Washington (Platts)--12Jun2008

Resolutions introduced Thursday in the US House of Representatives and
the Senate seek to restrict US nuclear power cooperation with Saudi Arabia and
instead encourage the development of solar power there.

Representative Edward Markey of Massachusetts and Senator Charles
Schumer of New York -- both Democrats -- introduced the resolutions to
overturn President Bush's support last month of building new nuclear power in
Saudi Arabia, even though the country is home to the largest oil reserves in
the world. Furthermore, they said that the country should be developing solar
power at a massive scale, given its extremely sunny climate.

Markey worried that handing over such sensitive knowledge to Saudi Arabia
would aid in "fueling a nascent nuclear arms race in the Middle East" since
many believe Iran wants to develop a nuclear weapon despite professing that
their nuclear program is for peaceful purposes like generating electricity.

"A potential Saudi nuclear power program is just as suspicious," he said.
"[Saudi Arabia feels] threatened by the rise of Iran and they want to
guarantee that Saudi Arabia too can play the nuclear game."

Schumer said that he has yet to talk with Majority Leader Harry Reid,
the Nevada Democrat, but he already has reached out to several Republicans
including members of the leadership. Markey, one of House Speaker Nancy
Pelosi's closest allies, said the measure soon will have the support of
at least six Republicans.

The resolutions were made in disapproval of a memorandum of understanding
that Secretary of State Condoleezza Rice and the Saudi Minister of Foreign
Affairs signed on May 16, during Rice's visit to Saudi Arabia.

They would have Congress "affirm the strong and historic ties" between
the US and Saudi Arabia, but disapprove of the MOU. The measures also would
encourage the two nations to "enter into full cooperation in the development
of renewable energy sources in Saudi Arabia, including a solar energy program
that takes advantage of that country's strong solar energy potential."

The resolutions would reiterate the US commitment to non-proliferation of
nuclear weapons and to preventing Iran from acquiring such weapons.

The resolutions would prohibit the US from entering into a nuclear
cooperation agreement with Saudi Arabia, and bar the export or transfer to
Saudi Arabia of "nuclear materials and equipment or sensitive nuclear
technology" and other "nuclear-related items" if "the end user is a nuclear
production or utilization facility, or if the President determines that the
material, equipment, technology, or item may be diverted for use in such a
facility."

Both Markey and Schumer noted the MOU was signed the same day that Bush
was rebuffed in his requests for a large increase in oil production to combat
rising prices. The effort is similar to one Schumer has backed to not allow
the White House to complete a weapons deal with Saudi Arabia unless the
country produces more oil.

"We wanted to show the Saudis that the relationship had to be a two-way
street," he said.

Markey said in an opinion editorial in the Wall Street Journal Tuesday
that "if this Bush nuclear deal moves forward, Saudi Arabia's petrodollars
could flow to the dangerous expansion of nuclear technologies in the most
volatile region of the world."

He said that "by signing this agreement with the US, Saudi Arabia is
warning Iran that two can play the nuclear game."

--Steven Dolley, steven_dolley@platts.com
--Alexander Duncan, alexander_duncan@platts.com