While some of Jordan’s Middle East neighbours are rubbing their hands with delight at the huge influx of money resulting from the high price of oil, Amman is not so lucky. With oil production of less than 30 barrels a day and gas output of less than 25 million cubic feet a day, it is hugely reliant on hydrocarbons imports to meet electricity demand. In 2007, the country’s energy spending accounted for more than 25 per cent of gross domestic product. This year, it is likely to be even higher.
For much of Jordan’s recent history, when it has looked over its borders it has been with gratitude rather than envy. Between 1985 and 2003, the country benefited from hugely subsidised oil imports from Iraq. The trade bartering agreements of which this policy was a part make it difficult to measure how much Jordan saved, but it was a substantial amount. Some locals say the energy was half price, some that it was “practically free”.
What they all agree on is that the end of cheap oil from Iraq brought about by the US-led invasion of the country in 2003 is the main reason they are suffering such high prices at the petrol pumps. Unfortunately, there is no going back. The restructuring of Iraq’s oil industry will be long and hard, and Jordan’s energy problems will not be high on the list of priorities.
After years of dependence, Amman is now taking the future of its energy supply into its own hands. In late 2006, King Abdullah set up a royal energy commission to develop a new energy strategy. This strategy, finally submitted in November 2007, is based on energy conservation and the development of indigenous resources such as oil shale, nuclear power and renewables.
“The basic pillar of the new strategy is decreasing dependency on imported oil, because the high and escalating price, and the fluctuations in price, have a serious impact on Jordan’s economy,” says Khaled Toukan, head of the Jordan Atomic Energy Commission (JAEC).
A series of targets have been agreed, including increasing the share of renewables to 10 per cent of its energy mix by 2020 and reducing per capita energy demand by 20 per cent over the same timescale. But what has been grabbing the headlines in recent weeks is Amman’s aim to provide 30 per cent of Jordan’s power from nuclear energy by 2030. The target, like those for renewable energy, is highly ambitious, but there is a serious commitment from the government, and in recent months its plans have started to produce results.
At the end of June, Amman signed a headline nuclear co-operation agreement with the UK and a memorandum of understanding with Canadian firms SNC-Lavalin and Atomic Energy of Canada. The agreements follow a similar deal with France a month earlier, which is expected to be followed by a more detailed framework agreement by the end of July. The JAEC will also sign accords with China and the US by the end of July, and intergovernmental deals with Russia and South Korea are set to follow soon, says Toukan.
The intergovernmental agreements are intended to pave the way for an estimated $10bn programme to develop Jordan’s extensive uranium reserves and build four nuclear reactors, each with capacity of about 1,000MW.
“It puts the mechanisms in place to allow technical engagement,” says a spokesperson for the UK’s Foreign & Commonwealth Office of the agreement with London.
The next step is for companies to sign direct contracts. “Once the intergovernmental] memorandum of understanding is in place, it is up to individual companies to follow up,” says one UK government official close to the process.
France’s Areva, which has the technology to build reactors and to enrich uranium, is understood to have been party to the talks with Paris, and has also expressed interest in the development of Jordan’s uranium reserves. Two US-designed reactors, built by Westinghouse and a consortium of GE and Hitachi, are also likely to come into contention once an agreement is signed with Washington.
While there are no companies in the UK with reactor technology, Rio Tinto is understood to have expressed interest in mining uranium, while PB Power “will continue to offer independent advice”, according to Alistair Smith, the company’s director of nuclear services .
“Our approach is to maintain an open relationship with all companies who have wide expertise so that when we float a tender for the reactors, we will have the flexibility to choose,” says Toukan.
Jordan’s plentiful uranium reserves and good international standing on non-proliferation mean it is well placed to develop a nuclear power industry. “We have carried out a lot of studies on uranium deposits,” says Maher Hijazin, director general of the Natural Resources Authority. “There are six areas where there might be deposits and one site in the middle of the country has proven reserves of about 70,000 tonnes of uranium oxide. Depending on our budget, there are plans to explore the other five areas or to market them for other companies to explore.”
Given that 10,000 tonnes of oxide will run a 1,000MW nuclear plant for 50 years, Jordan has more than enough resources, and Amman plans to export its surplus following preliminary processing. “Jordan’s uranium reserves make it an attractive prospect,” says Smith.
As a signatory of all the international agreements on nuclear non-proliferation, including the 1998 additional protocol that allows for inspection of any nuclear facilities by the International Atomic Energy Agency (IAEA), there are few political barriers to the development of nuclear power. “Jordan is in good standing with the IAEA and it is a stable country,” says the UK official. “It is not in the same situation as Iran.”
“If they enrich the uranium overseas, there will be no problem,” says Smith. “It is only if they decide to develop their own enrichment capabilities that people will start to worry.”
There are no such plans at the moment, but if multiple plants are eventually built, it will become a more viable option.
This is not to say the programme does not have obstacles. “One problem with nuclear power plants is that you have to run them at full capacity,” says Smith. “So unless you can export power, your capacity has to be no greater than the lowest point of demand throughout the year.”
Another issue is the increasing demand for nuclear plants throughout the world as countries look for alternatives to high-priced hydrocarbons. “Unless you have already demonstrated a strong commitment [to the development of nuclear power], you will not be at the front of the queue,” says Smith. “And if you are not at the front of the queue, you will have to wait at least five years before you can start.”
The third issue is the development of human resources. For the IAEA to give the
go-ahead to a new plant, it must be satisfied that there is sufficient resident expertise to make an informed design choice and to safely operate the plant once it has been built. This will not be easy, but the country is not starting from scratch.
“Jordan has quite a well-respected technical base at the JAEC,” says the UK official.
Amman’s determination to lay the groundwork for its nuclear industry means that while its plans are ambitious, it at least stands a chance of hitting its targets by 2030. Industry sources suggest that although the degree of bureaucracy involved in the process might delay the first reactor beyond the planned 2017 start-up date, a 2020 start date is realistic.
2017 – Planned start date for first nuclear reactor
2020 – Expected start date for first reactor
$10bn – Value of nuclear investment programme