Saturday, April 21, 2007

Visclosky pitches money for nuclear plants over GNEP

Loan guarantees and money for NRC licensing are a home run in the House

The Department of Energy had a bad experience at a House Appropriations hearing earlier this month. Rep. Peter Visclosky (D-In), chairman of the Subcommittee on Energy and Water Development, pushed DOE Acting Undersecretary Dennis Spurgeon to the wall over nuclear energy funding priorities. According to an energy industry trade newsletter, in a Q&A exchange Visclosky got an answer from Spurgeon that if given a choice he'd rather see federal money go for licensing new nuclear plants and loan guarantees than for the Global Nuclear Energy Partnership (GNEP).

It may be that in the sometimes upside down world of Washignton politics this exchange is exactly what Spurgeon wanted from the hearing because he stepped right up to the plate and hit Visclosky's softball pitch out of the park. Spurgeon said, "My number one priority is doing the things that we can do as a government to be a catalyst to help the process of getting more nuclear plants built in the US." In an odd choice of words, or perhaps not since, after all Spurgeon is the top DOE nuclear official, he added, "The criticality of early plants and the certainty of the licensing process are extraordinarily important to reinvigorating our nuclear industry."

GNEP gets tarred with Yucca's brush

GNEP has never been a favorite for funding on the House side. Last year the House Appropriations Committee cut DOE's request of $250M down to $168M. The message has been that getting new nuclear plants built in the near term, e.g., within the next five-to-ten years, is more important than achieving GNEP's spent fuel reprocessing goals over a 20-50 year timeline.

Spurgeon got to put in a plug for GNEP after his earlier lap around the bases. He said the $405M request for GNEP in 2008 would help the US position itself to be a leader in the fields of nuclear energy technologies and nonproliferation initiatives. He added that over the next 15-20 years there will be a "global expansion of nuclear power," and GNEP will help the US be a part of it.

Unhappily for Mr. Spurgeon, his second at-bat was not a hit with Visclosky who said scornfully that GNEP looked to him, "to be another in a long list of over-budget endeavors." He argued DOE should not get money for new programs like GNEP until it can control costs for current ones. Minutes later the committee listened as Edward Sproat, Director of the Yucca Mountain project, said delays in completing it will add costs in the billions of dollars. There were so many causes of delays, both technical and legal, that committee members were probably dizzy by the time he was finished with the list. Some may have recalled the words of the late Everett McKinley Dirkson who said, famously, "A billion here, a billion there, and pretty soon you're talking about real money."

Hobson switches sides on GNEP

There are no proposed GNEP plants in Indiana so Mr. Viscosky can have at them with impunity. Not so for Ohio's Rep. Dave Hobson, an Ohio Republican who chaired the full House Appropriations Committee until the November 2006 elections. At another point in the same hearing, Hobson advocated that DOE expand the mission of the mixed-oxide fuel fabrication plant it plans to build at the Savannah River site in South Carolina to include a GNEP facility. Why he said that is a good question since there are no members of the South Carolina congressional delegation on the appropriations committee.

Another reason it is a good question is that until now Hobson has opposed the MOX plant in its own right, and probably irritated his colleagues in South Carolina for it. He said at the hearing construction of the MOX facility would make sense only if it included the ability to make fuel for fast reactors under GNEP. Spotting an opportunity for a stand-up double, Spurgeon took it telling Hobson the plant could be designed to make MOX fuel and fast reactor fuel.

What's significant about Hobson's pitch to DOE is that in May 2005, according to a report in the Environment and Energy Daily, he asserted the MOX project should be canceled. He wrote, "the elimination of $368 million for construction of the mixed oxide (MOX) fuel project at the Savannah River Site stems from signals that Russia will abandon its similar program, which makes the U.S. program unnecessary." In 2006 Hobson continued to criticize the program saying,

"The Committee has serious reservations about GNEP as proposed by the Administration. The overriding concern is simply that the Department of Energy has failed to provide sufficient detailed information to enable Congress to understand fully all aspects of this initiative, including the cost, schedule, technology development plan, and waste streams from GNEP."

