WHY INDO-US NUCLEAR DEAL FOR THE SUPPLY OF NUCLEAR FUEL TO INDIA WHEN USA ITSELF IS BUYING FROM OUSIDE AND ALSO FACING SHORTAGE THAT WILL LIMIT ITS NUCLEAR POWER EXPANSION
Over the past three decades, safety concerns dampened all aspects of development of nuclear energy in USA. No new reactors were ordered for the past 31 years, and there was investment neither in new uranium mines nor in building facilities to produce fuel for existing reactors. Instead, the industry lived off commercial and government inventories, which are now nearly gone. Worldwide, uranium production meets only about 65 percent of current reactor requirements. Limited supplies of fuel for nuclear power plants will thwart the expansion plans in the nuclear energy in the United States.
That shortage of uranium and of processing facilities worldwide leaves a gap between the potential increase in demand for nuclear energy and the ability to supply fuel for it. Now large numbers of new reactors are being planned in USA, but USA is starting to emerge from 20 years of underinvestment in the production capacity for the nuclear fuel to operate them. There has been a nuclear industry slowdown all over the world. Few years ago uranium were being sold at $10 per pound, but as the demand has increased the uranium price has risen to the current level of $85 per pound. Like the rise in oil price, the nuclear fuel price is rising sharply due to the lack of capacity to produce it.
Currently, much of the uranium used by the United States is coming from mines in such countries as Australia, Canada, Namibia and, most recently, Kazakhstan. Small amounts are mined in the western United States, but the United States is largely reliant on overseas supplies. The United States also relies on Russia for half its fuel, under a “swords to ploughshares” deal of 1991. This deal is converting about 20,000 Russian nuclear weapons to fuel for U.S. nuclear power plants, but it ends in 2013, leaving a substantial supply gap for the United States.
China, India and Russia have plans for massive deployments of nuclear power and are trying to lock up supplies from countries on which the United States has traditionally relied. As a result, the United States could be the last one to buy, and it could pay the highest prices, if it can get uranium at all. In this context it is very strange that USA is negotiating a Indo-US nuclear treaty for the supply of nuclear fuel to India. USA has not invested in additional capacity to mine uranium and facilities to process it. Probably USA is expecting India to invest and do the dirty work in this regard for it to enjoy the additional supply of Uranium.
Mined uranium comes in several forms, or isotopes. For starting a nuclear chain reaction in a reactor, the only important isotope is uranium-235, which accounts for just 0.712% of the natural Uranium mined, while the remaining uranium isotope 238 is not fissionable. To fuel a nuclear reactor in India, that is mostly heavy water based, this natural fuel is sufficient. But for USA, the reactors use light water and the natural uranium needs to be enriched which means that the concentration of uranium-235 has to be increased to 4% to5% in an enrichment plant.
Current enrichment capacity in USA, is enough to recover only about four out of seven uranium-235 atoms. Limited uranium supplies could be stretched if industry could recover five or six of these atoms, but there is not enough processing capacity worldwide to do so. US could get more amount of fuel made from a given amount of natural uranium by outsourcing more enrichment services to recover more uranium-235 atoms.