Centrus Energy Corp. · NYSE:LEU
Centrus Energy — World Nuclear Association Symposium 2016
16 slides from Centrus Energy's conference presentation, Sep 15, 2016
Slide 1: Enriched Uranium as a Strategic Resource
Enriched Uranium as a Strategic Resource Daniel B. Poneman President & CEO World Nuclear Association Symposium September 15, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements Disclaimer: Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the remainder of the year, and Centrus undertakes no obligation to update any such statement to reflect later developments. Factors that could cause
Slide 3: Dependence on Oil Imports and the 1973 Oil Crisis
Dependence on Oil Imports… and the 1973 Oil Crisis 40% Net Dependence on Oil Imports (U.S.) $0.50 35% Regular Gasoline Price 30% (U.S.) $0.40 25% $0.30 20% Oil embargo 15% Surge in import $0.20 dependence 10% $0.10 5% 0% $0.00 1969 1970 1971 1972 1973 1974 3
Slide 4: Response: Establish IEA & Create Strategic Reserves
Response: Establish IEA & Create Strategic Reserves • International Energy Agency established in November 1974 – Facilitates global cooperation, consultation, and transparency – Requires 90 days worth of imports to be set aside as strategic reserves (public & industry held) International Energy Conf
Slide 5: Other Examples of Strategic Reserves
Other Examples: United States, China, Rare Earth Metals: 20,000 ton stockpile Strategic National – key to defense, energy & electronics Stockpile: $7 billion of medicine & supplies kept United States, National Defense Stockpile: at secure locations in $1.5 billion worth of strategic materials/minera
Slide 6: IEA 2DS: Nuclear Must More than Double by 2050
IEA 2DS: Nuclear Must More than Double by 2050 6
Slide 7: Nuclear Key to Energy Security
Nuclear Key to Energy Security Existing Under Construction Belarus UAE Planned Proposed Chile North Korea Israel Saudi Arabia Malaysia Thailand 7
Slide 8: Assessing the Possible Supply Risks
Assessing the Possible Supply Risks: Regulatory/policy 1974 U.S. closes order books 4 years changes 1996 U.S.-Euratom 123 agreement lapses 3 months 2003 Macarthur River Mine flood 6 months Natural disasters 2006 Cigar Lake Mine flood 8 years Black Swan Events: Unanticipated 2009 NRU shutdown limits
Slide 9: Recommendation: Governments Should Create Strategic LEU Reserves
Recommendation: Governments Should Create Strategic LEU Reserves • Energy security: Supply disruption is a low probability, high impact event. Why take the risk? • Non-proliferation: LEU banks remove risks of supply disruption, reducing pressure on countries to pursue new enrichment programs. • Stra
Slide 10: What Might a Reserve Look Like?
What Might a Reserve Look Like? • Governments could establish reserves held as: – Fabricated fuel, or – Virtual reserves held at converters/fabricators overseas, or – Enriched uranium product at international repositories • Reserves should be maintained consistent with IAEA standards & oversight • S
Slide 11: Why/When to Create a Reserve?
Why/When to Create a Reserve? Commodity is key to national security Supply subject to factors beyond nation’s control Domestic demand greatly outstrips domestic production capacity Strategic industry is under stress Opportunity to fill reserve at low market prices 11
Slide 12: How Should We Think About a Reserve?
How Should We Think About a Reserve? • The IEA requires a 90 day oil reserve, roughly 25% of annual imports • For argument’s sake, apply that model and use the United States as an example: – Roughly 68% of U.S. nuclear fuel is imported, or 1.36 million kg LEU – 25% of annual imports = 340,000 kg LEU
Slide 13: Storing LEU vs. Storing Oil
Storing LEU vs. Storing Oil Cost Footprint Strategic Petroleum $7 billion to build 60 underground caverns Reserve $21 billion to fill 2000 feet deep (25% annual $200 million/yr to operate 4,000,000,000 ft3 imports) Strategic Fits inside here: LEU $350 million to fill Reserve $2 million/yr to operate
Slide 14: Size Matters
Size Matters: • Here is one of four sites Bryan Mound that comprise the U.S. SPR Site Strategic Petroleum 500 acres Reserve • A 340,000 kg LEU reserve would fit inside the red dot 14
Slide 15: Bottom Line
Bottom Line • Governments would be wise to invest in strategic LEU reserves, just as they have already done for oil, medicine, food and critical materials. • Oil reserves cost 50-100 times more to build, fill and operate. An LEU reserve would be a bargain. • Advances energy security, national securi
Slide 16: Fueling the Future of Nuclear Power
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