On Thursday, Politico reported Congress Sends Russia Sanctions to Trump’s Desk, Daring a Veto.
Reuters reported Senate Slaps New Sanctions on Russia, Putting Trump in Corner.
Assuming Trump signs the bill or his veto is overridden, how might Russia strike back?
First, let’s discuss the background.
By a 98-2 vote, the Senate slapped sanctions on Russia, Iran and North Korea. The only Senators voting against the bill was the odd mix of Rand Paul and Bernie Sanders. The bill passed the House by a 419-3 vote. Thus, any veto could easily be overridden.
Everyone is hopping mad over alleged Russia interference in the US election despite the fact there is not a shred of credible evidence.
Senator John McCain offered his typical babble: “The United States of America needs to send a strong message to Vladimir Putin and any other aggressor that we will not tolerate attacks on our democracy.”
How Might Russia Strike Back?
On June 1, 2016, the US Energy Information Administration (EIA), reported U.S. Uranium Production is Near Historic Low as Imports Continue to Fuel U.S. Reactors.
Most of the uranium loaded into U.S. nuclear power reactors is imported. During 2015, owners and operators of U.S. nuclear power reactors purchased 57 million pounds of uranium. Nearly half of these purchases originated from two countries, Canada and Kazakhstan, providing 17 million pounds and 11 million pounds of uranium, respectively.
U.S. uranium concentrate production, which started in 1949 and peaked in 1980, has recently been near historic lows. Uranium production was 0.63 million pounds of uranium (U3O8) in the first quarter 2016. At that rate, total 2016 production may be about 2.5 million pounds, only slightly higher than the low of 2.0 million pounds produced in 2003.
Nebraska and Wyoming are the only states that produced uranium concentrate in fourth-quarter 2015 and first-quarter 2016. Production in Texas and Utah stopped in the third quarter of 2015. The one uranium producer in Nebraska has decided to reduce production. Three new producers have begun operations in Wyoming since 2013, but the state’s other producers are scaling down production.
Employment in the U.S. uranium production industry generally correlates to the market price for uranium. The spot price of uranium increased from an annual average of $11 per pound in 2003 to nearly $100 per pound in 2007. Uranium production employment more than quadrupled from 321 person-years in 2003 to 1,563 person-years in 2008. Since then, uranium spot prices and production employment have been lower, with prices averaging below $30 per pound and employment at 625 person-years in 2015.
The Russians Have the Sanctions Hammer
Russia Insider writer Tom Luongo claims The Russians Have the Sanctions Hammer.
Lost in all of this talk about the U.S. Congress adding sanctions onto Russia is Russia’s unique placement in the world’s Uranium industry. So much focus is placed on its Oil and Gas industry (and specifically the share of its exports) that it blinds our analysis to the how strong Russia’s position in world nuclear power is.
And, so, John McCain can grandstand all he wants about how Russia is nothing more than a “gas station masquerading as a country” what he doesn’t want to admit to himself or the world is that Russia is more central to the world’s uranium fuel market than Saudi Arabia ever was to the crude oil market.
Russia’s power in this industry doesn’t come from its production of Uranium Oxide (U3O8 or yellowcake) it comes from owning 45% of the world’s enrichment capacity into a usable fuel. Russia only produces around 3,000 tons of U3O8 annually.
Kazakhstan is the world’s largest producer of yellowcake with the world’s largest reserves. Do you seriously think Kazakhstan, one of Russia’s strongest allies, is going to go it alone in one of its major industries if the new Cold War between the U.S. and Russia intensifies further?
I have two words for you. Hell and No.
Canada’s Athcabasca Basin in Saskatchewan has been instrumental in expanding world yellowcake supply in recent years. But, that’s not changing the dynamics of the industry, it’s just keeping Urainium prices depressed.
SWUs Trump SJWs
The issue isn’t ore production but turning that ore into usable fuel, called Single Work Units (SWU). And the U.S. and Canada are not interested in refining Uranium due to environmental policy. I’ve heard nothing from the Trump administration on this either, so, nothing is going to change in a way to affect current or fear future events.
Rosatom, the Russian State Nuclear Energy company, has tremendous leverage. The faux outrage over Hillary Clinton selling 20% of U.S. Uranium reserves to the Russians is irrelevant.
