Nuclear Power

15 Mar 2023

Senate Hearing Focuses on Securing the Entire U.S. Nuclear Fuel Cycle

15 Mar 2023  by   

In this screenshot from a video recording of the hearing, Huff, Wagner, and Dominguez answer a series of questions from Sen. Manchin

“Right now, our country is deficient in nearly every aspect of the fuel cycle. This must change and it must change quickly,” said Sen. Joe Manchin (D., W.V.), chairman of the Senate Committee on Energy and Natural Resources (ENR), as he opened a Full Committee Hearing to Examine the Nuclear Fuel Cycle on March 9. “Whether it is uranium mining, milling, conversion, enrichment, nuclear fuel fabrication, power generation, or nuclear waste storage and disposal, there is much work to be done, starting with conversion and enrichment. Simply put, Russia dominates the global market, representing nearly half of the international capacity for both processes.”

ENR ranking member Sen. John Barrasso (R., Wyo.) also focused on Russia during his opening remarks, saying, “It wants to undermine America's nuclear industry, and by several metrics, Russia is succeeding. For decades, Russia has unfairly dumped uranium into our market. It has undercut America's nuclear fuel producers, driving our companies out of business. American uranium production is now at a level not seen—as a low level—since the 1940s.”

The full committee questioned three witnesses—Kathryn Huff, assistant secretary for nuclear energy at the Department of Energy; John Wagner, director of Idaho National Laboratory; and Joseph Dominguez, president and chief executive officer of Constellation Energy—on how a range of fuel cycle issues impact the future prospects for a reliable U.S. grid powered by clean energy sources.

Securing fuel supplies: The Nuclear Fuel Security Act, introduced by Sens. Manchin and Barrasso and Sen. Jim Risch (R., Idaho) in February, is similar to legislation that passed the Senate by voice vote in December 2022, and would provide the authority required to expand U.S. uranium conversion and enrichment capacity. Remarks from the senators and witnesses underscored the need for that authorization.

Wagner testified that U.S. uranium mining has decreased by 92 percent since 1980 and that the United States currently imports over 90 percent of the uranium needed to support the existing power reactor fleet of 92 reactors, with about 14 percent of that uranium coming from Russia.

“Currently, the only commercial source for HALEU [high-assay low-enriched uranium] is Russia,” Wagner said. “This presents both a challenge and an opportunity for our nation. Ideally, we would expand the LEU fuel cycle capabilities to a HALEU fuel cycle, but this is not possible given the crippled state of our domestic capabilities. By developing a 100 percent domestic HALEU fuel cycle, which would include mining, conversion, enrichment, and deconversion capabilities, we would address both LEU and HALEU needs.”

Questioned on the need for import restrictions on Russian uranium, Huff explained, “It takes a while—a few years—to stand up new fuel cycle capacity to replace the capacity that we currently import from Russia, and we have only a finite amount of inventory available inside this country. We want to make sure that the timing is appropriate such that we have incentivized the expansion of that fuel cycle capacity at the same time as pairing it with import restrictions . . . to ensure the continued operation of our existing nuclear power plants without fuel disruption. What we need is a pairing of those import restrictions and incentives for that fuel cycle capacity to be stood up.”

For HALEU, the question is when: The DOE is preparing to issue a draft HALEU acquisition strategy. Questioned by Barrasso on the timing of that release, given that Congress directed the DOE to establish the HALEU Availability Program with the Energy Act of 2020, Huff explained that the draft “goes through a process where other agencies and the Office of Management and Budget and everyone has an opportunity to weigh in, and I expect that when we do release it, it will be exactly right and there will be no question across the entire whole of government.” She continued, “We expect it to be out very soon. . . . My understanding and hope is that it is collectively a desire to get it out, get it out soon, and get it out correctly.”

Huff said that in addition to congressional support for HALEU supply to date, “ending our reliance on Russian supplies also requires additional appropriations and authorization,” and she suggested that a revolving funding mechanism could reduce the need for additional appropriations.

Sen. Martin Heinrich (D., N.M.) questioned whether HALEU availability funds would be competitively awarded and open to bids from the United States’ sole operating commercial enrichment facility, the Urenco facility in Eunice, N.M., unlike the HALEU Demonstration Program, which supported Centrus Energy’s HALEU enrichment cascade in Piketon, Ohio. Huff said in response, “I can absolutely commit to this being a fully competitive process.”

