Almost 20 percent of US electricity is generated via nuclear power. Where do Trump and Biden stand on this energy source?
During this controversial US election season, it’s hard to believe that the two presidential candidates could ever agree. However, President Donald Trump and Democratic candidate Joe Biden have similar stances when it comes to the importance of nuclear energy.
Energy security has been a top priority for the American government since at least 2012. Fortifying domestic supply chains while reducing dependence on foreign entities has been the primary goal.
The US has seen some success in its energy ambitions. The nation became the leader in oil production globally in 2013; however, it remains heavily reliant on imports of uranium to fuel its nuclear reactors.
Currently almost 20 percent of the country’s electricity is generated through nuclear power, meaning that it definitely has a place in the energy debate. The fact that nuclear energy can cleanly and efficiently provide an abundance of base load electricity only adds to its important — especially if the US wants an immediate option for addressing the issue of climate change.
With the election approaching, the Investing News Network (INN) asked experts if the US can ever be energy independent, and if so, which candidate is the best option for getting there. Here’s what they said.
US energy security: Trump’s energy promises
Trump is a supporter of nuclear energy and the sector’s ambitions. In his first term, efforts were made to streamline project applications and approvals, and to deregulate the industry in some ways.
The president has adopted his 2016 platform again for this year’s election, and it includes a plan to attain “energy dominance.” It focuses heavily on oil, gas and coal, with a brief mention of nuclear.
“We support the development of all forms of energy that are marketable in a free economy without subsidies, including coal, oil, natural gas, nuclear power and hydropower,” reads the document.
In terms of nuclear, the platform states, “We support lifting restrictions to allow responsible development of nuclear energy, including research into alternative processes like thorium nuclear energy.”
However, as the first Trump term nears an end, it’s important to note that no new nuclear plants have come online during that time — in fact, three have been retired, shrinking the nuclear fleet to 96 reactors. Over the last four years, only one project has neared completion.
“It’s kind of funny, the one that is closest (to commissioning) is a third plant being added to an existing nuclear power facility in Georgia. And that one actually got going under the Obama administration,” Lobo Tiggre of Independent Speculator told INN.
“It’s a little bit of a fun fact. Of course, it would have been in process for a long time. And the approvals are not supposed to be political, it just happened to be that one got approved during the Obama administration. So there is a new one that’s coming online soon,” he said.
Tiggre did point out that although three reactors closed during Trump’s time in office, there could have been more shutdowns without him.
“Trump has actually done more than just talk about this … There were a bunch of reactors that were scheduled for early retirement because people don’t like nuclear, and more than a dozen of those early retirements have now been rescinded during Trump’s tenure,” said the Independent Speculator. “So that’s pretty significant.”
US energy security: Section 232 investigation
Another development the uranium sector saw under Trump was a Section 232 investigation into foreign uranium imports. The investigation was initiated by domestic producers who were concerned to see the US purchasing uranium from its adversaries.
Their worries are not unwarranted. According to the US Energy Information Administration, US power reactors purchased 40 million pounds of uranium in 2018 — 90 percent of that was imported, while just 10 percent was produced domestically.
Chart data collected via the US Energy Information Administration.
The US producers had hoped the investigation would lead to the implementation of domestic production and/or sourcing quotas. Instead, the Nuclear Fuel Working Group was born. The group examined the nuclear fuel cycle and presented the president with a handful of proposals.
One suggestion was to build a domestic stockpile. In that scenario, US$150 million would be contributed annually for a decade in order to build material up. Trump added the spending to his 2021 budget proposal, but it still needs to be approved by Congress.
While the Section 323 investigation has been lauded by some in the industry, others have questioned it.
“I would not have filed that Section 232 petition. I don’t think there’s really a serious national security issue here for the US,” said Tiggre. “I can understand why they did it — you’re a producer and prices are too low for you to make money, you’ve got to do something … but I wouldn’t have gone that route.”
At the current price of US$29.75 per pound, uranium is well below the US$50 to US$60 threshold required for domestic producers to be lucrative.
“(If) the US wants to stockpile, just buy it from them for US$30 rather than paying US$60 to artificially support uranium industry,” Brent Cook of Exploration Insights commented to INN.
