It's common knowledge that Wyoming is the nation's powerhouse for coal. The Cowboy State is also No. 2 for natural gas production. Even Wyoming oil reversed a 20-year production decline in 2006.

But consider the state's contribution to nuclear energy.

Nearly half of this nation's uranium production comes from a single in-situ leach operation in Wyoming's Powder River Basin. One industry analyst suggested that if the Smith-Highland Ranch mine were to shut down for any length of time, brownouts would roll across the country.

The United States, China, India and other nations are expected to become more reliant on nuclear energy. Aside from nuclear's appeal in the global warming arena, aside from issues of spent fuel and safety, demand for nuclear energy rises on the same supply-and-demand fundamentals as any other energy source.

Global demand for oil has grown by 1.5 percent per year in recent years, while production trails by about 0.2 percent. That shrinking supply cushion drives the rush to develop all energy resources, including nuclear.

Had uranium market fundamentals been let alone during the past 17 years, it would be on the same incremental climb as coal and natural gas. Instead, the market has gone from the extremely noncommercial price of $10 per pound of uranium oxide in 2000 to more than $140 in 2006.

What startled this energy giant out of hibernation is the dwindling supply of material from recycled warheads that supplemented the market since the early 1990s. The "Megatons to Megawatts" program eliminated thousands of nuclear warheads as its No. 1 priority. Now, the uranium market is adjusting to the shrinking supplement.

The result is a rush on uranium production.

"These are the drivers," said Steve Kerekes, spokesman for the Nuclear Energy Institute. "The Megatons to Megawatts program expires in 2013, so obviously there are some questions about what will happen in regard to supplies after that date."

The Nuclear Regulatory Commission anticipates license applications for 31 new nuclear reactors in the United States over the next 10 to 15 years. That rise in demand, along with certainty of shrinking recycled material, has spurred dozens of companies to initiate what can be a three- to four-year permitting process for new mining and refining facilities.

Wyoming's role

The Nuclear Regulatory Commission expects to receive applications for some 14 new in-situ leach uranium mining operations throughout the Intermountain West. More than half will come from Wyoming.

The Smith-Highland Ranch mine continues to produce at a rate of more than 2 million pounds annually. Capacity at the mine is about 5 million pounds, according to the U.S. Energy Information Administration. In addition, COGEMA Mining Co.'s Christensen Ranch mine will resume production in the Pumpkin Buttes area at nearly 1 million pounds.

Dozens of other players intend to open production, from Rawlins to the Gas Hills to the Powder River Basin and into the extreme northeast corner of the state.

Wyoming holds the largest uranium reserve in the United States, according to the Energy Information Administration.

In the 1990s, the Wyoming State Geological Survey estimated that at $50 per pound it would be economically feasible to mine 363 million pounds of Wyoming's uranium reserve. New Mexico trails at 341 million pounds. Colorado, Arizona and Utah each hold 123 million pounds.

Uranium's $140 spike in 2006 has settled to around $120 this summer, and industry officials say their mine plans are based on a more sober, realistic price of right under $100 per pound.

Many uranium speculators in Wyoming base the economics of their planned operations on a price somewhere between $50 and $100 per pound. The Wyoming State Geological Survey is currently recalculating the state's reserve estimate on today's market, said Robert Gregory, WSGS uranium specialist.

Uranium's direct economic infusion to state and county coffers through severance and ad valorem taxes is significant. In 1979, one of the production high points, uranium contributed $69.2 million in taxes, according to the Wyoming Department of Revenue.

The state's 4 percent severance tax on uranium was suspended in 1997 when prices fell below $14 per pound, but came back on in mid-2004 as prices spiked.

With only one in-situ leach mine operation, the industry contributed $12.3 million in taxes in 2005, and $17.8 million in 2006, according to the revenue department.

Glory days

Renowned geologist J.D. Love is credited for the first major discovery of uranium in Wyoming. According to the WSGS, Love found uranium-bearing ore in tertiary sandstones near the Pumpkin Buttes in southern Campbell County in 1951. Exploratory efforts found uranium ore in similar formations throughout the southern Powder River Basin, Shirley Basin, Gas Hills and the Red Desert.

The onset of the Cold War in the 1950s sparked a boom in domestic uranium production, and Wyoming was a main player. The industry peaked in the 1950s and again in the late 1970s and early 1980s. Uranium mining employed some 5,000 during the height of activity - comparable to today's coal industry in Wyoming - and produced more than 12 million pounds annually, according to the Wyoming Mining Association.

Whether the industry returns to that level of activity in the next five to 10 years is a matter of speculation. Despite proven reserves and sound forecasts for nuclear energy demand, much will still depend on the human element.

"Uranium markets are driven by perception of what might happen as much as actual supply and demand," Kerekes noted.

In August, more than 100 people turned out for a Nuclear Regulatory Commission public meeting in Casper. Some urged the agency to expedite permitting of new production facilities, while others urged to proceed with extreme caution.

Still, the industry is bullish on Wyoming's future uranium play. As longtime Wyoming uranium geologist Dayton Lewis recently put it, "People in Wyoming understand mining."

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@casperstartribune.net.