U.S. President-elect Joe Biden and Vice President-elect Kamala Harris Source: Biden Campaign, photo by Adam Schultz

As president-elect of the world's biggest uranium consumer, observers believe Joe Biden could help bring about a proverbial sea change to the politics around nuclear power compared to his former boss Barack Obama, as bipartisan support appeared to grow for legislation aimed at bolstering the U.S. nuclear sector.

The Democratic Party's platform finalized in August named existing and advanced nuclear technologies — along with other zero-carbon technologies like hydroelectric power, geothermal and carbon capture and storage — within the "technology-neutral" approach it embraced to decarbonize the power sector.

It was the first time the party had endorsed nuclear energy in 48 years, according to the American Nuclear Society. The chart below shows that over the last three presidencies, nuclear has stagnated while natural gas has grown thanks to the shale boom, as have renewables, though from a lower base.

Yet while Biden has a deal on nuclear power lying in wait for him in the U.S. Senate, he will have to wrestle with a large rift between Republicans and his party's more progressive members over the establishment of a federal uranium stockpile.

Republicans insist the nation needs a reserve of uranium in the event of a geopolitical rift with China or Russia, and included it in the deal with support from moderate Democrats, while progressives such as House Natural Resources Chairman Raul Grijalva, D-Ariz., have historically opposed policies that would expand uranium mining in the U.S., citing a legacy of water pollution in tribal communities.

In an interview with S&P Global Market Intelligence, Grijalva said he would not support any legislation establishing a uranium reserve "any time soon." Any deal on legislation would require additional assurances, including progress on reforming U.S. hard rock mining laws, he said.

"The discussion about a stockpile and domestic mining of uranium should not cancel out the need to protect places like the Grand Canyon, and other places where that type of mining does not add to the conservation or multi-use of public land," Grijalva said. "What I would like to see is fixing the law first, and giving the land agencies and communities some level of faith into these mining activities."

Growing bullishness

Despite some congressional concern, some players in the uranium investment space are growing bullish about the sector's prospects under Biden. Uranium fund Sachem Cove Partners' New York-based founder and Chief Investment Officer Mike Alkin was particularly excited by Biden's inclusion of the nuclear sector in his $2 trillion climate plan.

"This makes support for nuclear power a bipartisan issue for the first time since the 1970s," Alkin told Market Intelligence. "We believe from our discussions with people in D.C. that Biden is more pro-nuclear than people think."

Alkin said he was also encouraged by Biden's energy policy calling for the creation of a cross-agency Advanced Research Projects Agency on Climate to target "affordable, game-changing technologies to help America achieve our 100% clean energy target."

Such technologies included advanced nuclear reactors that are "smaller, safer and more efficient at half the construction cost of today's reactors," according to Biden's energy policy document. Biden has said he will re-enter the U.S. in the Paris Agreement, under which the country pledged to cut carbon emissions by 26% over 2005 levels by 2025.

Sydney, Australia-based L2 Capital Partners Managing Partner Marcelo Lopez, whose $25 million uranium fund is believed to be among the world's largest, told Market Intelligence that small modular nuclear reactors have safety benefits and believes "more people will start to look at nuclear energy differently" once such plants start getting put into operation.

Lopez said that with the likes of Microsoft Corp. founder Bill Gates lobbying Congress for a public-private partnership to fund new reactor technology being developed by TerraPower LLC, "the world is turning towards nuclear energy."

"I believe we are at the start of a huge atomic wave," Lopez said.

Alkin said that with China not expected to overtake the U.S. as the world's biggest uranium consumer for up to a decade, there could be a "sea change" in bipartisan support, which makes him bullish on uranium more broadly.

Though nuclear reactors have been closing in the U.S. and Western Europe, Alkin said new plants being built in China, South Africa, India, Russia, Belarus, the United Arab Emirates and Poland will ensure global uranium demand continues to grow.

"If prices stay below $50 per pound, idled production won't come back online and new mines won't get built — that need to get built — and deficits will be at least 35 million pounds per year" out to 2030, Alkin said.