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The Independent Institute
Commentary

The Latins Go Nuclear


WASHINGTON—While the world was concentrating on Iran’s nuclear drama, some Latin American nations were going nuclear too. Argentina and Brazil have relaunched their nuclear energy programs big time and in Chile, despite President Michelle Bachelet's initial skepticism, officials are beginning to consider that option.

In the case of Brazil and Argentina, it’s all about an old rivalry so bitter that cross-border jokes run something like this: A Brazilian tells an officer that he has run over an Argentine visitor and neglected to inform the victim's family.

“Well done, you might have caused a war if you had told them. You are a pacifist,” the officer replies.

“But when I buried him, he shouted that he was alive,'' explains the contrite Brazilian.

“Don't worry, ” comes the response, “they all lie.”

Brazil, which has the world’s sixth-largest reserves of uranium, recently inaugurated a couple of centrifuges in its enrichment facility at Resende. This plant will feed the country’s two nuclear reactors. At present, those reactors provide 4 percent of the nation’s electricity but President Luiz Inacio Lula da Silva’s plan will significantly expand the nuclear component of the energy matrix with seven new plants to be built over the next 15 years.

Argentina also has two reactors providing 9 percent of the nation’s electricity. But President Nestor Kirchner has announced a $3.5 billion program that includes a third plant, conducting feasibility studies for a fourth, and reopening a uranium enrichment facility at Pilcaniyeu that was closed after a nuclear weapons program was revealed at the end of military rule in 1983.

Both countries say their intentions are benign. Brazil’s centrifuges will only enrich uranium to 3.5 percent U-235, well below the 90 percent concentration needed for weapons. However, military establishments in both countries have a history with nuclear weapons and delivery systems. In the 1970s, Brazil secretly transferred its technology to a military program known as Solimoes. The program was scrapped in 1990 under foreign pressure. In Argentina, the military developed “Condor” strategic missiles until they were decommissioned in the 1990s. Since then, both countries have signed, and complied with, nonproliferation treaties, and military leaders are no longer in power.

I call attention to this because there is no economic logic behind the relaunching of the nuclear programs. It is all about national pride and regional power politics. The energy problems could easily be solved in more economic ways and prevent future tensions.

The reason for natural gas shortages in Argentina is that price controls have caused an investment drought at a time when economic growth has spurred demand for electricity. In the last five years, the electricity capacity has remained at around 17,000 megawatts while the economy has grown strongly. Brazilians, in turn, are worried by Bolivia’s nationalization of energy production—they depend on that country for half of their natural gas consumption. But that is still a small part of the energy mix. For example, the country has announced it will very soon be oil-independent. Thanks to stunning new technology, Brazil's energy giant Petrobras is drilling ultra-deep offshore wells in the Barracuda and Caratinga fields in the Atlantic, east of Rio de Janeiro.

Admittedly, there is a worldwide nuclear energy revival. New plants are being built or renewed in Europe and the U.S. is pursuing an expensive government-funded effort to give nuclear power the kiss of life. Russia, India and others are commissioning new reactors, and so is Australia—with Argentine technology. High oil prices and the fact that nuclear power is clean have helped people overcome the trauma of the Three Mile Island meltdown in the U.S. and, especially, the Chernobyl disaster in Ukraine.

How long will this new fad last? Probably until some new development leads people to say that nuclear power is not so clean after all since despite 60 years of research, no great solution to the disposal of nuclear waste has been found.

Should Latin American governments that have abundant and cheaper energy sources undertake massive programs that could eventually become unpopular? Of course, if private investors want to invest in a nuclear reactor to sell electricity, they should be free to do so. But nuclear plants are not profitable business ventures. It is ironic that such projects are being launched by governments of the same left-wing parties that once denounced their nuclear programs when the military governed their countries.

If the United States, a very wealthy nation, wants to divert resources to subsidize the revival of nuclear energy in the context of a national hysteria about oil, it's a luxury Americans can probably afford. Latin Americans can’t.


Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.

(c) 2006, The Washington Post Writers Group
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