Born - 1943-09-25 PDF : [HW000W][GDrive]
Father - Lee Miller Neff (born 1912)
Siblings (1) - William David Neff (born 1945)
As the Cold War ended in the late 1980s and early ’90s, a new fear arose amid the rejoicing and relief: that atomic security might fail in the disintegrating Soviet Union, allowing its huge stockpile of nuclear warheads to fall into unfriendly hands.
The jitters intensified in late 1991, as Moscow announced plans to store thousands of weapons from missiles and bombers in what experts viewed as decrepit bunkers, policed by impoverished guards of dubious reliability.
Many officials and scientists worried. Few knew what to do.
That is when Thomas L. Neff, a physicist at the Massachusetts Institute of Technology, hit on his improbable idea: Why not let Moscow sell the uranium from its retired weapons and dilute it into fuel for electric utilities in the United States, giving Russians desperately needed cash and Americans a cheap source of power?
Last month, Dr. Neff’s idea came to a happy conclusion as the last shipment of uranium from Russia arrived in the United States. In all, over two decades, the program known as [the] Megatons to Megawatts Program turned 20,000 Russian warheads into electricity that has illuminated one in 10 American light bulbs.
Dr. Neff fathered the atomic recycling program in spite (or perhaps because) of his lack of name recognition, his inexperience on the world stage and his modest credentials in arms control. Moreover, he not only came up with the original plan but shepherded it for decades.
“I was naïve,” Dr. Neff, 70, recalled in a recent interview. “I thought the idea would take care of itself.”
In fact, it required sheer doggedness and considerable skill in applying nuclear science to a global deal freighted with technical complexities and political uncertainties. Yet in the end, Dr. Neff noted, the mission was accomplished: Uranium once meant to obliterate American cities ended up endowing them with energy.
Nuclear experts hail it as a remarkable if poorly known chapter of atomic history. The two decades of bomb recycling, they say, not only reduced the threat of atomic terrorism and helped stabilize the former Soviet Union but achieved a major feat of nuclear disarmament — a popular goal that is seldom achieved.
“It’s an amazing thing,” said Frank N. von Hippel, a physicist who advised the Clinton White House and now teaches at Princeton. The wave of arms destruction, he said, eliminated up to a third of the planet’s atomic bomb fuel, making it “the biggest single step” in the history of nuclear arms reduction.
He called Dr. Neff an underappreciated hero, adding that in a time of governmental muddle and paralysis, his success was a striking example “of what one person can do.”
Thomas Lee Neff was born in 1943 in Oregon, the older of two boys; his family raised chickens and grew most of its own food. He studied math and physics at Lewis & Clark College in Portland, graduating with highest honors, and received his Ph.D. in physics from Stanford. As a senior M.I.T. researcher, he specialized in energy studies, writing books on nuclear power, solar energy and, in 1984, the global uranium market. His timing was propitious.
In the nuclear age, the rare isotope uranium 235 has played starring roles in war and peace. When highly purified, to a level of 90 percent, it fuels atom bombs; at 5 percent, it powers nuclear reactors for electric utilities.
As the Cold War ended, Dr. Neff wondered whether these disparate worlds might be able to do business together. When Washington and Moscow announced major unilateral arms reductions in late 1991, he recalled, “I said: ‘Wow. What’s going to happen to all these weapons?’ ”
Dr. Neff, like many experts of the day, worried that the Soviet Union was ill equipped to deal with thousands of discarded bombs. The treaties and independent actions of the Cold War allowed nuclear arms taken from bombers and missiles to be kept in storage, raising the possibility of reuse, diversion and theft.
The beleaguered communist state, he feared, was already cutting back on nuclear upkeep, workers’ pay and dozens of measures meant to keep weapons safe. He also suspected that newly impoverished Russian nuclear scientists, once a pampered elite, might seek work elsewhere.
“It all sounded dangerous,” he said.
His solution was atomic recycling. The question was how to float the idea.
On Oct. 19, 1991, nuclear experts filed into the Diplomat Room of the State Plaza Hotel in Washington. The agenda of the nongovernmental meeting was demilitarization. A Soviet delegation attended, as did Dr. Neff.
Outside the conference room during a break, he approached a leader of the Soviet bomb complex, Viktor N. Mikhailov, a canny apparatchik known for his love of Western cigarettes.
Dr. Neff asked whether he would consider selling the uranium in Soviet weapons.
“Interesting,” he said Dr. Mikhailov replied, puffing away. “How much?”
Five hundred metric tons, Dr. Neff said, giving what he considered a high estimate for the quantity of Soviet bomb fuel soon to become surplus. “If I had known how much they really had,” he recalled, “I would have said 700 tons.”
Even so, 500 metric tons was a lot: 1.1 million pounds, heavier than a fully loaded 747 jetliner.
Five days later, Dr. Neff made his idea public in an Op-Ed article in The New York Times, “A Grand Uranium Bargain.” The illustration showed a kitchen pot and spoon floating eerily above a countertop and — just behind — an open window. Outside was a bomber.
“If we do not obtain the material,” he warned, shadowy agents in the former Soviet Union, perhaps uncontrolled by central authority, might seek to “sell weapons-grade materials to the highest bidders.”
The idea gained support in both Washington and Moscow. Carrying it out, through a tangle of conflicting state and commercial interests, was another matter. Dr. Neff was there to prod it along at almost every turn. In late December 1991, he was among the last Westerners to see the Soviet hammer and sickle flying over the Kremlin.
The first shipment of uranium arrived in 1995; 250 more followed over the next 18 years. Last month, a freighter sailing from St. Petersburg to Baltimore delivered the last shipment. Strapped into transport pallets were giant steel drums, each holding about two bombs’ worth of diluted uranium.
Colorful signs on the drums showed fluttering Russian and United States flags, with a message in large type: “20,000 Nuclear Warheads Eliminated.”
Dr. Neff estimates that he flew 20 times to Russia and other former Soviet states to work on the original deal and its amendments. He says a book he is writing draws on thousands of documents.
Thomas B. Cochran — a senior scientist at the Natural Resources Defense Council in Washington who helped organize East-West interactions at the Cold War’s end, including the gathering where Dr. Neff met the Soviet official — said the American physicist deserved “99 percent of the credit” for the uranium deal. Its most important result, he added, was simply improving the relationship between the United States and Russia at a critical moment in history.
Last month, the Russian Embassy in Washington held a reception to mark the end of the Megatons to Megawatts program. Dr. Neff was an honored guest.
A brochure handed out at the reception reprinted his Op-Ed article, praising the commercial deal as a first for nuclear disarmament. It put the overall cost of the transaction at $17 billion.
Uranium from the dismantled weapons, it said, was diluted into 15,432 tons of low enriched uranium. The resulting reactor fuel supplied half of all American nuclear power plants.
The total electric power, it said, could illuminate the whole of the United States (roughly 20,000 cities and 115 million households) for about two years — or Washington, D.C., for 185 years.
The atomic sale, the brochure said, “is widely held to symbolize the end of the era of confrontation between the two major nuclear powers.”
In an interview, Ernest Moniz, the federal secretary of energy and a former colleague of Dr. Neff’s at M.I.T., praised him for not only proposing the plan but helping guide it for more than two decades.
“If he hadn’t stuck with it,” Dr. Moniz said, “it could have very easily been one of these great ideas that ends up just spinning its wheels.”
Millions of idealists, from President Obama on down, have sought a world without nuclear weapons. Dr. Neff, despite doing more than almost anyone to advance that goal, is circumspect about what he accomplished.
He made no mention of energy windfalls, geopolitical realignments or the biblical injunction to turn swords into plowshares.
The lesson of the story, he remarked in an interview, “is that private citizens can actually do something.”
