Categories: Energy
Topics: General Energy

Megaton-to-Megawatt Program

Former Energy Secretary Abraham on Nuclear Energy, Global Warming and Obama’s EPA

Former U.S. Secretary of Energy Spencer Abraham (2001-2005) is busy these days as the board chair of Uranium Energy Corp. On Wednesday, we spoke by phone to discuss a number of issues. Atop his mind: The completion at year-end of the so-called U.S.-Russian Megaton-to-Megawatt program.

That program was created in 1993 as a way to not just help diminish the supply of weapons-grade nuclear material on the market but also as a way to help this country feed its nuclear energy program. Now that it is ending, Abraham says that it is imperative that this country increase its domestic uranium supplies, adding that over time, nuclear energy will play a greater role in the United States. In the coming weeks, I’ll flesh out some of his answers in the form of full-blown columns:

EnergyBiz Insider: Sir, could you kindly explain the Megaton-to-Megawatt program and whether the ending of it is an economic or political decision?

Abraham: When the program was launched in 1993, it served a national security objective. It helped the Russian Federation to dispose of weapons-grade material. A lot of this has been addressed. There was also a need for Russia to generate revenue. Obviously the economy there has improved a lot. The energy sector has grown and that has altered the calculus. The nature of the agreement that was entered into and then renewed, and which created an exclusive relationship to obtain these fuels, was viewed as being less desirable from the standpoint of seller. Russia felt it could sell this product on the spot market for higher prices. On their end, they wanted to have more flexibility.

EnergyBiz Insider: Has that been a good a decision, given that uranium prices have been depressed since the Fukushima accident?

Abraham: The price of nuclear fuel has gone up and down. Today, the price of uranium is lower. The market has been affected by the Fukushima nuclear accident. That has reduced demand in Japan and has, for a period of time, caused a lot of caution and policy debate over the continuance of nuclear power around the world. That environment was bound to have a downward pressure on nuclear fuel prices.


I believe that is short-lived. Given the change in the Japanese government (during the recent election,) as well the increased demand in Finland and the United Arab Emirates, things will get back to normal and potentially start growing. First the curve was upward when there appeared to growth in nuclear. Then there was a huge drop because of Fukushima. Prices will come back up.

The fact of the matter is the Russian program is ending. It is both political and economic. But you can’t predict these things years in advance, when they made a decision to end the program. The higher price would have argued in favor on flexibility back then. It is now coming up on its expiration and you are making a bet not just on the day it will end but also 10 years after that. In 5 to 10 years, the market for this product will be higher. People will understand the accidents have been unique. Nuclear power has to be part of the mix. The demand for uranium will be affected.

EnergyBiz Insider: Is there the political will to mine for uranium in the United States and why can’t we just rely on foreign imports?

Abraham: America has to face the fact that its security is a little less certain because we don’t have this guaranteed source. So, we need more domestically generated sources.  If we have more access to uranium at home, we will have a higher level of energy security.

Texas and the Rocky Mountain area are potentially rich sources. These are important resources we should be cultivating at home. Over 30 percent of the uranium we now get comes from Kazakstan. We need to be more aggressive so we can supply our own nuclear power plants.

The raw material can be enriched for the power plants we have. At the end of the day, you still need to engage in a conversion process. We need modern capabilities. Now, some processes are more expensive and outdated. We need to have more domestic enrichment, or centrifuge, facilities.

My bottom line is we are going to have a strong nuclear fleet in the U.S. We will need to be able to supply it. We have access to the uranium. If it can be domestically sourced, that’s the better outcome.

EnergyBiz Insider: What are your thoughts on the federal court decision to force the Nuclear Regulatory Commission to continue studying Yucca Mountain? Is a permanent waste disposal site possible here?

Abraham: In 2002, I recommended we go forward with Yucca Mountain. Congress approved it. If you go way to the back the beginning, the wiser approach would have been to recommend a 250-year storage facility. That would not be so long in time as to pose the type of hypothetical problems that a 10,000 year scenario has created.

If we had set a time a frame that was reasonable, then over the next several hundred years, mankind would find safe ways to address nuclear waste. By making it a permanent repository, we opened the flood gates for every theory as to why not to do it. We have given critics and opponents the grounds on which to make their case. But a centralizing facility, as opposed to on-site situations, is a much safer approach. Settings in metropolitan areas are not safer than storing nuclear waste under a mountain that is 1,000 feet below the earth.

We need to make it sufficiently attractive to the states where any 250-year facilities would be located. We need to give them same incentives we do with regard prisons or power plants we locate in their regions. We have done the same thing with low-level radioactive waste in New Mexico. 

EnergyBiz Insider: Let’s discuss nuclear energy in the context of global warming. Are you in any way connecting these two issues?

Abraham: I’ve always found it frustrating to hear the same people who are opposed to global warming say that they are opposed to nuclear energy. To me, it has always made sense to stay in the role of nuclear and to expand the role of natural gas. Through those kinds of actions, you can address emissions and you can do it in a way that does not create concerns over intermittency issues. 

EnergyBiz Insider: How does coal fit into the national energy plan?

Abraham: I was part of the process that helped launch FutureGen, (which is a coal gasification unit that is scheduled to begin operations in 2014 and which will reduce harmful emissions to close to zero.) It remains a good idea. It is in our interest to identify ways we can use coal in a more environmentally friendly way. I’m happy the Obama administration has kept FutureGen on track.

EnergyBiz Insider: Any thoughts on the Obama administration’s EPA?

Abraham: It remains to be seen how it will handle a number of issues. It is hard to tell how realistic it will be on issues such as fracking and renewable fuels standards, which are big questions. The jury is still out on whether the EPA still needs to reform its role in a way that is reasonable and that takes into account all sides of the equation, including economic growth and a strong economy.