The Future of Uranium as Trump Goes Nuclear
WHY YOU SHOULD CARE
Because the U.S. imports three-quarters of its uranium — and Russia is one of its biggest suppliers.
By Nick Fouriezos
With a grim forecast for their industry, many speakers at a recent global uranium symposium exhibited a kind of gallows humor. Take the introductory lines of the conference chair, Paul Goranson, an executive vice president at Energy Fuels, who joked that he was drafted into his unenviable position after he happened to miss a meeting. “A lot of us are still here,” he says dryly. “The problem is, we have a lot more gray hair.”
That was the somber mood last month in Wyoming, which has the largest uranium deposits in the United States. The symposium in Casper for international industry leaders comes at a time when U.S. nuclear energy projects stall and even grind to a halt amid technical mistakes, regulatory delays and financial woes. And after President Donald Trump recently poked the bear with North Korea, the discussion of a nuclear conflict potentially in play for the first time since 1945 has even casual observers reaching a fever pitch of interest.
Whether you love Trump or hate him, he is undeniably good for nuclear power and domestic uranium.
Scott Melbye, executive vice president, Uranium Energy Corp.
Saber rattling alone will have little to do with increasing uranium production. The radioactive product is mostly used for generating energy, so increased interest in yellowcake “doesn’t necessarily lead us to producing more nuclear weapons,” says Christopher Pugsley, co-partner of a Washington, D.C.–based practice that specializes in regulatory policy for radioactive substances. Trump doesn’t have to make a mass shipment of nukes to aid the industry — in fact, U.S. stockpiles peaked in the late ’60s, with more than 30,000 nukes. Due to disarmament efforts, that firepower is expected to drop to 3,620 warheads by 2022, according to a report from the Nuclear Information Project at the Federation of American Scientists.
However, some believe the beleaguered industry could rebound as part of America’s quest for energy independence. In June, Trump gave a speech declaring a plan for “energy dominance.” His executive order mandating a department review of EPA regulations is already eliminating cumbersome, “overlapping dual jurisdictions,” says Pugsley. Trump’s two appointees to the Nuclear Regulatory Commission, both awaiting Senate confirmation, will likely be more favorable to uranium producers. And Trump-appointed EPA chief Scott Pruitt told industry representatives that he would like to reduce wait periods on uranium mine licenses from six years to six months, says Scott Melbye, executive vice president of Uranium Energy Corp. “Whether you love Trump or hate him, he is undeniably good for nuclear power and domestic uranium,” Melbye says.
At the Casper conference, Wyoming governor Matt Mead noted that his state produced 12 million pounds of uranium in 1981, and while it’s still the nation’s top producer, last year the country’s entire output was only 1.6 million pounds. The U.S. imports more than three-quarters of the uranium it uses, mainly from Russia and Canada. As governors from states as disparate as New York and California, Illinois and Hawaii announce ambitious energy goals to become carbon neutral, nuclear remains an affordable, non-CO2-producing option, Mead says: “It’s not like we’re asking people to support the horse-and-buggy industry while cars are being made.”
Still, the challenges are steep. American producers say that public opposition to nuclear plants has hurt demand for their stateside product. There have been no completed nuclear projects in the U.S. since the Three Mile Island accident in 1979. Plus, domestic industry experts gripe, regulations have made their uranium more costly than uranium produced abroad.
It’s not just the U.S. turning its back on the proven, if controversial, power source. In June, South Korea’s new president, Moon Jae-In, vowed to end nuclear power in the country that the World Nuclear Association ranked fifth in nuclear energy output last year. And France, which became the world’s largest net electricity exporter thanks in part to the nuclear plants that supply three-quarters of its energy, outlined plans in 2015 to reduce atomic energy to half its portfolio by 2025.
Meanwhile, uranium producers are biding their time for what they hope will be a turn in the market. Industry insiders expect prices to settle as worldwide supply drops, with 17 million annual pounds of uranium expected to disappear from the global market with the closure of five major mines by 2025. Meanwhile, threats from South Korea and France to decrease their nuclear-generated electricity will likely fade as those countries face the difficulty of such a seismic energy shift, argues Melbye (indeed, French officials have already pushed back their deadline to 2050). And producers expect new markets for uranium in China, with 37 operating reactors and 183 more proposed, and India, with 22 operating reactors and 65 in planning stages.
As a result, uranium producers have adopted a short-term defensive posture which, they hope, will still allow them to scale up once prices rebound. It’s forced them to be creative. Goranson’s outfit, Energy Fuels, a top U.S. producer, has two mines on standby and has reduced output from a third site. In the meantime, it has repurposed its Utah-based White Mesa mill to process copper and vanadium, which is used in steel and titanium alloys and large-scale batteries for renewable energy systems. That flexibility is the company’s “secret weapon,” as Chief Operating Officer Mark Chalmers puts it. Cameco Resources, based in Casper, has curtailed production at its Smith Ranch-Highland mine in Wyoming while doubling down on its project at Cigar Lake in Saskatchewan, Canada, where it expects to produce 18 million pounds of uranium this year, says Brent Berg, the company’s director of U.S. holdings.
Until their moment arrives, expect yellowcake-creating businessmen and politicians to maintain their dark humor. As Dave Miller, the majority leader of the Wyoming House of Representatives, quipped to fellow attendees between sessions at the Casper symposium: “Are we learning anything here? Or are we just patting ourselves on the back for still being alive?”