CASE NUMBER: 360

CASE MNEMONIC: ARMENIA

CASE NAME: Armenia and Nuclear Power

  I. Identification
1. The Issue

A.    IDENTIFICATION

1.    The issue.

     In June of 1995, Armenia reopened an aging Russian-built
nuclear power plant closed after a 1988 earthquake that devastated
much of Yerevan, Armenia's capital.  Land-locked Armenia has been
energy starved for years and officials here hope that the
electricity that the plant generates will meet 30% of the countries
energy needs.  Armenia has been crippled by its on going war with
Azerbaijan and its poor trade relations with the rest of its
neighbors.  Many of these same neighbors have protested vehemently
to persuade Armenia to keep the plant closed, due to its unsafe
structure and the potential of future earthquakes.

2.    Description    

     Some observers had suggested that the threat to open these
facilities was just a ploy, to use the threat of a major nuclear
catastrophe to coax its neighbors into restoring trade relations
and help to lift the blockade coming from Azerbaijan.  Armenian
officials have triggered alarm in the past by saying that the
energy crisis has threatened to cut off power to the cooling
system, which in turn would severely impact the nuclear fuel and
radioactive waste stored in the plant.   

     But Armenia is virtually without electricity, and has been in
an energy crisis through most of its history since independence
from the Soviet Union.  Because of this, and poor regional ties,
even some environmentalists within Armenia have sided with Nuclear
Power Plant advocates.  As Mr. Aboivan, an ecologist says,"the
drain and loss of other natural treasures such as Lake Sevan would
be a reality without a power plant, while a mishap at the power
plant is only a possibility."  

     While I was in Armenia in March of 1995, the energy crisis was
obvious.  The city of Yerevan maintained electricity for only two
hours a day, and after 5 o'clock the entire town was dark.  Power
was not the only shortage that made itself known here.  It was very
hard to find quality food, beer and other everyday commodities. 200
miles away in Tblisi, Georgia many of these staples were readily
found.  This is a testament to the contemporary and historical
realities that undermine Armenia's ability to trade for
necessities, and spur its industries. 

     Armenia's desperate situation comes from the fact that it is
landlocked and depends on its neighbors for all of its gas and oil,
while two-thirds of its food, including sugar and wheat, also come
from abroad.  While Armenia was in the Soviet Empire, the problems
were not as great because all exports and imports were centrally 
directed from Moscow.  But now Armenia and its neighbors are all
sovereign powers in a region that has historically been adverse to
both peace and progress.    

     Armenia's geo-political fix starts with the war it continues
to wage with Azerbaijan, its eastern neighbor.  Azerbaijan has in
turn maintained a blockade, and as a result no gas has flowed
through the pipeline nor a carload of food rolled across the rails
crossing Azerbaijan into Armenia.  Armenia must therefore look
elsewhere to find its energy sources.  

      Trains that bring Armenia oil and food from Russia and
Ukraine have to traverse Georgia, Armenia's northern neighbor.  But
that new republic is racked by political instability and
lawlessness, and if the trains are not robbed, Georgian authorities
charge 30 percent of the cargo as a tax. (Bonner 1993, A4). 

     To its south is Iran, a fundamental Islamic state siding with
the Muslim Azerbaijani's.  Formal trade has been discouraged by the
Iranian government, although underground trade has continued, and
formal talks have brought about agreements on providing Armenia
with natural gas.  At the least, trade ties between Iran and
Armenia can be considered strained.   

    Armenia's relationship with its last remaining neighbor has
been infamous, dating back to the early years of this century when
the Turkish Ottoman Empire carried out mass killings of Armenian
civilians, (The Armenian Genocide of 1910) through forced
resettlement, shooting and starvation.  During the war between
Armenia and Azerbaijan, Turkey has supported Azerbaijan and
coincidentally sealed its border with Armenia.  

      The unrest in the region has also discouraged international
investment by both International Agencies and private investors. 
Proposed gas pipelines that would benefit more than one country in
the region have been stalled by civil unrest, from mafia terrorism
and threats to the Georgian government to detrimental government 
strategies in both Armenia and Azerbaijan.  This has also resulted
in the destruction of current pipelines, rail lines and other
sources of energy this region has depended on.  

