Why America Pays Russia $1 Billion Monthly

 Why America Pays Russia $1 Billion Monthly

American companies pay around $1 billion yearly to Russia’s state-owned nuclear agency to buy fuel that generates over 50% of the country’s emissions-free energy. 

• It’s not just nuclear power companies that rely on Russian uranium. U-S-based companies need the supply to transition away from burning fossil fuels. Hence, the $1 billion uranium cash flow from the U.S. to Russia continues despite significant efforts by Western allies to sever economic ties with Moscow.

• The U.S. and Europe have primarily stopped buying Russian fossil fuels as punishment for the Ukraine invasion. But roughly a third of enriched uranium used in the U.S. is now imported from Russia, the world’s cheapest producer.

• A house bill banning Russian uranium imports to the U.S. gained momentum in May. Still, it contains waivers allowing the import of low-enriched uranium from Russia if the U.S. energy secretary determines there’s no alternative source.

• U.S. reliance on nuclear power will grow as the nation aims to reduce reliance on fossil fuels. Uranium is crucial to nuclear power; so demand for the silvery-grey metal will also increase. But no U.S. company enriches uranium, hence the reliance on Russian uranium. U.S. companies make monthly payments to Rosatom, a nuclear energy company intertwined with the Russian military.

• U.S. producers may revisit past projects to increase production, but this requires substantial capital and subsidies at the state level. The implementation process could take three to five years but still doesn’t guarantee a complete replacement of Russian uranium. If the uranium ban goes through, nuclear fuel costs increase significantly, with severe implications for the U.S. electricity supply market.