I will paraphrase her for the only time in my life, “What difference does it make” to expand ore production when the Russians effectively control the refineries?
Due to policy changes over the past twenty years the U.S. has no ability to credibly produce its own nuclear fuel. So, improved Canadian ore production still has to be shipped to Russia or Europe for processing.
19.5% of our electricity comes from Nuclear Power. The base load of the U.S. electricity grid is supplied by Russian SWU’s, folks. Without relations with Russia there is no air-conditioning.
We are the world’s largest consumer of SWU’s, using over 32% of the global total. That’s around 15.1 million SWUs. France is next at 14%. Over 90% of our Uranium consumption is imported.
All discussion about U.S. energy security is a non-starter until we discuss Uranium. It is the limit at which the U.S. Congress can make noise until Putin has had enough.
You notice he never talks about it. No one does. Because, all puns intended, this is truly the “Nuclear Option” in geopolitics. It is the hammer that can be brought down once the world is in an SWU deficit, which we are rapidly approaching.
China’s embracing of solar is all Keynesian pump-priming make-work. It’s not a solution to their energy problems. Russian Oil, Gas and Uranium is.
If things get really testy over the Nordstream-2 pipeline with Germany, then you can bet that becomes an issue as well. This is why the sanctions are so stupid. They are driving Germany into the arms of Russia even faster. They are driving the Russians to deepen ties with China.
Evidence on Russia Interference?
Despite weeks of media hyperventilation, there is no proof or even credible evidence on Russia.
ZeroHedge comments Meet The Awan Brothers – The (Not-Russian) IT Staff Who Allegedly Hacked Congress’ Computer Systems.
Even if there is evidence, unless the US is willing to stop meddling abroad, what’s good for the goose should be good for the gander.
If we cannot keep our filthy hands to ourselves, why should we expect anyone else to?
Philosophical discussions aside, let’s get down to the nitty gritty.
What the Sanction Bill is Really About
On July 25, I wrote Make America Safe: Put Congress on Permanent Recess (What the Sanction Bill is Really About).
The bill is aimed specifically at the Nord Stream 2 project, which the US considers as detrimental to its interests.
Nord Stream 2 is a gas pipeline deal between Russia and the EU. It will bypass Ukraine, thus all the huffing and puffing by McCain.
Economic Madness
This kind of meddling and unwarranted reactionary politics is precisely what sets off global trade wars.
In regards to the sanctions bill, I commented:
Even without the uranium angle, these sanctions were economic folly. Uranium is icing on the economic madness cake.
Mike “Mish” Shedlock
Trump could veto the bill but the votes in both houses of Congress were overwhelming and would override his veto – only bringing more scrutiny on Trump for being in cahoots with Putin and Russia. So Trump was left with little choice considering Iran and North Korea were also included in the deal. He probably apologized to Vlad in advance when they met at G20.
And it’s not like Russia has no leverage here. Putin controls the gas spigots that keep the western euros warm in the dead of winter.
The US politicians are pushing us into a new cold war. They aren’t happy unless we have lots of enemies and international conflicts.
It won’t matter if all the evidence exonerates Russia of electoral interference. This goes much deeper than that. The election tampering accusations were only an excuse to lite the fuse.
Besides, it’s so stupid for America to accuse other nations of interfering with our election process when we’ve turned it into a sport.
Anybody with a couple brain cells should be able to see what’s going on here.
Yes, it is plain to see.
The Dollar’s days as world reserve currency are numbered.
And it’s not that big a number.
Disagree but time will tell.
for the record, Mish, Rand and Mike Lee voted against the bill.
Sanders expressed support for Russia sanctions but I don’t how how he voted. He did support sanctions under Obama .
The Hill says 98-2
Paul and Sanders
http://thehill.com/policy/international/russia/344221-senate-sends-russia-sanctions-bill-to-trumps-desk
A good start but misses the elephant in the room: the congress’s puppeteers.
Could Trump simply not enforce sanctions as he has threatened to do with Obamacare rules?
If obama can just ignore immigration laws already on the books…with only praise from the legacy fake media.
Why would any future Presidents stop from doing the same with other laws?
Democrats never could figure out that tactics and techniques they use while in power will someday be used against them. Only 50 votes to confirm a judge now…ok…
Just wait until Trump uses the IRS to go after HIS political enemies and uses to the EPA to shut down industries he doesn’t like…
Good question.
