Uranium Demand: Thoughts on Nuclear Energy

Mike Shedlock discusses the worldwide nuclear energy situation, discussing the situation in Iran, how this may increase worldwide Uranium demand, and how the US may be losing its lead when it comes to nuclear technology.

“India will not be pressured into voting against Iran over its suspect nuclear program at this week’s meeting of the International Atomic Energy Agency (IAEA), Prime Minister Manmohan Singh said.

“‘We will do what is right for the country. India’s national interest is the prime concern, whether it is domestic or foreign policy,’ Singh told reporters in New Delhi, the Press Trust of India (PTI) news agency reported.

“‘We will not come under pressure. We will do the right thing for the country. Our prime concern is to protect and safeguard India’s enlightened national interest,’ the premier said on Sunday.

“U.S. ambassador David Mulford warned last week that a historic deal to provide India with American nuclear technology might fall through unless it votes against Iran at the Feb. 2-3 meeting of the IAEA…

“Mulford said a prospective deal for the United States to transfer civilian nuclear technology to India would ‘die’ in the U.S. Congress if India voted against a resolution on Iran.

“If India decides not to back the resolution, ‘The effect on members of the U.S. Congress with regard to [India-U.S.] civil nuclear initiative will be devastating,” Mulford told PTI in an interview.”

Right, wrong, or indifferent, more and more countries are willing to stand up to U.S. threats about energy policies. China, India, Pakistan, and Russia all have shown recent tendencies to pursue policies that will help secure their energy needs, even as the United States threatens trade sanctions. Should the United States withhold a transfer of technology to India because of Iran, the beneficiary would likely be Russia or China, both of whom would likely be happy to make new trade relationships. [Greg’s Note: India, Russia and China all changed their positions right before the vote, unanimously supporting Iran’s referral to the UN Security Council.]

Uranium Demand: Confrontation Resolved?

I suspect that such a confrontation may not take place, as “China and Iran Warm to Russian Nuclear Proposal”:

“China and Iran expressed support on Thursday for a Russian proposal to resolve Tehran’s standoff with Western governments which suspect it of secretly planning to build a nuclear bomb.

“Top Iranian nuclear negotiator Ali Larijani, on a one-day trip to Beijing to seek China’s support, said the Russian proposal — that Iran’s uranium fuel be enriched on Russian soil, rather than in Iran — needed further discussion.

“Tehran has previously shown little interest in the idea, intended to ensure it does not covertly divert enriched fuel toward a weapons program. It has repeatedly insisted it has no plans to build bombs but has the right to enrich uranium fuel on its territory for nuclear power generation…

“Russia and China wield veto power in the U.N. Security Council along with the three other permanent members — the United States, Britain, and France.

“Analysts say China would be more likely to abstain from a vote than use its veto. But [Chinese Foreign Ministry spokesman Kong Quan] said Iran should have the right to peaceful nuclear power.

“‘All Non-Proliferation Treaty countries’ rights to peacefully use nuclear power should be respected, but we must emphasize that these countries should also strictly abide by the relevant regulations,’ he said.

“German Deputy Foreign Minister Gernot Erler said Berlin welcomed signs Iran was considering the Russian proposal.

“‘Iran initially rejected this, but since yesterday it looks as if this window could be reopening,’ he said.

“U.S. President George W. Bush described how the arrangement would work: ‘The material used to power the plant would be manufactured in Russia, delivered under IAEA inspectors to Iran, to be used in that plant, the waste of which will be picked up by the Russians and returned to Russia.’

“‘I think that is a good plan,’ Bush told a news conference. ‘The Russians came up with the idea, and I support it.'”

Uranium Demand: Nuclear Energy for Everyone?

The obvious winner, should such a deal be worked out, is Russia. Not only will it increase the demand for uranium, but Russia would get a huge service contract out of it as well.

With that thought in mind, please note that “Putin Proposes Access to Nuclear Energy for All Countries”:

“Global infrastructure should be established to give all interested countries access to nuclear energy with reliable guarantees that the nuclear non-proliferation regime will be observed, President Vladimir Putin said Wednesday. Putin said Russia was ready to build an international center ‘to offer nuclear fuel cycle services, including [uranium] enrichment under the control of the IAEA.’

“The Russian leader said the center under the control of the International Atomic Energy Agency, the U.N.’s nuclear watchdog, would be open to every nation.

“He said technological innovations were needed to build new-generation reactors and fuel cycles, and this required broad international cooperation.

“‘We will propose this approach to G8 member states during our presidency and all our partners in the sphere of peaceful use of nuclear energy,’ Putin added.”

One can only wonder what Russia’s offer might do to the demand for uranium. Still, that could be peanuts compared to the upcoming demand from China.

