A Rare Bipartisan Beacon, Nuclear Energy Policy

In a rare show of bipartisan support, U.S. policy is turning in favor of nuclear energy. On 3/8/24, President Biden signed into law the fiscal 2024 spending bill that appropriates over $2.72 billion to boost domestic uranium production.[1] Additional spending on nuclear research & development (R&D) and policies streamlining the nuclear permitting and development process may help to boost the U.S. nuclear energy industry.

Backed by Billions

In addition to the $2.72 billion for the Department of Energy (DOE), $1.6 billion has been allocated to the DOE’s Office of Nuclear Energy’s research & development activities.

Key features of the financial allocations include:

• $188 million to secure a near-term supply of high-assay low-enriched uranium (HALEU) to support the DOE’s supported R&D projects
• $142.5 million to support the continued execution of five advanced nuclear reactor projects
• $56 million to establish new testing facilities at U.S. national laboratories
• $143 to support university R&D
• $32 million to advance the use of digital tools and manufacturing methods such as artificial intelligence (AI) and additive manufacturing to strengthen nuclear supply chains
• $8 million to support several U.S. international projects
• $100 million to boost nuclear workforce training

The allocations also support over $900 million for projects involving light-water reactor systems and their supply chains.

Additional Policies to Support the U.S. Nuclear Industry

New initiatives have emerged aimed at bolstering homegrown nuclear supply chains and reducing reliance on Russian uranium imports.

One such milestone was the passing of the Nuclear Fuel Security Act in 2023. This groundbreaking legislation not only established fresh programs within the Department of Energy (DOE) to incentivize the production of High-Assay Low-Enriched Uranium (HALEU), a significant portion of which is currently sourced from Russia, but also broadened existing laws to guarantee the accessibility of domestically manufactured, converted, and enriched uranium.

In February 2024, H.R. 6544, another significant piece of legislation, was successfully passed to streamline the Nuclear Regulatory Commission's (NRC) licensing procedures for advanced reactors. This entails reducing application fees, increasing agency personnel, and enabling expedited environmental assessments for select reactor projects.

Potential Investment Opportunity

For years, nuclear energy has been plagued by what we believe is an undeserved bad reputation. Nuclear energy does not produce any carbon emissions and may help to complement the intermittent nature of renewable energy.[2]

Recent U.S. policy shifts could fuel a surge in nuclear energy production, offering a potential boon to firms within the sector.

How May Investors Gain Exposure to Companies in the Nuclear Energy Sector?

The Range Nuclear Renaissance Index ETF

The Range Nuclear Renaissance Index ETF (NUKZ) seeks to track the performance, before fees and expenses, of the Range Nuclear Renaissance Index. The index aims to track the performance of a portfolio of stocks that are involved in the nuclear fuel and energy industry.

NUKZ may be an attractive vehicle to gain exposure to companies in the nuclear energy industry.

[1] Unless noted, all data sourced from: Forget Oppenheimer – Nuclear Power Is Having Its Moment In Washington, Politico, 3/11/24 & US Proposed Budget Supports Nuclear Projects, World Nuclear News, 3/14/24
[2] How Can Nuclear Combat Climate Change, World Nuclear Association website, Retrieved 3/18/24
 

Risk Disclosures:

Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's full or summary prospectus, which may be obtained by visiting www.rangeetfs.com/coal. Read it carefully before investing or sending money.

Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated investment objectives.

Investments in the energy industry are subject to significant volatility due to changes in commodity prices. Additional risks include changes in exchange rates, government regulation, world events, economic and political conditions in the countries where energy companies are located or do business, and risks for environmental damage claims.

The Fund is non-diversified. Its concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.

Nuclear companies may be subject to substantial government regulation and contractual fixed pricing, which may increase the cost of doing business and limit the earnings of these companies. A significant portion of revenues of nuclear companies depends on a relatively small number of customers, including governmental entities and utilities. As a result, governmental budget constraints may have a material adverse effect on the stock prices of companies in this sub-industry.

International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility.

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