In Washington's world of blue smoke and mirrors when an appropriations committee chairman uses the term "serious reservations," it can usually be rendered into plain English as "we don't believe a word of it." It is a first class euphemism employed to tell a government official Congress will not give a plugged nickel to fund their agency's program.

It isn't clear what turned Hobson around about GNEP, but perhaps the prospect of having a GNEP site or two in his state might be the difference. In fact two of the eleven proposed GNEP sites are in the northern Kentucky and southern Ohio region though neither is in his district. If one goes to Savannah River, as Hobson proposd at the hearing, that leaves one for Ohio.

The two sites in question are the Paducah Uranium Plant and the Portsmouth Reservation. Both proposed GNEP sites pitch the nuclear fuel recycling center and the advanced recycling reactor. What's even more interesting is that USEC, a firm that makes enriched uranium for the nuclear energy industry, has plants in at both sites. Also, as a matter of fact, Mr. Spurgeon was the COO of USEC and other uranium mining and enrichment firms before joining the Department of Energy. Of course you want a guy with this kind of experience running a program like GNEP. Still, the politics of developing multi-billion dollar energy programs in Washington can sometimes get very complicated.

Speaking of politics there's plenty of opposition to the proposed GNEP plant in Piketon, OH, which is part of DOE's nuclear waste cleanup program. Area residents say the cleanup work will never be finished if the GNEP facilities are built there. The cleanup activities are not trivial. GAO estimates that the cleanup will take until 2019 and cost almost $1.6 billion to complete. Maybe Rep. Hobson wants the GNEP advanced reactor fuel facility to go to Savannah River so it won't be put in Ohio? That's not likely. It's an outcome that would not be "happy to see me" news for Rep. Jean Schmidt (R-Oh) who's district includes the Piketon plant.

Hobson's choice to now support the GNEP program, at least in Savannah River or perhaps also in Ohio, is a 180 degree change from his previously strongly worded views. Without putting too fine a point on it, what we have for the moment is a member of the Appropriations Committee who went from "what is it you don't understand about no," to "hey, bring one of those over here." There is nothing like political pork on the menu to bring an appropriations committee member to the table. I guess DOE must have answered his "reservations." Table for two in Ohio for Mr. Hobson coming right up.

Iran's nuclear situation spins in all directions

That was the week that was and there's nothing funny about it

There was a lot of spin this week over Iran's nuclear program. Some of it was machinery and others news fell in the political realm. Not much has changed. Iran is still nuts about nuclear weapons, and the West is still struggling to organize itself to use diplomacy to stop them. A third round of UN sanctions may follow an IAEA report scheduled for late May on Iran's nuclear ambitions. Meantime, here are some current developments.

Iran's centrifuges blow up

Just when Iran claimed it was now processing uranium enrichment on an "industrial scale," the Chief of Iran's atomic agency, Gholam-Reza Aqazadeh, this week confirmed press reports that some of the centrifuges at its nuclear enrichment plant blew up during the enrichment process, with damage ranging from 10 to 20%.

He said, "The uranium enrichment plant in Natanz has been constructed for establishing a factory for 50,000 centrifuges, but it would take between two to four years to install all these centrifuges." The IAEA confirmed the installation and operation of around 1,300 centrifuges in six cascades with 164 centrifuges each, although it was unclear whether all the cascades were fully operational. Aqazadeh claimed that all the centrifuges were made in Iran. Failure of 10-20% of the devices would translate into 130-260 centrifuges that are no longer enriching uranium. While Iran needs thousands of centrifuges to make enough enriched uranium for nuclear weapons, this week it is counting its efforts in the hundreds.