Brother William David Neff (born 1945) attends
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See article in Journal for Peace and Nuclear Disarmament - [HP000G][GDrive]
Involves :
Frank von Hippel is a Senior Research Physicist and a Professor emeritus of Public and International Affairs in Princeton University’s Program on Science and Global Security. He has a Ph.D. in nuclear physics from Oxford University (1962). He has worked on nuclear policy issues for almost half a century and has been praised by his fellow physicists “for his outstanding work and leadership in using physics to illuminate public policy in the areas of nuclear arms control and nonproliferation, nuclear energy, and energy efficiency” (American Physical Society 2010). The publisher of a collection of his essays, described him as “at the forefront of those scientists grappling with the troubled legacy of our Nuclear Age” and as offering “insights about the choices we must make and how science can help us to make them” (Springer Nature 1991).
The edited and footnoted interviews published here are von Hippel’s account of his years of engagement with a series of nuclear policy problems – mostly as an outsider but also as a White House official. He began by trying to strengthen nuclear-safety regulation in the United States. He and his colleagues then fought successfully to stop the US Atomic Energy Commission’s planned “plutonium economy.” As the chairman of the Federation of American Scientists, he worked with a group of physicists advising Mikhail Gorbachev in his successful efforts to end nuclear testing, reverse the nuclear arms race, and dismantle the tank confrontation across the Cold War boundary dividing Germany. After the Soviet Union collapsed, von Hippel worked in the White House to help launch cooperative programs to secure nuclear materials in Russia from theft and to eliminate the stocks of highly enriched uranium and plutonium resulting from the drastic down-sizing of the US and Soviet Cold War nuclear arsenals. In 2006, he co-founded the International Panel on Fissile Materials, which seeks to end the production and use of highly-enriched uranium and separated plutonium for both weapons and non-weapons purposes.
In a sense, von Hippel inherited the problem of nuclear weapons from his grandfather, James Franck, who participated in the US World War II nuclear-weapon project, overseeing the development of the process to separate plutonium from irradiated uranium. In the spring of 1945, Franck convened the group that produced the Franck Report, which became famous after the end of the war because it had warned of a nuclear arms race with the Soviet Union if the US used the new weapon in a surprise attack on Japan.
Von Hippel initially proceeded down the career path of a theoretical physicist until he was an assistant professor at Stanford. There, because of the Vietnam War and revelations that many consequential government decisions for technology had been based on political calculations rather than considerations of effectiveness or the public interest, he decided to change his career to focus on public policy. He and Joel Primack, a younger activist physicist, co-authored a book on the roles of scientific insiders and outsiders in influencing government policy. Von Hippel then opted for the outsider role for himself, starting in 1974 by organizing a study of reactor safety sponsored by the professional society of American physicists.
The impact of that study resulted in an offer to continue his research at Princeton. There, he learned from a colleague, Harold Feiveson, of the Atomic Energy Commission’s (AEC’s) proposal to base the world’s future energy system on plutonium breeder reactors. India had just tested a bomb using plutonium that had been separated for supposedly peaceful purposes with AEC assistance. Feiveson, von Hippel and a third colleague, Robert Williams, organized a group that critiqued the AEC’s proposed “plutonium economy.” Their work helped provide the analytical basis for the Carter Administration’s 1977 decision to try to shut down the program, which Congress finally agreed to five years later.
In 1979, von Hippel was elected chairman of the Federation of American Scientists (FAS), a group created in 1945 by veterans of the US World War II nuclear-weapons program to try to prevent a nuclear arms race with the Soviet Union. Two years later, the Reagan Administration took office asserting that the Soviet Union believed it could fight and win a nuclear war. The Reagan Administration asserted that the only way for the US to deter nuclear war was to develop a similar posture. The public’s reaction was the Nuclear Weapons Freeze movement. Von Hippel joined the movement, focusing his efforts on ending nuclear testing and the production of “fissile” materials for nuclear weapons.
In 1983, in response to public concerns, President Reagan announced a program to develop a system to protect the US from a Soviet ballistic-missile attack – quickly labeled “Star Wars” by critics. A group of Soviet academicians wrote an open letter to US scientists asking whether they had changed their view that the proposed ballistic missile defenses (BMD) could easily be overcome by countermeasures and would provoke an offense-defense arms race. The FAS leadership responded that it had not changed its views and was invited to Moscow to brainstorm with a small group of the academicians on how to end the nuclear arms race. Two years later, Mikhail Gorbachev became the leader of the Soviet Union and the FAS group learned that the Soviet academicians they had been brainstorming with were advising Gorbachev.
During the ensuing five years, von Hippel found himself and his colleagues swept up in a head-spinning series of Gorbachev initiatives to end the nuclear arms race:
In 1993, von Hippel was invited in as an advisor on the Clinton Administration’s plan to end US nuclear testing. Later that year, he was invited to join the White House Office of Science and Technology Policy where he became involved in launching programs to secure nuclear materials in Russia and to stabilize Russia’s nuclear cities. He was also responsible for supervising the process of deciding how to dispose of excess US weapons-grade plutonium, and pushed to expand programs to end the use of weapon-grade uranium as a reactor fuel.
Back in Princeton, von Hippel co-founded Princeton’s Program on Science and Global Security and the International Panel on Fissile Materials. His research since has focused primarily on ending the production and use of highly-enriched uranium and plutonium as reactor fuels worldwide and dealing with Iran’s nuclear program along with the longer-term goal of total nuclear disarmament. He also has been working with citizens groups to educate the US Congress and the public on opportunities to advance nuclear nonproliferation and disarmament.
[...] The APS Reactor Safety Study
That year, 1974, Wolfgang (Pief) Panofsky, was president of the American Physical Society. He had been one of the younger physicists in the Manhattan Project and was in the observational aircraft that accompanied the bomber that destroyed Nagasaki. He was one of the original members of the President’s Science Advisory Committee, which President Eisenhower created after the surprise of Sputnik in 1957 and he was a leading advisor on nuclear arms control for the following half century. My favorite recollection of Panofsky is toward the end of his life when we were standing at adjoining urinals at the National Academy of Sciences and he turned and said to me, “Frank, this is the only place where people know what they are doing!”
Panofsky chose Harold (Hal) Lewis as chairman for this APS study. For some reason, I took an immediate dislike to Lewis. I decided that his interest in the issue was to prepare himself to become a consultant to the nuclear industry. It is very difficult for me to conceal my feelings so the situation quickly escalated into one in which Panofsky felt he had to intervene. Somehow, with the help of Panofsky and Tom Neff, who had taken a class with me at Stanford and was acting as Panofsky’s assistant during Panofsky’s year as APS President, Lewis and I papered over our mutual dislike sufficiently to proceed.
Again, the summer study was at Los Alamos but this time it was for a month.
While we were there, I met Harold Agnew, the director of of the Los Alamos National Laboratory. He had worked on Fermi’s reactor at the University of Chicago in 1942 and had been on the observation plane that had accompanied the bomber that destroyed Hiroshima .
[...]
See PDF here : [HE0006][GDrive]
"Acknowledgements - I wish to thank my thesis supervisor, Professor Henry Jacoby, for his assistance and encouragement throughout the duration of this thesis. His ability to successfully wear two hats, as co-principal investigator on the Nuclear Fuel Assurance Project and as thesis supervisor, has contributed substantially to the progress of my research by coaxing me in a direction which simultaneously satisfied academic and policy analysis goals. In addition, I wish to thank Dr. Thomas Neff, the Project's other co-principal investigator, for his assistance with the analysis. Lastly, thanks are to due to the Department of Energy whose financial support of the Fuel Assurance Project made the research possible."
This report was prepared as an account of work sponsored by the United States Government. Neither the United States nor the
United States Department of Energy, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trace name, mark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommenda- tion, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.
