by C. Alessandro Mauceri –
The embargo imposed by Western countries on Russia has not achieved the desired results. The results of the measures adopted even before the conflict in Ukraine were mild, and the situation has not changed since the beginning of 2022. Western media persist in providing contradictory news on the Russian economy. In February, the International Monetary Fund estimated the economy would contract by 2.3 percentage points. And the World Economic Outlook estimates were limited to growth close to zero: 0.3%. Other analyzes have predicted the collapse of Moscow’s economy. Instead, a few weeks ago, the European Bank for Reconstruction and Development had to revise its estimates upwards and spoke of Russian GDP growth of 1.5% and even 3% next year.
Years of embargo and limitations on trade with Western countries which have not achieved the desired results. There are two reasons: the first is that Russia has reduced trade towards the West but has increased trade with friendly countries in Asia, with China and India alone accounting for 3 billion people. Added to this is that even the countries that imposed these “embargoes”, limitations waved by Western leaders, could not help but continue trade with Russia in important sectors such as energy. And Russia, despite the monstrous expenses due to the war and the internal crisis, has never stopped its growth in some sectors. Surprisingly also thanks to purchases from countries like the USA.
The United States of America has long been looking for an alternative to oil and fossil fuels. At the COP28 underway in Dubai they presented themselves as leaders (together with France) of a coalition of 22 countries thinking of reducing CO2 emissions by using nuclear power. The signatories committed to “work together to advance the global goal of tripling nuclear energy capacity from 2020 to 2050.” Declared objective to meet the commitments for 1.5°C outlined by the IPCC and IEA. But also no longer being slaves to fossil fuels such as oil or natural gas. For this reason, the signatories of the agreement intend to “support the development and construction of nuclear reactors, such as small modular reactors and other advanced reactors for energy production, as well as broader industrial applications for decarbonization, such as the production of hydrogen or synthetic fuels ”. Even Belgium, which has not signed the agreement, seems to be very interested in the development of the atom: it has announced that it will host the first world nuclear summit next March.
Being independent of fossil fuels does not mean being autonomous, much less being free from dependence on Russia. To operate the reactors of nuclear power plants, large quantities of enriched uranium are needed, and even before the war in Ukraine, countries such as the USA purchased almost half of their uranium needs from Russia, as well as from Kazakhstan and Uzbekistan. Two years after the start of the conflict, the USA does not seem to have managed to find alternatives. For this reason, despite the sanctions, they continue to buy enriched uranium from Russia. Many other Western countries are doing the same: after having waved about commercial border closures and embargoes, they continued to buy from Moscow, begging Russia not to interrupt uranium supplies.
The most surprising example is precisely the exchange of this raw material with the USA. According to the Wall Street Journal, in the last year alone, US companies have purchased about a billion dollars’ worth of enriched uranium from Russia. About 25% of all enriched uranium used by America’s nuclear power plant network is supplied by the Russian giant Rosatom. This was admitted in November by the Deputy Secretary for Nuclear Energy at the Department of Energy (DOE), Kathryn Huff, who called it “concerning that approximately 20% of the fuel used by the US nuclear reactor fleet is supplied through enrichment contracts with Russian suppliers”.
There are several countries that mine uranium. But the one used by the power plants must be subjected to “enrichment”, a process that takes place in a limited number of countries. A global market controlled for almost 50% by Russia. For this reason, according to Huff, it is “fundamental to free ourselves from our dependence, especially on Russia. Without intervention, Russia will continue to maintain this market.”
Exchanges of enriched uranium from Russia to the USA are nothing new: the first date back to the last century, at the end of the Cold War, when the Megatons to Megawatts program was launched. To deprive Russia of material that could be used to build atomic weapons, the USA signed an agreement with Russia which envisaged using hundreds of tons of Russian uranium to fuel US nuclear power plants. After the Fukushima disaster many countries decided to suspend the construction of nuclear power plants. This generated the collapse of the enriched uranium market. Russia, however, did not hold back, which made Rosatom more powerful than before, as part of the competition had disappeared. Proof? According to US government data, in the first half of 2023, after a year of war in Ukraine, the US was still forced to buy about 25% of the enriched uranium needed for its plants from Russia.
The new policies wanted by Biden could make the situation worse: Rosatom, thanks to one of its subsidiaries, is the main company in the world capable of supplying large quantities of a new type of fuel called “haleu”, essential for powering the new generation of reactors smaller and more efficient. None of the competitors, namely the French Orano and Urenco or the British, German and Dutch consortium, seem able to offer the same quantity and quality of enriched uranium.
Biden recently asked Congress for over two billion dollars to incentivize US nuclear companies to increase enrichment and conversion capacity. “We really need to increase capacity in that part of the supply chain,” said Maria Korsnick, chief executive of the Nuclear Energy Institute. According to the US Energy Information Agency, there are 93 commercial reactors operating at 54 nuclear power plants in the United States. “Five to 10 contracts need to be signed to build new reactors within the next two to three years if the United States is to meet its 2050 climate goals,” Korsnick said. “Otherwise we will not achieve the commercial take-off needed to get the amount of clean energy we need by 2050.” And to power these plants it may be necessary to buy more and more enriched uranium from Russia. Or, alternatively, start producing it in the USA.
The “nuclear” issue could become explosive for Biden’s election campaign. In the last presidential elections he won by promising voters that he would do the opposite of what Trump, accused of being hyper-nuclear, said. Now, with the presidential elections around the corner, the nuclear issue could prove to be yet another change of direction for Biden. A change that voters may not like: it is no coincidence that Biden and Trump are neck and neck in the polls. Biden’s decision to boost nuclear power and make the US even more dependent on Russia may not please voters. And help cost him the White House.