Russia delays completion of Bushehr nuclear plant

Wire services report that while some of Iran's centrifuges were spinning out of control, Russia has announced a new delay in the completion of Iran's Bushehr nuclear power plant. Last month Russia stopped work on the plant when it claimed that Iran had failed to make progress payments of $25M/month. Russia is building the plant for Iran under contract. Iran had tried to shift payment from dollars to Euros. The Russians objected, but relented shortly after the UN Security Council, of which Russia is a voting member, unanimously imposed a second round of sanctions on Iran for its pursuit of enrichment of uranium that could be used to make nuclear weapons., Russia had scheduled shipment of nuclear fuel for the plant six months prior to start-up. Iran does not have its own nuclear fuel and is depending on the Russians for it. Without the fuel the plant is an empty shell and cannot begin operations.

Russia figured out earlier this winter that Iran's desire for nuclear technology led to only one place and that is bomb making. Together with its acquisition of long range missiles from N. Korea, Iran is heading toward being able to target Russian cities. The Kremlin finally gets it.

German newspaper says UN sanctions aren't working

Speaking of things that are spinning the wrong way, Der Spiegel, a leading German newspaper, published a report this week that the UN's second round of sanctions against Iran are not working due to the immense amount of trade European nations have with that country. Turkish diplomat Ertugrul Apakan, speaking at a security conference in Berlin, said the high price of oil is keeping Iran's economy afloat. He added that Iran's biggest European trading partners, Italy and Germany, cannot turn their backs on the business their nations do with Iran.

The newspaper also reported that Iran does not fear a military attack from the US. It reports an attack "could come in handy" for Iran's president Mahmoud Ahmadinejad. To divert attention away from criticism of his regime and problems on the home front, the president "has astutely painted uranium enrichment as a question of national pride."

Der Spiegel reports public dissatisfaction is on the rise with one in four Iranians unemployed, real inflation estimated at close to 20 percent, and the mullahs' nepotism crippling the country. The paper says further sanctions would force large segments of the population to support the president, even if they disapprove of his overconfidence. A military attack is a bad spin with a worse result. It would tip over any political opposition in Iran to its nuclear program into the support column.

In the category of long walks on short piers

The Associated Press reports a former engineer at the nation's largest nuclear power plant has been charged with taking computer access codes and software to Iran and using it to download details of plant control rooms and reactors.

Mohammad Alavi, who worked at the triple-reactor Palo Verde power plant west of Phoenix, was arrested April 9th at Los Angeles International Airport when he arrived on a flight from Iran. Alavi, 49, is a U.S. citizen. He is charged with a single count of violating a trade embargo that prohibits Americans from exporting goods and services to Iran.

According to court records made available to the news media, the software is used for training plant operators, and allows users access to details on the Palo Verde control rooms and the plant layout. In October 2006, the FBI says, the software was used to download training materials to Tehran, using a Palo Verde user identification.

This is clearly a case of a guy who got spun up about Iran's nuclear program, but in effect took a long walk on a short pier. His career is over and a domestic US nuclear utility has some explaining to do about how its software sailed out the door.

Tighten UN sanctions to avoid military conflict

Victor Davis Hanson, a senior fellow at the Hoover Institution, a defense and foreign policy think tank located at Stanford University, has some scary thoughts on why Iran wants to be a nuclear power. Hanson, who is a widely published scholar on modern and ancient history, has some insights into Iran's method and appearance of madness. Iran is mad, Hanson, says, because it's leadership has a vision of greatness rooted in the 7th century

It is understandable why Ahmadinejad might want an arsenal of nuclear missiles. It would allow him to shake down a constant stream of rich European emissaries, pressure the Arab Gulf states to lower oil production, pose as the Persian and Shiite messianic leader of Islamic terrorists, neutralize the influence of the United States in the region—and, of course, destroy Israel. Let no one doubt that a nuclear Iran would end the entire notion of peaceful global adjudication of nuclear proliferation and pose an unending threat to civilization itself.

Carrots, Sticks, and Cue Balls

As for what is to be done, Hanson believes the most effective actions are to pursue more UN sanctions. The next step is for the Europeans to adopt a complete trade embargo to prevent all Iranian access to precision machinery and high technology. That's a tough call because Iran sells Europe a lot of oil and gets all that stuff Hanson is talking about in return.

