By Llewellyn King
Bill Richardson could teach Donald Trump something about the art of the deal.
He has done a lot of them. Richardson also wrote a book about the art of the deal, the big deal, entitled “How to Sweet-Talk a Shark; Strategies and Stories from a Master Negotiator.”
In a towering life of public service (U.S. representative, U.N. ambassador, secretary of Energy, New Mexico governor, and peripatetic hostage negotiator), Richardson confronted Fidel Castro, Saddam Hussein, the Taliban, two of North Korea’s dictators, and an assortment of international thugs. He was a five-time nominee for the Nobel Peace Prize.
The essence of Richardson’s deal-making was that the commitment must be kept by both parties.
At present Richardson sees one of his deals in jeopardy, and he was in Washington last week to raise the alarm, meeting privately with former colleagues and appearing at a press conference at the National Press Club.
The deal in jeopardy involves a commitment he made, when he was secretary of Energy in the Clinton administration, with the Russians to dispose of weapons-grade plutonium, the long-lived ingredient in nuclear weapons. There are 34 metric tons of the stuff that the United States is bound, by treaty with Russia, to dispose by integrating it into nuclear fuel and burning it in civilian power plants. This is known as mixed oxide fuel or MOX.
But the Obama administration wants to end the program, before a fleck of plutonium has been processed for fuel. It is seeking to pull the plug on the construction of the facility at a Department of Energy site on the Savannah River in South Carolina, which is two-thirds complete and has already cost over $4 billion.
The administration is now looking not at the completion cost, but at the lifetime cost of the facility. And it is saying that it is too high; although that could have been calculated years ago.
The deal was signed by Vice President Al Gore with Russia back in 2000. The Russians, for their part, are burning their surplus plutonium in fast reactors, which we do not have in operation.
The back story may be not about lifetime cost, but about the deployment of federal dollars in the very near future. Nuclear industry insiders believe that the Department of Energy, which makes nuclear weapons and stockpiles them, wants to divert all available resources to its weapons refurbishment program and, in argot of the moment, kick the plutonium can down the road. New funds are harder to come by than re-purposing extant ones.
The department is floating the idea that the plutonium should be “down-blended,” meaning mixed with some secret ingredient that the department believes will render it safe for all time, and stored in a troubled existing facility: the Waste Isolation Pilot Plant (WIPP) in New Mexico.
“I don’t believe this is a good course of action.” Richardson told reporters at the press club event. He said the WIPP facility was designed for low-level waste … there would be a lot of opposition in New Mexico.” He was involved in that project, too, when he was in government.
On sanctity of treaties, Richardson said, “I think that [closing down the MOX facility] would be a grave mistake across the board.”
Richardson said that he had negotiated with the Russians as U.N. ambassador and as Energy secretary. In the matter of plutonium disposal, he said the Russians have kept their side of the deal. There was plenty of tension over Ukraine and Syria, and “we don’t need any more tension.” He said, “This is one potential area of cooperation that should not be discarded, and it would be, should the MOX facility be discarded.”
If the MOX facility is shuttered, it will be one of many nuclear facilities across the country, paid for by taxpayers, which have been abandoned because of other priorities or political agendas. The price is high in enthusiasm, creativity and commitment from the workforce at facilities, like the MOX one.
The dollars spent have no legacy except a sad, new kind of national monument: structures that have been left forlorn and incomplete as politics have zigged and zagged. These abandoned structures range from the experimental Fast Flux Test Facility in Hanford, Wash. to the Integrated Fast Reactor in Idaho Falls, Idaho to the sad, $18-billion Yucca Mountain facility sitting unused in Nevada. There are many more.
As Richardson might tell, in a long life in public service, you have to defend the deal long after it was signed, sealed and delivered. Not so, perhaps, in real estate transactions. — For InsideSources.com
To hear Brenda Shaffer, a peripatetic academic specializing in European and Eurasian energy issues, currently on a research fellowship at Georgetown University, natural gas is the predominant fuel of the 21st century, and it will be used copiously as time goes on. It will become the fuel of transportation as well as heating, manufacturing and electric generation.
But, at this point in time, moving natural gas from supplier to user presents special problems. It is not as easily transported as oil, and it is not as fungible.
Ideally, natural gas is transported by pipeline. Less desirably, it is converted into a liquid at -260 F and shipped around the world, where it has to be regassified. The freezing and the regassification processes for liquefied natural gas (LNG) require hugely expensive plants: over $5 billion at the originating end, and half that at the receiving end. This makes the gas expensive and its shipment inflexible.
Oil is put on tankers and unloaded wherever it is needed. LNG is shipped in special cryogenic tankers to dedicated terminals on long-term, take-or-pay contracts.
The United States is in the middle of a natural gas boom of unprecedented proportions; the result of extraordinary reserves in shale and the development of sophisticated hydraulic fracturing (fracking) technology linked to horizontal drilling. The pressure to export is on, balanced by environmental concerns and the fear of manufacturers tat the price will rise.
In the current crisis over Ukraine, a question has arisen as to whether we can help our European allies by shipping them LNG. The answer is “yes and no.”
We do not have any terminals ready to begin exports; the first LNG exports will be loaded from the Sabine Pass terminal in Louisiana late next year and will be shipped to Asia. Nor does Europe have enough receiving terminals.
But the Europeans argue strongly that the mere presence of the United States as a player in the natural gas export business will have a huge impact on the world market, signaling that we are on the way and, hopefully, warning Russia that its captive gas customers in eastern and central Europe are looking at alternatives, and want to lift the yoke of dependence on Russia.
With the invasion of parts of Ukraine by Russian troops or their surrogates, gas has become a weapon of war. Russia's giant, state-owned gas monopoly, Gazprom, has been an arbitrary supplier to Europe for years. Most troublesome is that the bulk of Europe's gas supplies transit Ukraine, and that Gazprom has never behaved like anything but an arm of the Kremlin, dangerous and capricious.
In 2009, Gazprom cut off supplies over alleged contract and payment issues; in the cold of winter, the Russian bear was merciless. Also, it posts a different gas price for each customer, regardless the distance from Russia's border or cost of delivery.
Desperately, Europe is looking for a defense against Russia freezing supply to Ukraine this winter and cutting off some countries, particularly those wholly dependent on Russian gas, like the Baltic states and Slovakia.
That is why the Visegrad Group, consisting of Poland, the Czech Republic and Slovakia, under the chairmanship of Hungary, has been intensively lobbying Congress to pass a bill that would simplify and speed up the licensing of export terminals in the United States. At present, seven terminals have provisional licenses from the Department of Energy, and Sabine Pass is fully licensed.
Visegrad members swarmed Capitol Hill this week, lobbying for the legislation. They were accompanied by officials from Bulgaria, Croatia, Latvia, Romania and Ukraine.
Their message was simple: the legislation would convince the Russians that they had to play by market rules because the entry of the United States as a player in the world of LNG — even if the gas cannot be offloaded in Europe in the near future — will send a strong market-stabilizing message.
Where possible, eastern and central European countries are improving their interconnections and adjusting their systems so they can reverse the flow of gas to help Ukraine in a dire emergency. But no one believes that it will make enough of a difference; besides, as most of that gas will have originated in Russia, some Russian contracts specify the use of the gas.
Almost all of the gas in the region is used for heating rather than electric generation or manufacturing. Central and eastern Europe is dreading winter and imploring the United States to send strong signals, even if it will be a long time before Pennsylvania or Ohio gas warms the people of Ukraine and its neighbors. — For the Hearst-New York Times Syndicate