On March 26, we ran a blog post by Sufyan bin Uzayr subtitled: “The U.S., hooked on Russian enriched uranium, is in no position to impose long-term sanctions on Russia.” In other words, collateral damage from sanctions might include an end to Russia supplying the United States with enriched uranium. Bin Uzayr had linked to an article on the U.S. Energy Administration Information website that begins:
Owners and operators of U.S. commercial nuclear power reactors buy uranium in various forms as well as enrichment services from other countries. U.S. nuclear plants purchased 58 million pounds of uranium in 2012 from both domestic and foreign suppliers; 83% of this total was of foreign origin.
An accompanying pie chart shows that, as of 2012, after Canada and the United States, Russia was the third source of foreign uranium at 13%. The question (bearing in mind that I, personally, am opposed to nuclear energy): Can the percentage of enriched uranium that the United States procures from Russia be replaced and at an affordable price?
By way of background, Megatons-to-Megawatts was a program in which high-enriched uranium (HEU) was extracted from Russian warheads and turned into low-enriched uranium (LEU) for nuclear energy, which the United States then bought. That program ended in 2013 and the United States then signed a deal to procure fuel from TENEX, Russia’s nuclear energy provider.
In July 2013, on the occasion of TENEX’s 50th anniversary in the nuclear fuel business, its General Director, Lyudmila Zalimskaya, addressed supplying nuclear fuel to the United States.
For the past five years, TENEX has been waging an active contracting campaign in the U.S. market that resulted in our contract portfolio consisting of thirteen direct and one TENAM-mediated (this is our U.S. subsidiary) long and mid-term contracts with ten U.S. utilities worth nearly $6 billion overall. … There are, of course, contracts stretching beyond 2020, but there aren’t many of them yet.
As for nuclear fuel that be obtained elsewhere, a look at the pie chart referred to above shows the other countries providing enriched uranium to the United States in 2012 were, in descending order, Australia, Kazakhstan, Namibia, Uzbekistan, Niger, Brazil, China, Malawi, Ukraine, and South Africa. Meanwhile, Virginia Uranium, Inc. reports:
There is an almost inexhaustible undeveloped supply of uranium existing the world over, but there is a limited supply of uranium that can be extracted at a reasonable cost. For instance, uranium could be extracted from seawater at approximately $250-$300 per pound. In comparison, some of the new mines in Africa are expected to have a production cost of $45 to $50 per pound, and some mines can produce uranium for as little as $12 per pound.
Typically the lead time for bringing a new uranium mine on line is about ten years. It is conceivable that major shortages could occur in the short term, despite there being ample amounts of uranium in the earth’s crust. In other words, a major supply disruption won’t be corrected quickly because it takes years to finance and build a uranium mining and milling facility.
Reliance on the Russian state-run nuclear company for U.S. nuclear fuel supply poses serious challenges in terms of U.S. energy security. For instance, in the winter of 2008-09, the Russian state-run natural gas company, Gazprom, suddenly cut off all natural gas exports to Eastern Europe for more than a month, leaving millions of homes without heat or electricity in the middle of one of the harshest winters in recent history.
… Given the growing demand for electricity and the number of new reactor builds planned, it is likely that the markets for uranium will only grow fiercer, placing the U.S. in a precarious position indeed if it does not develop domestic uranium deposits.
But when Alice Slater, the New York director of the Nuclear Age Peace Foundation, read bin Uzayr’s post, the notion that the United States was dependent on Russia for enriched uranium raised a red flag for her. She contacted Russell Lowes, Research Director for Safe Energy Analyst, who replied:
I have read a few versions of the Red Book [as Uranium: Resources, Production and Demand, published by the IAEA every two years, is called] over the years, and critiques of that uranium projections book series. There are potential serious supply chain issues in the next 10 years, and beyond, with delays in mine openings, and with increased demand in Asia, and with a potential for hoarding of fuel. A Russian supply chain slowdown or stoppage could put some stress on the overall supply, but that could be alleviated by a speedup in the opening of mines or by the U.S. initiating its own HEU>LEU program.
We also contacted Robert Alvarez, senior scholar of the Institute of Policy Studies focused on nuclear disarmament, environmental, and energy policies. He wrote:
I’m not convinced that the U.S. nuclear plants could be impacted, if the Russian’s decided to cut off enrichment services to the largest reactor fleet in the world.
Even through the “Megatons to Megawatts” program ended recently, and the U.S. Uranium Enrichment Corporation (USEC) continues to lurch towards collapse, there are other enrichment businesses that can fill the vacuum. The most prominent is URENCO a Dutch/German enrichment business operates several facilities, including its most recent in New Mexico. Also, in 2010, the U.S. offered a $2 billion loan guarantee to the French Areva enrichment services to build a new gas centrifuge plant.
If things get tough, the U.S. is sitting on a very large stockpile of UF6 “tails” that still contain enough U-235 that could be re-enriched by URENCO. The U.S. also has a large stockpile of U-235 left over from dismantled weapons, which is being held in reserve and can be blended down in a real pinch.
The other factor is the sagging market for enrichment, in the aftermath of Fukushima and the accelerated closures of reactors in the U.S. due to cheap natural gas.
In part two tomorrow, Michael Mariotte, President of the Nuclear Information and Resource Service, will provides his viewpoint.