Dennis Ross, the former US Middle East Envoy, has an idea about how to do it. He writes that "the diplomatic track is slowly having an impact on Iran's leadership, but at a pace that continues to be outstripped by the country's nuclear advances. The key, then, is to find a way to alter the behavior of Iran's rulers more quickly."

Ross says the West should stop offering diplomatic carrots to Iran. It is just too easy for Iran to reject them and move ahead with its nuclear plans. Sticks are what work says Ross.

"Penalties, more than inducements, are the key to altering the Iranian position. When inducements have been put on the table, the Iranians have had little trouble rejecting them. Yet, when even the threat of UN sanctions appeared real, we began to see signs of a sharp internal Iranian debate."

He says sticks won't work, "so long as the Europeans are providing approximately $18 billion in loan guarantees for companies doing business in Iran, the Iranians won't be convinced they are on the brink of seeing their economic lifeline severed."

Engaging Saudi Arabia, which is equally threatened by Iran's desire to have nuclear weapons and long range missiles to deliver them. Ross claims, "Since the Saudis see Iranian nukes as a profound threat, we should be encouraging Riyadh to use its financial clout with the Europeans, the Japanese, and even the Chinese to choke off Iranian access to the international economic system."

I'm skeptical this will work. Getting the insular Saudi kingdom to engage in European diplomatic affairs sounds like a three-bank shot in pool. Every angle increases the degree of complexity as well as the amount of spin you have to put on the action when you hit the cue ball.

Beach Boys, Bush, and Bushmills

Ross and Hanson are on the same page despite their different political perspectives and experiences. The implications of their analysis are that unless Europe closes its collective wallets to Iran, it might open itself to a much bigger set of problems. If diplomacy fails, Hanson thinks the Bush Administration might snap into a madness of its own, lose touch with reality, and order military strikes against Iran. Hanson, who's deep knowledge of the irrational ways wars come into being, has this warning for Iran.

So far the Iranian leader has posed as someone 90 percent crazy and ten percent sane, hoping that in response we would fear his overt madness, grant concessions, and delicately appeal to his small reservoir of reason. But he should understand that if his Western enemies appear 90 percent of the time as children of the Enlightenment, they are still suffused with vestigial traces of the emotional and unpredictable. And military history shows that the irrational ten percent of the Western mind is a lot scarier in the end than anything Islamic fanaticism has to offer.

This is really scary stuff. It implies that if you think Iran is nuts, wait to you see the end game the Bush administration has in mind when diplomacy fails. The political leadership of this country is deeply invested in evangelical visions of their mission on earth enforced by military means.

Here's an example and though it sounds funny it's not. Republican 2008 presidential hopeful John McCain this week crooned the words "Bomb Iran" to a Beach Boys' tune in joking response to a question about any possible US attack over Tehran's nuclear weapons program.

"That old Beach Boys song, Bomb Iran ... bomb, bomb, bomb, bomb," the Vietnam War veteran warbled softly to the band's "Barbara Ann" when he was asked when the United States would send an "airmail message" to Iran. The singing performance during a campaign stop in South Carolina drew laughs from the audience and is seen on the Internet video sharing site YouTube after being posted there.

It's strange, but a military confrontation to promote its "end of time" vision is just what Iran has in mind. If you are reading this late at night, I recommend a double shot of Bushmills before turning in.

CFR - nuclear is not a solution for global warming

More fossil fuel use, and more global warming are likely, for the next 50 years

The Council on Foreign Relations (CFR), a leading policy think tank in Washington, DC, issued a report this week which states that nuclear energy is unlikely to have a major impact on global warming. According to a CFR press release,

"The report argues that nuclear energy, despite its attributes, is unlikely to play a major role in the coming decades in strengthening energy security or in countering the harmful effects of climate change. In particular, the rapid rate of nuclear reactor expansion required to make even a modest reduction in global warming would drive up construction costs and create shortages in building materials, trained personnel, and safety controls. There are also lingering questions over nuclear waste, as well as continued political opposition to siting new plants."