      As Armenia waits for its fate to change, it continues to wage
war with Azerbaijan, and the energy-starved nation continues to
deplete its own natural resources.  The choice had become stark:
reactivate a nuclear power plant that has been shut down for four
years for safety reasons, or drain water from a lake (Lake Sevan,
their only major source) for hydroelectric power and risk losing
the lake.  Without an alternate energy source, just about everyone
agreed that the Government had to find a means, or thousands of
Armenians could potentially perish.(Bonner 1993, A2)  In the winter
of 1992 it is believed thousands died for lack of food and heat.

      The old Nuclear Plant began to generate 25 percent of
Armenia's electrical needs in 1980.  It produced up to 50 percent
when there were gas and oil shortages.  But the plant was closed in
January 1989 after a major earthquake near the plant.  Mr.
Tashjian, Armenia's Deputy Prime Minister for Energy and Natural
Resource Development, admits that the nuclear power plants in the
Soviet system were not built to Western standards.  He also admits
that more work needs to be done to make the Armenian's more
"earthquake resistant". (Sonni 1995, A7)    

      Although the International Atomic Energy Agency said it
believed the plant was safe, the United States as well as other
Western Governments have objected to its reopening.  Washington
believes the design of the 407-megawatt Metzamor reactor is one of
the world's most dangerous.  There are six other plants with the
same design in Bulgaria, Russia and Slovakia.  What makes Armenia's
even more dangerous is the potential for earthquakes in the
immediate area.       

     Armenia has reacted to these criticisms by imploring that
their plant meets international standards.  It has also complained
that Washington and other international organizations, while
brandishing the plant unfit, have failed to provide them with the
resources or expertise to satisfy Western demands.  Armenia does
receive substantial aid from international financial institutions
such as the the World Bank and IMF, as well as food aid from Europe
and the US.  

      Mr. Hakob Sanasarian, a Member of Parliament and leader of
the country's Green Party has conceded, "it is not easy being an
environmentalist when you're talking to people who are freezing and
starving."  He admits opposition to the plant has become a lonely
fight, because as time has gone on, the situation in Armenia has 
gotten more desperate.  Armenians are ready to take the risks.   

     But at what price does Armenia carry on its seven year war
with Azerbaijan.  The effects of this war have prompted an exodus
that has reduced the country's population of 3.5 million by between
20 and 30 percent.  Many Armenian emigrants have come to the United
States. (New York Times 1995, C18)  Seven times from late January
to mid-March 1993, Azerbaijani saboteurs blew up gas pipelines in
Marneuli, a region of Georgia populated by Azerbaijanis.  The
reality of unabated destruction of energy sources from Georgia,
have been exacerbated by the complete blockade coming from
Azerbaijan and Turkey, and the strained relations with Iran, all as
a result of the war.    

      At present there have been cease-fires and the warming of
trade relationships in the region, but Armenia's claim to the
Nagorno-Karabakh (which is ethnically Armenian) still holds major
importance both to the government and its people.  "We are hungry
because of Karabakh," said an unemployed man buying bread, "but
it's ours.  We will die, but we will not give it to them.(Bonner
1993, A4)  Armenia must decide what is more important, Karobakh's
independence or its own well being.  Today attempts at building a
foundation of peace include an international effort to build a
pipeline that would require cooperation between Armenia and
Azerbaijan.  But without much spirit of compromise between the two
sides, more energy through peace seems a far reach.

3.   Related Cases

KAZAKH case
AZERI case
CHERNOB case
CASPIAN case
MOCHO case
SLOVAK case
MURUROA case
SELLA case
TURKMEN case

4.   Draft Author:  Kenneth C. Baker, December, 1996

II.  LEGAL CLUSTER

5.   Discourse and Status:  DISagreement and INPROGress 

    At present, there are two avenues of discourse contributing to
the precarious environmental situation resulting from the Nuclear
Power Plant.  The first is built on the realities of Armenia's war
with Azerbaijan, and its trade relationships.  Any increase in
other energy sources can only come from outside of Armenia's
borders, it has no other major sources to tap, without causing
irreversible environmental damages.  Because of this, a more
permanent peace must be brokered with Azerbaijan.  Up until now
there have only been tentative cease-fires creating some positive
signs of stability and improved trade relations.  Armenia seems
eager to bring renewed stability to the region, but it has yet to
find a compromise that would appease its nationalist fervor.      
 A lasting recognized peace would open the doors to the foreign
investment needed to build gas pipelines.  It would also help to
end the blockade Armenia has suffered from some of its neighbors,
while enhancing its trade relations with the others.  The end
result would be an increase in energy resources at lower prices,
making Armenia less dependent on the nuclear reactor.   

