Our Energy Future

Interest is surging in nuclear power as a solution to our energy future. Why? Advocates argue that nuclear is clean energy, produces no carbon emissions in operation, makes continuous, firm power, and reduces our dependence on foreign oil.

Any currently plausible plan for commercial scale nuclear power relies on conventional uranium-fueled nuclear power plants (UFNPP) that use fission reactors. (Despite decades of research and advocacy for thorium-based and fusion reactors, they remain impractical.) The uranium, like oil, coal or gas, must be extracted from the earth, and is not replenished naturally in human time-scales.

Current nuclear technology cannot be described as renewable; but, given its supposed clean tech benefits, does that matter?

Replacing fossil fuels with nuclear would have an arguably positive effect on the environment by reducing carbon emissions, at least in operation. (The environmental impacts of uranimum mining, plant construction and waste disposal remain problematic.) The economic impacts are troubling, given the enormous cost of nuclear energy compared to all alternatives, and the enormous but nearly impossible-to-quantity costs of waste disposal.

There are other challenges [pdf]:

Nuclear energy must become dramatically more attractive to utilities, governments, and publics around the world. This would require reducing costs, preventing any substantial accident, avoiding terrorist sabotage, finding politically sustainable solutions to nuclear-waste management, and ensuring that nuclear energy does not contribute (and is not seen as contributing) to the spread of nuclear weapons to proliferating states or terrorist groups.

While these challenges are real, they can perhaps be solved given sufficient political skill and technical effort.

Uranium fuel supply, however, is a different kind of challenge.
 
If the United States were to sharply increase its use of nuclear power, from whence would the uranium fuel come? The International Atomic Energy Agency (IAEA) is sanguine, declaring in the announcement of its core study of uranium supply and demand (the "Red Book") that:

... new discoveries and re-evaluations of known conventional uranium resources will be adequate to supply nuclear energy needs for at least 100 years at present consumption level. Growing demand and higher prices have spurred greater investment in exploration and led to larger identified conventional uranium resources over the past two years.

But the present consumption level will almost certainly change, as the IAEA admits:

The demand picture is increasingly complex, with significant nuclear power builds underway in China, India, Korea, Japan and the Russian Federation, and phase-out programmes underway in several European countries. Yet the report notes that new builds along with plant life extensions should increase global installed nuclear capacity in the coming decades, thereby increasing demand for uranium. Projections for 2030 indicate a range of expected growth in demand from a low estimate of 38% to a high case of roughly 80%. Demand, however, is increasing, and will increase more sharply still if current discussions in the US Senate play out.

Thus, when considering only the currently projected increase in demand from this identified capacity growth, global supply might not last even 70 years. Climate change policy globally and partisan politics in the US will likely spur even more growth in UFNPPs and demand for uranium, shortening the timeline further.

A typical UFNPP in the US receives an NRC operating license for 40 years which is routinely renewed for an additional 20 years. To make the economics of nuclear power work, the plants need to operate for 60 years. With the long lag times to permit and build plants, however, the uranium supply will not be secure for the full lifetime of operation for plants yet to be built. This will, of course, have a major impact on the overall economics of any UFNPP project.

The supply of uranium is of two kinds. The IAEA, in its latest summary [pdf] writes of uranium:

Supply exceeded demand until 1990 when that relationship was reversed. The gap between newly mined and processed uranium (primary supply) and uranium requirements that developed after 1990 was filled by secondary supply including highly enriched uranium (HEU) from military stockpiles and inventory drawdown. In 2003, total demand was covered about equally by primary and secondary supply.

In other words, in 2003, only just over half of demand was met by new mining, with about 40% coming from previously mined but unused supply, and on re-purposing uranium originally part of weapons. (This so-called Megatons to Megawatts Program provides about 10% of US uranium supplies by the dismantling of former Soviet warheads. Would that there were more of this sort of swords-to-ploughshares program for weapons of all kinds throughout the world.) While energy security is rightly seen as an increasingly key part of national security, it is unlikely that the weapons stockpile will be cannibalized for its uranium to any great degree. At length, the secondary supply will become exhausted and the primary supply must increase to match demand.

The IAEA supply estimates are not beyond question. Michael Dittmar, a researcher at CERN in Switzerland believes the Red Book numbers are suspicious, if not wholly unreliable [pdf]:

Analysis shows that neither the 3.3 million tons of “assured” resources nor the 2.2 million tons of inferred resources are justified by the Red Book data and that the actual known exploitable resources are probably much smaller.

At The Oil Drum there is disagreement about short-term supply problems, but a recognition that the long-term picture is other than the IAEA picture would have it. Others see shortages of uranium by 2050.

One of the leading uranium consulting entities, Ux Consulting is cautious in its Uranium Market Outlook:

The market that we now find ourselves in is like no other in the history of uranium. Production is far below requirements, which are growing... Supply has become more concentrated, making the market more vulnerable to disruptions if there are any problems with a particular supply source. Another source of market vulnerability is the relatively low level of inventory held by buyers and sellers alike.

So far, this transition has been subject to considerable price volatility. The question is whether this volatility will continue. This will depend on the procurement, inventory, and investment decisions that are made in anticipation to and in reaction to the developing trends. Will governments get into the act, and how might this affect the future market? What other surprises may there be?

The global supply is not uniformly distributed, and any aggregate numbers mask the considerable differences in geographic concentration, economic feasibility and political availability. Much of the future increase in world-wide supply is thought to be coming from Kazakhstan and secondly from Africa and Canada. While the bulls see increased exploration and production making up for the inevitable decline of the secondary supply, the heterogeneous nature of the suppliers should give one pause.

The US supply situation is not favorable. Per the 2007 Red Book, annual uranium demand in the US was 22,890 tonnes. Domestic production, however, was barely 2,000 tonnes. The total identified uranium resource which is feasibly extractable in the US, assuming a resource price of less than $130/kg, is 339,000 tonnes. US domestic uranium supply, assuming 100% extraction, would last less than 15 years at current consumption rates.

Security concerns around nuclear power stem not just from keeping the materials and technologies away from the bad actors, but also on not becoming dependent on others for uranium supply. China, India and other countries are net importers of uranium to feed their ambitious and growing programs. The United States imports almost all of its uranium today, with about half coming from Canada and half from Russia. The gap between demand and supply will only grow as pressures mount to replace dirty coal plants with something else.

The United States continues to have a serious and potentially existential problem with its dependence on oil imports from foreign countries with capricious policies and despotic leaders. Decades in the making, this situation is the result of our failure to transition from an oil-based economy following the Hubbert's Peak in US oil production in the early 1970's. Instead of aggressively finding and adopting a different and indigenous energy source, we chose to become dependent on foreign suppliers.

Today our electricity generation has no significant reliance on foreign supply. An increased reliance on generating electricity by UFNPPs risks repeating the historic mistake of our reliance on foreign oil. What confidence do we have in our uranium supply in 2030? Or 2050? Is there a future risk of a uranium cartel akin to today's OPEC, composed of Kazakhstan, Russia, Niger and others indifferent, corrupted or even hostile to our interests? Perhaps we can rely on Canada and Australia to remain friendly and cooperative, but 40 years is a long time, and climate change will re-order the world in ways we cannot readily predict.

Can we afford to make the same mistake a second time? Nuclear power using uranium may be a brief stepping-stone on the journey to a secure energy future, but it is not the destination.