Uranium is also the subject of international security concerns because of its association with the proliferation of nuclear weapons
These security concerns are related to the nature and behavior of the international market for nuclear fuels. For example, political aspects of security become more salient if the uranium market is tight, or if there is little flexibility in supply arrangements. Conversely, an oversupply situation--or growing diversity of supply--lessens the impact of political and other constraints.
THIS IS THE BIG EDITORIAL THAT WAS USED AS THE "INSPIRATION" FOR Megatons to Megawatts Program .
Privatizing U.S. National Security: The U.S.-Russian HEU Deal At Risk
Just before their end of summit press conference on September 2, Russian President Boris Yeltsin informed President Bill Clinton that he was going to announce the end of the historic "HEU deal" signed by the two countries in 1993. Under this unprecedented government-to-government agreement, the United States agreed to purchase, over a 20 year period, 500 metric tons of highly enriched uranium (HEU) from dismantled Soviet weapons that Russia would "blend down" to low-enriched uranium (LEU) for sale to the United States as fuel for civilian nuclear reactors. The deal—worth an estimated $12 billion to Moscow—would guarantee that the Russian HEU, enough to build more than 20,000 nuclear weapons, would never again be used for weapons purposes.
The HEU deal, initiated by President George Bush and signed by President Clinton in February 1993, arose from a proposal to U.S. and Russian officials in October 1991 (only weeks before the dissolution of the Soviet Union)< 1 > and subsequently became the centerpiece of U.S. efforts to address what is arguably the most extreme proliferation threat since the beginning of the nuclear age: the possibility that nuclear weapons, the fissile material from them, or the technical skills necessary to make them would be diverted from the rapidly decaying Soviet military industrial complex to rogue states, terrorist groups or countries with nuclear ambitions. To date, Russia has shipped LEU made from about 50 tons of HEU (10 percent of the total)—the equivalent of about 2,000 nuclear weapons.
Because Russia's closed "nuclear cities" that are responsible for making nuclear weapons are unavoidably involved in the destruction of these weapons and the purification and blending down of HEU, the U.S.-Russian deal ensures that money flows to precisely those places and people that present the largest proliferation threat to the world. The need to verify that the LEU that Russia sells under the deal truly comes from HEU has given the United States the opportunity not just to monitor the destruction of Russian weapons-usable fissile material, the so called transparency process, but also to assist Moscow in improving fissile material protection, control and accounting systems that further protect inventories of these materials. In addition, U.S. national laboratories have developed active relationships with an increasing number of Russian "nuclear cities," an engagement that builds peaceful relationships with the most capable of Cold War adversaries and the most dangerous potential contributors to global nuclear weapons proliferation. These otherwise intrusive measures—and new initiatives on plutonium and closed cities—are possible largely because of the more than one half billion dollars per year Russia gains from the HEU deal.
In short, the HEU deal benefits Russia, the United States and international security. Why then did Yeltsin threaten to end the deal? The answer lies in recurrent failures on the part of both governments to implement the deal. While this failure is due in part to Russian bumbling and commercial incompetence, it is the United States that has created the real impediments to success. Despite warnings and opportunities to intervene, Washington has consistently put domestic commercial and financial interests, most notably those involved in the recent privatization of the U.S. Enrichment Corporation (USEC), ahead of U.S. national security interests. If the deal is to be repaired, the United States must reassume the responsibility it has abdicated. If decisive action is not taken, shipments will end, perhaps permanently.
An Unusual Deal
The basic terms of the HEU deal are outlined in an agreement signed by the United States and Russia on February 18, 1993. However, the HEU deal is unusual in that it calls for the parties to carry out their obligations through commercial mechanisms. Under the agreement, each government was to appoint an "executive agent" that would carry out commercial implementation of the deal through contracts for the purchase and sale of the Russian LEU.
Russia assigned implementation to its Ministry of Atomic Energy (MINATOM), which would utilize its experienced government trade organization AO Techsnabexport (TENEX). In a fateful move, the United States, which initially made the Department of Energy (DOE) its executive agent, committed to make USEC—a newly created, government-owned corporation—its ultimate executive agent. Created by the Energy Policy Act of 1992 and slated for eventual sale to private investors, USEC was the result of a 20 year effort to make the government's uranium enrichment operations more "business-like."
Unfortunately, actions taken by U.S. government officials—some of whom later joined USEC—to assure the corporation profitability and increase its value at privatization have systematically worked against the HEU deal. National security officials, skilled in negotiating agreements and wielding U.S. power in conventional ways, have either failed in their oversight of the commercial implementation at home, been misled, or simply been outvoted in the administration.
While some administration officials now take the position that the United States has no financial responsibility for the HEU deal, and that Russia must simply take what it can get, the 1993 agreement is quite clear that the ultimate responsibility belongs to the governments. The agreement specifies that the "[commercial] terms (including price), shall be subject to approval by the Parties." The United States committed to "use the LEU converted from HEU in such a manner as to minimize disruptions in the market and maximize the overall economic benefit for both Parties." Such provisions show the responsibility of both governments to manage carefully the commercial implementation of the HEU deal. From the Russian perspective, the United States has failed to do so.
The Uranium Problem
While the United States is committed under the government to government agreement to purchase LEU from Russian HEU and the initial contract was for the purchase of LEU, that is not how things have turned out. The Russian LEU contains two inputs of value: the natural uranium (as uranium hexafluoride, or UF6) and the "enrichment" services (measured in separative work units, or SWUs).
The current problem is that Russia is not being paid for the uranium component, which is a state asset of the Russian government, like gold. The enrichment component is being purchased by USEC, with that money going to MINATOM. Because it is not possible to ship a SWU (except as an input of enriched uranium) and because Russian law prohibits export of state assets without a contract for sale and payment within 180 days, LEU derived from HEU cannot be exported from Russia without a uranium sales agreement. Thus, the whole HEU deal rests on finding a workable solution to the uranium problem.
The uranium problem has been present from the beginning of the deal. Following the intergovernmental agreement, an implementing contract for the HEU deal was negotiated with MINATOM and TENEX by DOE Deputy Assistant Secretary Philip Sewell in May 1993. That contract called for DOE to purchase Russian LEU but to pay immediately only for the enrichment component. The uranium component (actually, an equivalent amount of feedstock material that USEC customers had previously delivered for enrichment) was to be paid for when USEC "used or sold" the uranium equivalent or at the conclusion of the deal, which might be as late as 2013. At the time the contract was negotiated, it was expected that USEC would be assigned the contract after the company came into existence in July 1993. Indeed, Sewell left government for USEC several months later and the final contract was signed by USEC and TENEX at the January 1994 Moscow summit.
This defective LEU purchase contract, which Russia contends did not carry out the intent of the 1993 agreement, was designed more to benefit the commercial interests of USEC than to implement the intergovernmental agreement. USEC would get control of the uranium component of Russia's LEU without having to pay for it until the company wanted to. Of course, USEC would not be able to resell the accumulating inventory of displaced feedstock for some years because of trade restrictions on the sale in the United States of Russian uranium. USEC could have used the uranium for a process called "overfeeding," that is, using more uranium in the enrichment process to reduce consumption of electricity. DOE had been overfeeding the two gaseous diffusion plants it owned for years, a practice that was assumed to continue when the HEU deal was proposed. However, subsidies provided to USEC (in particular, DOE's below-market-value electricity contracts) eliminated incentives to overfeed and it soon became apparent that Russia would not get paid for its uranium anytime soon.
Thus, even from the beginning, the United States did not act to ensure payment to Russia for the uranium component of the LEU, which was estimated to be worth up to $4 billion over the course of the agreement. But USEC supporters were too clever by half: the corporation would, two decades hence, have to pay for the Russian uranium it held title to under the contract, a major liability that would interfere with the ultimate privatization of the corporation.
