Section 232 comments oppose domestic uranium quota

WASHINGTON – November 13, 2018 – A review of comments filed in the U.S. Department of Commerce (DOC) Section 232 investigation into uranium imports reveals virtually no support for a 25 percent quota on domestic uranium beyond  those with a vested interest in the petitioners’ and their allies’ growth, according to the Ad Hoc Utilities Group (AHUG).

The petitioner comments reveal that they seek, under the pretense of national security, a government mandated 25 percent domestic quota to establish pricing leverage when negotiating new long-term contracts.  In fact, comments from most producers and utilities underscore the potential for catastrophic economic harm to the U.S. nuclear industry and adverse impact to the nation’s national security from a 25 percent domestic quota on uranium.

“The petitioners have simply failed to make the case that they suffer economic harm and that imported uranium presents a threat to national security,” said David Tamasi, AHUG spokesperson.  “The petitioners’ thirst for profits could unnecessarily expose the U.S. nuclear industry to a dramatic spike in uranium prices that would immediately threaten100, 000 good-paying domestic jobs and put our national security at risk.”

Earlier this year, the DOC initiated the Section 232 investigation into uranium imports after two mining companies, Ur-Energy and Energy Fuels, petitioned the agency to implement a 25 percent domestic purchase quota limiting imports. In late September, comments were due to the DOC regarding the investigation.  AHUG reviewed the comments filed and identified the following:

  • Devastating Impact to U.S. Nuclear Industry Would Vastly Exceed any Potential Harm to U.S. Uranium Miners
    • The petitioners suggest their decreased production levels have led to economic losses – and blame foreign uranium supply.
    • However, the petitioners are currently profiting – and they intentionally limited production, laid off workers, and acted as brokers of foreign uranium.  To the extent they face economic challenges; those are not from imports but from the impact of Fukushima earthquake and the subsequent idling of 54 Japanese nuclear plants.
    • Any potential economic loss from decreased uranium mining production would predominantly be limited to the few western states where miners reside.  The entire U.S. uranium mining industry employs about 400 workers.
    • A domestic purchase quota would jeopardize nuclear plants in more than 30 U.S. states, threatening nearly 100,000 direct jobs and 475,000 indirect jobs.
    • Petitioners’ assertion that “an operator cannot have a reactor shut down for lack of something as relatively inexpensive as uranium” is completely wrong.  In fact, the quota would drive up nuclear fuel prices by $500-$800 million per year – absolutely putting many nuclear plants at risk of early closure.
  • Petitioners See Quotas as Opportunity to Make More Profit
    • The petitioners had entered into long term contracts that had locked in higher prices years ago.  These long-term deals are expiring or have expired. Now they are seeking to establish a 25 percent domestic quota to get higher prices when negotiating new long-term contracts.  This is a craven attempt to use national security to exact higher uranium prices and greater profits at the potential expense of the U.S. nuclear industry.
  • Petitioners Argument on Defense Shows Why Their Proposed Quota Makes No Sense
    • The U.S. Navy relies on a consistent supply of highly enriched uranium (HEU) to fuel its reactors. In addition, the Naval Nuclear Propulsion Program relies on almost 100 naval nuclear reactors that power U.S. aircraft carriers and submarines.
    • The U.S. is already implementing a plan that would address existing defense needs and not exhaust economically available U.S. resources.
    • Even if the stockpile is diminishing, as the petitioners allege, the proposed quota would only hasten the exhaustion of U.S. resources by requiring utilities to consume U.S. uranium instead of uranium from other countries. The quota would completely exhaust these resources in up to 30 years.
  • We Rely on Uranium Imports from Trusted U.S. Allies, Not State-Owned Entities
    • The petitioners are using scare tactics and unsubstantiated rhetoric to claim that U.S. imports uranium only from “bad actors” like China and Russia. This is demonstrably false.  In 2017, the U.S. and U.S. allies Canada and Australia accounted for nearly 60 percent of the U.S. uranium supply.
    • Another 11 percent came from Kazakhstan, which is a NATO partner that enjoys a strong relationship with the U.S.

About AHUG – The Ad Hoc Utilities Group (AHUG) consists of a majority of the nuclear generators in the U.S. including Ameren Missouri, Dominion Energy Services, Inc. on behalf of Virginia Electric and Power Company and Dominion Energy Nuclear Connecticut, Inc., Duke Energy Carolinas, LLC and Duke Energy Progress, LLC, Energy Northwest, Entergy Operations, Inc. and Entergy Nuclear Operations, Inc., Exelon Generation Company, LLC, Pacific Gas and Electric Company, PSEG Nuclear LLC, South Carolina Electric & Gas Company, and Xcel Energy Services Inc.