Spending By World Nuclear Powers Soared To $91.4 Billion in 2023

Pakistan, Israel and North Korea spent roughly $1 billion apiece. ICAN has noted that most of the money went toward modernization and updating of aging weapons, although some nations spent money to expand their arsenal. Founded in 2007, ICAN is a global civil society consisting of an international coalition of organizations whose objective is to eliminate nuclear weapons, with a focus on enacting international law to ban them.

ICAN has called for the top spending countries to join the nearly 100 signatories to the U.N. Treaty on the Prohibition of Nuclear Weapons. "The acceleration of spending on these inhumane and destructive weapons over the past five years is not improving global security but posing a global threat," the report's co-author Alicia Sanders-Zakre has lamented. ICAN has condemned the billions spent on nuclear defense, calling it an "unacceptable misallocation of public funds that could be used for vital public services or tackling global crises such as climate change or slowing biodiversity loss.’’ ICAN calculates that five years of nuclear weapons spending would feed the 45 million people across the globe currently facing famine for the rest of their lives.

However, leading defense contractors are not complaining about skyrocketing nuclear spending. According to ICAN, 20 nuclear weapons development and maintenance companies raked in $31 billion in 2023 revenues with at least $7.9 billion in new contracts. This brings outstanding nuclear contracts to be fulfilled over the next decade to a staggering $335 billion. The report reveals how the nuclear weapons sector acquires sway over governments through hiring lobbyists and financing think tanks.

ICAN claims that America’s Big six defense contractors namely Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD), RTX Corp. (NYSE:RTX), Northrop Grumman (NYSE:NOC) and Honeywell (NASDAQ:HON) collectively accounted for almost $86 million out of a total $118 million spent lobbying by the industry in France and the United States. In Europe, Airbus (OTCPK:EADSF) and Britain's BAE Systems (OTCPK:BAESF) led lobbying spending.

Nuclear Spring

The ICAN report has revealed that nuclear powers have hiked spending on atomic weapons arsenal by 34% over the past five years as they continue to modernize their stockpiles amid growing geopolitical tensions. Similarly, the commercial sector is also recording a nuclear spring with nations rushing to beef up their energy security amid the global energy crisis triggered by Russia’s war in Ukraine. Back in March, a total of 34 countries, including the U.S.,pledged to increase their nuclear output in a bid to reduce their reliance on fossil fuels.

“We have to do everything possible to facilitate the contribution of nuclear energy. It is clear: Nuclear is there. It has an important role to play,” Rafael Grossi, the head of the International Atomic Energy Agency, declared at the first ever Nuclear Energy Summit in Brussels.

The U.S. nuclear sector is enjoying an unprecedented level of support by the federal government. Uranium producers including Cameco (NYSE:CCJ) and Denison Mines (NYSE:DNN) have been surging following news that the U.S. government will ask companies to bid on contracts for as much as $3.4B of domestically produced nuclear reactor fuel. Last month, President Biden signed a ban on imports of enriched uranium from Russia, effectively unlocking ~$2.7B in funding in previous legislation to build out the U.S. uranium fuel industry. Centrus Energy Corp.’s (NYSE:LEU) is among the companies that will compete for the funding. Three years ago, the U.S. Nuclear Regulatory Commission (NRC) approved Centrus Energy’s request to make High Assay Low-Enriched Uranium (HALEU) at its enrichment facility in Piketon, Ohio, becoming the first company in the western world outside Russia to do so. HALEU is the fuel used in small modular reactors (SMRs) that the Biden administration is promoting.

Meanwhile, the U.S. federal government has agreed to provide a $1.5 billion loan to restart a nuclear power plant in southwestern Michigan, abandoning earlier plans to decommission it in what will become the first ever nuclear plant in the U.S. to be revived after abandonment. Further, California regulators have given the greenlight for the Diablo Canyon plant to operate through 2030 instead of 2025 as the state transitions toward renewable power sources. Pacific Gas & Electric, the plant's owner, said federal aid helped it repay a state loan.

By Alex Kimani for Oilprice.com