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On U.S. Uranium Supplies, Part 2: Mitigating Future Energy Security Risks from Large Imports Disruptions

Rick, you make a good point as the one of the challenges to controlling future power consumption and required generation levels.  Residential and Commercial Sectors’ power consumption have increased almost steadily historically and as the economy recovers more from the 2007-09 economic recession are trending up again.  The Industrial Sector has been trending down for over 10 years; due to a combination of increased manufacturing efficiency upgrades (made without Government mandates by the way) and some level of carbon leakage (increased high energy intensity Consumer goods imports).  In the U.S. most folks may not realize we are somewhat unique and possibly directionally spoiled compared to most other Developed Countries.  Comparing the U.S. to the EU for example, what is one major differences in Consumer choices?  As you have identified, the U.S. has far more options or choices for most any Consumer commodity; from cloths, to food, to most any type of toys including automobiles.  The challenge is changing this Consumer culture and expectations/behaviors to reduce future power and other energy consumptions.

December 19, 2014    View Comment    

On U.S. Uranium Supplies, Part 2: Mitigating Future Energy Security Risks from Large Imports Disruptions

Jim, if you turn down baseload Nuclear Power generation capacity today, guess what replaces it?  Ideally it would be Natural Gas, in order to keep carbon emission increases down and also keep common pollutants to reasonably low levels.  However, today that probably means increasing Coal Power generation and the associated increased carbon and common pollutants (NOX, SOX, PM, etc.) emissions.  Nuclear and Coal Power can feasibly be replaced by Natural Gas and Wind/Solar, however, even with the hydraulic fracturing of shale gas the U.S. would be forced to import substantial natural gas in the future.  What do you think would happen to world natural gas prices and the cost of U.S. power under this scenario?  The price of U.S. average electric power will more than double and possibly triple for all Consumers.  National energy security will also go in the wrong direction.

Also, as far as incremental production costs of electric power, nuclear is fairly low compared to alternatives.  And, which power source has most negatively impacted Public health over history?  I’ll let you research this question, but I suggest you begin with the CDC

December 19, 2014    View Comment    

On U.S. Uranium Supplies, Part 2: Mitigating Future Energy Security Risks from Large Imports Disruptions

A. Springs, the first step in developing a (mutually beneficial) US-Aus uranium strategy begins with the US Federal Government recognizing the real risks to future uranium supplies; and perhaps, Australia recognizing the value of building this zero carbon power generation capacity domestically.  The second step begins with acknowledging (or educating responsible Administration Officials) of the historically strong alignment and Ally/Trade Partner relationship between the US and Australia.  Australia has been a very important foreign policy supporter of the US since before WWII and continues to be one of the US’s strongest supporters in the Asia-Pacific and Middle East today.  This relationship needs to be built on in many areas of opportunity including the co-benefits of increased Australia uranium production.

You are absolutely correct that the Nuclear Industry in all Developed Countries was not built or expanded without Government support.  Unfortunately the opposition to Nuclear is has grow to be very strong, particularly in some Developed Countries.  Australia is the 3rd largest producer of uranium in the world, but has no Civilian Nuclear Power plants.  At the other extreme, France is the 2nd largest generator of Nuclear Power in the world (about half the U.S.) and imports 99% of its uranium (vs. the U.S. 80%).  These Nuclear Power Industries were originally supported and developed due to the innovative/cost attractiveness of this technology, followed by energy security priorities such as reducing the need for growingly more costly/restricted oil & gas back in the 1970’s-1980’s.

Today, Nuclear Power provides the only commercially proven technology to install zero carbon technology that provides the baseload capacity needed to balance-stabilize centralized power grids and ensure reliabilities.  The only proven industrial scale alternative is currently hydropower pumped storage, but even this technology is strongly opposed by the general public’s due to the environmental impacts of dams/reservoirs.

The bottom line, countries such as the US and Australia have an opportunity to partner and build on their historic strong Ally relationships.  This should involve some combination of reducing the US’s reliance on former Soviet Countries by helping develop Australia’s uranium production and by possibly sharing advanced nuclear power technologies to the benefit of both countries’ energy security and ability to reduce future carbon emissions.

December 19, 2014    View Comment    

On Is Cellulosic Ethanol All it’s Cracked Up to Be?

Edward, do you know what are the fuel specifications for the BioCNG heavy duty vehicle motor fuels?  Their website is a bit vague.  Important properties begin with Btu/CuFt.  If their processing unit can’t meet normal pipeline spec’s (1,000 Btu/CF minimum) that means they must probably operate totally independent to existing vehicle fueling infrastructures.  That makes this technology a niche market only for a limited number of company vehicles.  Since I suspect the heat content is 70-80% of pipeline spec’s, heavy duty truck VMT per refueling is proportionally less than Commercially available CNG.