CFR also claims that a rapid expansion of nuclear energy would fail because there aren't enough trained workers and rapid increases in demand for materials would make the plants uneconomical.

To significantly combat climate change in the near term, the “nuclear industry would have to expand at such a rapid rate as to pose serious concerns for how the industry would ensure an adequate supply of reasonably inexpensive reactor-grade construction materials, well-trained technicians, and rigorous safety and security measures.”

CFR noted that its work relies in part on a 2003 MIT study on the future of nuclear energy. The MIT study concludes nuclear energy faces four major competitive obstacles:
  • high costs; perceived safety,
  • environmental, and health effects;
  • the security risks of proliferation; and
  • unanswered questions about managing nuclear waste.
The Nuclear Energy Institute (NEI) took issue with the report and pointed to the participation of an anti-nuclear organization in writing the report's conclusions. NEI complained the report asserts incorrectly that nuclear energy is being positioned as the key answer to global warming. NEI wrote that "nuclear power has to be an option in a balanced portfolio for electricity generation if the U.S. and the world want to reduce emissions."

The Nuclear Energy Institute is also unhappy that their input to the report was ignored. On its blog this week the group noted that NEI's CEO (Skip Bowman) and CNO (Marv Fertel) were on an “Advisory Committee” for this report. NEI says the two executives raised serious objections to the report's conclusions, but apparently the advisory committee members were not asked to "sign off on the report or otherwise endorse it.” Instead, the advisers are identified as a “sounding board” to provide comments on the report after it is drafted. In short, NEI feels it was sidelined in the publication of an influential report that is likely to impact government policy makers.

CFR's President Richard Haass also testified about the report this week before the House Select Committee on Energy Independence and Global Warming. He recommended a series of near-term actions related to oil, coal, and natural gas as measures that would boost the nation's energy supply. He said that US dependence on oil for at least the next 50 years will continue to make the Middle East more important that it should be because of the nation's need for energy security.

While CFR was reporting that nuclear energy is not likely to have a significant impact on global arming, another energy analyst said the world's need for energy will expand regardless of the technologies chosen to meet demand. Jeffrey D. Sachs is director of the Earth Institute at Columbia University, wrote in the May 2007 issue of Scientific American that coal is the answer to meeting rapidly growing demand for electricity.

Low-emission electricity generation will be achieved in part through niche sources such as wind and biofuels. Larger-scale solutions will come from nuclear and solar power. Yet clean coal will be essential. New combustion techniques, combined with carbon capture and sequestration (CCS), offer the prospect of low- or zero-emission coal-fired thermal plants. The incremental costs of ccs may well be as low as one to three cents per kilowatt-hour.

CFR may find a warm welcome in Congress for its findings. However, in Asia it less likely that the report will change minds or government policies. The Uranium Information Center in Australia reported in February 2007 that nuclear energy is a significant factor in the growth plans of the economies in the region.
  • Asia is the only region in the world where electricity generating capacity and specifically nuclear power is growing significantly

  • In East and South Asia there are over 109 nuclear power reactors in operation, 18 under construction and plans to build about a further 110.

  • The greatest growth in nuclear generation is expected in China, Japan, South Korea and India.
In a sarcastic commentary the Financial Times of London chimed in that, "it is perhaps worrying that an industry that employs one Homer Simpson is viewed as the solution to the US energy dilemma." The FT went on to worry, this time for real, that the recent decision by TXU to cancel coal-fired plants and build very large nuclear plants may cause headaches for investors who do not want to wait 10-15 years for their returns.

Overall, the foreign policy wonks at CFR have a dim view of the prospects for nuclear power to impact global warming. Their advice may still travel far in Congress. It is ironic that the reported plans for 110 new nuclear plants in Asia suggest that CFR's global influence on energy issues may run out of gas once it reaches the US Pacific Ocean coastline.

