U.S. Rethinks Uranium Supply for Nuclear Plants After Russia’s Invasion of Ukraine

Republican Sen.

John Barrasso

of Wyoming—one of the main U.S. uranium-producing states—filed legislation on Thursday to ban Russian imports, calling the dependence on foreign uranium “simply unacceptable.”

Uranium prices have jumped more than 30% since the start of the war as a price hike hits commodities broadly and utilities try to lock down supplies on fears that sanctions could pinch some part of the specialized fuel cycle. A trade agreement limits U.S. dependence on Russian uranium to no more than around 20% of what domestic reactors need, but no other country could quickly fill Russia’s role in a complex supply chain that could take years to rejigger.

“U.S. utilities rely on Russia enough that you can’t replace Russia overnight,” said

Jonathan Hinze,

president of UxC LLC, a nuclear-industry market-research and analysis firm.

The Nuclear Energy Institute, a Washington, D.C.-based trade group, said it was assessing “the potential impacts of fuel disruption on the U.S. nuclear fleet.” But U.S. plants typically refuel every 18 to 24 months and plan refueling at least two to three years in advance, so there is little immediate concern of a short-term fuel shortage for existing plants, according to the group.

“I think that gives us time to react,” said

Maria Korsnick,

the group’s chief executive.

Still, uncertainty over securing future nuclear-fuel supplies raises questions for developers designing small modular reactors, or SMRs. Though none are under construction yet in the U.S., many proponents of nuclear generation consider SMRs the future of the industry. Russia was considered the chief supplier for those projects before the war.

The U.S. has met Russia’s assault on Ukraine with economic penalties targeting Russia’s financial sector and a ban on oil imports into the U.S., but so far, uranium has avoided sanctions. The U.S. relied on Russia and its allies Kazakhstan and Uzbekistan for about 46% of its needs in 2020, according to the U.S. Energy Information Administration.

Nick Akins,

chief executive of the utility

American Electric Power Co.

, which operates the Cook Nuclear Plant in Michigan, said the war has prompted talk of onshoring uranium production and enrichment. “I think things like this are going to change that discussion, and they should,” Mr. Akins said. The Cook plant doesn’t use Russian uranium, he said.

Nuclear power provides about 20% of U.S. electricity generation and 10% of the global total, according to the World Nuclear Association.

While uranium can be mined in many parts of the world, the multistep processing that turns the heavy metal into a fuel is concentrated in a handful of places globally. Uranium must be mined and milled, converted into a gas, and enriched to increase the percentage of the isotope needed for nuclear reactors before fuel fabrication.

Each step occurs in specialized facilities, and with the nuclear-power industry in a yearslong decline, there has been little reason for companies in the supply chain to invest. Raw uranium prices haven’t been high enough to encourage U.S. mining over cheaper imports.

Russian uranium enrichment accounts for around 35% of the global market, according to UxC. Uranium’s conversion into a gas is the other weak link in the supply chain. The only commercial uranium conversion plants outside of Russia operate in France and Canada.

The sole U.S. plant in Illinois has been idled since 2017, though it is scheduled to come online again in 2023, according to owner

Honeywell International Inc.

China has uranium conversion and enrichment plants but tends to supply its own reactors instead of exporting to other countries.

The price of raw uranium is the most visible part of the market, but costs for each processing stage are rising, too, as power producers rethink supply chains and signing new deals with Russian companies.

Boosting domestic capacity would take several years, said Adam Rodman, founder of hedge fund Segra Capital Management LLC. “This market has become too comfortable despite a fragile supply chain,” he said.

Natural disasters have taken plants or mines offline for periods before, and the market was hit by a demand shock and languished for a decade after the Fukushima disaster in 2011 led countries including Japan and Germany to close nuclear reactors. But the potential of a supply loss on the magnitude of Russia has no precedent.

“We’re going through a reshuffling that is entirely new since the second World War,” said

Mycle Schneider,

a Paris-based energy and nuclear-policy consultant who coordinates the World Nuclear Industry Status Report, an annual update compiled by researchers globally.

The Energy Department and some utilities or suppliers also keep small stockpiles, which could help offset potential disruptions.

Constellation Energy Corp.

, which operates the nation’s largest fleet of nuclear-power plants, said in a regulatory filing that it could meet refueling needs for several years regardless of potential sanctions.

Nevertheless, Constellation and some of its peers are pressing for greater domestic investment in the fuel process, noting long investment lead times are needed. “The reality is that there are a limited number of firms around the world that provide certain nuclear-fuel services,” said company spokesman

Paul Adams.

Write to Jennifer Hiller at jennifer.hiller@wsj.com