Last November 16, 2023, at the sidelines of the Asia Pacific Economic Cooperation Summit in San Francisco, the United States and the Philippines signed a civil nuclear cooperation agreement relating to the deployment of new nuclear technologies, such as small modular reactors supposedly to advance climate goals and energy security in the Philippines.
Particularly, the US State Department media note states –
This agreement lays out a comprehensive framework for peaceful nuclear cooperation between the Philippines and United States based on a mutual commitment to nuclear nonproliferation and is required by U.S. law to allow for the transfer of nuclear equipment and material for peaceful uses. With access to U.S. material and equipment, the U.S. and the Philippines will be able to work together to deploy advanced new technologies, including small modular reactors, to support climate goals as well as critical energy security and baseload power needs within the Philippines.
Philippine President Ferdinand Marcos Jr supported this statement, stating, “We see nuclear energy becoming a part of the Philippines’ energy mix by 2032 and we are more than happy to pursue this path with the United States.”
He added that nuclear energy is one area where we can show the Philippines-U.S. alliance and partnership truly works.
However, Philippine policymakers should take a more critical look at the state of US nuclear energy, as there are current geopolitical concerns emerging. The US is under significant pressure to remain competitive as the market landscape for new nuclear power opportunities is changing.
The relative decline of US nuclear export competitiveness comes at a time when Russia is boosting its dominance in new markets, and China is doubling down on its efforts to become a global leader.
There are reports that the US is lagging behind other countries in developing new technologies in nuclear power. Some experts have stated that the US is losing out to its major global competitors in the energy sector. Further, the US nuclear power sector requires extensive modernization, as scandals, bureaucracy and environment concerns have delayed the progress of US nuclear technology. As an example of bureaucratic delay, it takes up to 25 years to obtain permission from the US Nuclear Regulatory Commission, on top of the ten-year time framework to construct a nuclear power plant.
In terms of uranium supply, the Philippines can hardly depend on the US for uranium to supply a future Philippine nuclear reactor. According to the US Energy Information Administration, about ninety-percent of uranium used in the US is imported abroad, with forty-seven percent imported from Russia, Kazakhstan and Uzbekistan. As such, it should continue looking for other partners which can provide fully integrated cooperation, from technology, expertise and fuel supply.
Government should also subject to greater scrutiny the US commitment to provide small modular reactors to the Philippines, as one of the most technologically advanced SMR firms had shut down in early November 2023, a full week before the PH-US nuclear cooperation deal was signed. On 9 November 2023, it has been announced that NuScale Power has ended its Utah SMR project, which would have been the first SMR technology to reach commercialization.
The economic feasibility of the agreement also merits skepticism. Nuclear power plants are notorious for their high capital costs and the long timelines required for construction and commissioning. There is a palpable risk that the Philippines could be locked into an expensive, long-term project that may not deliver on its promises of energy security and economic benefit, especially when considering the rapidly decreasing costs of renewable energy technologies.
Moreover, the geopolitical implications of the agreement cannot be ignored. By aligning with the United States in such a strategically significant domain, the Philippines may inadvertently entangle itself in the power dynamics of larger nuclear players, such as Russia and China. This could undermine the Philippines’ own sovereignty and its ability to navigate international relations with autonomy.
With the decline in its competitiveness and the shuttering of one of its foremost SMR projects, the reliability of U.S. nuclear technology support is uncertain. The Philippines might find itself dependent on a partner who cannot guarantee the stability and continuity of technological and material support.
In light of these concerns, the Philippine government’s decision to engage in a nuclear cooperation agreement with the United States should be considered with caution. Policymakers must ensure that this agreement does not compromise the nation’s environmental integrity, economic stability, and sovereignty. It is imperative that all commitments under this deal are thoroughly vetted and that the broader implications of entering the nuclear energy arena are fully understood and addressed.