Thursday, April 19, 2007

California keeps ban on building nukes

No nuclear renaissance in Sacramento

The California Assembly killed a bill to remove the three-decade old ban on building nuclear power plants in that state. The Democratic controlled legislature never let the Republican sponsored bill out of committee.

Assemblyman Chuck DeVore, who hails from ultra conservative Orange County, had the rug pulled out from under him by Assemblywoman Loni Hancock who hails from ultra liberal Berkeley. It seems the debate centers on extreme partisan differences born out by geography and constituencies rather than the merits of nuclear power itself. DeVore, a Republican, had about as much chance in California as a Democrat from Sun Valley has in Idaho. Hancock cut off DeVore's pitch to the committee after five minutes according to news media reports.

DeVore called nuclear power the answer to meeting the state's growing demand for electricity without exacerbating the problem of global warming. His measure sought to repeal a 1976 moratorium on building new nuclear reactors in California until the Department of Energy builds a permanent storage facility for nuclear waste. Yucca Mountain has been stalled by technical, legal and political challenges.

DeVorse's opponents, including environmental and anti-nuclear groups, argued that nuclear waste is harmful to the environment, there is no permanent solution for storing spent fuel rods, and nuclear power plants could become targets of terrorism.

"Nuclear technology is the most dangerous technology on earth," said Dan Hirsch, president of the Committee to Bridge the Gap a California-based anti-nuclear watchdog group.

Just prior to the 6-3 committee vote along party lines, Hancock said "We have safe alternatives. We've just started looking at solar energy potential, wind energy potential ... and new alternative fuel sources."

According to the San Francisco Chronicle those sentiments aren't stopping a group of Fresno businessmen who formed an investment group to build a nuclear power plant in the San Joaquin Valley.

The Fresno Nuclear Energy Group LLC signed a letter of intent with UniStar Nuclear Development LLC, a subsidiary of Constellation Energy in Baltimore, to design, build and operate a plant.

John Hutson, the group's chief executive, said the death of DeVore's bill won't deter his group from going forward with its plans. The Fresno group's board is scheduled to meet to consider putting an initiative on the ballot asking voters to repeal the state's nuclear ban.

"The only thing that will stop us will be if the voters say we don't want nuclear power in California," he said.

The Fresno Bee reports proponents of the Fresno plant would face a divided public if they are able to get an initiative on the ballot. Of likely voters, 46% support new nuclear plants and 46% oppose them, according to a July poll by the Public Policy Institute of California.

Given the way the western power grid is set up sooner or later California will use electricity generated by nuclear energy. The only choice that will be left is how much the state will be willing to pay for it.

Tuesday, April 17, 2007

Idaho Academy of Science papers now online

Idaho Samizdat Nuke Notes, an independent blog, is pleased to announce it is now hosting papers from the Idaho Academy of Science, 49th Annual Meeting and Symposium; April 19-21, 2007; held at the Idaho National Laboratory (INL) and located at University Place, Idaho Falls, ID

For information on the conference
Energy for the Future: Human & Ecological Considerations Conference
Phone: (208) 234-7001 E-mail:

The URL for the conference papers is:

All papers are in PDF format for free download.

Sunday, April 15, 2007

Richardson - N. Korea will comply with agreement

Former US envoy Bill Richardson said on Sunday he was optimistic North Korea will begin taking steps to shut down its nuclear program despite failing to meet a promised deadline at the weekend.

Richardson, who served as US ambassador to the United Nations during former president Bill Clinton's administration, said he believed North Korea would allow in UN inspectors and move to shut down a nuclear reactor as part of an international agreement.

"My prediction is that early this week, they will invite the inspectors. They will start the process of shutting down the reactor," said Richardson, governor of New Mexico, in an interview with ABC television.

Did N. Korea take the money and run?

Angry US diplomats think they've lost leverage

North Korea missed a deadline to shut down its main nuclear reactor. What this situation boils down to is that N. Korea got back $25M locked up by the US in a Macao bank. In return, N. Korea was supposed to start shutting down its main reactor for making nuclear reactor fuel. The country got the money, but didn't take actions to keep part of the bargain.