The uranium problem was addressed, but not fully solved, by the USEC Privatization Act, which Congress passed and President Clinton signed into law on April 26, 1996.< 2 > The legislation called for the United States to purchase the uranium component of the Russian LEU delivered in 1995 and 1996 and, overriding the defective LEU purchase contract, returned title to the uranium content (rather, the displaced uranium set aside by USEC) to Russia for it to sell on its own beginning January 1, 1997. To facilitate Russian uranium sales, the legislation overrode trade restrictions imposed on Russia in 1992 (as a result of an anti dumping action against uranium exporters from the former Soviet Union) by creating a new and gradually expanding quota for Russian sales of uranium to the United States.
By returning title of the displaced uranium to Russia, USEC was relieved of a $4 billion liability on its books, but Russia was left with a substantial amount of uranium to sell. When annual Russian LEU shipments to the United States are scheduled to reach 30 metric tons HEU equivalent in 1999, the uranium component will reach 9,000 metric tons (23.4 million pounds U3O8) annually. By comparison, the United States consumes about 17,000 tons of uranium each year, while other Western nations together consume about 36,000 tons.
Moscow will face serious obstacles to selling such large amounts of uranium in the current market. Both the United States and the European Community impose restrictions on the amount of Russian uranium that can be sold, and Japan is reluctant to buy Russian uranium because of ongoing territorial disputes with Moscow. In addition, because most utilities purchase uranium under long term contracts that cover requirements for several years forward, there is little near term market for new sales of any kind of uranium. Thus, Russia will not be able to sell its uranium directly to utility end users, but only to companies that are willing to purchase the uranium and hold it for future sales when market demand and trade restrictions allow.
On June 2, 1998, Russia reached a preliminary agreement with a consortium of three Western uranium companies (CAMECO of Canada, COGEMA of France and NUKEM of Germany) to purchase its uranium at USEC for a 10 year period, including the 11,000 tons remaining from LEU deliveries to USEC in 1997 and 1998. Under the preliminary agreement, Russia would receive payment promptly when the uranium contained in the LEU delivered to the United States was returned to Russian control at USEC. The companies offered to pay the going market price, less a profit margin when prices rose above $29 per kilogram of uranium (as UF6).
For this deal to make commercial sense, the price of uranium would have to be expected to increase at a rate at least as great as the interest rate used to finance the purchase and holding of the uranium. Based on their own market analyses, the companies clearly believed that uranium prices would rise, particularly if the sale of the Russian uranium was handled responsibly, and that they would not have to hold the Russian uranium for more than a few years. After an extensive review, the Russian government approved the draft agreement by issuing a formal decree. In its own effort to be clever and put pressure on the companies to pay a minimum price in a final contract, MINATOM asked that the decree establish $29 per kilogram of uranium as the minimal acceptable price.
USEC Privatization
Unfortunately, just as Russia was approving its agreement with the uranium companies, the United States was completing its plans for USEC's privatization. Unbeknownst to all but those directly involved, USEC had convinced mid-level DOE and Office of Management and Budget (OMB) officials to transfer large amounts of DOE inventories of uranium to USEC to increase the company's value. The existence of this uranium was not generally known until May, when merger and acquisition bidders involved in USEC's privatization tried to find buyers for the uranium as part of their plans to finance the company's acquisition.
On May 20, the author alerted national security officials at the State Department and the National Security Council to the uranium transfers, and the potential negative implications for the HEU deal of USEC sales of uranium in competition with Russia. National security officials subsequently met with DOE and Treasury Department officials to discuss the implications of possible USEC uranium sales for the HEU deal. However, Treasury and White House officials pushing USEC privatization overruled any actions. The reasons given ranged from the parochial to the absurd: nothing could be done that might threaten the privatization, and government officials were forbidden to discuss any matters concerning USEC (even among themselves) during the "quiet period" mandated by the Securities and Exchange Commission (SEC). The latter turned out to be a fabrication—SEC rules apply only to company management's public disclosures and only after a securities offering is filed with the SEC. Neither was the case.
On June 26, Senator Pete Domenici (R-NM), who co authored the USEC Privatization Act, wrote to national security advisor Samuel Berger (with a copy to Secretary of the Treasury Robert Rubin) stating his concern that "sale of [the USEC uranium inventory] would negatively impact the sale of HEU Agreement derived natural uranium and could significantly reduce the Russian Federation's incentive to continue the [HEU] Agreement." Domenici concluded: "I have worked for over a decade to privatize the USEC. But if circumstances are different than what we have assumed, you need to take those new circumstances into account before a decision to privatize is made." Three days later, the Treasury Department proceeded to file the prospectus for the sale of USEC with the SEC, starting the countdown to the sale of USEC shares to private investors.< 3 > Domenici never received an answer to his letter.
If the president's highest national security advisor could, or would, do nothing, Secretary Rubin should have been in a position to weigh the foreign policy implications of USEC privatization against the domestic forces promoting privatization. But on June 24, Rubin delegated to the undersecretary for domestic finance the necessary authority for all matters relating to the privatization of USEC.< 4 > Whatever Rubin's reasons, he delegated the decision-making authority to the government's leading cheerleader for USEC privatization, a move that had the full support of more than 60 Wall Street investment firms set to profit from the sale of USEC.
The June 29 SEC filing confirmed not only the huge size of USEC's uranium stockpile, but also the fact that USEC was stockpiling additional uranium at one of the plants it was leasing from DOE by a process called "underfeeding."< 5 > To make matters worse, the SEC filing committed USEC to sell more than 60 million pounds of uranium on an accelerated schedule, before July 2005. A subsequent leak of an internal USEC planning document revealed plans to sell nearly 90 million pounds in this period, reaching a peak level of more than 22 million pounds in 2002.< 6 > If USEC and its administration supporters had intended to sabotage Russia's pending agreement with the three uranium companies, they could not have done more. USEC's planned sales totally changed the economics of any commercial deal to buy and hold Russian uranium. Not only would the holding time, and thus holding costs, increase, but the ultimate price received would be lower because of the additional supply to the market.
Perhaps coincidentally, DOE, under pressure from OMB (which strongly supported USEC privatization and DOE uranium transfers to the company), advanced a proposal in May to sell about 30 million pounds of its uranium inventories (in addition to that already transferred to USEC) between 1998 and 2003. New projections of uranium prices by industry analysts and the independent Energy Information Administration soon showed reductions of up to 40 percent in future uranium prices.< 7 > Not surprisingly, in the face of USEC plans and DOE uncertainties, the three Western companies re evaluated the draft agreement and informed Russian authorities it would have to be revised.
As USEC's privatization moved forward, Russia also made clear its serious reservations about the future of the HEU deal. On July 17, Russian Minister of Atomic Energy Yevgeniy Adamov wrote a letter to Domenici, who had visited Moscow in early July and discussed the deal with Russian officials. Adamov wrote:
We are not sure that after actual privatization USEC as a private company will be able to fulfill its commitments of the U.S. executive agent under this Agreement and ensure further acceptance and full payment for the low enriched uranium supplied…. We think that this constitutes deviation of the U.S. Party from the implementation of agreed provisions of the Agreement and affect its fulfillment. In such situation Russia will bear significant financial losses and this will result in strengthening the negative reaction of the Russian legislators both with respect to the implementation of this Agreement and other arrangements with the USA on the issues of nuclear arms control.
Adamov was undoubtedly referring to the opposition in the Russia Duma (the lower house of parliament) to the ratification of START II, to intrusive transparency and security measures, and pending legislation to end the HEU deal itself. Adamov's warning, which foreshadowed Yeltsin's threat to end the deal at the upcoming Moscow summit, should have made the dangers clear to the United States.