Also do you have any estimates of current BioCNG production-consumption volume levels?  It sounds like it could be greater than current hydrogen/fuel cells, but only a very small fraction of EV’s (equivalent fuel Btu basis).

December 16, 2014    View Comment    

On Is Cellulosic Ethanol All it’s Cracked Up to Be?

Edward, Cellulosic ethanol continues to be challenged by conversion/production costs and the ability to qualify as an ‘advanced biofuel’ with ‘full lifecycle’ GHG emissions 50% less than the petroleum gasoline (equivalent) fuel displaced.  The reason why cellulosic ethanol struggles to achieve any significant delivered volumes appears to be due to the still huge technology gaps and developments/innovations needed to achieve positive ‘net energy values’ (i.e. production energy/fossil fuels consumption < than finished ethanol fuel heat content).  Will cellulosic ethanol ever overcome these hurdles?  Only time, continuing R&D and (hopefully) future achieved advancements will tell.

As far as landfill gas or biogas qualifying as an advanced biofuel, this one appears to be another example of the EPA possibly putting political influence over sound science and engineering.  Based on my past research natural gas motor fuels (CNG/LNG) are the 3rd most successful alternative to petroleum gasoline.  However, the natural gas motor fuel comes from well/hydraulic fracturing production, not landfill biogas.  How the EPA rationalizes that landfill biogas qualifies as an advanced biofuel appears to be another example (Re. my past analysis of sugarcane advanced biofuels) of the EPA doing less than a reasonably accurate analysis of certifying another ‘less-than-advanced’ biofuel.  In the case of landfill biogas it can definitely and readily displace natural gas heating fuels used in convective heaters, boilers and power plants, but not very likely petroleum motor fuels.  The problem begins with raw biogas, 50-70% methane and 30-50% carbon dioxide.  To be used as a motor fuel it must be purified by removing the carbon dioxide, which is normally vented into the atmosphere, followed by compression/liquefaction and transported into natural gas fueling infrastructures.  The economic probability of this process-supply chain actually occurring is highly questionable.

A better justification for landfill biogas is that it does reduce natural gas emissions from landfills and does displace natural gas and possibly heating oil fuels.  Applying this to the ‘Renewable Fuel Standards’ appears to be another distortion of this regulation and its primary purpose: displacing and reducing the consumption and associated emissions of ‘petroleum motor fuels’; directly. 

December 16, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

James, the supply disruption risks of fossil fuels have been reduced over the years due to the combination of building the SPR, increased consumer efficiency upgrades (CAFE standards), increased crude oil production, and having adequate domestic Refining capacity.  All of these factors could be the outline for effective strategies to reducing the current risks to uranium supplies disruption and the possible negative impacts on future Nuclear Power generation.  The obvious problem with current U.S. uranium supplies is that about 40% come from FSU Countries that could be lost if Russia were to decide such a move was in their best interests.  Since current uranium supply inventories could cover 1-2 years of this potential supply disruption/loss, this factor will help dampen the short-term impacts of a possible future FSU embargo.  The risks are, however, are more complex than just raw yellow cake inventory supplies.  The next risk is enriching/converting current U.S. raw uranium inventories into nuclear fuel rods.  Once again, the U.S. substantially relies on Russia (refer to Figure 15, page 45), which potentially adds further to the supply risks.

Yes, there are solutions to these risks as you state, such as increased production/supply from reliable sources including the U.S., Canada and Australia.  All these Countries have very large untapped uranium reserves.   But tapping these reserves is probably more difficult to implement in a needed timeframe then you may be assuming.  Since it normally takes about 15 years to permit, construct and startup a new uranium mine within the U.S. historically, waiting until after the fact or in response to a future uranium supply energy crisis is not a very effective or recommended strategy.  The most effective and thorough strategies to fully mitigating future potential uranium supplies disruptions and shortages will be covered in a future Part 2 Post.  And yes, the solution will require new Government policies to facilitate needed, cost effective solutions.

December 5, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

Simon, your observation is probably accurate.  As the U.S. and UN continue to put pressure on Russia as a result of their growing expansion ambitions, Russia is definitely turning to their major ‘communist’ ally for trade and energy exchanges, beginning with natural gas.  And, possibly uranium in the near future since China (I refer you back to Table 1 of this post) apparently has plans to substantially increase their nuclear power generation.  Also agreed, the competition for Australian uranium resources will likely become a major issue of concern in the future as China tries to expand into this market.

