Opinion

Don’t Let Tariffs Derail Nuclear

By Charles Hernick
July 10, 2019 at 5:00 am ET

Our country has a strong foundation in nuclear energy. For decades, almost every aspect of American industry has benefited from clean, stable nuclear power. It’s been a steady 20 percent of our energy mix for over a decade specifically because of the focus on safety and reliability.

In a way, nuclear power has been delightfully boring, which is why watchers of HBO’s new “Chernobyl” series won’t lose sleep thinking about the American fleet. But in a few short weeks, nuclear’s role in our future energy economy could be thrown into needless jeopardy.

Unjustified uranium tariffs would be a nightmare for the nuclear industry.

In April, the U.S. Department of Commerce submitted the “Uranium Section 232 Report” to the White House examining the impact of foreign uranium imports in domestic energy markets. America is the world’s largest consumer of uranium, as uranium-fueled nuclear energy remains an important power source for our nation.

Because most of the uranium that fuels our nuclear power plants comes from international sources, there are protectionist calls for uranium tariffs, saying that foreign uranium is a threat to national security and U.S. uranium mining operations. Unsurprisingly, many of these voices originated from domestic uranium dealers.

But the facts matter. Thirty-five percent of uranium imports come from Canada, and another 20 percent comes from Australia. Over half of the uranium comes from countries that are firm allies.

A recent joint press release from two U.S. uranium mining companies announced the report’s submission to the White House. The press release calls for a “Buy American” policy that would impede foreign uranium imports with tariffs. The companies also want 25 percent of the domestic uranium market to be reserved for U.S.-mined uranium.

The mining companies maintain that inexpensive foreign uranium has hurt U.S. uranium companies and that foreign imports could be a potential security threat for nuclear-powered military technology as well as the national electric grid, which sources a good deal of its electricity from nuclear power plants. The White House is reviewing the report and will make a decision soon on whether or not to impose tariffs.

Although any purported security risks are largely speculative, the uranium mining industry does have a point when it comes to foreign imports. In 2017, only 7 percent of the total uranium purchased by U.S. power plants came from domestic sources. However, forcing American power plants to purchase expensive, domestic uranium would decimate our nuclear industry.

A study last year from the Nuclear Energy Institute found that inflicting a domestic uranium quota on the nuclear industry would have drastic economic consequences. The study found that a quota of this kind would mean extra costs to the tune of $500 million to $800 million per year.

U.S. nuclear power generators, which are already operating in a highly competitive energy market with tight margins, would have to pick up the tab. It could sink many of the smaller power generators.

Pushing restrictive legislation on nuclear power companies could not come at a worse time for the industry. Two nuclear power plants are scheduled to retire this year, and that number is set to rise to 12 closed reactors nationwide by 2025, according to the U.S. Energy Information Administration. If that happens, U.S. net electricity generation from nuclear power reactors would drop 17 percent in the next six years.

Nuclear companies need to stay competitive, which means having the lowest-cost fuel at their disposal. Nuclear power still has an important role to play in the future of America’s energy sector as over 60 percent of carbon-free electricity in the United States comes from nuclear power.

Our country still needs a healthy nuclear industry, especially if we want to reduce our carbon footprint. We must protect the industry’s well-being from counterproductive legislation.

If the White House decides to heed the fickle demands from uranium miners and limits foreign imports, then the nuclear industry suffers worse than the Springfield nuclear power plant at the hands of Homer Simpson. And we’d risk losing our most important source of zero emissions power.

 

Charles Hernick is the director of policy and advocacy at Citizens for Responsible Energy Solutions Forum, a nonpartisan, nonprofit organization that educates the public and influences the national conversation around responsible clean energy solutions that are actionable, market-friendly and responsible.

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