Additional interagency meetings on the HEU deal broke down because OMB officials insisted that President Clinton had approved a go ahead on privatization on July 25, 1997, and had not altered this order. In fact, Clinton reportedly had read a press article questioning privatization and forwarded it to his advisors, asking: "Are we sure we are doing the right thing?" Despite U.S. officials' prior knowledge of the impending problem and sober warnings from responsible Russian officials, the privatization juggernaut plowed on, raising questions about the source of the pressure to proceed at any cost, including U.S. national security interests. On July 28, USEC became a private company.
The Current Situation
At the Moscow summit, Clinton managed to dissuade Yeltsin from withdrawing from the HEU deal by assuring him that the United States would find a solution to the problems. Adamov and Energy Secretary Bill Richardson were appointed to coordinate the effort. However, Richardson was soon handicapped by differences within the administration about how to deal with the uranium feed issue. For a long time, White House officials steadfastly refused to consider a U.S. purchase of any part of the uranium feed component, arguing that Moscow must recognize that market circumstances had changed (even if the United States changed them) and therefore must settle for much less money from commercial buyers. In effect, these officials contended that the United States had no responsibility under the government-to-government agreement, and that Russia was on its own in the commercial implementation of the HEU deal.
This position arises from a fundamentally flawed assumption about the HEU deal. When it was first proposed, it was thought that the HEU deal would be "budget-neutral." At that time, it was the U.S. government, through DOE, that was to purchase the Russian LEU. DOE would then resell the LEU without requiring an appropriation by a Congress that was trying to balance the U.S. federal budget. It was thus politically and budgetarily necessary to assert that DOE would incur no costs when it entered into the contract. In fact, under government accounting rules for the enrichment enterprise, the HEU deal would not only be budget-neutral, but "profitable." The price the United States would pay for the uranium content of the Russian LEU would be recovered by reduced costs (according to government accounting rules at least) from overfeeding the enrichment plants, and the price paid for the SWUs would be far below the full-cost recovery values attributed to operation of the enrichment plants.
In privatizing the U.S. enrichment enterprise and transferring large amounts of uranium, administration officials themselves destroyed the budget neutrality of the HEU deal. The transfer of below-market-value electricity supplies to the new government corporation and the failure to charge a capital cost per SWU for use of the enrichment plants not only destroyed any incentive to overfeed and thus buy the uranium, but also subsidized USEC production costs for SWUs so that they were below what was promised Russia. The privatization of USEC compounded this problem, since the private corporation—unlike the government corporation—must make a profit in reselling the Russian SWUs. As discussed below, it is now impossible to pay Russia a fair market value for its enrichment services. Transfer of amounts of uranium greater than was statutorily authorized and aggressive USEC uranium sales plans made it impossible for Russia to sell the uranium from HEU at prices even close to those originally agreed.< 8
If U.S. actions taken in connection with USEC privatization have altered not just the economic factors, but also the fundamental assumptions of the deal, it is important to ask what responsibilities the United States retains under the original government-to-government agreement. In the world of commercial agreements, the answer would be clear: the United States would be obligated to compensate Russia for any lost income. Of course, Russia lost the Cold War and is desperate for money. Perhaps U.S. officials believe Russia will just have to accept the dictates of the victors.
For its part, Russia holds the United States responsible for purchasing the LEU and will not continue to ship without payment. Russia is undoubtedly counting on the importance of the HEU deal to the United States to force a resolution. However, this is a dangerous game of brinkmanship: Washington may push Moscow so far that it is impossible to revive the deal. The inability of policy makers to perceive the consequences of their actions, or inaction, or to act to fix things, does not give confidence. Nor is it easy to identify anyone in Russia who would champion a resumption of the deal once it ended.
Domenici's Proposal
In a September 8 letter to Clinton, Domenici wrestled with this dilemma and came down on the side of prudence. Commenting that he did not think Russia could bend further on terms and that changed political circumstances in Russia would make it difficult for ministries involved to accept much lower prices, Domenici suggested that the United States take partial responsibility for the situation and intervene in a limited way.
Under Domenici's proposal, the United States would, in effect, purchase about 28 million pounds of uranium from Russia's 1997 and 1998 LEU shipments—at a cost of about $300 million—conditional on Moscow reaching a long term commercial agreement for the uranium component of its future deliveries. The United States would hold the Russian uranium and remaining DOE stocks of uranium off the market for 10 years. The hope was that removing an estimated 58 million pounds of uranium from the market (28 million pounds of Russian uranium and 30 million pounds of DOE inventory) would partly reverse the negative market impact of uranium transfers to USEC. Domenici also called for the United States to define terms for returning the uranium component of the LEU to Russia for use in the blending down of HEU or as fuel in Soviet design reactors in Russia and elsewhere.
Essentially, Domenici invited Clinton to join in a bipartisan effort to strengthen the HEU deal and signaled congressional receptiveness to a budget request under the president's emergency appropriation powers. Such a presidential request would not be unusual; Congress finally settled on more than $20 billion of such emergency requests. On September 22, Richardson and Adamov, meeting in Vienna, issued a joint report on the status of implementation of the HEU deal.< 9 The framework proposed in the report was intended to facilitate a purchase agreement between Russia and the Western companies. The framework included most of the Domenici proposal, but no commitment to purchase the uranium from 1997 and 1998 deliveries. Subsequently, after a great debate at high levels, the administration agreed to accept a congressional appropriation of $325 million for the 1997 and 1998 deliveries, which was passed into law on October 21.
The resolution of the uranium problem is still uncertain. Russia continues to insist on prices for its uranium that are now significantly above market and refuses to recognize that commercial buyers will have to pay even lower amounts due to the high costs of holding the uranium until market and trade conditions allow it to be resold. Some in the administration still resist spending the funds authorized by Congress and seem unwilling to accept limits on DOE sales of uranium. Between Russian inflexibility, administration equivocation, and worsening uranium market conditions, it will be hard to reach a commercial deal that relieves the United States of all future responsibility for the HEU deal.
The Future of the Deal
If the uranium problem can be solved, the next challenge to the HEU deal will come from USEC's obligation to pay Russia for the enrichment component of its LEU deliveries. As a government owned corporation, USEC was—at least in principle—under the control of the U.S. government. The United States could ask USEC to pay for Russian enrichment services even if the cost was greater than the company's own cost of production and the corporation made no profit on the Russian SWUs. With privatization, USEC has no strong incentives to continue its role in the HEU deal. In fact, according to revelations in its SEC filing, USEC has a strong incentive to quit its role and even to seek to end the HEU deal.
Moreover, even when it was a government-owned corporation, USEC put its business interests ahead of the HEU deal. In 1996, Russia asked USEC to increase its 1997 purchases of LEU from 10 tons HEU equivalent to 18 tons. According to a protocol, or summary, of discussions in Moscow in July (in which no non-USEC U.S. government official participated), "USEC responded that because of power and labor commitments and level of demand for SWUs, this could not be done in 1997," offering instead to purchase the HEU equivalent of 12 tons.< 10 USEC officials asked U.S. government officials to approve the 12 ton level, but failed to inform them of the Russian offer to deliver more. Russian officials naturally assumed that USEC was speaking on behalf of the U.S. government. Without outside intervention, Washington might never have detected this subversion of the HEU deal.
The dominance of USEC's commercial interests has been amplified by privatization, enrichment market developments and continued ineffective oversight by government officials. According to the company's SEC filing: "Unit costs of SWU purchased under the Russian HEU Contract are substantially higher than the Company's marginal cost of production." Increasingly large volumes of Russian SWUs result in USEC having to operate its two enrichment plants at inefficient levels, raising unit costs on the SWUs that USEC does produce. The plants are most efficient at a production level of about 13 million SWUs per year. USEC sells 11 million to 13 million SWUs per year, but, by next year, Russian LEU deliveries will reach 5.5 million SWUs, meaning that USEC will have to operate its plants far below their optimum production levels.
