Time for DOE to Complete Its Part 810 Nuclear Export Reform

By Margaret Harding

Ms. Harding is an independent nuclear energy consultant at 4 Factor Consulting, LLC.

In August 2, 2013, DOE published a supplemental notice of proposed rulemaking (SNOPR) regarding revisions to 10 CFR Part 810, its regulation controlling nuclear exports. The SNOPR was the culmination of years of effort by DOE and industry to modernize a regulation that was based on Cold War era nuclear proliferation policies, politics, and trade patterns. The process is made more complex because the underlying law – The Atomic Energy Act was written during the Cold War and has not been updated either.

DOE’s first proposed revision of Part 810 met with strong adverse comments from across the industry because it failed to address the significant burden of its slow, opaque export approval process placed on US companies seeking to compete in the large and growing markets in China, India, Asia and the Middle East. In response, DOE promised to implement a process improvement program (PIP) and revised the proposed regulation to address a number of substantive issues raised by commentators.

Public comments on the SNOPR have been fairly supportive. Most have supported the SNOPR in whole or in part. Virtually all have supported the PIP.   The comments filed by the Nuclear Energy Institute (NEI) were an exception to the constructive approach taken by the other commentators. In a comment, that was significantly longer than the SNOPR itself, NEI recommended that DOE withdraw and republish the SNOPR, continuing the current Cold War era approach to the classification of nuclear trading partners.

Although it supported many of the changes in the SNOPR and made some reasonable proposals for further changes, NEI called the SNOPR “arbitrary and capricious”, said it does not provide a “rational connection between the facts found and the choice made” and that it violates the law because” it does not adequately support either the numerous significant and high-impact changes to the existing Part 810 rule”. The NEI comment also alleged that that DOE selectively chose data to support its own conclusions while disregarding data that would undermine its own arguments.

NEI’s primary complaint is that the SNOPR replaced the Cold War system of classifying about 75 nuclear trade partners on a list of restricted or “bad” countries where proposed transactions had to be specifically approved by DOE with a list of about 45 “generally authorized” trade partner countries where no specific approval was required. NEI is upset that as a consequence of this approach, future transactions with 77 counties that were not on the restricted list will require specific authorization when the SNOPR takes effect. DOE explained this decision in the SNOPR and provided an economic impact analysis showing the reclassification would have a negligible impact because the affected countries had little or no nuclear business today and were unlikely to have business for a decade or more.

In support of its position that DOE should withdraw the SNOPR and continue to generally authorize nuclear trade in 77 countries, the NEI comment does not identify a single country, project, end user, transaction or US company that would be adversely burdened by the specific authorization requirement currently facing U.S. companies doing business internationally.

The NEI comment is sadly out of step with the real concerns of industry. The reclassification has no adverse impact on nuclear trade because there is no significant nuclear trade with the 77 reclassified countries. Only one of those countries, Jordan, has an active plan to construct a Nuclear Power Plant. The State Department is actively working toward a 123 agreement, which will help move Jordan onto the generally authorized list.

Instead of quibbling with NEI about the impact in the 77 countries, DOE needs to improve its authorization process to facilitate trade where there is nuclear business: China, India, Southeast Asia and the Middle East.

DOE needs to complete the Part 810 Rulemaking, so industry can begin operating under a 21st Century export control regime. Stopping the rulemaking process now would be throwing the baby out with the bathwater. Trade with 77 countries that are almost universally NOT interested in nuclear business is not worth the cost of delaying this rule any further.

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