Big News for Nuclear Energy—What It Means for Investors

Ed Lopez: Welcome, everyone. Today is Friday, May 23rd, and we're shining a light on the nuclear industry, a sector that's been the black sheep of the energy world for years, but has recently been undergoing a bit of a remarkable renaissance. Today was a big day. Just today, nuclear stocks generally were up over 10 percent. Year to date, just over 18 percent. And now with recent developments in U.S. government policy, there may be even more momentum building up.

President Trump just signed, just hours ago, a series of executive orders that not only have the potential to bolster the revitalization of the industry, but may create exciting potential opportunities for investors. We're going to delve into that and what this means for the future of energy and nuclear related equities with Sean Reynolds, portfolio manager, global natural resources with the BAN Act.

And Shawn, thanks for taking the time. I know I'm catching you late on a Friday afternoon, but perhaps we can jump right into it and talk about what just happened with Trump's executive order.

Shawn Reynolds: Yeah, great. Thanks for having me. This was well expected, especially since Chris Wright was named Energy Secretary. But it's also very, very exciting and very important. This should really be seen as greatly accelerating the multi-decade deployment of old and new nuclear technology. And as you pointed out, this industry.

It peaked, had its heyday in the 1970s and there has been no change in this industry since then. mean, there have been some attempts, it's definitely using old processes, old regulations and old technology. And this is really generated to speed things up and to revise everything.

Ed Lopez: So from what I've read so far, there are a few components to it. One was overhaul of the NRC, the Nuclear Regulatory Commission, overhauling licensing for reactors, guess, perhaps speeding those up, reinvigorating uranium production and enrichment in the United States. And I don't know if there was another one kind of related to defense. know somehow there were some articles about defense, but we'll see what comes out of that. Perhaps we can just kind of take those one at a time. The overhaul.

That's expected at the NRC. What has been the issue in your mind and what do you think will happen here?

Shawn Reynolds: Yeah, it's really streamlining the NRC, Nuclear Regulatory Commission, and it's very much related to things like DOGE and everything you're seeing in the government right now. And again, it's long overdue. Everything can be simplified there. And I say the two big things are speeding up all the regulatory protocols. But in particular, they've put together a provision that says that the license decision will be made within 18 months after the license application is made.

Ed Lopez: And what about, so the licensing of reactors is something I read about. Will that impact, there's like new technologies, SMRs for instance, small modular reactors that are out there. I don't know how many have been green lighted here in the US yet. Do you think that will help that technology take hold?

Shawn Reynolds: Yeah, there's no doubt. I think that licensing time frame that I just gave you, 18 months, is applicable to all technologies, both traditional reactors and some of these small modular reactors. mean, there has been one agreement or one license that's been given. It's for a 55 megawatt equivalent reactor. And there will be many more.

It's small, is small, 55 is small if you think about it, most nuclear reactors are the gigawatt scale. Something that's small is 100 megawatts or something like that, or 200 megawatts. So there will be more, but it is accelerating and the speed and advancement of development in all these different technologies is really gonna be enabled by this piece of legislation, or it's an executive order, it's not a piece of legislation, sorry.

Ed Lopez: One of the other things highlighted was reinvigorating uranium production and enrichment in the United States. Can you give me a little bit of history there? Like, what's the state of that process here currently and how big of a deal is it?

Shawn Reynolds: Yeah, I actually think that's probably one of the more important aspects of this whole order is really putting in a spotlight on that, you know, very far upstream part of the supply chain or in the ecosystem. You know, it goes from mining into enrichment into processing and then into, you know, nuclear fuel that gets distributed. And, you know, we rely almost entirely on international sources for that. we rely for about 20 % of the market is dependent on Russian enriched uranium. So we are really at the mercy of some adversaries and certainly some international players. And so what this does is really go after enriched uranium, nuclear fuel processing, and other types of advanced reactor inputs.

And that will be really important because those inputs are part of some of these new technologies, such as you mentioned, small modular reactors. And so you're really seeing a focus on that. You have to have the uranium, all right? But what we really need is the processing and enrichment in this country. so you can build an SMR, but if you don't have that, you're still dependent on others outside of the...the boundaries of the United States.

Ed Lopez: And how do you view these executive orders? How meaningful are they to the industry? Is it really just kind of opening up the rules a little bit and make it a little easier to do business? Do you think there will be any support financially for firms or incentives given for certain activities?

Shawn Reynolds: It should be very, very attractive to new sources of capital because the experience is, first of all, it's it's 50 years ago when when the United States did most of its 50, 60 years ago when the United States did most of its its building in nuclear reactors. And since then, you know, there's been a couple of new ones.

And some restarts, all right, but those have not been successful. It's certainly not financially successful. the big problem is, is really the time and the regulatory requirements your ROI on the project just, just diminishes every month and every year that goes by. And so they're actually trying to put some timeframe on these things and really speed up the whole ecosystem from mining right through processing into different technologies of nuclear creation.

Ed Lopez: Yeah, so we talked about an overhaul of the NRC. We talked about speeding up licensing for reactors and reinvigorating uranium production and enrichment. Have I missed anything else that these orders covered?

Shawn Reynolds: Well, I think the other interesting thing do you really want, you know, a new nuclear reactor in your backyard? So what they actually provide a provision and a separate executive order, a provision for the Department of Energy and the Department of Defense to identify some of the property that they own and they have access to that they can go out and they can actually put a reactor on that, that piece of land.

And so that's pretty interesting because, you know, once it's on, you know, on the military base or on a DOD agreed piece of property, that will dampen the not in my backyard issue by quite a bit. And I think that's also very important because you do have a secretary of defense and a secretary of energy who are very, very pro-nuclear and they're going to get out there and they're they're going to find places to put reactors in, site reactors.

Ed Lopez: So of all these different activities and initiatives, it seems pretty broad, the impact in terms of perhaps the types of companies. Can you break down the types of companies an investor might look to to take advantage of what might be coming here?

Shawn Reynolds: Yeah, I think the really exciting thing is that it again, it goes across the spectrum all the way from a mining company. And you know, when there several mining companies here in the United States, such as like, you know, Uranium Energy, you know, they produce, you know, in Wyoming and likely in Texas to some of the processing companies, enrichment companies. And, you know, they will grow.

We don't, because as mentioned earlier, that's one of the areas that there's kind of a black hole in United States for that. And then, know, then it goes to utilities and some of these SMR companies. So you think about, you know, large scale utilities, Constellation, the largest nuclear company here in the United States, but this will be very helpful to them. Something like Oklo, who is more of a small modular reactor, looking at that technology. So it's really crossing the spectrum. And that's the...

I think the really exciting part that it's not just if we think about what's happened in other industries, if you think about new energy, new green energy, you know, is really focused on EVs and wind and solar. We didn't really think about, there's an upstream to this. You know, there's a lithium, there's a graphite, there's a cobalt, there's a nickel, there's a copper. We have to worry about that. And we still haven't addressed that. And it's slowed down the industry. But this has looked at the whole thing.

Ed Lopez: That's fascinating. It's just fascinating how things change over time. Shawn, thanks very much for the update, especially on last minute notice. Appreciate it.

Shawn Reynolds: Sure. Thanks.

Ed Lopez: If you're interested in learning how to invest in the nuclear space, VanEck offers the VanEck Uranium and Nuclear Energy ETF, ticker symbol NLR. The ETF provides exposure to the largest, most liquid names in the nuclear energy industry. And that's 25 pure play names and mining, power generation, reactors, and equipment. Visit VanEck.com slash NLR for more information.