      The other discourse is also in progress.  This pertains to
the  measures taken to insure safety at the nuclear power plant. 
While many in the West are skeptical about the plants Russian-
design and its ability to withstand an earthquake, Washington has
refused economic aid to upgrade the Medtzamor reactor.  It wants 
to avoid the precedent that might force it to help the six other
plants in Eastern Europe suffering from the same design defects. 
Other international organizations who have offered much criticism
of the plant have been equally apprehensive about giving major aid
or expertise. (Levine 1995, A6)

6.  Forum and Scope:  Armenia and Regional Organizations

     The forum and scope involve Armenia and its immediate trading
partners as well as international organizations who can exert
influence on Armenia's domestic policies.

7.   Decision Breadth:  5 

     While the decision to continue to operate the power plant
legally binds only Armenia as it is a Sovereign country, its four
neighbors feel any hazards created by it could equally affect them,
which would interest them in possible treaties.

8.   Legal Standing: LAW     

      Experts in the West originally thought the threat of opening
the reactor was a foreign policy ploy to solicit more aid.  But
with the desperation felt in the Republic of Armenia, the central
governing body approved the reactor's use.  Armenia would only bind
itself to reversing this decision through treaties made with other
countries resulting in more foreign aid and energy sources (all
decisions concerning energy and environmental policy are made at
the national level).

III. GEOGRAPHIC CLUSTER

9.  Geographic Location

a.   Geographic  Domain:  Mideast
b.   Geographic Site:     North Mideast
c.   Geographic Impact:   Armenia  
                       
10.  Sub-national Factors:  NO
   
  The government of Armenia at the federal level has all legal
authority in policy pertaining to the nuclear power plant.

11.  Type of Habitat:  TEMPERATE 

IV.  TRADE CLUSTER

12.  Type of Measure:  Export Ban 

     A reversal on the ban on exports to Armenia would enhance the
prospects of Armenia reverting to other sources of energy.  In May
of 1995 Iran agreed to supply Armenia with natural gas for the next
twenty years.  In addition Iran agreed to supply it with
electricity, through a transmission line built between them.  This
has improved Armenia's access to international energy sources, but
not nearly enough.

13.  Direct vs. Indirect Impacts:  DIRect

14.  Relation of Measure to Environmental Impact:

a.   Directly Related:   YES (energy resources)
b.   Indirectly Related: YES (other economic sectors)
c.   Not Related:        NO
d.   Related to Process: YES (Pollution land and sea)

     An increase in foreign trade, investment and international aid
could potentially save other natural resources, such as Lake Sevan
which is the largest and most visited lake in Armenia, that are
being drained to make up for the energy shortfall.  It could also
cut down production at the nuclear power plant and ensure that it
runs safer.

15.  Trade Product Identification:  Raw materials, Energy

16.  Economic Data

      In 1993 the population of working age people was 2.1 million,
of whom 1.53 million were employed.  In January of 1994 there were
102,600 registered unemployed, about 6% of the labor force, showing
the unreliability of  government statistics.  After two years of
misery during which its gross domestic product fell by 67%, Armenia
was the only country in the former percent down to 3 percent at the
beginning of 1994.  This turnabout has been attributed to the year
long cease-fire with Azerbaijan and the increased stability in
Georgia opening alternate trade routes.  But as the cease fire has
not given way to lasting peace, neither has it given way to long
lived prosperity.  

      Much of Armenia's chief industries such as chemicals,
building materials and textile mills are very dependent on energy. 
The effects of the shortage on day to day life in cities such as
Yerevan have been equally devastating.  The economy cannot realize
its potential without a consistent energy supply, or increased
access to outside markets.

17.  Degree of Competitive Impact:  High 

      At present, if the nuclear reactor were to be shut down, the
effects on Armenia would be immense.  It would force Armenia to
deplete its other natural resources and would also have a major
effect on its industries.  While the reactor has not solved
Armenia's energy problems, it has given them the potential to
produce more energy.  It has also raised the stakes in their
relationship to the outside world.  Its neighbors have seen the
environmental devastation created by Chernobyl, and for this reason
have been rethinking their trade positions with Armenia.  Either an
accident or a shut down at the reactor could have a major impact on
Armenia's environment and economy.  Alternate energy sources
through trade are the only way to lessen the impact.