Uranium Demand: China’s Pebble-Bed Technology

In “China Leaps Forward,” Newsweek is reporting, “The people’s republic is embarking on the world’s biggest nuclear building spree.” Following are a few snips from that article (enquiring minds may want to read the entire piece):

“American businessman Edwin deSteiguer Snead went to China seeking a future for nuclear energy. He’s pretty sure he found it. On a recent bitterly cold day, Snead took a ride out to a military zone northwest of Beijing, not far from one of the most well-known sections of China’s Great Wall. In the spartan lobby of an unassuming concrete office building that contains the control center of a nuclear reactor, Snead studied a model of the reactor, housed in a hillside at the site. Nuclear scientist Chang Wei pointed at the model, which looked like a basement furnace split down the middle, and explained how the design — including 27,000 balls of uranium wrapped in layers of super-strong silicon carbide, ceramic material, and graphite — makes it physically impossible for the reactor to do anything but shut down if something goes wrong; the dangerous uranium would be trapped inside the spheres, which have a melting point much higher than the temperature inside the reactor could ever reach.

“‘So let me see if I can describe it in Texas English,’ said Snead, 76, an entrepreneur who hopes to build a nuclear power plant on 55 acres in Texas. ‘There’s no way it can explode or melt?’

“Chang nodded in the affirmative. She went on to explain how the design requires only a fraction of the control-room staff a more conventional reactor would need. Snead, apparently impressed, exclaimed that this newfangled Chinese technology may be the key to assuaging the nuclear fears of Americans. He wants to go back and sell the idea to Texas A&M University or another school willing to back a research center. ‘I think the Americans will be buying nuclear plants from China within five years,’ he said…

“What makes the pebble-bed technology so important is its fail-safe design — it would not be possible for the reactor to melt down or explode like Chernobyl or Three Mile Island. The uranium in each sphere can’t get hot enough to melt the casing and escape. Also, the main coolant for the system is inert helium, not water, as is used in other types of reactors (water, of course, contains oxygen, which is combustible). As global warming and politics render the world’s reliance on fossil fuels problematic, China may in a few short years hold the key to a renaissance in nuclear power.

“And the pebble-bed reactor is only a small part of China’s nuclear ambitions. In the past few years, Beijing has embarked on the boldest nuclear energy plan since the one orchestrated by the United States in the 1970s. Chinese leaders recognize that their reliance on fossil fuels — about 80% of China’s energy comes from coal — is unsustainable. Nuclear power has thus become an essential part of their plan to prevent an energy and environmental crisis. China intends to increase its output of nuclear power at least fourfold by 2020, from 8,700 to 36,000 megawatts. That will require building up to three reactors a year until then…

“China will soon add two more reactors to the nine it already has running. At least 16 provinces and municipalities plan to build nuclear power plants. The goal is to derive at least 4% of the country’s energy from nuclear power in 15 years. Although that’s far behind today’s world average of 16%, it will amount to the biggest nuclear-construction binge the world has seen in decades…

“China is positioned to leapfrog the world in nuclear power precisely because it entered the race late. Until now, the country has built a hodgepodge of reactors with different technologies and safety features. But recently, top leaders decided to build a newer infrastructure virtually from scratch based on the most advanced, and safest, technologies. Although the pebble-bed reactor is not yet ready for prime time, the government is buying equipment and designs that have never been built before. China plans to choose one design of three submitted by AREVA of France, AtomStroyExport of Russia, and Westinghouse Electric for an $8 billion program to build reactors in the eastern province of Zhejiang…

“‘I think that, unfortunately, in the United States, we’ve lost our market leadership,’ says Andrew Kadak, a professor in the Massachusetts Institute of Technology’s nuclear-science and engineering department who has worked on joint programs with the Chinese. ‘We’re going to be watching how emerging nations of the world, such as China and South Africa, do with these technologies and perhaps follow them, which is sad to say’…

“Even if the nuclear strategy is a runaway success, it won’t come close to solving China’s energy problems. Demand far surpasses supply — in large part because Chinese companies are notoriously inefficient energy consumers. China is quickly running out of raw materials, such as coal, while demand for electricity has seen double-digit growth for more than three years. Renewable-energy sources won’t come close to meeting China’s needs. But that only fuels the urgency Chinese officials express when discussing the nuclear boom. ‘We need every type of energy,’ says Zhang Zuoyi, head of the institute that helps run the pebble-bed test reactor. ‘We are hungry.’ China’s leaders won’t listen to naysayers. They can’t afford to.”

Unfortunately, it seems the United States has lost market leadership of nuclear technology to China. Although some of those advancements are not yet proven, I suspect they soon will be. Perhaps one reason why India just may not have cared too much if it lost a nuclear deal with the United States is the perception that U.S. technology will soon be out of date, if it is not out of date already. A more likely explanation is that energy is just too important. Regardless of the political ramifications of those thoughts, China, Russia, Iran, and others are clearly marching ahead with nuclear energy plans, and, ultimately, that will increase the demand for uranium. In the meantime, the search for the Holy Grail (a cheap, clean, renewable energy source) continues.

Regards,
Mike Shedlock ~ “Mish”
Feburary 6, 2006