Australia weighs nuclear push after Japan crisis

CANBERRA Tue Mar 22, 2011 7:06am GMT

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CANBERRA (Reuters) - Japan's nuclear crisis threatens to derail a political push by Australia's government to overturn a ban on selling uranium to India, as well as a drive to use nuclear power domestically to counter climate change.

Prime Minister Julia Gillard's minority Labor government is planning a debate at a rare policy-making conference later this year on nuclear energy and relaxing a long-standing bar on uranium exports to New Delhi.

Resources Minister Martin Ferguson told Reuters this month that he would press to modify prohibitions on uranium exports to countries which have not signed the Nuclear Non-Proliferation Treaty that would allow sales of the nuclear fuel to India.

But Gillard, who relies on Greens opposed to nuclear energy to remain in power, said on Tuesday the events in Japan would trigger a global debate on nuclear energy.

Gillard added she did not personally believe Australia needed nuclear power plants. "I don't see nuclear energy as part of our future," she said in Melbourne.

"We are blessed with abundant sources of renewable energy, of clean energy, of solar, wind, tide, hot rocks. That's our future, not nuclear, a clean energy future with carbon pricing as part of it."

With support now wobbling for the government and a new Essential Media poll this week showing 53 percent of Australians opposed to nuclear power at home, analysts said the debate could prove toxic for Gillard's fragile grip on government.

"It may well prove unrealistic and unreasonable to now expect Julia Gillard's minority government to expend substantial political capital on any issue which contains the words 'nuclear' or 'uranium'," said analyst Rory Medcalf of the Lowy Institute for International Policy.

New Delhi has long complained about Australia's uranium policy as it seeks access to nuclear supplies for its booming electricity sector and growing economy. Australia expects India to build five new nuclear reactors by 2016.

DOMESTIC NUCLEAR POWER

At the same time, some prominent lawmakers and business leaders are calling for a domestic nuclear power industry to help curb Australia's greenhouse emissions, which per capita are the world's highest due to reliance on coal-fired electricity.

Proponents include former conservative prime minister John Howard, deputy opposition leader Julie Bishop, prominent local entrepreneur Dick Smith, Australian Workers' Union chief Paul Howes and former Labor Party president Warren Mundine.

Australia has almost 40 percent of the world's known uranium reserves, but supplies only 19 pct of the world market. Australia has no nuclear power stations.

The country at present has only three mines, BHP Billiton's Olympic Dam, the world's biggest uranium mine, Energy Resources Australia's Ranger mine in the Northern Territory, and the Beverly mine, owned by U.S. company General Atomics.

Medcalf said even if Canberra proceeded to sell uranium to new markets, such as India or the United Arab Emirates, there could well be political pressure to add strong environmental conditions.

Those conditions could add even more complexity, and potentially costs, to bilateral nuclear safeguards agreements focused previously on the spread of nuclear weapons.

"Australians will note also that the Fukushima disaster is prompting India to review its own nuclear safety. Following the crisis in Japan, and in the glare of the Indian media, the intended expansion of India's nuclear footprint may well slow or even stall," Medcalf said.

Australia has 22 bilateral nuclear safeguard agreements, which allow exports to 39 countries.

In recent years, Canberra has signed agreements with Russia and China, and has already sent its first shipments of uranium to China, where uranium consumption is projected to grow by 44 percent to 18,000 tonnes by 2016.

At a uranium conference in South Australia state, Australian Uranium Association chief executive Michael Angwin said the economic factors driving countries to nuclear power use were unchanged by the Japan emergency.

"Countries turn to nuclear energy because they wish to improve their energy security and expand their electricity generating capacity in a way that does not increase their carbon emissions. That remains the case," Angwin said.

Australia's uranium exports in the year to July 1, 2011 are forecast at 8,700 tonnes, up 21 percent on the previous year, with production set to expand an average 15 percent per year to July 2016 as several new mines set to start production.

(Editing by Ed Davies and Jeremy Laurence)

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