Axios Pro: Energy Policy

January 10, 2024

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1 big thing: Zooming in on the uranium ban

Canisters of enriched uranium

Canisters filled with enriched uranium at the Urenco USA uranium enrichment facility near Eunice, N.M. Photo: Mark Felix/Bloomberg via Getty Images

The Russian uranium ban bill moving on the Hill could both increase operating costs for U.S. nuclear plants and alleviate what experts say is a big long-term security risk, Nick writes.

Why it matters: Russia is the world's largest supplier of enriched uranium, and U.S. nuclear power plants source about one-quarter of their enrichment services from the country.

  • That's a big gap to fill — but lawmakers want the import ban to complement an influx of federal resources intended to bolster domestic production.

How it works: The Prohibiting Russian Uranium Imports Act would ban low-enriched uranium, used in conventional commercial reactors, that comes from Russia.

  • It includes a waiver for energy companies with no "viable" alternative to continue sourcing LEU from Russia through the end of 2027.
  • That doesn't give companies much time in the slow-moving nuclear world. For that reason, some lawmakers have emphasized that the legislation has to be one in a sequence of policies to find new enriched uranium sources.
  • Energy and Commerce ranking member Frank Pallone has said the bill must be paired with efforts to shore up domestic enrichment.
  • It passed the House by voice vote in December after the lawmakers agreed to include the Nuclear Fuel Security Act — which would create a new DOE program for domestic uranium — in the defense authorization.

State of play: Sen. John Barrasso told Nick yesterday that he's still working with Ted Cruz, who's been blocking unanimous passage because of a political dispute with the House.

  • "Not this week," he said. "We haven't figured out how we're going to do that."

What they're saying: "It's really about a holistic, multi-pronged approach to standing up domestic fuel supply," said Rowen Price, a policy advisor on nuclear energy at Third Way.

  • Relying on Russia for nuclear fuel is a "looming instability that we need to take care of," said Jeremy Harrell, chief strategy officer at ClearPath.

Zoom in: The CBO estimates the legislation would increase the price of nuclear fuel by 13% and reduce average operating margins for U.S. reactors.

  • That in turn could increase federal spending under the IIJA's Civil Nuclear Credit Program, per CBO, because more companies would be expected to seek federal financial support.
  • Meanwhile, industry observers expect lawmakers to include nearly $3 billion more for enriched uranium in a national security supplemental — if they can overcome political hurdles on border and foreign aid provisions.

Between the lines: Many of the impacts here are TBD.

  • There are questions about whether Russia might decide to unilaterally stop exports to the U.S. before the waiver period ends.
  • And there are concerns among power companies about whether the Biden administration can stand up programs at DOE quickly enough to boost domestic production by 2028, said one industry source, granted anonymity to speak candidly about the bill.

Since the Russian invasion of Ukraine, "the market has anticipated, or at least acknowledged, the supply chain risk," said Timothy Fox, a managing director at ClearView Energy Partners.

  • Constellation, the biggest U.S. nuclear operator, told lawmakers it has fuel supply secured through 2028.
  • Urenco, which operates the only U.S. enrichment plant, has also said it will increase capacity 15% at its New Mexico facility.
  • "We are committed to meeting increased demand," a company spokesperson said in an email.

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