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Uranium exports: bonanza or bust?

February 23rd, 2013

Note: The usual sitewide ban on discussions of nuclear power is lifted, for this post only

Queensland’s ban on uranium mining was lifted last year, and a committee is due to report soon on the conditions under which mining might be restarted. As recently as a year ago, the prospects for uranium exports looked bright, despite the Fukushima disaster. In March last year, the Bureau of Resource and Energy Economics predicted “prices close to $100 a pound between now and 2015, rising to $124 in 2016 and $141.6 in 2017, in constant 2011-12 Australian dollars.”

In reality, however, the price has fallen to $US43/pound in early 2013 and looks set to decline further. Looking ahead, the future of nuclear power looks bleaker than at any time since the industry began. That’s bad news for the global climate – cheap and safe nuclear power would be the ideal replacement for coal if it could be delivered – but there is no benefit in denying reality

It’s now clear that the “nuclear renaissance” is dead in the US. There are four plants currently under construction, behind time and over budget as usual. No more are planned, and with two plants already closing, it seems clear that nuclear power capacity is going to decline. It’s fashionable to blame cheap gas for this, but that hasn’t stopped huge growth in wind and solar, neither of which is as heavily subsidized as nuclear. It’s even more silly to blame the opponents of nuclear power, who have been both quiet and politically marginal in the US, as is evidence by the bipartisan support for nuclear loan guarantees.[1]

The situation in Europe, and of course in Japan, is even worse. Again, and despite the absence of cheap gas, the economics simply don’t stack up. George Monbiot, who famously became an advocate of nuclear power *after* Fukushima, has reluctantly concluded that “for now, the facts are against me”.

The great hope for the future of nuclear power is, of course, China[2]. Given its rapid growth, China is in a position to place a bet on every horse in the energy race, including nuclear. But, while its plans for renewables have been steadily upgraded, China’s nuclear plans were scaled back substantially after Fukushima.

It seems likely that, with higher safety standards, the Chinese nuclear program (until now characterized by on-time and on-budget delivery, but probably with compromised safety) will start to experience construction costs and delays comparable to those that have been the uniform experience of the developed world. If not, there is still a chance for nuclear power in the future. But the establishment of a track record of safe construction and operation in China will take at least a decade, which means that any global renaissance won’t start delivering benefits until after 2030.

Most of these negative outcomes could have been, and were, predicted on the basis of 20th century experience with nuclear power. In this context, it’s striking that rightwingers who want to excuse anti-science attitudes on their side so often point to the anti-nuclear stance of many (not all) on the left as an example of leftwing anti-science.

The opponents of nuclear power have been proved right on the big question of whether cheap, safe and clean nuclear power can be delivered in developed countries. Perhaps some were right for the wrong reasons. But on this issue, as on so many others, the clearest examples of magical (and therefore anti-scientific) thinking are found among those rightwingers who continue to insist, against all the evidence, that nuclear power represents an obvious solution to our problems, and that the only obstacle to its success is the unreasonable opposition of environmentalist.

Coming back to the original quesiont, the price of uranium boomed in the early 2000s, after supplies derived from nuclear stockpiles were exhausted. But the current decline looks set to continue for a long time. Unless new mines are profitable at prices of $40/tonne or less, they will probably be uneconomic.

fn1. Of course, news like this doesn’t help (H/T David Adamson).

fn2. BREE also mentions India and Russia. But given the long history of lax construction standards in both countries (a problem China is at least addressing), it seems unlikely that either of these countries will serve as a model, or that they can manage a rapid expansion without another disaster, perhaps not on the scale of Chernobyl or Fukushima, but enough to derail the whole process.

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