“It’s sort of ironic to me that you get these hardcore conservatives and libertarians, anti-government — all of a sudden they’re pushing for the government to impose artificial pricing on uranium. That makes no sense,” the market watcher added.
US energy security: Security versus independence
Despite the economic challenges, the push for a stockpile may be part of the president’s larger plan for energy independence. “Under my presidency, we will accomplish a complete American energy independence,” Trump said during a May 2016 speech. “Complete.”
He later declared energy independence for the country in 2019 — but is the US really there? As noted, roughly 20 percent of electricity is generated from the 96 nuclear plants in the country. These plants are fueled by 40 million pounds of uranium, of which the US only supplies 10 percent at best.
“Energy independence is essentially impossible for the US as it’s currently constituted, with 330 million people scattered over half of North America,” said Agora Financial’s Byron King. “The US has to be plugged in, literally and figuratively, to the energy grid of Canada and Mexico.”
King prefers the concept of energy security, which is more of a collaborative effort, over the singular notion of energy independence.
“We trade back and forth with our partners and our friends and our allies. You know, whether it’s electricity, whether it’s natural gas, whether it’s petroleum, whether it’s refined products.”
This point was also made by Mercenary Geologist Mickey Fulp, who would like American uranium imports to come largely from Canada and Australia.
“We’re always going to be dependent on other countries — the only problem is we are dependent on Russia, Kazakhstan and Uzbekistan for about 40 percent right now,” he explained. “We need to import more from Canada.”
That will be a problem over the next year, as the majority of Canada’s uranium output has been curtailed over the last decade due to low prices. The remaining projects were shuttered this year due to COVID-19.
US energy security: The Democrat stance on nuclear
As the GOP platform states, “We support lifting restrictions to allow responsible development of nuclear energy, including research into alternative processes like thorium nuclear energy.”
Alternative processes include small modular reactors, which use considerably less uranium than a traditional reactor. There are even designs that don’t use any uranium at all — these are thorium and molten salt reactors. Small modular reactors are often discussed as alternatives to nuclear plants due to their compact nature, scalability and lowered risk.
But it’s not just Trump and the Republicans who are interested in advancing nuclear energy. The Biden platform also discusses it, supporting a research agenda ranging from costs to safety to waste disposal systems, all of which are challenges facing the nuclear sector.
Despite the vagueness of the Democrat platform, Tiggre pointed out that it uses positive language, which is a notable development coming from the party.
“But at the end of the day, this really is a matter of science, and it shouldn’t be political,” he said. “The writing’s on the wall, and it is really striking that the Biden campaign has that language in there.”
Tiggre then explained why a Biden win could propel a nuclear agenda.
“Maybe the best outcome for uranium bugs specifically would actually be a Democratic sweep. Because then you’d have Biden in there with at least in theory a pro-nuclear agenda, and both sides of Congress could then put something through that really would be supportive for the nuclear industry,” he said. “I don’t favor a Biden presidency, I’m just saying.”
For Fulp, the Democratic stance amounts to too little, too late.
“I don’t buy the idea that that a Biden administration would be nuclear friendly,” he said.
“This is lip service. The Democrats for first time since 1972 — 48 years — have come out and put a positive view on nuclear energy. The last time they did that was 1972.”
Regardless of pro-nuclear agendas or not, King believes the nuclear sector’s well-publicized difficulties make it scary to the general public. Add to that the time and costs associated with developing a nuclear plant, and it may be an energy endeavor many don’t want to take.
“If you want to build a nuclear power plant, you’re lucky if you can do it in 24 years, the regulatory system is so complex,” said King. “Then it’s immensely expensive.”
He went on to point out that there are also anti-nuclear advocates to be aware of.
“(They will) fight you every step of the way. Whether it’s mining uranium, processing uranium, transporting uranium, using it as fuel. Regulating the operation of a nuclear plant, regulating the storage of spent nuclear fuel,” he noted.
Overall, when it comes to energy, uranium and nuclear are often excluded from the conversation. But given their crucial role in providing approximately 20 percent of the country’s electricity, they are a key component of the discussion.
“You know the old saying, ‘Water is life’?” said King. “Well, water is life, but electricity is the quality of life, and if you don’t have access to ample electric power, you’re in trouble.”
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.