Energy security is an issue that has plagued countries across the globe, especially in the last couple of years with the coronavirus pandemic highlighting just how fragile supply chains are during global health crises. This was highlighted again when Ukraine was invaded by Russia earlier this year, which left the supply of gas and oil in Europe in uncertainty.
Currently, the United States imports 90% of the uranium it uses to generate 20% of its electricity. To ensure a steady supply of electricity from nuclear reactors, many have proposed that a strategic uranium stockpile be built.
The idea was first proposed by then-president of the United States Donald Trump, and it may have been based on America’s strategic petroleum reserve, which stores more than 4 million barrels at four different sites. The uranium reserve would have been built to hold a U308 stockpile, which would not only fulfill the U.S. military’s needs but also ensure that the supply of electricity wasn’t interrupted.
The country may be in dire need of a uranium stockpile, especially if one considers that uranium production in America has been on the decline since the ‘90s. The market’s performance after the Fukushima incident only made things worse, with the price of uranium falling significantly, which discouraged miners and led to the closure of many operations.
Congress passed the Consolidated Appropriations Act in 2020, which sets aside $75 million for the Uranium Reserve Program. The building of the uranium stockpile and the metal’s procurement will be guided under the program. However, as the importance of green, clean energy becomes more widespread and America builds a strategic uranium reserve, the possibility that other countries will also build their own stockpiles grows.
In an interview, the Nuclear Energy Institute’s senior director of Fuel and Radiation Safety, Nina Ashkeboussi, stated that other international utilities and countries would probably begin to evaluate strategic inventories. Ashkeboussi explained that Ukraine’s invasion had drawn attention to the need for the American government to procure fuel for its uranium program as well as increase already existing nuclear fuel inventories.
Other countries such as China already have stores of energy fuel, which only highlights the importance of a stockpile. However, unlike in the past when America used to import its uranium, the uranium to be added to the stockpile will be sourced domestically in the U.S.
America plans to significantly ramp up its production, which is still very low at the moment. Figures from 2020 show that the country only produced 220,000 pounds of uranium that year, with entities such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) producing most of that uranium.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
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