When I inquired with conservative Republican congressional office and asked that specific question – how can the US President not just refuse to enforce immigration law – but DEFY it – I was told time and time again that the Office of the POTUS is the enforcement branch and therefore can decide which laws get enforced and which don’t.
So why shouldn’t the same logic apply with Trump?
Isn’t it strange how the answers change when there is a changing of the guard?
I beginning to believe that the Republicans are bigger enemies to the good of the nation than are the Democrats.
At least I know where the Democrats stand from day to day. The Republicans change with the wind.
nice work
Trump just needs to find a single Federal Judge to nullify the Russian Sanctions Law.
That is how America works nowadays….
great news – let’s shut down all nuclear ! Thank you so much Mr. President 🙂
Just HOW is this the fault of the current president?
Do tell us.
And please do try to use logic and facts.
“Today TENEX’s export portfolio comprises 25 contracts worth nearly US$ 6.5 billion concluded with 19 American companies with the deliveries horizon up to 2028. ”
TENEX – Three Decades on the US Uranium Market
30.05.2017, 16:56 / Press service of TENEX
http://www.tenex.ru/wps/wcm/connect/tenex/site_eng/PressCentre/dbae9900415d3726954397874fbb2c32
If Russia is a “gas station masquerading as a country”
then USA is an oil company with an army.
“….how might Russia strike back?”
They could *actually* hack our elections……
We totally depend on Russia for our manned space launches ever since obama shut down the Space Shuttle with no viable replacement for at least 10 years (The Orion Program).
So that is one area.
Or Russia could just do a “Ukraine” in Estonia, Latvia and Lithuania.
Or let Europe freeze in the dark this winter.
But, it will most likely be a tit for tat in this exchange. And that is too bad.
We could actually use allies in Syria right now. Not to mention Russia controls all of the Northern Afghan border. Just a few sophisticated SAMs to the Taliban REALLY complicates Afghanistan for the American military…
Russians will keep selling uranium at the market prices without any interruptions. They will market it, sell it and deliver by the entities on the sanctions list. They will accept payment only by the bank on the sanctions list. So every step of the way , they will force US based buyers/utilities to “break” the sanctions. This will create a bureaucratic nightmare for US buyers. Utilities will need to hire thousands of lawyers, agents to petition the government agencies for a one time exemptions in order to get the delivery of uranium from Russian refiners. This will create an army of unpaid lobbyists on behalf of Russian commercial interests. Our senators will keep hearing : Why can’t we have a normal commercial – trade relationship with Russians. That kind of sophisticated response we should expect from Russians in coming months and years.
Or…they could buy from American and Canadian suppliers/mines.
At higher prices but no hassles.
So….is this an investment opportunity for CCJ and DNN?
The problem is not in the natural resource, the yellow cake, the problem lies in the refined product and CDA or US doesn’t have the capacity to do that. It’s like having an oil dwell in your garden. You can’t put the stuff into your car as is.
exactly and meanwhile
the steady expansion of economic cooperation between Chine-EU-Japan-Russia will be accelerated. The basic building blocks are in place ( alternative to SWIFT system, buy-sell in yuan or euros, etc, etc )
Today Washington had plenty of leverage to impose all sorts of sanctions & penalties essentially at will. The rest of the world is getting tired of this unilateralism by what is increasingly seen as a rouge state.
My European friends ( generally conservatives ) tell me they have never seen European leaders mocking a US President like they mock Trump. They think of Washington as some banana land place filled with wackos.
The Euros & Japanes are pedaling as fast as they can to quietly ditch Washington’s embrace. The latest round of Russisan sanctions are seen as yet another example of the pressing need to ditch Washington
Someone higher up in one of the sanctions list countries, will just quietly slip some to someone outside, and American buyers will buy from them. Supply always finds a way to meet demand. The nonsense will reduce efficiency, increase cost and create a class of profiteering middle men. But than again, that is exactly the sole purpose of all government, so what else is new?
More concerning, as prices go up, and official channels dry up, the kind of characters involved in the clandestine trade, will inevitably trend more and more unscrupulous. Which, when the trade in question is enriched Uranium, increases the risk of the occasional “accident” befalling some delivery.
