritch, nuclear energy is
currently the most cost effective energy production method and this
benefit will only increase as governments begin to impose penalties
for excess GHG emissions.

A NUCLEAR RENAISSANCE

5. (SBU) Presenters at the seminar were unanimous - nuclear energy
is enjoying a renaissance due to changing global realities and
political climates. These changes have led to new partnerships and
more public acceptance of nuclear energy. For example, Ritch
pointed out USG-India cooperation and the recently reinvigorated
nuclear energy cooperation among India, Brazil and South Africa
(reftel A). In order to ensure that the nuclear renaissance
continues, Ritch also highlighted that as we move beyond the Kyoto
Protocol we must construct a global regime of contraction (reduce
GHG emissions) and convergence (equalize per capita emissions rights
and access to nuclear fuel), and also elevate nuclear investment
(especially in the face of what Ritch termed as a failing UN system
that is being intimidated by anti-nuclear voices). He added that
building the nuclear profession through science and technology and
management education (e.g., WNA Summer Institute and orientation
course in Brazil first week of March 2008), and using public
diplomacy tools to ease public concerns about nuclear energy

BRASILIA 00002335 002 OF 003


(especially as it relates to waste) are equally important.

6. (SBU) ElBaradei added that the following factors will determine
the future of nuclear energy: 1) infrastructure; 2) innovation; 3)
safety - the lifeline of nuclear power; 4) security - protect from
nuclear materials falling into the wrong hands and accelerate
conclusion of responsibilities under the NPT; 5) economic
competitiveness; 6) equity among nations - small countries should
consider a regional approach to developing nuclear power and fuel
should be multi-nationalized; and 7) waste - experts say that waste
can effectively and safely dealt with - the challenge will be to
educate the public.

7. (SBU) Ambassador Sergio Duarte, Brazil's High Representative for
Disarmament Affairs, agreed the concept of a nuclear renaissance,
but emphasized that assuring equity in its revival is essential.
Peaceful use of nuclear energy, he said, should be available to any
and all countries. He pointed out that for many states, "the global
nuclear regime is evolving in a lop-sided, even discriminatory
manner" and that many non-nuclear weapons states also have concerns
over "the need to restore some fairness and balance in the
distribution of responsibilities of states that participate in the
Non Proliferation Treaty (NPT) regime." The resulting "crisis of
confidence" in the NPT requires tightening of non-proliferation
controls as well as more significant progress in disarmament and
overcoming obstacles to the peaceful uses of energy."

8. (SBU) Duarte went on to say that the nuclear renaissance may
become an important solution to the fight against global warming,
but it will also likely produce thousands of tons of new fissile
material that will need to be stored and/or disposed of. Thus, in
order to meet the challenges of nuclear energy in the future Duarte
said that the evolving nuclear regime must: 1) increase IAEA
leadership on dialogues involving the NPT, fuel cycle debate and
other negotiations; 2) recognize the rights of all countries to the
peaceful use of nuclear energy (universal membership); 3) demand
that nuclear weapons states comply with their obligations under
international law; and 4) require all states to ensure that domestic
law and policy is consistent with international non-proliferation
regimes.

BRAZIL'S NUCLEAR FUTURE

9. (SBU) Representatives from both the Brazilian Association for the
Development of Nuclear Activities (ABDAN) and the Brazilian Nuclear
Energy Association (ABEN) described the green virtues of nuclear
energy (Note: Brazil is the fourth largest emitter of GHGs
worldwide, but the majority of its emissions occur as a result of
deforestation, not fossil fuel emissions. End Note). They also
lauded nuclear energy's cost effectiveness and the ever-increasing
energy demand in Brazil, especially in rural areas. Accordingly,
Brazil has revived the construction of its third nuclear reactor
(Angra III - est. completion by 2014) and plans to build 4-8 new
nuclear reactors by 2030.

10. (SBU) Demonstrating the broad governmental support that the
development of nuclear energy enjoys in Brazil, Brazilian Minister
of Science and Technology, Sergio Rezende, highlighted the prominent
role that nuclear energy development will play in the Ministry's
recently released national S&T plan (Note: The plan was announced in
November of 2007 by President Lula. Overall, the plan calls for an
estimated USD 11 Billion in funding). Rezende reiterated that
Brazil supports universal use of nuclear energy for peaceful
purposes and that Brazil stands to play an important role in the
international nuclear renaissance. Rezende added that Brazil is
working to address the challenges of security and safety, waste,
development of human resources, and the expanded exploration of
uranium.