Meanwhile, USEC's portfolio of old high priced SWU contracts, inherited from DOE, are ending and market prices for new contracts are declining. Under its present contract with Russia, USEC must, in 1999, pay about $88.90 per SWU (including transportation)—more than the current price for new SWU contracts, implying that USEC must market Russian SWUs on which it can make no profit. When USEC was owned by the U.S. government, the United States could simply tell USEC to buy and resell the SWUs even if it did not make a profit. Obviously, privatization has changed this; private shareholders demand a profit.
Thus, the best outcome, by far, for USEC is for the HEU deal to fail entirely; that is, for the Duma or the Russian government, in nationalistic frustration, to stop exporting its sensitive national treasure. Based on the above SWU-cost factors and the higher prices expected for uranium if Russian uranium were kept from the market, USEC's profits would be approximately three times as high as at present if the HEU deal ended completely.< 11 USEC's private investors and the Wall Street firms that still hold stock could see an increase in their return on investment from about 7 percent to 22 percent, or, equivalently, a trebling of share price.
The transfer of large amounts of uranium to USEC by its administration supporters, together with USEC leaks of aggressive sales plans, nearly caused an end to the HEU deal on September 2. Failure of the United States to ensure payment for Russia's uranium may yet guarantee that result. Given declining SWU prices and increased deliveries, it is inevitable that USEC will seek a deferral of Russian SWU purchases and a substantial reduction in the price paid to Russia to ensure the company's profitability. The U.S. government would either have to explain to Russia why it has to sell at a price well below the market price—so a private American company can make a profit—or subsidize that profit from taxpayer funds. Of course, it may not come to such a clear conclusion: there are many ways to frustrate performance of a contract to the point that Russia finds continuing the HEU deal unacceptable.
Solutions
The United States must recognize that its own actions have severely undermined the HEU deal and that the assumption that the deal can be accomplished at no net cost to the United States is a serious mistake. In subsidizing and otherwise biasing USEC financial incentives against the SWU part of the deal and by transferring large amounts of uranium to the corporation without limits on sales, Washington may have increased the value received by the Treasury Department for USEC's sale but created a threat to national security that will most likely require continued expenditure of funds to alleviate. But even if the United States cannot shift the entire cost of the deal to the private sector, the HEU deal is a good buy, perhaps the most cost effective national security initiative in history. Trillions of dollars were spent in the Cold War to counter the threat of tens of thousands of Soviet nuclear weapons. If the United States can forever remove large numbers of such weapons from the world for less than the cost of one B-1 bomber, it will be money well spent.
There are several immediate tasks for the administration. The first is to use the uranium-funding "carrot" provided by Congress to secure the best possible long-term commercial agreement for the sale of Russian uranium beginning in 1999, and to formalize such an agreement in a way that ensures that it will continue in the future. To do so, the United States needs to convince Russian officials to be realistic about market conditions and the low salability of its large volumes of uranium, recognizing the Russian complaint that U.S. actions—from USEC transfers to trade restrictions—have significantly worsened the market situation for Moscow.
The second is to improve U.S. oversight over the HEU deal to a level commensurate with its national importance and U.S. commitments under the intergovernmental agreement. The president appointed an interagency oversight committee, but it has failed to recognize problems and take timely action. This failure is due partly to inadequate staffing and lack of information, partly to the inattention by national security officials preoccupied with other crises, and partly to the lack of influence of national security advisors in the White House policy process.
An immediate need is better information about what is happening in the HEU deal. The memorandum of agreement between the U.S. government and USEC defers excessively to USEC commercial interests.< 12 The United States should not depend on limited self reporting by the corporation about what is happening in the HEU deal. USEC's position, endorsed by the agreement, is that all information connected with the HEU deal is proprietary, preventing public as well as government scrutiny of developments—including those initiated by USEC—that involve profound public and national security interests. In short, privatizing USEC appears to have resulted in the privatization of an important aspect of U.S. national security. At the very least, a U.S. government observer should participate in all negotiations and meetings relating to the HEU deal and all documents should routinely be provided to a more knowledgeable and attentive oversight process.
With regard to the impending SWU problem, the United States could take several actions to alter USEC's economic incentives so that it was more willing to continue the HEU deal. After all, the United States owns the enrichment plants that USEC leases for only a few million dollars a year, and DOE holds the below market-value electricity contracts that benefit the company. One measure would be to increase power costs; another would be to impose an increasing fee per SWU for use of the enrichment plants above a certain level of production, so that USEC would have to pay more to produce SWUs that would otherwise replace Russian SWUs. Such a fee would also correct the artificial incentives that lead USEC to underfeed its enrichment plants and thus accumulate more uranium. If this cannot be done, the United States should itself (through DOE, for instance) replace USEC as executive agent for the HEU deal, taking over direct relations with Russia and reselling Russian SWUs to the highest bidders. If politically necessary, USEC might be given a right of first refusal to purchase the Russian SWUs.
Alternatively, while one must always be wary of institutional invention, creating a government owned corporation that could take on nuclear security tasks on a multi year basis, without the constraints of annual budget cycles and with a certain amount of commercial intelligence and flexibility, offers a number of advantages. Indeed, USEC was not a bad idea in principle; it was largely the pursuit of privatization and inadequate supervision that led to problems. The creation of a USEC II, for example, would provide the United States with a vehicle with which to bargain with both Russia and commercial parties to achieve the most efficient implementation of the HEU deal, including the ability to enter into long term commercial agreements that are impossible for government agencies. Such a government-owned corporation could also take on other post-Cold War tasks, including those relating to plutonium disposition, securing (including by direct purchase) smaller quantities of HEU and plutonium at diverse sites across the former Soviet Union, and other nuclear security matters that require sustained attention and funding.
From 2002 to 2019, Owned a company "Nuclear Security Associates, LLC' - operated out out of home in Concord, Massachusetts.
VANCOUVER, BC -- U3O8 Media Inc., in association with Carriere Consulting Group and Academy & Finance SA, are pleased to present Uranium Investor Forums in Zurich (March 27, 2007) and Geneva, Switzerland (March 29, 2007).
Experts, including Dr. Thomas L. Neff, senior researcher at MIT's Center for International Studies since 1975 and President of Nuclear Security Associates, LLC, will provide valuable information to help investors understand the uranium industry, uranium supply and demand to 2025, and the relation between production and uranium enrichment, and the investment opportunities in enrichment capabilities.
Investors will also hear from experts on subjects ranging from U.S. uranium consumption, factors likely to influence U.S. nuclear power plant construction, the ever-changing political climate toward nuclear energy and what new opportunities have been created by the trend toward nuclear energy in the U.S. International investors will learn how to invest and benefit from these trends by investing in uranium exploration and development companies.
In addition, forum attendees will learn about investment opportunities in promising junior, mid-tier and near-production uranium companies. Senior executives from ten of the fastest growing uranium companies will be on hand to answer investor questions about investing in the burgeoning uranium exploration industry.
"We are pleased to be involved in these important conferences that are designed to assist investors profit from the rapidly growing uranium market," says John Gomez, President U3O8 Media Inc.
"Investors will gain insight on the market from industry experts and have the opportunity to meet with management of some of the world's most dynamic uranium companies."
The ten invited participating companies are Augen Capital Corp. (TSX-V: AUG), Bayswater Uranium Corp. (TSX-V: BAY), Crosshair Exploration & Mining Corp. (TSX-V: CXX), Forum Uranium Corp. (TSX-V: FDC), Forsys Metals Corp., Monster Copper Corp., Powertech Uranium Corp., Strathmore Minerals Corp., Uranium Energy Corp., and Xemplar Energy Corp.
