South Korea and the U.S. have agreed to extend their bilateral atomic energy accord by two years after Seoul failed to secure Washington’s consent to develop independent nuclear fuel production capability, officials said Wednesday.

The two countries have been in talks since October 2010 to amend the so-called 123 agreement which was signed in 1965, last revised in 1974 and due to expire next March.

Despite progress in such issues as a joint research project for a new technology called pyroprocessing and support for Korea’s reactor exports, Washington still resists Seoul having its own capability to enrich uranium to low levels and reprocess spent fuel rods, officials here said.

Korea has proposed pyroprocessing and fast reactors as a solution to handle its spent fuel inventory. The technique is also less prone to proliferation because it leaves separated plutonium mixed with safer fissile materials.

“The areas that were discussed the least include stable supply of nuclear fuel and management of spent fuel,” a senior official at the Foreign Ministry told reporters on condition of anonymity due to the sensitivity of the issue.

The two-year extension reflects the subject’s technical complexity and the allies’ “need to come up with a more advanced agreement on some areas and to prevent a deal vacuum resulting from their respective domestic procedures that take a considerable amount of time,” ministry spokesman Cho Tai-young said at a news conference.

To speed up talks and possibly conclude them early, the two countries will meet every three months starting June, he said.

“We will seek various ways of bilateral and multilateral cooperation including a joint study on the nuclear fuel cycle for the pressing issue of spent fuel management,” Cho said.

“The two sides concurred that the agreement’s revision should be made in a way that will strengthen their alliance.”

South Korea argues it needs to peacefully produce its own nuclear fuel to feed its 23 commercial reactors and support its foray into the global atomic energy market.

The outdated deal has spawned public anxiety on the back of radioactive waste of 10,000 tons and counting and subsequent fears of radiation exposure. Storage sites in Gyeongju, North Gyeongsang Province are forecast to reach capacity in 2016.

Korea is a member of the Non-Proliferation Treaty and gets about 40 percent of its electricity from atomic power. In 2009, it won a watershed $20 billion contract to build four reactors in the United Arab Emirates.

The Park Geun-hye government had pushed to strike an “advanced, mutually beneficial” deal before her May summit with U.S. President Barack Obama.

The U.S., however, remains skeptical as reprocessing creates stockpiles of separated plutonium that can be enriched to weapons-grade.

Obama’s crusade for a “nuclear-free world” has also come under threat due to a regional arms race and covert atomic programs by countries like North Korea and Iran.

Adding concerns was a domestic movement from a minority led by former Saenuri Party chair Chung Mong-joon for Korea’s nuclear armament rather than relying on the American nuclear umbrella.

“We are at a delicate moment with respect to the situation with the North and we are also dealing with Iran,” U.S. Secretary of State John Kerry said during his joint press conference early this month in Seoul with Foreign Minister Yun Byung-se.

“(We) are very concerned at this time about not having any ingredients that could alter our approach with respect to either of those.”

Though the decision bought time for Seoul, Washington will likely not make way for a new nuclear capable country given mounting threats of weapons of mass destruction from rogue states and terrorist groups, said Jun Bong-geun, a professor at the state-run Korea National Diplomatic Academy.

“The most urgent task for Korea is to build its recognition as a partner that can work together with the U.S. in the nuclear power plant and nonproliferation fields for the common interests of the international community,” he said in a recent interview with the private East Asia Institute in Seoul.

He also called on Seoul to set up a nuclear policy research center to act as a hub in forming a network of experts who conduct full-scale studies in various related issues.

“Not only will the network offer advice on the government’s overall nuclear policy, but it can also contribute to future negotiations over the long term if it leads to a standing network of specialists from Korea and the U.S.”

By Shin Hyon-hee (heeshin@heraldcorp.com)