Don’t Be Fooled by Those Who Argue for Uranium Subsidies

COMMENTARY Nuclear Energy

Don’t Be Fooled by Those Who Argue for Uranium Subsidies

Jan 2nd, 2019 2 min read
Katie Tubb

Senior Policy Analyst

Katie Tubb is a senior policy analyst for energy and environmental issues in the Thomas A. Roe Institute for Economic Policy Studies.
Future defense-related uranium needs are well known. kadmy/Getty Images

In July 1993, a New York Times editorial headlined “Angora Goats and Honey Bees” implored Congress to heed the call of President Bill Clinton — and President Ronald Reagan before him — to eliminate subsidies for domestic wool and honey production. For decades, lawmakers had claimed that these subsidies were essential — indeed, a matter of national security.

Be wary, the editorial argued, of “bewhiskered” government waste masquerading as a national security imperative. However incredulous or trifling the claim, that program may never end. Indeed, wool subsidies had been on the books since 1954 and, like honey, have only mostly been repealed.

Naturally, many other industries also try to justify receiving subsidies — or imposing tariffs on foreign competitors — in the name of national security.

Case in point: a dodgy trade case brought by some in the domestic uranium-mining industry currently sits before the Department of Commerce. The petitioners argue that competition from Russia, Kazakhstan, Uzbekistan and China threatens U.S. mine operators. That situation, they say, jeopardizes U.S. military assets and leaves our nuclear power plants overly reliant on countries known to “weaponize” energy supplies for political leverage.

The requested remedy: tariffs on imports and a guaranteed 25 percent of the U.S. uranium market.

The claim may already sound more legitimate than the Eisenhower administration’s declaration that wool is “an essential and strategic commodity.” After all, uranium is the feedstock for nuclear weapons and the Navy’s nuclear-powered submarines and aircraft carriers. Nuclear power also supplies 20 percent of the nation’s electricity.

The truth is, uranium miners are facing the same tough competition and oversupplied markets that wool producers did after World War II. And they are turning to the same emotional ploy that worked all too well for the wool industry, giving it nearly 40 years of subsidies while producing exactly zero national security benefits.

Here’s one fact that should immediately raise suspicion that this case has anything to do with national security: Despite the petitioners’ insinuations, the U.S. imports no uranium from China. As for the other three countries named, the biggest exporter of them (Russia) supplied only 16 percent of the uranium delivered to U.S. reactors last year.

Rather than depend on any one supplier, American nuclear power operators purchase uranium from 11 countries in a variety of short- and long-term contracts. Longtime allies Canada and Australia supply more than half of the uranium delivered to U.S. reactors.

While the petitioners argue that we “cannot afford to depend on foreign sources” of uranium, the entire civilian nuclear power industry begs to differ. Access to competitively priced uranium has given the nuclear power sector a better chance at weathering low natural gas prices.

What of the military’s needs? Critical defense-related assets require domestically sourced uranium, processing, and enrichment facilities that are not “encumbered” by international nonproliferation agreements or peaceful-use restrictions. The National Nuclear Security Administration manages the military’s nuclear needs and has determined its uranium inventory currently meets all government requirements.

Future defense-related uranium needs are well known. The most immediate need — still 20 years down the line at least — will be for unencumbered reactor fuel for tritium production and new fuel sources for naval reactors around 2060.

In other words, the challenge facing the National Nuclear Security Administration isn’t sourcing domestic uranium, but rebuilding the domestic facilities needed to process and enrich uranium in compliance with international non-proliferation agreements.

This is not the first time the uranium mining industry has cried wolf. In the late 1980s it unsuccessfully attempted to use various legal, legislative, and trade measures to target two different countries that presented a supposed unacceptable national security risk: those scoundrels in Canada and Australia. In the 30 years since, Canada and Australia have been nothing but reliable suppliers of affordable uranium for commercial needs.

The case before Commerce today isn’t about national security. It’s just old-fashioned protectionism. Don’t let the wool be pulled over your eyes.

This piece originally appeared in The Washington Times