/ world today news/ The United States plans to ban the import of Russian uranium for twenty years. At the same time, the United States is now completely dependent on nuclear fuel imports. The consequences for the nuclear market of such an embargo could be even more severe than for the global oil market, experts believe.
A bill to ban the import of low-enriched uranium of Russian origin until 2040 has been approved by the US House of Representatives, news agencies report. The bill proposes to ban the purchase of uranium produced in Russia or by any of the companies registered in Russia.
However, the main point of the bill is different: it proposes to include the possibility of lifting the ban if no other sources of supply are found or “in the interest of the US national interest”. This may be done jointly by the US Secretary of Energy in agreement with the Department of State and the Secretary of Commerce. In addition, the US Department of Energy will be able to issue permits to import Russian uranium in the volumes permitted by current US law.
If this law is passed, the States themselves will suffer the most. “Russia still remains an important supplier of nuclear fuel to the United States and the world market. If the US intervenes so sharply in the nuclear sector, the consequences will be more severe and complex than the consequences for the world oil market after the introduction of oil sanctions. The nuclear market is more focused on long-term contracts than the oil market. Also, the nuclear sector is more concentrated and this is a problem. Russia controls 11-12% of the world’s production capacity in the global oil market, and occupies more than 40% of the market for uranium enrichment services. For the nuclear fuel market, this can be a game with completely unpredictable consequences, first of all for the American market itself,” says Sergey Kondratiev, deputy head of the economic department of the Institute of Energy and Finance.
The United States was once the leader in nuclear power and, along with the Soviet Union, controlled most of the uranium enrichment and nuclear fuel production. But the situation has long been different.
The World Nuclear Association estimates that 17,000 tons of uranium are needed annually to operate U.S. nuclear reactors, but uranium production in the United States itself last year was less than 100 tons. In the USA, only one uranium enrichment plant remains in operation in the state of New Mexico, and it belongs to the European consortium “Urenko” (Great Britain, Germany, the Netherlands). All raw materials are imported. The United States is forced to import fuel, notably from Urenko, which supplies the US with fuel from European plants, and from Rosatom.
According to the expert, the attempt to limit such a large player in the nuclear market as Russia will inevitably lead to an increase in fuel costs and prices around the world, and American consumers will be forced to pay the most.
“We may see a situation similar to the situation in the oil market, when Russian oil began to be sold at a discount after the introduction of sanctions. The new user will enter into contracts for the supply of Russian nuclear fuel at a discount. But because world prices will rise very seriously, even with a discount, our fuel will cost more than the prices that exist now. In fact, the American consumer will pay the highest price for these sanctions,” argued Kondratiev.
At the same time, unlike the oil market, the nuclear market is unlikely to have intermediaries – traders who will resell Russian nuclear fuel to American companies.
“It is a different market where it is difficult to do commercial activities. Given the size of the US market, they will rush around the market and try to find other suppliers. Now that seems like an almost impossible task. Because long-term contracts for decades are in force for fuel supplies. It seems to me that it will be very difficult to find users in the market who are willing to transfer their volumes to the Americans. The current capacity structure does not imply a choice. It was possible in the early 1990s, but a lot has changed since then. There is no such excess capacity in the Western world now,” says the expert from the Institute of Energy and Finance.
It is difficult for the USA to rely even on its friends – the Europeans. “Now France is not fully supplied and depends on supplies from Russia. If French companies start operating in the American market, it will mean even greater dependence of French consumers on Russia. I am not sure that the French government will agree to this, and the US will be ready for this scenario,” says Kondratiev.
In Asian countries, including India, Rosatom is again present. China has its own capacity, but it will be very difficult for the US to reach an agreement with Beijing.
“I don’t believe there will be the kind of global redistribution where everyone agrees to supply uranium to the United States to replace supplies from Russia, and it all happens relatively quickly and on schedule,” says an industry expert.
Therefore, these potential sanctions are rather an element of political bargaining in the US between different political forces. “Manufacturing companies that run nuclear plants in the United States tend to support Republicans. The Democratic Party is more likely to get support from renewable energy companies. Here, the Democrats are likely trying to play the “Russian card,” which they have often done in recent years, and impose sanctions on Russia’s nuclear industry. Their political opponents, in order not to be accused of sympathizing with Russia, are often forced to support the most outlandish anti-Russian measures. Therefore, this could potentially lead to the adoption of such sanctions,” Sergey Kondratiev does not rule it out.
However, the most likely scenario is the following: a decision will be made at the Congressional level for political reasons, but then the US administration will act rationally and freeze or suspend these restrictions, the expert adds. This scenario has played out more than once.
Still, the expert does not rule out that something goes wrong in the US administration – and that the sanctions really start to work. But in this case, there is a high probability that after some time – about a year – they will be stopped.
The peculiarity of the nuclear industry is that it has large reserves of nuclear fuel for several months or even years ahead. And the fuel itself is poured into the reactors every few months. Therefore, the introduction of sanctions will not lead to the rapid closure of nuclear power plants in the US, they will continue to buy stored fuel, only at a higher price. And when the stocks are exhausted, the American authorities will be able to lift the ban on the import of Russian fuel. It is not by chance that this possibility is clearly indicated in the bill.
Translation: V. Sergeev
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