US DOE seeks to use Defense Production Act to spur domestic nuclear fuel supply

The US Department of Energy is forming a consortium of nuclear energy companies to spur emergency agreements under the Defense Production Act to boost the domestic supply of enriched uranium and nuclear fuel.

DOE published notice in the Federal Register Aug. 25 of regulations providing the ability to oversee industry agreements designed to ease the country's energy emergency, and said they would be specifically applied to the issue of nuclear fuel.

The US is "heavily dependent" on foreign sources of uranium, conversion and enrichment services, President Donald Trump said in a May 23 executive order on reinvigorating the country's nuclear industrial base. The need for nuclear capacity has increased with growing demand for electricity, including from data centers, the EO said.

The DPA allows the government to establish voluntary agreements with industrial companies in an effort to secure a good or service that is needed for national security reasons. Subsequently action plans under those arrangements can carry out the goals of the arrangement participants.

DOE said it was establishing a consortium to ensure that nuclear fuel is available and help end the country's reliance on foreign sources of enriched uranium and critical materials used in nuclear energy, according to a DOE statement Aug. 22.

"By leveraging authorities in the Defense Production Act, DOE is able to take swift action to bring all parties to the table to accelerate our path toward a more secure and independent energy future," acting assistant secretary of energy Michael Goff said in DOE's statement.

DOE will favor agreements with companies "that have achieved objective milestones for the cooperative procurement of LEU [low-enriched uranium] and HALEU," or high-assay LEU, according to the Federal Register notice. LEU commonly refers to uranium enriched to levels used by existing nuclear reactors. HALEU is enriched to up to 20% U-235, and is planned to be used by most of the advanced reactor designs now preparing to be deployed. Russia has been a leading supplier of LEU to Western utilities and was the only supplier of HALEU until recently.

The DPA provides protection for private companies from antitrust regulations to the extent they are carrying out critical tasks that benefit national security.

The nuclear fuel consortium members will be identified in the coming weeks, and the group will meet for the first time Oct. 14, DOE said.

Companies weighing new enrichment plants

The Western nuclear industry has responded to Russia's 2022 invasion of Ukraine by seeking to reduce its dependence on Russian nuclear companies for fuel. The US has banned the import of Russian enriched uranium after 2027, and several nuclear fuel cycle companies have announced plans for expanded enrichment capacity or new enrichment facilities in the US and Europe.

The federal government has used the DPA's voluntary agreement powers in the past. One such arrangement was reached by the Federal Emergency Management Agency during the coronavirus pandemic in 2020. It allowed companies to share information and meet to ensure that logistical and manufacturing issues relating to the supply of critical health care resources were resolved quickly.

DOE said it was forming the consortium because actions taken so far, which include redirecting more than $2.7 billion in federal funding for future awards to bolster the production of enriched uranium, "are insufficient to ensure that the United States can break its current dependency on foreign-sourced uranium and develop a reliable supply of domestically-sourced nuclear fuel."