Economy 02-05-2024 01:03 2 Views

US Senate Gives Green Light to Russian Uranium Import Ban

In a unanimous decision, the US Senate has greenlit legislation to halt imports of Russian uranium, escalating efforts to disrupt Russia’s activities amidst its ongoing conflict with Ukraine.

The Prohibiting Russian Uranium Imports Act garnered unanimous consent in the Senate and now awaits President Joe Biden’s signature to become law.

The ban, expected to take effect within 90 days of enactment, is also poised to significantly impact the US market, given that the nation relies on imports to fulfill 100 percent of its annual uranium needs.

According to 2023 data from the US Energy Information Administration 12 percent of annual uranium imports originated in Russia, 25 percent was mined in Kazakhstan and 11 percent in Uzbekistan. Russian sources for over 90 percent of its annual uranium consumption.

The bipartisan bill, which received earlier approval from the House of Representatives in December, includes provisions for waivers in the event of domestic supply shortages for nuclear reactors. Moreover, it earmarks US$2.7 billion, previously allocated in legislation, to bolster the development of the domestic uranium processing industry.

Uranium serves as a critical fuel for commercial nuclear reactors, playing a vital role in electricity generation. The US ban on Russian uranium imports mirrors previous actions taken against the nation, such as the prohibition of Russian oil imports following its invasion of Ukraine in 2022, alongside the implementation of price controls on select crude and oil product exports.

The ban on Russian imports, if implemented, is expected to disrupt an estimated US$1 billion annual trade flow to Russia. Replacing this supply could pose a significant challenge and potentially raise the costs of enriched uranium by up to 20 percent.

The proposed statute, set to expire at the end of 2040, also includes provisions allowing the Department of Energy (DOE) to issue waivers authorizing Russian uranium imports up to export limits established in an anti-dumping agreement through 2027.

However, failure to secure these waivers could lead to a significant spike in uranium prices, potentially reaching record highs.

Senator John Barrasso, Wyoming’s Republican senator and top figure on the Senate Energy Committee, emphasized the readiness of states like Wyoming to step in and fill the void left by Russian imports.

‘Our bipartisan legislation will help defund Russia’s war machine, revive American uranium production, and jumpstart investments in America’s nuclear fuel supply chain,’ added the lawmaker in a press release.

President Joe Biden, who recently signed a foreign aid bill channeling significant support to Ukraine, is expected to endorse the legislation banning Russian uranium imports.

Biden administration’s efforts to ramp up domestic uranium supply

Earlier this year the Biden administration announced incentives for private companies to ramp up the production of high-assay low-enriched uranium (HALEU).

The move comes as part of a broader effort to reduce reliance on foreign sources of nuclear fuel and stimulate the growth of the US nuclear energy sector.

Last autumn, a facility in Ohio initiated the nation’s first domestic production of HALEU, albeit at a small scale. Now, with the support of the federal government, efforts are underway to expand domestic production capacity.

The DOE has offered private companies a minimum of US$2 million each to kickstart HALEU production, marking the second phase of a US$500 million allocation from President Biden’s climate-spending law, the Inflation Reduction Act.

“Boosting our domestic uranium supply won’t just advance President Biden’s historic climate agenda, but also increase America’s energy security, create good-paying union jobs, and strengthen our economic competitiveness,” said Ali Zaidi, Biden’s national climate adviser, in a statement earlier this year.

The move to incentivize domestic HALEU production comes amid growing concerns over Russia’s dominant position as a supplier of traditional fuel imports for American utilities. While the US and its allies have imposed sanctions on Russian oil, gas, and mining companies in response to Russia’s actions in Ukraine, the state-owned Rosatom continues to be a significant source of traditional fuel imports.

Edward McGinnis, former chief executive of the fuel-recycling Startup Curio, likewise raised the potential of recycling nuclear waste to complement traditional uranium mining.

He earlier called on the Senate and White House to champion measures to deploy nuclear waste recycling, describing it as a win-win solution that addresses both the nuclear waste problem and the need for domestic fuel production.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

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