US uranium producers want halt on federal transfers

17 April 2017

An organisation representing the USA's uranium producers has called on the US Department of Energy (DOE) to halt transfers of federal excess uranium inventory until the uranium market recovers. The Uranium Producers of America (UPA) said the domestic industry is currently in a fragile state after the transfer of large quantities of price-insensitive material over a long period.

"The uranium and conversion industries are struggling to survive," the organisation said in its response to a request for public comment on the effects of potential transfers of the DOE's material on the domestic uranium mining, conversion and enrichment industries.

"While we see growth in the long term, the uranium market is oversupplied in the short term, and the DOE material continues to overwhelm the market with large quantities of price insensitive supply," the organisation said. "UPA recognizes DOE is not the only reason for the current market conditions, but the DOE transfers since 2011 have clearly had an adverse material impact," it adds.

The 18-page letter, signed by UPA president Harry Anthony, notes that the USA is currently importing 94% of the uranium required to fuel its nuclear reactors, which meet 20% of the country's energy needs.

It recommends that the DOE should stop all transfers when the uranium spot market price is below the US Energy Information Administration's reported production cost for uranium (currently $35.453 per pound), and that "under no circumstance" should it "transfer more uranium than the US uranium industry is producing".

It calls for the DOE to work with Congress to pass legislation establishing statutory limits on excess uranium transfers and enhancing transparency and predictability associated with transfers. It also says the DoE should "seek to maximise taxpayer value for this asset", including working to place the excess material into the long-term market where, it says, uncommitted demand is better able to absorb it. High-enriched uranium downblended through the DOE's National Nuclear Security Administration should be used to provide fuel for research and advanced reactors, the UPA said.

The UPA said its recommendations are consistent with an executive order signed by President Donald Trump on 28 March. The Energy Independence Policy Executive Order includes a clause ordering the heads of agencies to review regulations and other actions that potentially "burden the development or use of domestically produced energy resources" including nuclear. "We are confident our industry can provide a stable, domestic supply of uranium to power our nuclear reactors, but the market needs time to recover and we need room in the market to compete. The DOE material is crowding out the market and accounting for nearly all the near-term uncommitted US utility demand," the UPA said.

The DOE holds inventories of uranium in various forms that have been declared as excess and not needed for US national security missions, some of which it has previously transferred in exchange for services such as the clean-up of the former Portsmouth gaseous diffusion uranium enrichment plant, and for the downblending of high-enriched uranium. In May 2015, then-US Energy Secretary Ernest Moniz issued a determination that transfers of up to 2500 tU in 2015, and 2100 tU in subsequent years, would not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry.

The DOE's request for comments, issued in the US Federal Register on 9 March, is part of the ongoing consideration of a new determination covering the potential continued transfer of federal excess uranium for the clean-up of the former Portsmouth enrichment plant.

The US Government Accountability Office recently raised issues related to excess uranium transfers over the past decade including questions on the DOE's assessment of market impact studies.

Researched and written
by World Nuclear News