One of the major political issues that many often over look is the fact that the current U.S. Administration has a bad habit of alienating major U.S. Allies and Trade Partners.  In the case of Canada, the chronic delay of the Keystone XL pipeline decision is the obvious example.  In the case of Australia, the President recently belittled this important Ally in a Climate Change speech

December 3, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

There have been a number of breeder reactors built and operated over the years.  Refer to a World Nuclear Association article on the subject.  Commercialization barriers appear to be more economic vs. conventional reactors, than technology.  Another beneficial factor is the ability of breeder reactors to use or process the large volumes of spent nuclear fuels stored at nearly all nuclear power plants today; since the U.S. lacks central spent fuel storage facility (Yucca Mt.) and has chosen not to ‘reprocess spent fuels’ over the years..  These are additional factors not understood or overlooked by most those who do not support current or future expansion of needed nuclear power generation capacities.

December 2, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

Hopefully, the necessary thorium power technology developments and innovations will materialize in the near future.  This advancement could only want for a little R&D support from the Federal Government.  Just think of the support and advancements’ made in wind and solar energy industries over the past decade or so.  Little of these developments and capacity expansions would have likely occurred without Government help and support.  Once thorium power overcomes current technical and economic challenges (possibly with some reasonable level of Government support), it sound like the fuels will be readily available and possibly relative cheap; from Lightbridge.

December 2, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

Joris, agreed, stockpiling additional inventories of yellow cake uranium supplies is definitely a very practical solution to help mitigate the risks of future supply disruptions.  Another complication or risk to nuclear fuels supplies is due to available uranium enrichment capacity and finished reactor fuel production.  The U.S. currently relies on Russia for its largest source of uranium enrichment processing.  Refer to Figure 15, page 45 of the EIA 2013 Uranium Marketing Annual Report.  This situation directionally increases the risks to current and future nuclear energy security, and should be addressed as part of a future strategy/policy to reduce overall supply/energy risks.

And yes, breeder reactor technology could definitely be a part of the solution to addressing future uranium shortages.  As you are probably aware breeder reactors are about 60-times more efficient than conventional LWR fission reactors and can operator on low grade and spent (waste) nuclear fuels.  Refer to a World Nuclear Association article on ‘Fast Neutron Reactors’ for further details.  The historic barrier to breeder vs. conventional (fission) reactor technologies has been cost.  Breeders are substantially more expensive than conventional reactors.  Based on historic costs of uranium (U3O8 equivalent) fuels of $10-$15 per pound, breeder reactors were nowhere near economic compared to conventional reactors.  Refer to Figure S2, page 6 of the EIA 2013 Uranium Marketing Annual Report.  However, since uranium market prices have increased up to $40-$50 per pound range since the mid-2000’s, the economics of breeder reactors should be much more attractive in the near future.

As far as “getting off nuclear power”, the lack of cost effective and commercially proven alternative technologies for required power grid baseload capacity is clear and very strong justification for current and future expanded nuclear power generation. 

December 2, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

Simon, from an ‘investor’s perspective’ some of these companies could provide significant investment opportunities; particularly if an international shortage of uranium does develop in the future due to potentially large supply disruptions from FSU or other unstable-major suppliers of uranium into current world markets.  From an ‘energy security perspective’ the U.S. and other Developed Countries, that have excessive reliance on uranium imports from less than reliable suppliers, need to develop supplies or suppliers from increased domestic production and/or reliable trade-partners including Australia, Canada, Greenland, etc.  In the future there could be a very good synergy between the economic attractiveness of expanding domestic and Developed Countries uranium supplies and mitigating a future shortage/energy crisis or increasing national energy security.

December 2, 2014    View Comment    

On U.S. Uranium Supplies, Part 1: Growing Energy Security Risks

Nathan, yes uranium energy density and cost per unit power generation is cheaper than all other fuels.  The U.S. Industry currently stores about 2 year’s supplies in inventory on average.  Refer to Figure 20 (page 56) in the EIA 2013 Uranium Marketing Annual Report.  Based on the combination of normal management practices of minimizing inventory costs/quantities, and the historic relatively good reliability of imports, most Nuclear Power Owners & Operators have not been concerned or motivated to plan for a potential and rapid 40% loss of imports.  This situation could change fairly rapidly if the Russian-Ukrainian situation gets out of control and the U.S. and UN are forced to substantially increase existing economic scansions.  Russia could readily retaliate by embargoing regional (total FSU supplies possibly) to the U.S. and EU.  And, yes current inventories would definitely help mitigate the supply shortage impacts over the next year or so, but replacing FSU uranium supplies (half the current available supplies to the world today) will become problematic since replacing half of current world uranium is no small task.

The Industry and Government needs to develop plans and policies to mitigate and potentially eliminate the risk of FSU uranium supplies disruption in the future.

December 2, 2014    View Comment