If approved, a new legislation may ban Russian uranium imports into American soil.
On Tuesday, Washington Representative Cathy McMorris Rodgers introduced the Prohibiting Russian Uranium Imports Act. The law prohibits imports of low-enriched uranium (LEU) to the U.S. from Russia through 2040.
Before becoming law, both chambers of Congress need to pass the bill and President Joe Biden must sign it.
According to the Congressional Budget Office, the legislation could increase the cost of nuclear fuel by 13 per cent. The bill may cause disruptions in the market, increase the average fuel price for American nuclear reactors and lower their average operating margins.
The law mandates the Department of Commerce to continue administering limitations on LEU imports through 2027. Additionally, the Department of Energy must report to Congress on sources of replacement supplies of uranium and on assistance necessary to expand domestic production.
Estimated budgetary effects would mainly arise from increased spending under the Civil Nuclear Credit Program due to higher nuclear fuel prices. The law includes areas of uncertainty, such as predicting changes in nuclear fuel prices resulting from the bill’s enactment.
The proposed law anticipates future uranium supply contract terms, projects future prices that reactors will receive for the electricity they generate and considers other external factors that could impact reactors’ operations and finances.
Last May, a House committee approved a bill introduced by McMorris banning Russian uranium imports 90 days after enactment. The HR102 bill also allowed a temporary waiver until a specified date.
A Senate panel passed a similar legislation backed by West Virginia Democrat Senator Joe Manchin and Wyoming Republican John Barrasso, who lead the Senate’s Energy and Natural Resources Committee.
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U.S. wants to stop relying on international sources for nuclear fuels
The Biden-Harris administration aims to enrich the country’s domestic production of nuclear fuels and reduce reliance on international sources.
Recently, enCore Energy Corp. (NYSE American: EU) (TSXV: EU) restarted its production pipeline at its South Texas Rosita ISR Uranium Central Processing Plant. The Rosita plant is around 60 miles from Corpus Christi, Texas with a production capacity of 800,000 pounds of triuranium octoxide (U3O8) per year.
However, the country requires more nuclear fuel to transition away from fossil fuels.
After the invasion of Ukraine, the U.S. refrained from banning uranium but banned imports of oil and imposed a price cap on sea-borne exports of crude and oil products.
According to the U.S. Energy Information Administration, the U.S. imported around 14 per cent of its uranium from Russia in 2021, 35 per cent from Kazakhstan and 15 per cent from Canada.
The demand for uranium increases as countries prepare for a carbon-free energy shift, moving away from oil and gas for power. Uranium prices reached a significant high this year with the emergence of small modular reactors and new nuclear power technologies.
natalia@mugglehead.com
