Quotes of the Day

To a billionaire investor like Warren Buffett, $50 million is pocket change. But when Buffett invested that amount in an unusual project four years ago, he watched it as closely as some of Berkshire Hathaway's biggest holdings.

The project is an international effort to thwart the spread of nuclear weapons. And Buffett believes the return on his modest investment could be vastly more valuable than any of the lucrative stakes he holds in corporate America. That's because Buffett's biggest worry these days isn't that the global economy might collapse, but that terrorists might destroy an American city with a nuclear weapon. "This is the great problem of mankind," Buffett, 80, said in a December interview from his office in Omaha. He had just returned from a meeting with President Obama at the White House, where the official subject had been charitable education grants (Bill and Melinda Gates were also present). But, reflecting the President's shared strong interest in Buffett's pet obsession, he says, "we also talked about the nuclear issue."

Four years after making that initial donation, Buffett recently saw the first dividends come in. On Dec. 5, the International Atomic Energy Agency (IAEA) unanimously approved the creation of a nuclear fuel bank overseen by the U.N. that would offer countries that agree to pursue nonmilitary nuclear programs a guaranteed source of fuel for their atomic reactors. The vote took months of diplomatic wrangling even after funds were raised to match Buffett's original 2006 donation of $50 million, which he offered on the condition that the additional $100 million required to buy the first stockpile of nuclear fuel come from other sources. With the help of an Obama Administration that has put nuclear nonproliferation at the top of its foreign-policy agenda, several countries chipped in — including $32 million from the European Union, $5 million from Norway, $10 million from Kuwait and another $10 million from the United Arab Emirates (which feels threatened by Iran and wants U.S. support for its own nascent nuclear-energy program).

Buffett first got the fuel-bank idea from his friend Sam Nunn, a former Democratic Senator from Georgia who left politics in 1996 and now heads the Nuclear Threat Initiative, a private foundation that works to lock down vulnerable nuclear material around the world. But the concept is not new. Almost since the dawn of the nuclear age, policymakers and scientists have worried about the steady growth of countries (not all of them stable or benevolent) with the ability to enrich raw uranium into a form potent enough to power a nuclear reactor — or, alternatively, to the higher level of enrichment needed to make a nuclear bomb. In fact, it's been on Buffett's mind almost as many years. "I got interested in this in the 1950s," Buffett says. "I was never any star at physics, but when the first atomic bomb was detonated, I was delivering the Washington Post newspapers describing it. And when Einstein came out a few days later and said, 'This changes everything,' I knew it was important."

That's an understatement. The problem is that even countries that claim to want nuclear energy for peaceful purposes also insist they need enrichment equipment and expertise within their own borders. Case in point: Iran. Tehran's leaders have long claimed that their nuclear program poses no international threat because it is for peaceful purposes only. But they also say they need sophisticated enrichment plants with ultra-high-speed centrifuges because they can't rely on the international community for nuclear-fuel supplies. (Tehran often cites the way Germany abandoned a nuclear-reactor project near Bushehr after Iran's 1979 Islamic revolution.)

The U.S. and its allies, as well as many Arab nations, don't believe this claim; a broad consensus exists that Iran is determined to achieve at least the capability to develop nuclear weapons. The Obama White House sees an international fuel bank as a way to call Tehran's bluff. In speeches outlining his nonproliferation agenda, Obama has argued for supporting nuclear programs in countries that forswear bombmaking and domestic enrichment. "That must be the right of every nation that renounces nuclear weapons, especially developing countries embarking on peaceful programs," Obama said in an April 2009 speech in Prague. In an address in Cairo two months later, Obama specifically cited Tehran: "Any nation — including Iran — should have the right to access peaceful nuclear power," he said.

Although it will be many months before the fuel bank is open for business (a location has yet to be chosen, for instance), its advocates claim a major victory. "Preventing the proliferation of enrichment is a big step," says Nunn. "I'm delighted, obviously," says Buffett. Some observers are more skeptical, however. "The existence of the fuel bank won't deter Iran from continuing with its enrichment program," says Mark Hibbs, a nuclear-energy expert with the Carnegie Endowment for International Peace. "Iran spent billions of dollars on this investment and took considerable political risks to make it happen. Because of that enrichment program, Iran sits at the table with the world's powers. By the same logic, the fuel bank on its own merits won't deter other countries — such as Argentina, Brazil, Canada, South Africa, South Korea and Turkey — from giving up the option of enriching uranium sometime in the future. Developing countries are suspicious that the fuel bank is a tool designed by a handful of advanced nuclear countries to discourage the rest from developing nuclear technology themselves."

Still, others remain hopeful that dynamic can be changed. Some, like Buffett and Nunn, see it as an urgent matter of national security. A world in which more and more nations can enrich uranium at home, they contend, is a far more dangerous world. Not only does a domestic uranium-enrichment program allow a country to divert its nuclear fuel to military purposes, it also multiplies the sources from which terrorists or rogue states might steal nuclear material or purchase it from corrupt insiders.

That's why Nunn argues that a fuel bank is just one step toward a long-term goal of putting all the world's nuclear material under IAEA safeguard. "Over time, my belief is that we'll end up with regional enrichment centers where countries pool their resources to make [enrichment] economically viable, and make the process under IAEA safeguard," Nunn says.

That won't be easy. But simply giving up is too dangerous, Buffett argues. The nuclear threats "never go away," Buffet concedes. "So we have to do what we can to minimize it. We can't put the genie back in the bottle — but we can keep that genie contained."

• Michael Crowley
• Warren Buffett's latest project is an international effort to thwart the spread of nuclear weapons, a plan he believes could be more valuable than any of his other holdings