18.  Industry Sector:  ENERGY  (NUCLEAR)

19.  Exporters and Importers:  Armenia   

     Armenia imports the majority of its gas and energy resources
from Russia, and Iran.  It could potentially import from other
sources depending on its regional trade relations.  At present
Armenia does not export or import nuclear energy.  In 1995, before
the reactors opening, Armenia did not have the capability to
produce enough electricity for even nominal use, while those
countries around them had ample supply.     

COUNTRY       Electricity Production 1994 

  Armenia          5.7 Kwh  (billions)
  Iran            50.8 Kwh        
  Turkey          71.0 Kwh 
  Russia         876.0 Kwh 
  Azerbaijan      17.5 Kwh 
  Georgia          9.7 Kwh

V.   ENVIRONMENTAL CLUSTER

20.  Environmental Problem Type:  Source and Sink

      An accident at the nuclear power plant would seriously impact
the habitat and species in Armenia and those of its four neighbors. 
It would also create a long lasting pollution impacting the air,
land and sea.
 
21.  Species Information

22.  Resource Impact and Effect:  High and REGULatory

     Regulations put into place to stop the irreversible damage of
Armenian natural resources, such as Lake Sevan, have led to a
greater need for the power plant.  Stricter safety regulations are
now needed at the nuclear power plant to prevent the potential for
catastrophic environmental damage.  The power plant has helped to
lessen the impact on other environmental concerns in Armenia.  An
increase in trade and safety regulations would lessen the reactor's
potential impact immensely.

23.  Urgency and lifetime:  Medium

     The energy crisis led Armenia to a sense of urgency to accept
the risks that go along with running their dilapidated reactor. 
But the risk of nuclear contamination has not been felt deep enough
to lead them with the same sense of urgency in its pursuit of
peace, and through it increased trade.  Neither has it persuaded 
its neighbors enough to provide alternatives.  The nuclear reactor
will be a threat to its environment as long as it is in service. 
The threat can be minimized through an overhaul of the facility,
but as long as there is a threat of earthquakes like the one that
killed 30,000 Armenians in 1988, the reactor can never be deemed 
totally safe.

24.  Substitutes:  LIKE

     There are many alternate sources of energy, but they must be
brought in from outside of Armenia, which has put them and their
neighbors in this precarious situation.

VI.   OTHER FACTORS

25.   Culture:  NO

26.   Human Rights:  NO

27.   Transboundary Issues:  YES   

28.  Relevant Literature

Bonner, Raymond. "Landlocked and alone, Armenia fears the
winter." New York Times, 9 August 1993, A4(N).

Bonner, Raymond. "Armenia amidst wars: environmental puzzles."    
New York Times, 17 August 1993, A1(L).

Bonner, Raymond. "War, blockade and poverty are 'strangling'      
Armenians." New York Times, 16 April 1994, 1(N).

Boudreaux, Richard. "Gas pipeline to Armenia again ruptured by    
blast." Los Angeles Times, 12 February 1993, A4.

Drastamat, Isaryan. "Gateway to oil riches." Bulletin of Atomic   
Scientists 50 (January/February 1994), 30.

Drastamat, Isaryan. "Armenia: until there are no more trees."     
Bulletin of Atomic Scientists 50 (January/February 1994): 28.

Efron, Sonni. "Fuel blockade has Armenia on the ropes." Los      
Angeles Times,  7 February 1993, A1.

Efron, Sonni. "Nuclear plant reopening to cheers from weary      
Armenians." Los Angeles Times, 6 July 1995, A7.

Friar, Erin. "Armenia reopens nuclear plant." Wall Street
Journal, 28 June 1995, A10(E).

Levine, Steve. "Despite U.S. protests, Armenia will restart      
nuclear reactor." New York Times, 24 October 1995, A6(L).

Sneider, Daniel. "Iran, Turkey pick up trade in the war-torn      
Caucases." Christian Science Monitor, 8 June 1995, 7.

Sneider, Daniel. "Armenia considers reviving old reactor shut by  
earthquake." Christian Science Monitor, 19 February 1993, 1.

Economist, "Better than cold (with insufficient energy, Armenia   
is forced to use what may be unsafe reactors)." 331 (April 9,
1994): 54.

New York Times, "Iran agrees to supply Armenia with gas." 9 May   
1995 D4(L).

New York Times, "Could a pipeline deliver peace in a steady      
stream?" 15 February 1995, C18(N).

The Statesman's Yearbook. 1995-1996., St. Martins Press, NY 1995, 
p. 217.