According
to the U.S. Energy Information Administration (click here to go to its website),
U.S. nuclear power plant operators in 2020 purchased 48.9 million pounds of
triuranium octoxide (U3O8, from which uranium is obtained). And 47% of this purchase (22.98 million
pounds) was from Kazakhstan, Russia, and Uzbekistan.
As
of this date, uranium purchases from Russia have not been sanctioned due to
Russia’s invasion of Ukraine. A good
reason for this is that without these imports, U.S. nuclear power plants likely
would have a very difficult time finding other vendors to make up the amount of
purchases made from Kazakhstan, Russia, and Uzbekistan.
Two
countries, Canada and Australia, are large producers of uranium (in 2020 Canada
produced approximately 8.6 million pounds of U3O8 and Australia approximately
13.7 million pounds). Uranium purchases
from Canada and Australia are possible replacements for some of the Kazakhstan,
Russia, and Uzbekistan imports, but probably not enough to replace the Kazakhstan,
Russia, and Uzbekistan imports.
Another
uranium source is increased production by uranium producers in the United
States. However, the U. S. producers
would have to greatly increased their production amounts. In 2020, uranium production in the United States
was approximately 13,000 pounds, which is miniscule compared to the amount of U3O8
needed for purchase by U.S. nuclear power plants. It is not likely that even an increased production
in the United States and increased purchases from Canada and Australia could
replace any time soon what is currently imported from Kazakhstan, Russia, and
Uzbekistan. This seems to be leaving the
United States vulnerable to not meeting its U3O8 purchase needs.
The
continued long-term reliance on Russia (and Kazakhstan and Uzbekistan; two
countries with close ties to Russia and likely strongly influenced by Russia)
seems to be an uncertain and undesirable reliance, giving unfolding
geopolitical situations due to Russia’s invasion of Ukraine.
A
conclusion from the above is that increasing the production of U3O8 in the
United States makes sense. Companies
producing U3O8 in the United States include Cameco; Encore Energy; Energy
Fuels; Laramide Resources; Uranium Energy; and Western Uranium and Vanadium.
As
an added consideration, the Biden 2021-passed infrastructure bill calls for
increases in nuclear power production in the United States, likely to further increase
the demand for uranium. This bill’s call
for increases in nuclear power production is consistent with a global-wide
increased emphasis on using nuclear power to help meet reduction goals in
fossil-fuel based energy. Globally, fifty-two
nuclear reactors were under construction during 2021, reflecting this globally
increased emphasis on nuclear power (and adding to an increasing global need
for U3O8).