Sanctions produced Hitler, it hurts the people not those in power,it puts brake on international commerce, sanctions invite counter sanctions,it is the weapon of fools.
Mish, I would suggest that every reader of your blog write a letter to our President, at http://www.WhiteHouse.gov asking the president not to sign this idiot Russian sanctions bill, and in fact remove all the sanctions on Russia that were falsely started by Obama and the the Neo Crats and Neo Cons of the deep state. These sanctions are costing American busineses huge sums of profits. While, bringing us one step closer to disaster, or worse war. McCain and Graham back and push these sanctions for what reason I don’t know. However it would be best for our country and the world if Trump would call for a special prosecutor to investigate both of them completely for their ties to Hillary the Clinton Foundation. Both idiots supported Hillary in outward statements and were never Trumpers. Drain the swamp people. Drain the swamp.
“Due to policy changes over the past twenty years the U.S. has no ability to credibly produce its own nuclear fuel.”
Notice how vague that statement is. “Policy changes.” I suspect it’s the same ENVIRONMENTAL related (over)restrictions which has resulted in the US which is rich in rare earth minerals letting China have a virtual monopoly on these highly strategic minerals.
“The only operating rare earth mine in the United States sends all of their valuable resources to China for processing.”
Why?:
Interference in elections: read ,the American Siberian adventure by William S Grave a US general commending US troops in Siberia 1914/1918. Hint: his book was not welcome by the Elite . Before ones make a judgment one should know history.
The buried lead here is that if we don’t produce reactor fuel we have a very high likelihood of forgetting how. Not to mention the plants that are used to process the stuff aren’t cheap to maintain when they’re idle. If the few we have remaining go away we might as well shut down the generating stations and it probably would be a good idea to get rid of the nuclear fleet and the warheads too.
And I’m not talking about the textbook knowledge, but the practical stuff the guys on the line know. When the old timers retire and pass that knowledge will be gone forever.
Titanium may be a greater economic vulnerability than uranium. The US is almost completely dependent on Russia for titanium. Boeing and other firms could be put out of production by Russian sanctions.
http://www.realclearworld.com/articles/2014/08/12/how_long_can_the_us_rely_on_russian_titanium.html
Why can’t we have a normal commercial trade relationship with Russians. That kind of sophisticated response we should expect from Russians in coming months and years…..
Because we are at war with Russia in East Ukraine. The war is very hot every day.
The Hill says 98-2
Paul and Sanders
http://thehill.com/policy/international/russia/344221-senate-sends-russia-sanctions-bill-to-trumps-desk
Am I the only individual that can see armed conflict on the horizon courtesy of the Numbnuts of Capitol Hill…Our plate is already loaded for war with NK and Iran…Throw in the South China Sea as well…
Congress won’t agree on one piece of legislation for the American people, but our heros can waste time and vote overwhelmingly to sanction, and p!ss off another nuclear armed country over bu!!sh!t…But I suppose all is not lost—
At least for this moment in time, Poland is still our friend…
Senator John McCain offered his typical babble: “The United States of America needs to send a strong message to Vladimir Putin and any other aggressor that we will not tolerate attacks on our democracy.”
Of coarse, McCain ignores Time Magazine’s cover story on the secret U.S. plan to interfere in Russia’s 1996 election, in order to get Yeltsin elected. McCain should not throw stones in his glass house.
For the good of the nation he needs to step down.
But egomaniacs never act on behalf of what’s best for others.
He’ll use his illness to get a bigger spotlight on the stage.
“Everyone is hopping mad over alleged Russia interference in the US election despite the fact there is not a shred of credible evidence.”
The American mainstream media DID interfere in our election and there is credible evidence of that.
Reblogged this on World Peace Forum.
Russia signs 50 year deal with Syria What Sanctions ??
US and Ukraine are successfully defending the Russian invasion. Every day we kill a dozen Russian boys. The Russian Army is helpless against our superior technology. East Ukraine and Crimea are scorched earth and useless to Russia. Sanctions are starving the general population. Annually the Russian population declines by 0.5% or seven hundred thousand. The added sanctions will break the back of Russia.
Trump is proving no better than HRC on interventionism. There was no reason to believe it would be otherwise. Sorry to say I told you so.