Limited supplies of fuel for nuclear power plants may thwart the renewed and growing interest in nuclear energy in the United States and other nations, says an MIT expert on the industry.
Over the past 20 years, safety concerns dampened all aspects of development of nuclear energy: No new reactors were ordered and there was investment neither in new uranium mines nor in building facilities to produce fuel for existing reactors. Instead, the industry lived off commercial and government inventories, which are now nearly gone. worldwide, uranium production meets only about 65 percent of current reactor requirements.
That shortage of uranium and of processing facilities worldwide leaves a gap between the potential increase in demand for nuclear energy and the ability to supply fuel for it, said Dr. Thomas Neff, a research affiliate at MIT's Center for International Studies.
"Just as large numbers of new reactors are being planned, we are only starting to emerge from 20 years of underinvestment in the production capacity for the nuclear fuel to operate them. There has been a nuclear industry myopia; they didn't take a long-term view," Neff said. For example, only a few years ago uranium inventories were being sold at $10 per pound; the current price is $85 per pound.
Neff has been giving a series of talks at industry meetings and investment conferences around the world about the nature of the fuel supply problem and its implications for the so-called "nuclear renaissance," pointing out both the sharply rising cost of nuclear fuel and the lack of capacity to produce it.
Currently, much of the uranium used by the United States is coming from mines in such countries as Australia, Canada, Namibia, and, most recently, Kazakhstan. Small amounts are mined in the western United States, but the United States is largely reliant on overseas supplies. The United States also relies for half its fuel on Russia under a "swords to ploughshares" deal that Neff originated in 1991. This deal is converting about 20,000 Russian nuclear weapons to fuel for U.S. nuclear power plants, but it ends in 2013, leaving a substantial supply gap for the United States.
Further, China, India, and even Russia have plans for massive deployments of nuclear power and are trying to lock up supplies from countries on which the United States has traditionally relied. As a result, the United States could be the "last one to buy, and it could pay the highest prices, if it can get uranium at all," Neff said. "The take-home message is that if we're going to increase use of nuclear power, we need massive new investments in capacity to mine uranium and facilities to process it."
Mined uranium comes in several forms, or isotopes. For starting a nuclear chain reaction in a reactor, the only important isotope is uranium-235, which accounts for JUST 7 out of 1000 atoms in the mined product. To fuel a nuclear reactor, the concentration of uranium-235 has to be increased to 40 to 50 out of 1000 atoms. This is done by separating isotopes in an enrichment plant to achieve the higher concentration.
As Neff points out, reactor operators could increase the amount of fuel made from a given amount of natural uranium by buying more enrichment services to recover more uranium-235 atoms. Current enrichment capacity is enough to recover only about 4 out of 7 uranium-235 atoms. Limited uranium supplies could be stretched if industry could recover 5 or 6 of these atoms, but there is not enough processing capacity worldwide to do so.
JPG : [HW000V][GDrive] PDF : [HW000W][GDrive]
"Quick Facts : Thomas is a high school graduate. Current occupation is listed as Clerical/White Collar. Thomas was born on 1943-09-25. Thomas's age is 76. You may also know Thomas as Tl Neff, Thomas Neff, Tom Neff, Thomas L Neff, Tom L Neff, Neff Tl, T Neff. Thomas lives at [REDACTED ON THIS SITE], Jackson, WY 83001-9372. This address has been used for business registration by Harris Capital Strategies LLC and Centennial Advisors LLC. "
NOTE - At least one address was in Concord MA - Must be correct Thomas L Neff
Like most Americans born in the 1940s, Thomas Neff BA ’65 remembers the “duck-and-cover” days. He recalls the siren tests, the Civil Defense ads, the emergency broadcast system, and Life magazine stories about nuclear fallout shelters. This was the national Cold War anxiety that Neff absorbed as a child in Portland, where his father taught at Lewis & Clark.
Even though Neff says Portland was “kind of remote” in the 1950s, “we had to go through all these nuclear attack drills in grade school and high school. At the time, I really didn’t understand how getting under my desk was going to do any good.”
Thomas NeffDecades later, as the Cold War angst of Neff’s youth was defused by détente, a different form of nuclear anxiety emerged. As the Soviet Union broke apart, many feared that cash-strapped Russia would sell or lose control of thousands of “loose nukes” then deployed across the former Soviet Union—and that its underemployed nuclear scientists and technicians would offer their knowledge and skills to the highest bidder. Nuclear weapons expert Rose Gottemoeller—now under secretary of state for arms control and international security—describes American policy-makers in 1991 as fearing “nuclear mayhem.”
For Tom Neff, it was not a time to duck and cover. A scheme he proposed in an October 24, 1991, New York Times op-ed became a win-win solution to the nuclear weapons problem. And not only did he conceive of it, he put himself in a position to pitch it to a key Soviet official—a meeting that came about both by chance and by design.
Neff’s idea was so simple that it was almost dismissed as an impossibility by Washington. In essence, he based his plan on Russia’s economic self-interest. Neff calculated that the highly enriched uranium in a typical nuclear weapon could be “blended down” to make low-enriched fuel for nuclear reactors that was worth about $500,000 per weapon. If the United States were to buy this fuel, the Russians would be motivated to continue guarding their massive arsenal and paying their many nuclear scientists and technicians—not to build and maintain nuclear weapons but to dismantle them.
Under Secretary Gottemoeller calls Thomas Neff “the genius who pulled this whole thing together in a very skillful way. He had the idea, communicated it well, and sold it to top people on both sides.” Neff was “the complete package in terms of crystallizing the concept. Although there were years of implementation work and some difficult issues to work out, the idea itself was inherently so good that it survived all of this. And it has fulfilled its original promise—an amazing nonproliferation program with important benefits for both sides.”
“Thomas Neff was the genius who pulled this whole thing together. He had the idea, communicated it well, and sold it to top people on both sides.”Rose GottemoellerUnder Secretary of State for Arms Control and International Security
During the next 22 years—with Tom Neff’s constant attention —what came to be called the Megatons to Megawatts program actually worked. More than 20,000 Russian warheads—any one of which could have destroyed an American city—were converted into U.S. electricity, a deal ultimately worth $17 billion.
The final shipment of Russian fuel-grade uranium arrived in Baltimore in late 2013. Shortly thereafter, the Bulletin of the Atomic Scientists reported the little-known fact that “nearly half of the uranium burned in U.S. power plants during the past 20 years came from decommissioned Russian weapons.” This fuel supplied roughly 10 percent of all U.S. electricity during that period. And while the United States and Russia continue to spar today in what some have called a new Cold War, those nukes never got loose.
Neff, who is currently writing a book about his experiences, remembers 1950s Portland as a working-class town where “everybody around me was pretty much blue collar, working on just getting through life.” His father taught business courses at Lewis & Clark and was a small-time entrepreneur—starting several businesses and managing an apartment house that he built in nearby Lake Grove (now Lake Oswego).
Tom went to work at an early age, picking berries and beans. “Before migrant labor,” he recalls, “they let school out to pick the crops. By the time you were 12, the school bus would come and take you to the fields. You’d see all your classmates on the bus, and from 7 a.m. to 3 p.m. you’d pick—a nickel a flat for strawberries.”
A good student, Neff graduated from Lake Oswego High School in 1961. He applied to Harvard, but his father wouldn’t fill out the financial aid forms. As a result, Neff ended up living at home and attending Lewis & Clark tuition free due to his father’s position. At the college, he took a wide range of courses while majoring in math and physics. He feels privileged to have had Elvy Fredrickson as a mathematics professor, observing that “she could have been at MIT or Stanford.” (Fredrickson taught at Lewis & Clark from 1946 until 1980. She passed away in 2008.)
