nuclear energy to the rescue....THE energy solution...
As I was flying into JFK on my way back from a uranium mine in Labrador recently, I peered down at the cityscape and was struck by just how brightly this country lights up the night sky.
I’m not talking just about metropolitan centers. From Boston to New York, there’s a solid stretch of millions of homes, with nearly every window glowing.
I’ll bet very few residents think about how or why the lights turn on. They’d be surprised to learn that there’s almost a one-in-five chance that a nuclear generator is providing their electricity.
America gets 19.3% of its electricity from 104 commercial nuclear generating plants with a capacity of 97,400 megawatts. We could be getting a lot more, but our nuclear program stalled after the Three-Mile Island and Chernobyl disasters.
Now nuclear energy is ready to make a comeback in a big way. I attribute this to what I call the “Three E’s” ...
Economics: Nuclear power is getting cheaper and safer.
Environment: Global warming is a major problem.
Energy security: Taking control of our own destiny.
Given our dependence on the turbulent Middle East and Persian Gulf for energy, I think the last point takes on the greatest urgency ...
Uranium Can Get Us Out
From Under OPEC’s Thumb
Right now, there’s little doubt that OPEC has the U.S. by the throat when it comes to energy. The simple reason: Our domestic oil production has been declining for decades — we now produce nearly 40% less than we did in 1970, and America’s domestic production now supplies only 40% of our total needs.
Meanwhile, in the next 20 years, according to the Energy Information Administration, U.S demand for oil is expected to jump 30% (and natural gas by more than 50%).
Unfortunately, we are “addicted to oil,” as President Bush says, and we’ll do just about anything to keep the “Central Bank of Oil” — Saudi Arabia — on our good side.
For example, we’ll ignore that 15 of the September 11 hijackers came from Saudi Arabia, or that, for decades the Saudi royal family has been funding the kind of extremism that came back to sucker-punch us that day.
We really don’t have a lot of options on oil — not with imports (crude oil and products) accounting for 60% of the total oil used in July. Mind you, a fifth came from the Persian Gulf, and that proportion is growing.
That’s why nuclear power could be the key to our energy security. Indeed, the U.S. is one of seven countries that, combined, control approximately 90% of the world’s known uranium resources.
This has countries like Iran scared to death. Not one of the seven major uranium-producing countries is in the Persian Gulf. With Peak Oil looming, you can see why some members of OPEC might find that a little intimidating.
America Can Flex Its
Nuclear-Energy Muscles
Wouldn’t it be nice if we produced more oil than we consumed? Yes, but that’s not likely to happen anytime soon. In contrast, when it comes to nuclear power, we’re talking a whole new ballgame — one where the U.S. has a very realistic chance of hitting the ball out of the park.
Some facts:
The U.S. was once the world’s largest uranium producer, until Three-Mile Island derailed the nuclear industry in this country.
The U.S. has about 7% of the world’s uranium reserves, but only 2.5% of the world’s uranium production. Second-quarter 2006 uranium oxide production in the U.S. was 894,268 pounds — up 42% from a year earlier.
In the first half of 2006, U.S. production of uranium concentrate totaled 1.8 million pounds, up 36% from the first half of 2005, and the highest since 2000.
It’s no surprise that U.S. uranium production is increasing ...
There are 442 operational nuclear power reactors in the world. So demand for uranium fuel is enormous.
Total global uranium consumption was estimated at 176.3 million pounds in 2005. Only 47% was supplied directly from mining. The rest was from stockpiles, which are dwindling — fast!
130 new nuclear power plants are either being built or are in the planning stages. Some analysts put the number of planned reactors as high as 160.
In other words, we have both a raging bull market in uranium prices ... and a chronic, long-term shortage of uranium. Uranium mine production simply cannot keep up with demand. Stockpiles are dwindling. And this widening gap between supply and demand is expected to get worse for years to come.
Plus, here’s the really interesting thing: Despite the big bull market surge in uranium prices over the past couple years, on a historical basis, uranium hasn’t come anywhere near its old peak in inflation-adjusted terms.
In 1978, uranium topped out at $43.40 per pound, which, in today’s dollars, is around $145. Compare that to uranium’s current price of $53.50 per pound, and you’ll see that it would have to nearly triple to match its old highs!
The climb could be steep: According to an estimate from CIBC World Markets, the price of uranium will likely hit $70 per pound by the end of 2007 — a 31% rise from present prices.
To give you some perspective, an equivalent rise in the price of gold would put the yellow metal at nearly $800 per ounce ... and an equivalent rise in crude oil would take its price to $85 a barrel.
by Dr. Martin D. Weiss
moneyandmarkets.com |
