Best of the Week
Most Popular
1.Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - Nadeem_Walayat
2.Gold And Silver – A Reality Check - Michael_Noonan
3.The Killer Ape, Human Evolution, Artificial Intelligence and Extinction End Game - Nadeem_Walayat
4.Stock Market S&P 500 Volatility-Based Price Probability Range - Richard_Shaw
5.A Stocks Bear Market Is Now More Likely Than Not - Richard_Shaw
6.Money Supply and the Fed’s Serious Inflation Risks - Zeal_LLC
7.More Selling for Stock Market, Gold? - Brad_Gudgeon
8.Gold, Silver Precious Metals: a Critical Week Ahead - Rambus_Chartology
9.Gold Price Change in Character - Gary_Savage
10.Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - TLSReport
Last 5 days
Why Millennials Are So Different - 13th Oct 15
Unhealthy, Not Wealthy, and Far from Wise, The Changing Healthcare World - 13th Oct 15
Which Is The Better Investment - Gold Or The Dow? - 13th Oct 15
Stock Market Initial Projection Reached (Short-Term Top Expected) - 13th Oct 15
Gold Signals The End Of This Monetary Era - 13th Oct 15
Gold for Stocks Bear Market? - 13th Oct 15
The Mindless Stupidity of Negative Interest Rates - 13th Oct 15
China, The Great Depressions 1 & 2, and Gold - 13th Oct 15
Top 3 Technical Tools Part 3: MACD - Video Lesson - 13th Oct 15
An Introduction to Technofeudalism Ascending - 13th Oct 15
Stock Market S&P 500: Is it This Simple? - 12th Oct 15
Chanos: I'm a Potential Purchases or Glencore Stock - 12th Oct 15
IMF Fears $3 Trillion Credit Crunch; Lagarde Warns 'IMF Credibility at Stake' - 12th Oct 15
Structural Reasons For A Long-Term Financial Markets Decline - 12th Oct 15
New Hedge Fund Buying Enters Crude Oil Market - 12th Oct 15
Stock Market / GDX New Lows Coming: Panic Ahead? - 12th Oct 15
Stock Market Gains, but the “Super Crash” Is Accelerating - 11th Oct 15
October Stocks Bear Market and Crash Killer - 11th Oct 15
A Bifurcated U.S. Housing Market, How Much Longer Can Unaffordable Housing Prices Last? - 10th Oct 15
Stock Market Primary V to New Highs Underway - 10th Oct 15
Putin’s “Endgame” in Syria - 10th Oct 15
Gold And Silver Trapped In A Low-End Trading Range - 10th Oct 15
Free Traders Educational Week - 10th Oct 15
Stock Market Rally May be Broken - 9th Oct 15
Gold Stocks Major Breakout - 9th Oct 15
Contrarian Investing - Being the 10th Man - 9th Oct 15
U.S. Can Expect Recession in 1-3 Years - 9th Oct 15
The Greater Economic Depression Deep State - 9th Oct 15
Financial Markets Calm Before the Storm? - 9th Oct 15
Stock Market History Calling, Says Performance will be Crappy for Another ~10 years! - 9th Oct 15
Why This Feels Like an Economic Depression for Most People - 9th Oct 15
Dr Copper Back from the Dead - Time to Buy or Blink - 8th Oct 15
Glencore Rout Blamed on Short Sellers Playing With CDS - 8th Oct 15
The Real Reason for the Refugee Crisis You Won’t Hear About in the Media - 8th Oct 15
US Stocks: The [Trend]Line Between Bull and Bear Market - 8th Oct 15
Bundesbank “Reassures” Re. Gold Bullion Reserves as Deutsche Bank Shocks With €6 Billion Loss Warning - 8th Oct 15
How Our Aversion To Change Leads Us Into Danger - 8th Oct 15
Moving Stem Cell Research Forward: Bernie Siegel of the Genetics Policy Institute - 8th Oct 15
Stock Market VERY IMPORTANT Turn Date - 7th Oct 15
The 5th Convergence…An Economic & Financial Superstorm That Will Devastate America - 7th Oct 15
Summers Grades Janet Yellen's Fed Performance 'Incomplete' - 7th Oct 15
Gold Versus Central Banks Paper Ponzi - 7th Oct 15
QE3 is Over Get Ready for QE4 - 7th Oct 15
How to Profit from Government Mandates in Biofuels - 7th Oct 15
A Key Oil Price Trend That Everyone Is Missing - 6th Oct 15
Stock Market Turn Appears to Have Been Made - 6th Oct 15
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective - 6th Oct 15
Peter Schiff Predicts Gold Price Breakout - Video - 6th Oct 15
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

The Big Nuclear Energy Lie

Commodities / Nuclear Power Dec 12, 2012 - 12:15 PM GMT

By: DailyWealth


Matt Badiali writes: What are the Japanese doing in Uzbekistan?

