Earlier this month, US President Biden went to the Grand Canyon to declare nearly one million acres of adjacent land a US landmark, thereby blocking future mining in the region with high concentrations of uranium.1 According to the World Nuclear Association, uranium is mined in at least 20 countries, including the US.2 Kazakhstan, Namibia, Uzbekistan, and Russia account for 43%, 11%, 6%, and 5% of global uranium mine supply, respectively.
Where does the US currently get its enriched uranium? It imports one-third of it from Russia.
Uranium must be enriched before it is used in a nuclear plant, and there are no enrichment plants in the US. Where does the US currently get its enriched uranium? It imports one-third of it from Russia, and the vast majority of the rest comes from Europe, although there is a small amount made via operations inside the US by a British-Dutch-German conglomerate. The reliance on imports means the US sends more than $1 billion annually to Russia for nuclear fuel.3
A presidential priority
President Biden is keeping his campaign promise to close off large areas of the US to mining, as part of efforts to protect 30% of US lands and freshwater, and 30% of US ocean areas over the next ten years, via the 30 by 30 conservation plan.4
Earlier this year, the Biden administration blocked the Pebble Mine in Alaska from proceeding.5 The Pebble Mine is the largest undeveloped copper deposit in the world and has been in development since 1987. There are good reasons for the delay. The mine is in a very sensitive environmental location in Alaska, and concerns about the mine's impact on the local community have stalled progress.
The administration has also protected 225,000 acres in northern Minnesota from mining development that would access that area's rare earth minerals.6
A presidential predicament
Closing off the areas of dense mineral deposits necessary for a clean energy future does several things, regardless of the justifiable intent to protect these areas:
- If we cannot source the minerals within the US, the minerals will come from other countries. Importing the materials adds to the carbon footprint of production if supply lines extend further across the globe.
- It adds to the national security concerns when supplies of essential fuels for clean energy, such as enriched uranium, come from countries like Russia, where the US is actively involved in a proxy-military conflict.
- Even if some mining occurs within the US but at less dense deposit sites, it raises the cost of extraction, the cost of the mineral mined, and of course, increases the costs of the final product, whether it is nuclear energy, or an electric vehicle, solar panel, wind turbine, etc. It would seem counterintuitive to raise the costs of minerals via environmental policy while incentivizing lower clean energy transition costs via Inflation Reduction Act subsidies on the final products.7
Nuclear power: An accepted clean energy?
For all the resources committed to the energy transition, we would argue for better protection of fuel sources for domestic nuclear power. Nuclear power provided 47% of all clean energy in the US in 2022, far ahead of the second largest source. Even in Europe, nuclear power has been accepted into the clean energy taxonomy – qualifying it for similar status as wind turbine and solar panel electricity generation.8
There needs to be far more investment, production, and adoption of renewable and low-carbon energy sources.
In early August, the International Energy Agency estimated that global oil demand reached a record 103 million barrels per day in June.9,10 That record high serves as a stark reminder that there needs to be far more investment, production, and adoption of renewable and low-carbon energy sources.
Despite record demand, oil prices have been contained so far this year due to several issues, one of which is broken promises. Russia had agreed to a production cut of 500,000 barrels per day in February but had not cut production.11 The Biden administration had promised to refill the Strategic Petroleum Reserve by purchasing oil on the open market, but instead, continued selling oil, adding to commercial supplies and artificially lowering prices.12,13,14 In July and August, these promises were finally met when Russia cut production, and the US government shifted to purchasing oil, reducing supply to commercial oil markets.
We would never be in favor of policies that destroy the environment. Instead, we think it is prudent to highlight the consequence of the policies that are in place, which can affect the price of commodities. Offsetting policies are needed, such as announcing where the uranium will come if the area around the Grand Canyon is deemed off limits to mining. Failing the ability to access domestic sources, the big question is which country will we rely on for a 20-year supply of uranium, copper, and rare earth minerals?
As long as commodity supply policies remain one sided and focus on domestic restrictions, commodity prices are at risk of rising.
1 "Biden creates new national monument near Grand Canyon, citing tribal heritage, climate concerns." AP News, 8 Aug. 2023. https://apnews.com/article/grand-canyon-national-monument-biden.
2 World Nuclear Association is the international nuclear organization that promotes nuclear power and supports companies that comprise the global nuclear industry.
3 "The U.S. is paying billions to Russia's nuclear agency. Here's why." The New York Times, 14 Jun. 2023. https://www.nytimes.com/2023/06/14/climate/enriched-uranium-nuclear-russia-ohio.html.
4 "Biden administration lays out 30x30 vision to conserve nature. NRDC.org, 6 May 2021. https://www.nrdc.org/bio/helen-oshea/biden-administration-lays-out-30x30-vision-conserve-nature.
5 Ross, Isabelle. "EPA stops Alaska’s Pebble mine with rarely used power." Alaska Public Media (Dillingham), 6 May 2021. https://alaskapublic.org/2023/01/31/epa-stops-alaskas-pebble-mine-with-rarely-used-power/.
6 "Biden-Harris Administration Protects Boundary Waters Area Watershed." US Department of the Interior, 26 Jan. 2023. https://www.doi.gov/pressreleases/biden-harris-administration-protects-boundary-waters-area-watershed
7 The Inflation Reduction Act (2022) is a landmark US federal law which aims to curb inflation by possibly reducing the federal government budget deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy.
8 "EU Sustainable Finance Taxonomy delegated act on nuclear energy and natural gas." International Trade Admin., 22 Dec. 2022. https://www.trade.gov/market-intelligence/eu-sustainable-finance-taxonomy-delegated-act-nuclear-energy-and-natural-gas
9 The International Energy Agency is a Paris-based autonomous intergovernmental organization, established in 1974, that provides policy recommendations, analysis and data on the entire global energy sector.
10 Khan, Shariq. "Oil up on Record Demand Forecast, 7th Straight Weekly Gain." Reuters, 11 Aug. 2023. https://www.reuters.com/business/energy/oil-prices-tick-higher-opec-demand-optimism-2023-08-11/
11 Soldatkin, Vladimir and Astakhova, Olesya. "Russia to cut oil output by 500,000 bpd in March." Reuters, 10 Feb. 2023. https://www.reuters.com/business/energy/russia-cut-oil-output-by-500000-bpd-march-2023-02-10/
12 The Strategic Petroleum Reserve is the world's largest supply of emergency crude oil that was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the US under the international energy program.
13 Lefebvre, Ben. "Biden administration set to start refilling oil reserve." Politico, 16 Dec. 2022. https://www.politico.com/news/2022/12/16/biden-administration-strategic-petroleum-reserve
14 "Weekly US Ending Stocks of Crude Oil in SPR." US Energy Information Administration, 17 Aug. 2023, www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCSSTUS1&f=W. Accessed 24 Aug. 2023.
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