ST PETERSBURG, Russia, July 15 (Reuters) – U.S. uranium trader USEC Inc. will lose its exclusive right to import Russian nuclear fuel to the United States by 2009 at the latest, Russia’s atomic energy chief said on Saturday.

Sergei Kiriyenko said an agreement on civil nuclear cooperation announced by U.S. President George W. Bush and Russia’s President Vladimir Putin contained a clear mandate for the U.S. government to end the monopoly.

If that does not happen, Russia will seek to overturn the monopoly in the courts anyway, said Kiriyenko.

Full article here.

It was one of those delicious little ironies arising from the collapse of the Soviet Union.  In 1993, the U.S. and Russia entered into a nuclear non-proliferation agreement, giving the U.S. government the sole and exclusive right to take high-enriched uranium from dismantled Russian nuclear weapons and convert it into low-enriched uranium for nuclear fuel and other civilian uses.  Under the Energy Policy Act of 1992, the U.S. government created a company called USEC (U.S. Enrichment Corporation) to privatize this function, acting as the U.S.’s agent for the purposes of the non-proliferation agreement.  In the 1998 public offering of USEC, the U.S. government made about $3 billion.  USEC’s ongoing business model relies on the fact that about 20% of all U.S. electrical power is generated by nuclear plants that rely on USEC’s supply of refined uranium.

Leave it to a newly-minted free market in Russia to give the U.S. government an opportunity to implement an unabashedly socialist plan, backed by a government-imposed monopoly.  In putting an end to the USEC monopoly, it was an irony that certainly wasn’t lost on Russian atomic energy domo Sergei Kiriyenko, who said, “A monopolist go-between … is not liberal, it is not (consistent with) a market economy . . . We want to sell direct to American companies at a fair price and American companies want to buy from us openly and under market conditions.”

Putting aside the effect of the end of USEC’s monopoly on the cost of nuclear power in the U.S., it is interesting timing.  There have been numerous insider reports that the U.S. is making head-way on garnering Russian support for its plans to force Iran into abandoning its own nuclear program.  No doubt the U.S. government’s willingness to forgo the USEC monopoly is probably helping Russia to get on board with such plans.  The ultimate idea, after all, is for the U.S. to supply Iran with nuclear power so that Iran doesn’t have to be nuclear-capable —  it stands to reason that Russia would like a piece of that action.