For natural resource investors, it's one of the most important questions in the world. The country is a major gold producer. It also produces large amounts of natural gas, cotton, and copper. But these days, Japan has little interest in the traditional commodities Uzbekistan has to offer.

The Japanese are in Uzbekistan because they need uranium...

That might surprise a few readers. Japan's Fukushima Daiichi nuclear disaster pushed the country to shut down its 50 nuclear reactors within weeks. The mainstream media reported Japan planned to swear off nuclear energy for good.

Several other countries followed suit, most notably Germany. Chancellor Angela Merkel shut down all of Germany's nuclear power plants, instantly removing 41% of Germany's electric power.

But that's not the end of the story. And if you dig through the hysteria and government misinformation and look at the facts, you'll find a big investment opportunity...

You see, once again, basic economics is overriding political speechmaking. Let me explain...

Coal is the world's most important fuel for power generation... accounting for 40% of the electricity generated in 2010 (the most recent full-year data available)... Natural gas comes in next at 21% (and rising). Hydropower generates 16%, barely ahead of nuclear at 13%.

Global demand for electric power totaled 22,018 terawatt hours (TwH) in 2010, according to the International Energy Agency (IEA) World Energy Outlook 2012. Depending on policy changes, economic development rates, and population growth over the next 25 years, the study predicts an increase in electrical consumption between 48% and 88%.

Government policies will drive development of the various fuels. But in any scenario you choose, nuclear power plays a prominent role.

In 2010, nuclear power produced 2,756 TwH of electricity. Depending on the scenario used, the IEA projects nuclear power growth between 42% and 117% over the next 25 years. That would put production between about 4,000 TwH and 6,000 TwH.

That is a significant underestimation.

This study accepts at face value governments' fanciful projection of renewable energy, which would reduce the role of nuclear power. In the most aggressive scenario, the study shows non-hydro renewable power accounting for 9,031 TwH in 2025. That's much more than nuclear and nearly 12 times the power production by renewables in 2010. That is a ridiculous assumption. And I believe, in real life, that nuclear power will be tapped to fill much more of that production than in this estimate.

Here's why...

The following table displays the costs of various sources of electric power in U.S. cents per kilowatt hour (KwH). Nuclear power is the cheapest source of electricity.

Further complicating Japan and Germany's anti-nuclear stance... both countries are aggressively trying to restrict the use of fossil fuels, like coal, to reduce carbon-dioxide production. (We'll leave the folly of that endeavor for another day.)

If you abandon nuclear fuel and coal... you're left with limited and expensive options...

"Renewable" energy sources are popular to discuss, but the only viable one is hydroelectric power. And as the table shows, it's more than four times as expensive to operate as a nuclear power plant. Wind and solar are unproven as mainstay sources of power for a national power grid... and are incredibly expensive to build and maintain.

Add to that... the demand for electricity is growing fastest in places that don't have the luxury of experimenting with fads and theories...

The IEA and oil major BP both put out highly regarded annual energy forecasts. And according to both analyses, electricity demand represents the largest growth of any energy sector. World electricity demand is projected to grow between 2.2% and 2.6% per year through 2030, according to the two major forecasts. And as you would expect, the main sources of growth are the immense and modernizing economies of China (38%) and India (13%).

One of the cheapest, cleanest options for these countries is nuclear power. There's just no way the world can work without nuclear energy playing a prominent role... no matter what the politicians say.

That's why Japan is in Uzbekistan looking for uranium. Just a few months ago, Japan Oil, Gas, and Metals National Corporation – the government agency responsible for creating stable supplies of key resources – closed a deal to help fund the exploration and production of large uranium deposits in central Uzbekistan.

This is not the action of a country ready to give up on nuclear power. It's the action of a country that's saying one thing and doing another. And that's why there's a big opportunity here for investors.

In my next essay, I'll show you another major factor that will help kick off a bull market in uranium and uranium producers.

Until then...

Good investing,

Matt Badiali

P.S. Last week, I told my S&A Resource Report subscribers about my three favorite ways to profit off the opportunity in uranium. These companies are so beaten-down that we won't risk more than 12.5% on any of them... and our potential gains are as much as 300% if they simply recover to their pre-Fukushima prices. You can gain immediate access to these picks with a subscription to the S&A Resource Report. Learn more here.

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History