“Diversity of supply is security of supply,” Huff said. “We are committed to ensuring that the acquisition approach is flexible enough to incorporate the possibility of supporting as many suppliers as can make our system as robust as possible.”

Huff pointed to the use of offtake agreements as a mechanism to ensure that enrichers will actually deliver the HALEU they contract to provide. “By structuring a strategy that would use long-term commitments for offtake agreements, we ensure that this is payment on receipt of the material, ensuring that the United States taxpayers’ investment really goes to the production of material from new capacity,” she said.

Focus on grid reliability: Dominguez testified that reliance on natural gas has left the PJM Interconnection in which Constellation operates vulnerable during extreme events, and that increasing wind and solar generation resources pose a similar risk in the future. “In 2014 we almost lost the PJM system to blackouts during the middle of the polar vortex,” he said. “That year we thought we fixed it. But then leading into the Christmas holidays this year, we again got into an emergency situation where a lot of generation failed to operate and we were going to go into emergency measures.” He credited nuclear capacity with preventing large-scale impacts on customers but added that “the challenges we recently faced are not the last challenges we're going to face as we transition to more intermittent resources.”

“Anything you want to power, anywhere it exists in the grid, . . . whether it's a blow dryer and or electric vehicle or a steel factory, all of it depends on the electric grid functioning and that depends on a robust nuclear industry,” Dominguez said. “Right now that industry is dependent on fuel sources that are not domestically produced, and the risk of that is a cutoff by the Russians to those fuel sources, which could turn into a reliability crisis.”

When Manchin questioned Wagner on nuclear economics in a grid impacted by renewables, Wagner replied, “I think we're getting dangerously close to papering over what is going to be one of the most difficult engineering challenges our nation will face. And that's trying to replace an energy system that has these guarantees [to . . .] be on all the time with resources that don't operate when people dispatch them, but when Mother Nature permits them to operate. And I do believe that we've overlooked these problems in the early days of the introduction of some of these intermittent resources and the consequence has been fairly small so far because the percentage of penetration has been minimal.”

Credits critiqued: In February, the Nuclear Energy Institute and three other organizations sent letters endorsing a proposal to use funds from the Civil Nuclear Credit program to ensure U.S. nuclear fuel availability. When Barrasso asked Dominguez if he would agree that a portion of the CNC funds could be used for fuel availability, Dominguez replied that Constellation currently has no plans to apply for CNC funds.

“What I could simply tell you, Senator Barrasso, is that we don't intend to use the Civilian Nuclear Credit program,” Dominguez said. “Our focus here isn't where the [fuel availability] money comes from necessarily. It's in getting this work started. . . . I could tell you the CNC program is not something that we will be using in our fleet, and historically we've had the most challenged units.”

Huff testified to the importance of the CNC program for other plants in the fleet. “The second round was recently opened for a broader set of plants to apply. We expect that even with the production tax credits and the Inflation Reduction Act, there will still be plants at some economic risk . . . that will continue to apply for that program.”

Dominguez said that although Constellation doesn’t plan to apply for CNC credits, the combined impact of the Bipartisan Infrastructure Law and the IRA was a “total game changer. It allows our investors to support us when we're extending the lives of the assets. The conversation for the last 10 years has been about closing nuclear plants. Now we're in this welcome discussion about continuing their operation for generations to come.”

Adding capacity: Dominguez said Constellation is interested in the business case for small modular reactors, not in large gigawatt-scale reactors. “For our company there's no way we could undertake the construction of a large dual-unit site. Think about the irony of that—we own 23 of these things already and we can't build the next two on our balance sheet,” he said, adding that SMRs are a different story. “You get the machine up and running and producing energy sooner, meaning revenues are in the door and the costs of interest carrying costs are substantially lower.”

Sen. Heinrich questioned the licensing prospects for those plants, saying “the NRC [Nuclear Regulatory Commission] has a 48-year record of saying ‘no’ nearly all the time,” and he asked whether a different regulatory framework was needed.

