CASPER — Wyoming’s uranium industry has been decimated by record-low appetite for U.S. uranium. Uranium production nationwide has nose-dived to an over 70-year low as nuclear power companies turn to cheaper international markets. But some relief could be around the corner for Wyoming, the nation’s leading producer of uranium.
In a budget request, the U.S. Department of Energy asked for $150 million in fiscal year 2021 to build an uranium reserve fund and boost domestic demand for the mineral.
Wyoming officials and energy groups have long pressed President Donald Trump to institute new trade policies, like quotas, to intensify domestic demand of uranium. Right now, most utility companies import cheaper uranium from other countries, like Kazakhstan or China, displacing demand for U.S. production of the commodity.
In last year’s third quarter, only about 32,211 pounds of uranium concentrate was produced at four mines in Wyoming. That’s a 94 percent decline since the same quarter in 2016, according to the Energy Information Administration.
Though the $150 million in the reserve would not solve the steep challenges facing uranium producers, it could still help, according to Paul Goranson chief operating officer for Energy Fuels, the country’s largest uranium company and a Wyoming operator.
“This buying program was necessary because the uranium industry was literally disappearing,” he said. “Certainly (the funding) is not going to restart all the uranium mines at once, but it does provide demand and it provides demand that is not there right now.”
If approved, the reserve fund could revive production at two uranium mines in the country, according to the Department of Energy.
Since arriving in office, Gov. Mark Gordon has also stood by the struggling industry, going so far as to write a letter to Trump in September. He urged the president and his nuclear fuel working group to consider Wyoming’s plight. The governor lauded the Trump administration’s decision to propose funding for domestic uranium Tuesday morning.
“The uranium industry is vital to Wyoming and the national security of the United States,” Gordon said in a statement to the Star-Tribune. “I support President Trump’s bold and forward-thinking proposal to establish a domestic uranium reserve.”
To many politicians and industry leaders here, importing the commodity from “foreign adversaries” not only delivers an economic blow to the nation and state, the practice also threatens the country’s national security. Foreign uranium companies that are state-owned, such as in Kazakhstan, can often deflate prices and make it difficult for U.S. companies to compete.
Kazakhstan supplied U.S. nuclear reactors with about 12 percent of required uranium, according to 2017 data from the U.S. Energy Information Agency.
“The U.S. needs a readily available and reliable supply of home-grown uranium,” Gordon added. “Should the U.S. mines close, we will be almost solely dependent on foreign supplies that are mined without reclamation or enforced environmental standards.”
Recently, a pair of uranium companies — Energy Fuels and Ur-Energy — urged the Trump administration to adopt quotas for domestic uranium. Instituting quotas could limit the country’s dependence on foreign adversaries for the commodity devoted mainly for energy and defense purposes, they reasoned.
The uranium companies recommended requiring that 25 percent of uranium bought by government entities come from the U.S.
Several nuclear energy companies, which rely on uranium to do business, opposed the imposition of domestic quotas. Regulating the uranium market would likely hike production costs and lead to layoffs in the nuclear sector, some companies warned.
Last year, Trump established a Nuclear Fuels Working Group to drum up recommendations that could strengthen the country’s nuclear fuel cycle, which includes uranium mining. Trump ultimately declined to introduce quotas, but the group still recommended the Energy Department establish a reserve fund next fiscal year.
“President Trump took action to support domestic uranium miners and promote U.S. national and energy security,” Mark Chalmers, president and CEO of Energy Fuels said in a statement. “This is an important step toward addressing the devastating impact of our nation’s over-dependence on uranium imports from Russia and its allies, which is displacing free market uranium and forcing U.S. mines out of business.”
Energy Fuels operates three uranium processing facilities in Wyoming, Texas and Utah. The company said with an uptick in demand, it could reignite production “immediately.”
The apparent win for uranium producers comes as Sen. Brian Boner, R-Douglas, drafted a bill to provide tax relief for the state’s uranium producers in Wyoming. Senate File 85 would introduce a sliding scale on the state’s mineral severance tax for uranium producers.
“Honestly, I’d rather be producing enough where I’m paying a severance tax, that would be good,” Goranson, of Energy Fuels, said in response to the proposed bill. “But I think that the state of Wyoming is looking for what steps to take to make Wyoming uranium more competitive than others. And one of the things they can do is provide some relief on the tax side.”