A key mentor was Robert Dusenbery, a published poet who built the college’s English department in the decades following World War II, hiring fellow poets William Stafford and Vern Rutsala, both of whom taught Neff. Dusenbery stopped Neff on campus during the fall of his senior year to ask whether he might nominate him for a Danforth Fellowship—a full graduate-school scholarship. It turned out to be Neff’s long-awaited ticket out of Portland. After graduating at the top of his class in 1965, he moved to California to begin a doctoral program in physics at Stanford University
So how does a Cold War kid from Portland end up imagining a key international deal that ends up destroying one-third of the world’s nuclear weapons arsenal? How did Thomas Neff become the right person in the right place at the right time— with such an elegant but practical idea? Looking back, nearly every aspect of his intellectual and social formation seemed to contribute to his being the right person. And every twist of his career seemed to carry him toward the right time and place— his October 19, 1991, encounter with Viktor Mikhailov, deputy minister of atomic power and industry and head of the Soviet nuclear weapons complex.
Academically at Stanford, he says, “I was in way over my head.” (He had actually completed his physics major at Lewis & Clark through self-study and a set of examinations.) The summer before leaving for Palo Alto, he says he acquired the physics books that were being used at Stanford and “worked through them.”
“It was the math I got at Lewis & Clark that saved me,” he says with a nod to Professor Fredrickson, “along with good physical intuition.” He earned a PhD in 1973 and went on to a postdoctoral fellowship at the University of California at Berkeley, planning an academic career.
Yet just as he had the right teachers and mentors at Lewis & Clark, Neff attracted some important attention at Stanford. “Out of the blue one day came something that really changed my life long term,” he says. It was a call from Wolfgang Panofsky, an internationally renowned particle physicist and director of the Stanford Linear Accelerator. Panofsky (known as “Pief”) was president-elect of the American Physical Society (APS) and was looking for an executive assistant. Would Neff take the job?
“I thought long and hard about that,” Neff says. “It meant putting my physics career on hold. But it was really about the best thing that ever happened to me.”
The “half-time” job thrust 29-year-old Tom Neff into the world of national science policy. “Pief didn’t have time to be president-elect of the APS, let alone its president, so he would send me to his meetings,” Neff says. “He was also an advisor to various parts of the government and a member of the Association of Presidents of Scientific Societies—where there were all these famous gray-beard guys—so I would go to those meetings for him too. I had to buy a suit for the first time, but I kept wearing my sandals.”
In the course of his work with Panofsky, Neff helped draft the legislation that led to the creation of the Department of Energy. And when Panofsky launched the APS Panel on Public Affairs in 1974, Neff became its program coordinator. In 1975, he moved to the Center for Theoretical Physics at Massachusetts Institute of Technology, where he continued physics research and assisted the next two chairs of the APS panel, Philip Morse and Herman Feshbach. During this period, he also served as chief staff officer for the Ford Foundation’s comprehensive Nuclear Energy Policy Study, which he later helped present to President Jimmy Carter and members of his cabinet.
In 1977, Neff was appointed director of MIT’s International Energy Studies program, a position he held until 1985, when he became a senior member of the institute’s Center for International Studies. Thus, when the time came to find a way to contain and destroy thousands of Soviet nuclear weapons, no one was better positioned to see the big picture than Tom Neff.
The deal wasn’t a slam dunk. But Neff’s Times op-ed, which he had circulated to key actors in advance of publication, got him an invitation to a nongovernmental bilateral meeting between American nuclear scientists and their Soviet counterparts. The Russians, led by Deputy Minister Mikhailov, were in Washington to discuss the technical details of implementing START 1— the historic July 1991 agreement to radically reduce the number of nuclear weapons deployed by the U.S. and Soviet Union.
The Soviet empire was financially ruined and on the brink of falling apart—mere weeks from its December 1991 demise— and the Russians were also in Washington looking for help.
Neff made sure he was in the right place to pitch his idea to the person who mattered. Following a short break in the talks, Neff noticed that Mikhailov had remained in the hallway with his interpreter—chain smoking. Seeing an opportunity to talk to the top Russian, Neff also stayed out of the meeting.
“I approached him in the hall to make my proposal, simply asking if he would be willing to sell fuel derived from [highly enriched uranium] in destroyed weapons to support his program,” Neff writes in a draft of his book. “Mikhailov’s response was that he was interested. I handed him a draft of the op-ed and the summary I had prepared, which Mikhailov folded and put into his suit coat pocket. As I turned to go, he suddenly asked a question through his interpreter: ‘How much could I sell?’ ”
Neff had not anticipated this question—and he had no idea how much highly enriched uranium could be harvested from decommissioned Soviet weapons. “So I said 500 metric tons. Mikhailov thought for a minute and surprised me by saying he thought he could do that.”
Earlier that day, Mikhailov had invited the American scientists to come to Moscow and Kiev in December for further talks, and Neff became part of that delegation. On October 24, his op-ed,
“A Grand Uranium Bargain,” was published. He hoped the idea would take hold in Washington—“that someone in power would actually do something about it, the so-called decision makers,” he says. “My great discovery was that that there aren’t many real decision makers in Washington. But I had met a bunch of Russians. I had their business cards.”
The idea was relatively easy to sell to the Russians, Neff says. In the confusion surrounding the collapse of the Soviet Union, a business deal made more sense than a treaty. Cash could accomplish more in the starving post-Soviet economy than could American diplomacy.
However, in the United States, many were still in a Cold War mindset, even as President George H.W. Bush was declaring that America had “won the Cold War.” Regarding the Russian nukes, the State Department had a different view than the Energy Department, which had a different view than the National Security Council. And few in government, particularly Defense Secretary Dick Cheney, could imagine that the Russians could safely collect and dismantle their own weapons without U.S. assistance.
In the confusion surrounding the collapse of the Soviet Union, a business deal made more sense than a treaty.
Russia’s minister of atomic energy, Aleksandr Rumyantsev (second from left), at a 2002 dinner for Thomas Neff (second from right). Rumyantsev and Neff worked together on the uranium purchase agreement.
“A lot of U.S. government and military people wanted to stick their noses in to tag, seal, and track everything,” Neff says. “That wasn’t possible. The Russians were not going to let in a lot of ‘spies’ to play with their weapons. I figured they would find a way to keep them safe, just to harvest the reward of taking them apart and selling stuff off.”
Trading megatons for megawatts was a way around the diplomatic and geopolitical impasse—but Neff had to make one final adjustment before his idea could get a fair hearing in Washington: He convinced the Russians to propose it. Once a concrete proposal came from the Russian side, the United States was compelled to respond and negotiate. An interagency group concluded that the deal had merit and, after some haggling over quantities and prices, an agreement to “recycle” 500 metric tons of weapons-grade uranium was signed in early 1993. The first shipment of fuel-grade uranium arrived in the United States in 1995.
With his scientific mind and the practical wisdom of his Oregon upbringing, Tom Neff saw an opportunity to propose and propel change. “I think there are always opportunities,” he says. “There are always people who see something that can be fixed. The average college graduate will probably have an opportunity in his or her life to do something that actually improves things.
“But the trick,” he says, “is recognizing it.”
https://www.researchgate.net/scientific-contributions/4201808_Nicola_T_Neff
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"Quick Facts - January 31, 1944 is her birth date. Her age is 76. [REDACTED], Davis, CA is the current address for Nicola. The expected price of renting a two bedrooms in the 95616 zip code is $1,630/month. This is a business registration address for Cultive Franchise LLC and Consolidated Orthopedic Services Inc. Richard Neff and Richard Schultz are connected to this place".