Huff replied, saying, “Senator, I could not agree with you more that the need for our regulatory system to work efficiently to enable these deployments is absolutely critical. To get to our carbon reduction goals, it's essential, and the Nuclear Regulatory Commission has a huge job facing it. I do not envy them this task. Their approach to streamline and improve their efficiencies I hope will result in success.”

Manchin asked all the witnesses, “Do you think 20 percent is the right mix for nuclear? Can it go higher?”

Dominguez replied, “It's been 20 [percent] for a long period of time, but it's 20 percent of what, right? We're talking about this energy transition where we're electrifying everything. . . . That pie is going to get bigger, so the 20 percent is going to be relatively larger. That's where SMRs play, in my view. The need for baseload power is far greater than 20 percent, and I think that's been demonstrated time and again. . . . Replacing the percentage that coal and nuclear together historically occupied in the grid, that's really your target.”

Huff agreed, adding that the Biden administration’s Pathways to Net Zero report “agrees with this assessment that the amount of clean firm power needs to increase to completely fill what is currently all firm power.”

The back end and Yucca Mountain: The back end of the nuclear fuel cycle came up a number of times during the hearing, with Sen. Catherine Cortez Masto (D., Nev.) reiterating her state’s opposition to the Yucca Mountain repository project. At one point, Cortez Masto said that the recent derailment of a Norfolk Southern train in East Palestine, Ohio, is one reason Nevada residents have “serious concerns” over moving spent nuclear fuel and high-level waste to the proposed repository. “It is a prime example of why state consent is critical,” she said, noting that moving waste to Yucca Mountain would require the shipment of over 9,000 spent fuel casks on 2,800 trains over the next 50 years through the state.

While agreeing with Cortez Masto’s call for reforms to strengthen railroad safety, INL’s John Wagner responded by noting that spent fuel transportation casks are extremely robust. “Having been directly involved in designing and licensing spent fuel transportation casks, the level of rigor as required by the Nuclear Regulatory Commission on those packages is substantially different,” he said.

Cortez Masto retorted that Nevadans were also told by scientists and the federal government that atomic weapons testing done in the state was safe. Claiming the Yucca Mountain site is not safe, she said the country has an opportunity to move forward on the waste issue using new technology. Speaking about the Nuclear Waste Policy Act (NWPA), Cortez Masto said, “It is an archaic law that is basically saying, go back and review the Model T in a Ford manufacturing plant and tell us whether it’s safe or not.”

In response to a question on the nuclear industry’s position on Yucca Mountain from Barrasso, Dominguez said that it is the industry’s view that the licensing process be completed even if the site is ultimately never used.

Consent-based siting: In addition to Yucca Mountain, committee members also discussed consent-based efforts to site an interim storage facility for spent nuclear fuel, with Manchin saying, “We must have a consent-based program in place that can thoughtfully and effectively engage with state, local, and tribal governments to find a suitable means to site a repository.”

Manchin further noted that the federal government has paid about $8.6 billion to date in standard contract settlements for failing to take possession of the country’s inventory of spent fuel. “That is approximately $2 million a day, or $167,000 over the course of today’s hearing,” he said.

In response to a question by Sen. Agnus King, (I., Maine) on when the DOE may have an answer to the spent fuel dilemma, Huff said that the department is making progress on its consent-based siting initiative using congressional appropriations. “We have recently closed and are now reviewing applications for a funding opportunity announcement of $26 million that will be sent out to communities to explore their own interests and understanding of spent nuclear fuel interim storage,” she said.

In follow-up questioning by Sen. John Hickenlooper (D., Colo.) regarding constraints to the DOE building an interim storage facility, Huff noted that the NWPA currently links the siting of a final, permanent repository with the construction of an interim storage facility. “In order to actually construct an interim storage facility, one may need to reevaluate that linkage,” Huff said, adding that she recognizes that it is “critically important that an interim storage facility not become the de facto permanent repository.”

Cortez Masto also asked Huff about recommendations that have been made to move the civilian nuclear waste program out of the DOE. Huff, noting that was a recommendation of the Blue Ribbon Commission on America’s Nuclear Future, said the idea has “significant merit.” She added, “It is a constant topic of conversation internal to my office."

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