Restore Nuclear Leadership Now or Risk Russia and China Filling the Void

Jun. 28, 2020

The last two decades have seen the US has cede its position as the world leader in nuclear energy. Russia and China have filled the void. This was the viewpoint of Dan Brouillette, U.S. Secretary of Energy, as highlighted in an article in Defense One.[1] Efforts to restore US leadership in nuclear energy are being undertaken.

We believe that these efforts help to underscore our bullish outlook for nuclear energy and uranium.

Restoring US Leadership in Nuclear
To revive America’s nuclear energy industry and restore our competitive advantage, the US launched the Nuclear Fuel Working Group. The product of this whole-of-government effort, the “Strategy to Restore American Nuclear Energy Leadership,” was released by the Department of Energy last month.

The strategy proposes a series of actions to enhance nuclear power as a firm baseload source of energy that is clean, reliable, resilient, safe, and sustainable in an evolving energy landscape; revive our uranium mining, milling, and conversion industries; strengthen American technology supremacy; and drive U.S. exports of advanced nuclear reactors and fuel technology.

Underpinning the entire strategy is the acknowledgment that our national security depends on a robust nuclear-energy industry.

Roadmap to Restoration
First, the proposed strategies will rewrite foreign-policy relationships. Countries looking to pursue nuclear energy to fill their energy needs are turning to China and Russia for technical assistance. The working group’s proposed strategies hope to increase American competitiveness in new markets by making it easier to export civil nuclear technologies, equipment, and fuel.

Second, the working group’s strategy aims to prevent an increase in nuclear weapons around the globe. The ability to influence global non-proliferation, nuclear security, and safety standards is dependent on our credibility in the international reactor export market, according to the working group.

Increasing Domestic Uranium Production
Additionally, the long-term ability of the US to build new nuclear warheads and to fuel its submarines and aircraft carriers depends on the domestic production of uranium. Foreign suppliers are prevented from supplying this element for military purposes.

We have already written about the working group’s recommendation to create a domestic uranium reserve.

Additional Investment in Technology
The working group’s strategy also calls for funding advanced research, development, and deployment of America’s next generation of nuclear energy technologies.

Summary
US national security may depend on a strong, robust nuclear energy industry. Efforts to restore US dominance in nuclear technology can bolster both domestic and international development of nuclear energy and the building of new reactors. This has the potential to increase the demand for uranium. At the same time, the creation of a domestic uranium reserve may remove supply from the market. These developments have the potential to bolster uranium prices.

How may investors gain access to uranium and uranium miners?

The North Shore Global Uranium Mining ETF (URNM)

The North Shore Global Uranium Mining ETF (URNM) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the North Shore Global Uranium Mining Index (the index).

By seeking to replicate the index, URNM looks to provide investors with access to both miners and holders of uranium.


[1] Brouillette, Dan, Our National Security Requires a Stronger Nuclear-Energy Industry, Defense One, 5/28/20

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