11. (SBU) In addition to public financing of its ambitious nuclear
energy agenda, Brazil has also appeared to garner significant
interest from international private investors. For example, French
company Areva (a major sponsor of the seminar) is reportedly making
a serious push to provide its services in Brazil as the Brazilian
government expands nuclear power. During the seminar, Areva Brazil
Executive Director, Johannes Hobart, presented France "as a
reference case for safe and sustainable production of nuclear
energy." He added that "Areva is the only company in the world that
provides services for all cycles of production and recycling." With
regard to uranium prospecting, in conjunction with Brazilian
juggernaut Companhia Vale do Rio Doce (CVRD), Australia and Canada
also have plans underway to revive uranium prospecting in Brazil.

12. (SBU) Brazil indeed appears to have sufficient uranium supplies

BRASILIA 00002335 003 OF 003


to meet the planned growth of its nuclear energy sector. The
majority of its reserves are conveniently concentrated in three
geographic areas of Brazil: (Pitinga (NW); Santa Quiteria (NE); and
Lagoa Real (CE). At present, Brazil processes about 400 tons per
year, but production is planned to increase to 800 tons by 2011.
According to figures presented by Leonam dos Santos Guimares,
Advisor to the President of Eletronuclear, Brazil ranks 6th in the
world in terms of uranium reserves (6.7% of worldwide reserves) -
(survey of Brazil's reserves were done in the mid to late 70s), but
only 30% of Brazil's reserves have actually been prospected.
Guilherme Camargo of ABEN added that while mining of uranium is
ongoing, prospecting has not occurred since the 80s.

13. (SBU) According to Brazilian experts at the seminar, Brazil also
has the capacity to deal with nuclear waste and spent fuel. To
oversee the waste from expanded nuclear energy production, the
Brazilian government plans to create the Empresa Brasileira de
Rejeitos Radioativos (Brazilian Radioactive Waste Agency), which
will deal exclusively with nuclear waste. For high level waste and
spent fuel, Brazil plans to use a deep geological deposit model
similar to that used by Sweden. (Note: Brazil already has 3
temporary waste deposits for low-level waste and 2 pools for
temporary spent fuel storage. The issue of waste has also affected
Brazilian public perception of nuclear energy due to an accident in
city of Goiana in 1987 where a cylinder with radioactive material
was removed from an abandoned medical clinic. The removal and
subsequent spreading of the radioactive material to the local
population resulted in several deaths and many more cases of
radioactive poisoning. Clean-up of the site did not conclude until
1997. End Note).

REGIONAL COOPERATION

14. (SBU) Regionally, South America is not immune to the global
challenges of climate change, rising energy demands, and poverty.
Moreover, as leaders in the region and current users of nuclear
power, DG ElBaradei said that he could "see Brazil as a regional
supplier and Argentina could become a joint partner." Other
countries in the region are also interested in nuclear power -
ElBaradei explained that leaders in Chile and Uruguay told him that
they are interested in developing nuclear energy capabilities.

15. (SBU) In the case of Argentina, Argentine Ambassador Elsa Kelly
briefly described Argentina's support of non-proliferation efforts
and of peaceful uses of nuclear power. Kelly highlighted the
important bilateral relationship with Brazil in this regard. She
also provided an update on Argentina's position on the Additional
Protocol (AP) and Global Nuclear Energy Partnership (GNEP).
According to Kelly, Argentina still maintains observer status in
GNEP. She added that Argentina will likely take Brazil's lead
regarding the AP and will not finalize its position on the AP until
Brazil does. (reftel B and C).

COMMENT

16. (SBU) Brazil clearly seeks to raise its profile within what many
are calling a nuclear renaissance. Plans with political support are
underway in Brazil to make nuclear energy a significant part of its
domestic energy portfolio in the future. Moreover, as the concept
of supply assurances gains more traction, Brazil also has the
ambition and the natural resource capacity to become a regional
supplier of nuclear fuel. Internationally, Brazil is wooing private
investment in its nuclear sector and voicing its position on NPT
obligations and equitable access to nuclear energy for all states.
Opportunities for US investment in the Brazilian nuclear sector also
likely exist, although such investments were not discussed at the
seminar. At least two questions that remain to be seen are whether
public financing of Brazil's nuclear develop plans will materialize
over time, and whether Brazil's plans to deal with nuclear waste
will keep pace with its ambitious production goals.

CHICOLA

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