Political Mining: Industry with Wyoming ties pushes for Trump to make uranium production local again

By on January 31, 2018

 

 

Nuclear fuel pellets are stacked vertically in long metal tubes to power commercial nuclear reactors. There are many steps involved in processing uranium before it is fabricated into nuclear fuel. (PHOTO: Courtesy of Areva via Flickr Creative Commons)

During a week that saw President Donald Trump order tariffs on solar panels, solar panel components and washing machines manufactured overseas, one industry with strong ties to Wyoming — uranium mining — is hoping the administration’s recent foray into more protectionist trade policies can be leveraged to its benefit.

Earlier in the week, Colorado-based Energy Fuels and Ur-Energy asked the U.S. Department of Congress to investigate whether uranium sourced from the world’s largest producers, like Russia, are a national security threat to the United States. The two companies also asked the Trump administration to recalibrate imports of uranium from foreign producers.

The investigation requested by the companies is referred to as a “Section 232 investigation.” A 232 investigation is performed by the U.S. Department of Commerce, and is intended to study the effect of imports — whether they be raw materials or finished goods — on the national security of the U.S. The Trump administration opened 232 investigations on steel and aluminum in 2017 and those reports were recently delivered to the administration, which will now decide how to act.

The tariffs placed on foreign washing machines, solar panels and their components were the administration’s response to the result of a similar type of investigation.

According to the two companies, about 40 of the uranium used in the U.S. is sourced from government owned companies in Russia, Kazakhstan and Uzbekistan. The companies also say less than 5 percent of the uranium used in the U.S. is mined here.

Relying so heavily on foreign nations for uranium may be bad for U.S. national security they assert, since uranium is used by the U.S. military to power naval vessels, and because uranium is a key material used in the production of the weapons-grade fissile material used in nuclear weapons.

According to the two companies, uranium production in countries like Russia and China are expected to increase in the future, implying that even more of the isotope used in the U.S. will be sourced from nations whose friendship with the U.S. is questionable.

“1989 the (Department of Commerce) initiated a Section 232 investigation at the request of the U.S. Department of Energy because of concerns that uranium imports exceeded 37.5% at that time,” A joint news release issued by Energy Fuels and Ur-Energy said. “The problem is far worse now.”

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According to the Nuclear Energy Institute, about 20 percent of electrical energy in the U.S. is produced by nuclear energy, and about 60 percent of the nation’s mix of carbon-free electricity originates at nuclear power plants.

But the dominant sources of the country’s energy production are rapidly changing, and nuclear energy production has essentially been flat since the 1990s, according to the U.S. Government.

The U.S. Energy Information Administration, or EIA — a part of the U.S. Department of Energy — said that in the first quarter of 2017, the amount of power produced by renewable energy sources like wind, solar and hydroelectric surpassed the amount of energy produced by nuclear reactors in the U.S. According to the report, wind and solar production hit all-time highs, and record rainfalls across much of the Western U.S. led to a boon in hydroelectric generation.

“More than 60% of all utility-scale electricity generating capacity that came online in 2016 was from wind and solar technologies,” Mickey Francis of the EIA in the report. “These sources contributed to record high levels of generation from both fuels.”

Overall, the EIA noted a 16 percent increase in wind-derived electricity between March 2016 and 2017, and a 65 percent increase in solar power generation over the same period. Almost half of the nation’s new generation capacity added in 2017 came from renewable energy sources.

Renewable energy sources accounted for about 21 percent of the total energy produced overall in the U.S., very nearly matching the amount of energy produced by nuclear plants, according to the EIA’s figures.

Much of the increase in renewable energy came from states in the West, the EIA says. About 67 percent of hydroelectric power was generated in the West, and about 69 percent of solar power was, according to the agency. Wind energy is more evenly spread across the nation, with about 21 percent coming from Western states.

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Should the companies’ request for a 232 investigation be granted, and the outcome and action by the administration favorable, Wyoming would certainly be affected. But the size of that impact is unclear.

Wyoming led the nation in uranium production between 1995-2015, according to a study by the U.S. Geological Survey, and in 2016 the state produced about two-thirds of the uranium mined nationwide. All uranium currently mined in the state uses a process called in-situ leach. Unlike traditional mining, in-situ leach dissolves uranium ore with an oxygen and carbon dioxide leaching solution that pumped into the ground via high-pressure wells. The process is considered safe and efficient, with a minimum of labor required.

Overall, Wyoming produced 2 million pounds of uranium ore in 2017, according to the EIA. In the late 70s when almost all uranium used in the U.S. was domestically mined, the state produced about 12 million pounds. In the late 70s when more mines were pit or subterranean, the industry employed 5,300 people. In 2017, uranium mining industry accounted for 323 person-years of employment in the state of Wyoming, according to the EIA. Overall, the industry said it paid $24.9 million in salaries and benefits in the state in 2017, and average of nearly $77,000 per person-year.

The bigger benefit to the state would likely be in form of taxes. For the 2 million pounds of uranium ore extracted in the state of Wyoming, the industry paid about $8.1 million to the state, counties and municipalities, according to a survey done by the Wyoming Mining Association.

And though demand for uranium worldwide is expected to grow, it’s unclear what will happen in the U.S. where demand for fissile material has been essentially flat for nearly 30 years.

In the U.S., there are currently four reactors under construction, but the recent retirement of several reactors across the U.S. has resulted in overall lower demand for uranium, the EIA said in a report. Most of the increased demand for uranium is driven by foreign countries. Abroad, there are 60 reactors under construction and 160 planned, according to the Wyoming Mining Association. Yet the association also says uranium prices are depressed due to overproduction and that current market prices make expanded extraction of uranium, “too low for economic production.” PJH


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