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This deal may cause India to collapse

By Rajeev Srinivasan
September 08, 2008 12:01 IST
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There have been hosannas and hallelujahs aplenty about the fact that the Nuclear Suppliers Group has decided to provide a waiver of sorts to India. The fine print is yet to be deciphered, but already the usual suspects are taking credit for having brought about 'energy security in our time.'

I am reminded of Neville Chamberlain, a British prime minister (his other claim to fame was his ever-present umbrella) returning to the UK from a conclave in Munich, where he had participated in appeasing Germany by giving away the Sudetenland. Chamberlain said: 'My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honour. I believe it is peace for our time... Go home and get a nice quiet sleep.'

He said this on September 30, 1938. Alas for him, on September 1, 1939, Germany invaded Poland, and two days later, Britain declared war on Germany. Famous last words, indeed.

But I am being unfair to poor Chamberlain. He honestly believed that he had achieved something for his country. Not so with the bigwigs of the UPA. It has been abundantly clear for a very long time that the so-called nuclear deal stinks to high heaven, and that interests wholly unrelated to India's energy needs are driving the deal. The UPA knows what they are getting into, and they have been lying continuously to the Indian people.

It would be unseemly for me to name names (not to mention unwise, given the propensity of the UPA to cry 'libel' at the drop of a hat -- fortunately, a New Jersey court just threw out a wholly frivolous case filed by overseas acolytes of the UPA, who I do hope will get slapped with large punitive damages), but circumstantial evidence suggests that Jaswant Singh was not far off the mark when he talked about American 'moles' high up in the Indian government.

The confidential letter from the US State Department to the House Foreign Relations Committee, as publicised by Representative Howard Berman, is refreshingly candid about the real facts behind the deal: To use pithy Americanisms, the Indians are being taken to the cleaners. Being sold a bill of goods. Led to the slaughter. Being totally sold snake-oil, with the active connivance of their leaders.

Perhaps the apt historical analogy is not Chamberlain, but the East India Company. Or better yet, the capitulation to China over Tibet. India gave away its substantial treaty rights in Tibet to China in return for... vague promises of brotherhood. Here India is giving away its hard-won nuclear deterrent, the one thing that prevents the Chinese from running totally rampant in Asia, in return for... honeyed words from the Americans about strategic partnership!

I exaggerate, of course. There must be more. Nehru, being naive, believed in the bhai-bhai thing with China. But today's leaders are hard-boiled, and are doing this for other, very good reasons. What these reasons are, we shall never know, notwithstanding the Right To Information Act. The Indian government is extremely good at obfuscation.

What is being celebrated as a Great Victory (over what I am not sure) at the NSG is a little puzzling. I hate to be the little boy who asked about the Emperor's new clothes, but what exactly is India getting? After all the huffing and puffing, India has now been given the privilege of spending enormous amounts of money -- absolute billions -- to buy nuclear fission reactors and uranium? This is a good thing? Let us remember that the NSG was set up in 1974 as a secret cabal to punish India for its first nuclear test.

There is an old proverb in Malayalam about spending good money to buy a dog that then proceeds to bite you. India is now going to buy all these dangerous fission reactors from the US and France and Japan and spend $30 billion to $40 billion to be left with the possibility of Australians and Americans holding the Damocles' Sword of a disruptions in uranium supplies over us? This is better than being held hostage by OPEC over fossil fuels?

And if all goes well, India will be left holding the bag for absolute mountains of extremely dangerous and long-lived (10,000 years, say) radioactive waste, which we will not be allowed to reprocess in case we might extract something useful out of it. Of course all the reactors and the radioactive waste must be making our friendly neighbourhood terrorists rub their hands with glee in anticipation. Did I mention something about giving someone a stick to beat you with?

I think it should be obvious by now that India has been coerced into de facto accession to the NPT, the CTBT, the FMCT, and all the other alphabet-soup treaties that were set up to keep India muzzled. America's non-proliferation ayatollahs, barring a last-minute reprieve like the US Congress voting down the 123 Agreement (I am tempted to chant 'Berman saranam, Markey saranam,' etc) have accomplished 'cap, rollback, and eliminate'.

The letter leaked by Berman, as well as the fact that Article 2 of the 123 Agreement explicitly states that 'national laws' (read: The Hyde Amendment, with the clever little Barack Obama Amendment -- yes, Virginia, Obama did get his fingers into this pie too) govern the 123 Agreement, clarify that India is at the mercy of any US administration that sees fit to unilaterally abrogate the thing. Remember Tarapur? There was a similar little artifice of domestic legislation that was used to weasel out of a binding international treaty. The 123 Agreement is really not worth the paper it's written on.

Let us note that of the other hold-outs to the NPT, nobody is putting any pressure on Israel to sign anything, and they are getting all the fuel they need from sugar-daddy America; and Pakistan gets everything, including their bombs and their missiles, from their main squeeze China, while minor sugar-daddy America beams indulgently.

The sad part is that none of this does a thing for the only issue that matters, India's energy security. While the rest of the world has, rightly, looked upon the nuclear deal as a non-proliferation issue, the propaganda experts in India have sold it to the gullible public as a way of gaining energy independence. Alas, this is not true at all.

