The 20% of America’s electricity that is currently supplied by nuclear power requires about 57 million pounds of uranium each year; yet America’s uranium industry produced only 2.6 million pounds U3O8 in 2005. In a post-9/11 world, reducing our dependence on foreign oil by expanding our nuclear capacity will have little impact if we are simply shifting to a dependence on foreign uranium. The uranium in situ recovery (ISR) technology developed over the past 30 years is exceptionally efficient and competitive because it allows production from relatively low-grade deposits in the U.S. to be cost competitive with large conventional mines in foreign countries.

 For more than 20 years demand (i.e., consumption) has exceeded primary supply. This trend is expected to continue for at least the next decade, making it imperative to find new  sources of primary supply.

For more than 20 years demand (i.e., consumption) has exceeded primary supply.  This trend is expected to continue for at least the next decade, making it imperative to find new sources of primary supply.

Over the next 10 years there is still a significant difference between known supply and demand for uranium – a gap.  This supply shortfall amounts to almost 400 million pounds or 23% of western demand over this period.

New production is expected to fill a significant portion of this gap (perhaps as much as 16% of total western demand), however this is by no means guaranteed.  New production will be subject to many regulatory, technical and political issues, all of which will require time and money to resolve before this production will be available to the market.

Even assuming the currently-known “best case scenario” for anticipated production, the market is still “short” 100 million pounds over the next decade.  This potential shortage is the primary reason why the UPA has urged the Secretary of Energy not to sell any more DOE uranium, but instead hold these inventories as an emergency reserve for national energy security.

Canada and Australia today account for just over 50% of the world's total primary production.

The spot price for uranium was first published in August of 1968.  At that time, the price was $6 a pound; over the next decade the price rose to an all-time high of over $43 in the late 70’s.  Beginning in 1978 the price began a steep decline and for the 20 year period 1983 to 2003 remained below $20 per pound U₃O₈.  The price bottomed out in December, 2000  when it dropped to $7.10 per pound U₃O₈.

Although the current spot market price of uranium may seem high, in inflation-adjusted dollars it is still far below the prices seen in the late 1970’s and early 1980’s.  Higher prices have led to increased expenditures for uranium exploration and a modest increase in production, but recovery of the industry will require sustained higher prices.

Uranium Production from ISR In 2004, 100% of U.S. primary uranium production was derived from ISR operations.  In 2005 ISR mining will account for nearly 80% of total U.S. uranium production.

U.S. civilian nuclear power reactors consumed a total of 56.6 million pounds U3O8 in 2003; for the period 2006 to 2013, the average yearly consumption of uranium by U. S. utilities is expected to be 60 million pounds U3O8.

In the early 1980’s the U.S. was the world’s leading producer of uranium.  This high production was supported by $40 per pound U3O8 sales contracts entered into in the 1970’s, prior to Three Mile ISR and.

Low uranium prices have led to significant consolidation of producers, such that two companies (both owned by Cameco Corporation of Canada) have dominated U.S. production for the past five years.

Higher prices will enable more companies to enter into production, stimulate competition, and provide U.S. utilities with greater variety of supply for their nuclear fuel.