The NY Times reports the agreement that the US signed with North Korea on Feb. 13, in talks that also included China, Russia, Japan and South Korea, gave the North 60 days to respond. According to the terms of the agreement, N. Korea was supposed to do the following by April 13th.

  • Allow international inspectors into the country
  • Allow seals to be put on the Yongbyon plants
  • Stop related nuclear fuel reprocessing operations
  • Account for and surrender its nuclear weapons

Since none of these actions happened the US chief nuclear negotiator, Christopher Hill, may be thinking that it is a case of "take the money and run." Hill, who was in Beijing trying to figure out what to do next, told reporters there that the disarmament deal at present doesn't have "a lot of momentum." Later, he called on the North Koreans to "get moving on their issues."

The Bush Administration is understandably upset because of the appearance of looking like they've been had. The political problem for the US is that critics of the deal with N. Korea, who argued that keeping the $25M was the only leverage the US had are now saying the equivalent of "I told you so."

John Bolton, the former US ambassador to the UN, told the New York Times he hoped N. Korea would do something stupid like violating the the Feb. 13 agreement because it would give Mr. Bush an excuse to renounce the deal. Bolton, who's recess appointment to the UN expired, has been a constant critic from the right of diplomatic initiatives with N. Korea. Bolton had previously warned that returning the money to states that committed fraud "will have a debilitating effect on bringing sanctions against Iran and other rogue states."

The issue of the money is more than just the amount, which is paltry by international standards. What roils the US is the way it was obtained in the first place. Some of the money came from black market arms deals, drug smuggling, and even counterfeiting of US $100 bills. Earleir this year the US government seized more than $45 million in counterfeit $100 bills, known as super notes, that were produced in North Korea with the approval of top officials.

More ammunition for critics of the deal came from an April 2006 hearing where the US Senate Committee on Homeland Security issued a strongly worded description of some of these state-sponsored criminal activities.

A significant source of income that is keeping this malevolent empire solvent derives from a vast criminal network involved in counterfeiting currency and commercial goods, illegal drug production and trafficking, and slave labor.

It raises the questions of whether N. Korea is really a nation state at all or just a family of criminal gangs who also have ambitions to deploy nuclear weapons and long range missiles capable of delivering them. Some analysts think the N. Korean missiles could hit the US. The US takes the threat seriously and is building a anti-missile capability in Alaska specifically to shoot down N. Korean rockets.

As the situation stands today 60 days out from the Six-party agreement, the US has few good options having lost the one key point of leverage that apparently was important to N. Korea. It puts the rest of the terms of the deal on the skids.

What got the agreement in place was China's anger over N. Korea's nuclear test last October. Until then Beijing was diplomatically neutral. The test, which was a fizzle, nevertheless moved China off dead center and into pressuring N. Korea to sign an agreement. N. Korea kicked IAEA inspectors out of the country and quit the Nuclear Nonproliferation Treaty in December 2002. The actions required by the February 2007 six-party agreement are designed to restore international control of the country's nuclear ambitions.

Without leverage the US is back to square one which includes some diplomatic jawboning. Christopher Hill, the now clearly frustrated US envoy, stated the obvious. "It's their turn now. The ball's in their court," he said in Beijing. "We're not happy that they missed this very important deadline." Hill said the U.S. was prepared "to hold on for a few more days" after talks Saturday with his Chinese counterpart, Wu Dawei, who asked the U.S. for patience.

The fact that the N. Koreans got the money and so far have done nothing in return, after making pledges to the US, China, and four other countries, to take serious actions with their nuclear program complicates the prospects for further negotiations. Officially, the US is not happy about the current turn of events. What it means is the six parties to the agreement with N. Korea will have to put their heads together to find new ways to get that country to throttle back its nuclear program.

Hill left China today knowing Beijing has a stake in bringing about nuclear disarmament. "China is the best guarantee that North Korea won't welsh on the deal," he said. Time will tell.