Here are a few facts about energy. I am indebted to, among others, the Centre for Study of Science, Technology and Policy (STEP) in Bangalore for this information.

Present world energy use: 15 terawatt-years per year

Potential availability of energy from different sources (in terawatt-years) (Source: Harvard)

  • Oil and Gas: 3000
  • Coal: 5000
  • Uranium (conventional reactors): 2000
  • Uranium (breeder reactors): 2,000,000
  • Solar: 30,000 (per year)

Do note that last two numbers. One, solar energy accessible per year far exceeds the sum energy available from fossil fuels and uranium-fission reactors in toto, that is, by exhausting them. Two, breeder reactors can leverage thorium (turned into uranium-233) endlessly by creating more fuel than is exhausted, but the technology will take time.

Now, take a look at the amount of energy India generates, and how it is used up (Source: CSTEP and Lawrence Livermore Labs)

Total consumption: 5,721 billion kwh, of which:

  • Lost energy: 3,257 billion kwh
  • Useful energy: 2,364 billion kwh

Generation is from:

  • Hydro: 84
  • Wind: 5
  • Solar: 0
  • Nuclear: 58
  • Bio-fuels: 1682
  • Coal: 1852
  • Natural Gas: 225
  • Petroleum: 1645

Usage is by:

  • Unaccounted electricity: 99
  • Agriculture: 301
  • Residential: 1511
  • Commercial: 132
  • Industrial: 1548
  • Light Vehicles: 132
  • Heavy Vehicles: 330
  • Aircraft: 65
  • Railways: 43

I believe the data is for 2005. What is startling is the enormous amount of wasted energy: more than the amount of useful energy. Besides, unaccounted for electricity is almost the same as the amount of energy used up by all air and railroad traffic in India! Thus, the very first thing that can pay huge dividends would be to get better accounting for energy use and to reduce wastage (as for example due to traffic congestion in cities).

Consider the capital costs of various types of energy: (Source: CSTEP)

  • Natural Gas: $600/kW with 4-10cents/kWh in fuel costs
    • Plus cost of pipelines and LNG terminals
  • Wind: $1200/kW
    • Plus cost of transmission lines from windy regions
  • Hydro: n/a
  • Biomass: n/a
  • Coal: $1135/kW and 4c/kWh in fuel costs
    • With CO2 cleanup: $2601/kW and 22c/kWh in fuel costs
    • Plus cost of railroads and other infrastructure
  • Solar Thermal: $4000/kW
  • Solar Photovoltaic: $6000/kW
  • Nuclear Fission: $3000/kW and 8c/kWh in fuel costs
    • Plus cost of radioactive waste disposal
    • (Source: World Nuclear Association, The Economics of Nuclear Power)

It can be seen that the cost of nuclear power is quite high, even if the costs of waste management are discounted. In addition, there has to be a substantial risk premium for the fact that the raw material is in short supply and is under the control of a cartel. A 'uranium shock' can be far more painful than the recent oil-shock, because it will simply mean the shuttering of a lot of the expensive plants acquired at extortionate prices.

All things considered, including the impact on the environment and carbon footprint, solar is the most sensible route for India. The capital costs for solar will come down significantly as new thin-film technology reduces the manufacturing cost, and conversion efficiency rises -- 40 per cent has been accomplished in the lab. Besides, if you look at the fully loaded cost, that is taking into account the gigantic public outlay already incurred for fossil fuels (as an example, there is a pipeline running 20 km out to see at Cochin Refineries so that large tankers can deliver oil without coming close to shore), solar is currently not very overpriced.

And, of course, you cannot beat the price of fuel: free, no need to get any certificates from the NSG, available in plenty for at least 300 days of the year. If large solar farms are set up in a few places (they may be 10km x 10km in size, and surely this can be put up in arid areas like the Thar desert), then solar energy is likely to be attractive. Besides, there will be economies of scale in manufacturing once demand is seeded by subsidies and tax breaks. Large-scale solar plants are becoming a reality: two giant solar farms, totally 880 MW, have just been approved by Pacific Gas and Electric in California: This is a huge step considering the largest solar plant in the US now is just 14 MW.

In addition, there are technological breakthroughs just around the corner in solar energy, as venture money is flowing into alternative energy. If only India were to invest in solar research and subsidies the billions that the UPA wants to spend on imported white elephant fission technology, India will truly gain energy independence.

The entire nuclear deal is a red-herring and a diversion. It is a colossal blunder; and when this is coming at such an enormous cost -- loss of the independent nuclear deterrent and intrusive inspection of the nuclear setup, which happy proliferator China is not subject to -- this is perhaps the worst act any government has taken since independence.

The UPA is subjecting India to colonialism. The beneficiaries are China, Pakistan, and the US.

This deal may well mark the tipping point that causes India to collapse: Without a nuclear deterrent, India is a sitting duck for Chinese blackmail including the proposed diversion of the Brahmaputra, for Pakistani-fomented insurrections, and Bangladeshi demographic invasion. India must be the very first large State in history that has consciously and voluntarily decided to dismantle itself.

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