1. 1 Charles Forsberg Executive Director MIT Nuclear Fuel Cycle Study Massachusetts Institute of Technology 77 Massachusetts Ave; Bld. 42-207a; Cambridge, MA 02139 Tel: (617) 324-4010; Email: cforsber@mit.educforsber@mit.edu The Importance of Understanding Uranium Resources For A Century MIT Center for Advanced Nuclear Energy Systems Nuclear Fuel Resources Workshop Four Points by Sheraton Norwood Norwood, Massachusetts October 12, 2010

2. Uranium Resource Understandings Have Driven Policy Decisions A decision to recycle over 100,000 tons of uranium from defense reprocessing with 232, 233, 236 U Early nuclear power development Early commercialization of reprocessing Sodium-cooled fast reactor emphasis 2 Different decisions would have been likely in the 1950s and 1960s if they had today’s understandings of uranium resources U.S.-British efforts to control all uses of nuclear energy by control of uranium resources Hanford 5000-7000 MTU/y

3. Nuclear Power Economics Implications for Uranium Resource Estimation 3

4. 2009 U.S. Levelized Cost of Electricity for New Power Plants: Deregulated Utilities Risk premium over coal/gas $25/tCO 2 Goal of DOE First-Mover Incentives is to Eliminate the Financial Risk Premium that Exists in the U.S. 4

5. Implications of Economic Assessment Uranium is a small cost component 2-4% of total electricity production costs Uranium prices could increase several times without impacting operations of existing nuclear power plants For more competitive nuclear power—major emphasis should be on reducing the capital cost If uranium is not a long-term cost issue 5 Uranium resource estimates versus cost are central to long-term nuclear power choices !

6. Fuel Cycle Transitions Are Slow Need Understanding of Uranium Resources for a Century 6 LWR lifetimes ~60 y Assumptions U.S. Uranium demand 2.5% Growth rate Fast reactor (FR): Conversion ratio = 1 Four cases LWR Once through FR with startup on LWR TRU FR with startup on 19% 235 U FR with startup on 14% 235 U

7. Energy Security Uranium Resource Distribution Is Important ! 7

8. Oil and Gas Reserves Are Concentrated in the Persian Gulf RankCompanyTotal Oil/Gas Reserves: Oil Equivalent (2007) (10 9 Barrels) 1Saudi Arabian Oil Company303 2National Iranian Oil Company300 3Qatar General Petroleum Corp.170 4Iraq National Oil Company134 Non-Government Corporations 17ExxonMobil Corp.13 19BP Corp.13 Oil Price and Availability are Political Decisions Where Uranium Is Located Is Important ! 8

9. Access to Uranium Partly Drives National Nuclear Programs Uranium access has driven policy decisions France Japan India Experience with oil results in policy makers placing a high value on uranium access Access impacts nonproliferation concerns Emphasis on closed fuel cycles is partly reflects concern about long-term access to uranium 9

10. Key Resource Questions What is the cost of uranium versus cumulative global production? What is the global access to uranium? 10

11. Year 1998 Dollars per Metric Ton But With High Stakes Want High Confidence J. Papp et al., USGS, Cr, Cu, Mn, Mo, Ni, and Steel Commodity Price Influences, Version 1.1, Open-File Report (2007-1257) Inflation Adjusted Metals Price History Over a Century Suggests Uranium Will Not Constrain Nuclear Power Growth 11

12. The Case of Seawater Uranium Sufficient Resources to Meet Demands for Millennia Places a cap on uranium costs Some future seawater cost estimates are sufficiently low as to be competitive with some sustainable (breeder) reactors with closed fuel cycles Global access to seawater would eliminate concerns about access 12 Large Policy Incentives to Understand the Ultimate Cost of Seawater Uranium

13. Questions 13

14. Biography: Charles Forsberg Dr. Charles Forsberg is the Executive Director of the Massachusetts Institute of Technology Nuclear Fuel Cycle Study. Before joining MIT, he was a Corporate Fellow at Oak Ridge National Laboratory. He is a Fellow of the American Nuclear Society, a Fellow of the American Association for the Advancement of Science, and recipient of the 2005 Robert E. Wilson Award from the American Institute of Chemical Engineers for outstanding chemical engineering contributions to nuclear energy, including his work in waste management, hydrogen production and nuclear-renewable energy futures. He received the American Nuclear Society special award for innovative nuclear reactor design. Dr. Forsberg earned his bachelor's degree in chemical engineering from the University of Minnesota and his doctorate in Nuclear Engineering from MIT. He has been awarded 11 patents and has published over 200 papers including multiple papers on design options for repositories and alternative geochemical methods to reduce radionuclide releases from repositories. 14

15. Uranium Resource Workshop: Setting the Stage The availability of uranium resources has historically driven many nuclear decisions. Originally uranium resources were thought to be extremely limited. In the 1950s and 1960s this led to: U.S.-British efforts to control all forms of nuclear energy by control of uranium resources A decision to recycle over 100,000 tons of uranium from the U.S. defense reprocessing operations through enrichment plants Early emphasis in nuclear power development on reprocessing and sodium-cooled fast reactors to address high-cost uranium. Events have demonstrated that uranium is far more abundant than was previously thought. The lack of understanding of uranium resources resulted in large resources being spent that would not have been spent if there was a better understanding of uranium resources. Today, because of strategic and price concerns about oil resources and the need to limit greenhouse gas emissions, the world is considering a nuclear future where nuclear power may be expanded worldwide by an order of magnitude or more. Some nuclear power plants are now licensed for 60 years and many more are likely to operate for a similar period of time. Both business and government policy makers have strong incentives to understand global uranium resources from decisions from purchase of nuclear power plants to what should be the long- term R&D priorities in nuclear energy. For example, the need and timing of introduction of sustainable (breeder) reactors and nuclear fuel recycling partly depends upon uranium resources. This leads to two questions: What is the cost of uranium versus the cumulative production? This is for a timeframe of a century with the potential of at least an order of magnitude growth in nuclear power What is the global access to uranium? Many of the concerns today about oil is because most of the world’s oil reserves are in the Persian Gulf region. Some of the concerns about lithium for car batteries are because of the current known locations. The workshop today is to help the U.S. Department of Energy to lay out a path forward to ultimately address these two questions—the answers for which partly depend upon geology and partly on technology The uranium resources can be divided into two categories: conventional and seawater. Seawater is considered separately because: (1) there is sufficient uranium for millennia - thus the cost of extraction from seawater puts a cap on the cost of uranium, (2) some estimates of future seawater uranium costs are sufficiently low as to make it an economic competitor to sustainable breeder reactors, and (3) there would be global access to seawater uranium. While the long- term goal for the fuel resources task at DOE is to provide critical information for utility and public policy decisions, a secondary goal is to assist U.S. industry (from uranium miners to utilities to U.S. users of electricity) to have confidence in the adequacy of uranium resources for at least the next century. 15

16. Relative Uranium Cost Cumulative GWe-y of Nuclear Electricity 16 G10 = 10 times as many reactors each operating for a century 1 2 3 Relative Uranium Cost vs Cumulative Nuclear Energy Generation (MIT)

17. Ore grade – Deffeyes’ Model (parts per million of uranium) Deffeyes’ Log Normal Correlation (a parabola on log-log paper) 17