After Russia’s invasion of Ukraine began in late February, global energy costs skyrocketed, and U.S. consumers were hit with record high prices at the gas pump.
President Biden banned Russian oil imports and was quick to call for U.S. “energy independence” as Americans felt the sting of inflation rates not seen in four decades due in large part to energy cost increases of 25.6% year-over-year.
“This crisis is a stark reminder,” Biden said in a March 8 press conference from the White House. “To protect our economy over the long term, we need to become energy independent.”
Biden is hardly the first president to champion “energy independence,” and it remains a rallying cry for politicians across the political spectrum. While the U.S. did become a net energy exporter in 2019 and 2020, actually achieving energy independence is more complex than many politicians are willing to admit.
Oil and gas are only one part of the U.S. energy picture. Domestic energy providers still depend on foreign suppliers for key energy resources—and there’s no better example than uranium.
The uranium problem
While nuclear power is often overlooked, nuclear fission reactors account for around 20% of America’s total electricity production each year, and provide a staggering 52% of the country’s carbon-free or “clean” electricity, according to the Office of Nuclear Energy.
Without uranium as a fuel source, nuclear power production wouldn’t be possible, and the U.S. imports roughly 90% of the uranium it uses as fuel. Additionally, almost half of America’s total uranium imports come from Russia and its allies Kazakhstan and Uzbekistan.
While the Biden administration has banned Russian oil imports, it has thus far avoided touching Russian uranium —and for good reason. Replacing current U.S. imports from Russia alone, which represent 16% of U.S. supply, would be quite the challenge.
The U.S. does mine uranium domestically, but in the fourth quarter of 2021, U.S. miners produced only around 10,000 pounds of the critical commodity.
“The U.S. alone needs 45 to 55 million pounds of uranium each year. And I think at its peak over the last two decades, we produced maybe 5 million pounds a year,” Jonathan Hinze, the president of the nuclear market research and analysis firm UxC told Fortune.
Hinze explained how building a new supply of uranium domestically would take years, not months, due to the costly nature of expanding mining operations, obtaining permits, and signing viable sales arrangements with nuclear power providers.
Uranium mining is also incredibly damaging to the environment due to its radioactive nature, according to the EPA, and Native American tribes have stood in firm opposition to new mining operations on their land.
Hundreds of abandoned uranium mines established from the 1950s through the 1980s dot the Navajo reservation. As a result, many Navajo women have high levels of radioactive metal in their systems, according to a recent study by the University of New Mexico.
Then, there’s the lack of U.S.-based uranium enrichment companies. Russia not only supplies the U.S. with uranium, it also enriches up to 20% of the uranium used in U.S. reactors.
“There’s no U.S. company that is actively in enrichment,” Hinze said. “There’s one company [Honeywell] that does what’s called conversion, which is an intermediate step…but that plant has been offline since 2017 and is only coming back next year.”
“I’m not convinced something like pure energy independence is even possible,” Hinze added.
A push for domestic uranium production?
Uranium prices have jumped roughly 30% since the invasion of Ukraine began, and that’s without sanctions on uranium imports from Russia.
The jump is largely a result of speculation from buyers, including the Toronto-based hedge fund Sprott Asset Management LP, which purchased excess supply in the days following Ukraine’s invasion in hopes of making a profit from supply disruptions.
This reality hasn’t stopped a bipartisan group of congressmen from proposing a bill to ban uranium imports from Russia. Rep. Pete Stauber (R-MN) said a ban on Russian uranium would “stop funding for Putin’s brutal war against Ukraine, create jobs for American workers, and secure our national defense” in a press release announcing the bill.
But the U.S. Department of Energy’s top nuclear energy official, Kathryn Huff, said replacing Russian uranium amid a ban on imports would require government spending in excess of $1 billion.
While mining companies and associations including the Uranium Producers of America and the National Mining Association stand in support of the bi-partisan proposal, with inflation at a four-decade high, Americans might not be quite as keen to see their energy costs rise.
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