The Megatons to Megawatts Program is the name given to the program that implemented the 1993 United States-Russia nonproliferation agreement to convert high-enriched uranium (HEU) taken from dismantled Russian nuclear weapons into low-enriched-uranium (LEU) for nuclear fuel.
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From 1995 through late 2009, 375 metric tons of highly-enriched uranium from Russian nuclear warheads have been recycled into low-enriched-uranium fuel for U.S. nuclear power plants. This program has eliminated the equivalent of 15,000 nuclear warheads. The Megatons to Megawatts government-to-government program goal of elimination 500 metric tons of warhead material is scheduled to be completed in 2013. Currently, ten percent of U.S. electricity is produced using this fuel. {www.USEC.com/megatons to megawatts, http://nnsa.energy.gov/news/2592.htm].
Under the terms of the agreement, both the United States and Russia created government-owned corporations to act as the deal’s executors. The United States set up the United States Enrichment Corporation (USEC), while the Russian Federation created a commercial subsidiary of its Ministry of Atomic Energy (MinAtom), Tekhsnabeksport (“Tenex”). The original deal called for Tenex to downblend its HEU to LEU at MinAtom facilities. USEC would then buy the Separative work unit (SWU) component of this LEU, accepting it in shipments over a 20-year period. The price negotiated came to approximately two-thirds of the 1993 market value of the entire quantity of LEU (the other one-third being the feed component). USEC would then be free to resell the SWU's in compliance with relevant U.S. regulations and international laws. Tenex, on the other hand, would retain title to the uranium component, and would be free to resell it, subject to relevant international agreements and Russian statutes.
These circumventions, though contrary to common sense, are forced by the peculiarities of the uranium market: though there is only one actual product shipped to USEC – five percent low-enriched uranium hexafluoride – USEC holds title only to the value of the services employed to enrich it; i.e., the SWU's. According to the agreement, the actual material that has been produced remains in Tenex’s legal possession. Obviously, it is impossible to physically separate raw materials from the work that has processed them into a finished product. Therefore, when USEC resells the SWU component, it must provide its customers with the entire LEU product it received from Tenex. This leaves it in a barter debt: it owes the physical mass of the material to Tenex. The situation is resolved by USEC’s customers shipping an equivalent quantity of natural uranium feedstock back to USEC – which is then designated as Tenex’s component returned.
In addition, USEC would reimburse Tenex for the cost of the uranium blendstock that the latter used to downblend the original HEU. The reimbursement was to be in the form of a barter payment again in natural uranium, equivalent to the amount the Russians had used (even though Tenex would use 1.5 percent slightly enriched uranium (SEU), not natural uranium, for downblending). Tenex would then be free to resell this natural uranium as well.
Several problems soon arose with the deal. Based on market trends, it became clear that the price agreement negotiated in 1993 was overly generous to Russia. For its part, Russia also had concerns for the agreement demanding a “price floor,” below which it would not ship. The deal was renegotiated in March 1999 to address these and other outstanding issues.
Based on mid-2005 market prices, USEC estimates it will pay Russia nearly $8 billion for the SWU's of the low-enriched-uranium.
In December 2009 USEC announced that the Megatons to Megawatts program had reached a new milestone ([1]); 375 metric tons of Russian HEU warhead material, equivalent to 15,000 nuclear warheads has been eliminated. From 1993 to date 375 metric tons of Russian warhead HEU have been diluted and converted to LEU--low enriched uranium--fuel for nuclear power plants. The fuel is purchased by USEC for use in many of America's 103 commercial nuclear power plants to produce electricity. Approximately 20% of America's electricity is generated by nuclear energy. Nuclear warheads that were once on guided missile ICBMs aimed at American cities are now providing 50% of the nuclear energy produced in the United States--one tenth of America's overall electric power production. The U.S.-Russian agreement and the commercial implementing contract will be completed in 2013. At that time it is expected that a total of 500 metric tons of warhead HEU will be converted in Russia to LEU and purchased to fuel U.S. nuclear power plants. The Megatons to Megawatts program will have eliminated the equivalent of 20,000 nuclear warheads.
Completion of the Megatons to Megawatts agreement will leave a considerable gap in the supply of uranium fuel at a time when the global use of nuclear power is increasing. In the United States, there are 103 nuclear power reactors currently operating. New construction and operating permits for 15 nuclear power reactors are under review by the U.S.NRC. Nuclear Regulatory Commission. According to government and industry sources, seventeen companies are preparing license applications for as many as 31 new U.S nuclear reactors. Since the Megatons to Megawatts program is scheduled to end in 2013, demand for other sources of uranium supply will be necessary to meet current and future demand..[1]
  | Military Warheads as a Source of Nuclear Fuel - Military Warheads as a Source of Nuclear Fuel: World Nuclear Association |
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