Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Greece: Down and Probably Out - 27th Apr 15
Biotech Stocks and the Power of Context - 27th Apr 15
Strawberry Picking Undervalued Gold Stocks - 27th Apr 15
Rock-Paper-Silver - 27th Apr 15
Gold Flows East - China, India Import Massive Quantities of Gold from Switzerland - 27th Apr 15
Conservatives Start to Pull Away from Labour in Opinion Polls, But is it too Late? Election Forecast 2015 - 27th Apr 15
Gold and Silver - It's ALL about The Big Picture After All - 27th Apr 15
Sheffield School Places Election Crisis - Affluent Schools Demand Increase in Funding - 27th Apr 15
Labour Bribes Voters With Housing Market Stamp Duty Cut and Rent Controls - 27th Apr 15
Stock Market SPX Index at Resistance - 27th Apr 15
Society's Leaders Have Been Digging a Bottomless Economic Pit - 27th Apr 15
Impending Stock Market Top - Trend Forecast Summer 2015 - 26th Apr 15
Desperate Stock Market Bubble Thinking Takes Hold on Wall Street - 26th Apr 15
Stock Market Back into The Bear Suits - 26th Apr 15
One Stock Market Where You Haven't Missed the Bull Market Boom Yet - 26th Apr 15
Migrant Crisis - Europe Has Completely Lost It - 26th Apr 15
What Obama's First-Ever Energy Review Missed - 26th Apr 15
Sheffield Hallam Election Battle 2015, School Places Crisis, Can Nick Clegg Win? - 26th Apr 15
Stocks Bull Market Looks to Resume - 25th Apr 15
Gold And Silver - The U.S. Is A Corporation. Precious Metals Stand In The Way - 25th Apr 15
When the Nuclear Money Option Fails - 25th Apr 15
The War on Cash Special Report - 25th Apr 15
China Economic Slowdown Story - Why “Didi Dache” Is a Phrase You Need to Know - 25th Apr 15
The Trans-Pacific Partnership and the Death of the Republic - 25th Apr 15
Stock Splitting Caused the Stock Market Crash - 25th Apr 15
China Stock Market Parabolic Mania’s Global Risk - 24th Apr 15
What Will Happen to You When the U.S. Dollar Collapses? - 24th Apr 15
Why 2 of U.S. Dollar's Recent Bottoms Have 1 Thing In Common - 24th Apr 15
UK Economy Debt Timebomb Will Explode After Election - 24th Apr 15
Are Gold Stocks the Cheapest Ever? - 24th Apr 15
God, the Stock Market and Pascal's Wager - 24th Apr 15
Greedy Insurers Are in for a Nasty Surprise – Positioning You for Big Profits - 24th Apr 15
Four Things Missing From Obama’s First-Ever Energy Review - 24th Apr 15
How to Grow a Regenerative Medicine Industry - 23rd Apr 15
Stocks and Bonds Seven Year of Negative Returns; Fraudulent Promises - 23rd Apr 15
The Existential Danger To The Euro Is Elections - 23rd Apr 15
Stock Market No Clear Direction As Investors React To Quarterly Earnings Releases - 23rd Apr 15
Is China The Next United States? - 23rd Apr 15
U.S. Oil Glut: How High Can It Go? - 23rd Apr 15
Distorted Financial System Expect Deflation, Inflation And Hyperinflation - 23rd Apr 15
What McDonald’s Corporate Earnings Report Is Really Telling You - 23rd Apr 15
Gold Price Forecast to Become Priceless - 23rd Apr 15
FDIC Plots a Bank Heist Involving YOUR Accounts - 23rd Apr 15
$GOLD Price Year 2007 Again - 23rd Apr 15
Stocks Bubble - The Spread between Stock Prices and GDP is Blowing Out - 23rd Apr 15
Ukraine War - When Did We All Become Murderers? - 23rd Apr 15
Libya Crisis - EU Leaders Are Indicted for Nazi-Style Crimes against Humanity - 22nd Apr 15
Why Alternative Energy Isn’t Taking It on the Chin Despite Low Oil Prices - 22nd Apr 15
Bill Gross - German 10-Year Bunds Short of a Life Time - 22nd Apr 15
How to Profit from the Drop in the Oil Price - 22nd Apr 15
The U.S. Dollar's Move Is More Dangerous than You Think - 22nd Apr 15
Apple Watch Means Apple Will Become Worlds First $1 Trillion Stock - 22nd Apr 15
Half a Stocks Bubble Off Dead Center - 22nd Apr 15
They Said Go to College - Learning to become Debt Slaves - 22nd Apr 15
Best Cash ISA 2015/16, Instant and Fixed Savings Interest Rates, New Flexible Withdrawal / Deposit Rule - 22nd Apr 15
Unsound Banking: Why Most of the World's Banks Are Headed for Collapse - 21st Apr 15
Bitcoin Recent Low Price Volatility Might Be Deceptive - 21st Apr 15
Currency Wars Back As Russia Buys Gold - One Million Ounces in March Alone - 21st Apr 15
The Greece 'Grexit' Issue and the Problem of Free Trade - 21st Apr 15
Why Europe Lets People Drown - 21st Apr 15
Wealth Destruction for the 99.9 Percent - 21st Apr 15
SNP Publish England's Suicide Note as Pollsters Still Forecast Labour-SNP Election Disaster - 21st Apr 15
Characteristics of Extremely Over-Indebted Economies - 21st Apr 15
Trader Education Week -- a Free Event to Help You Learn to Spot Trading Opportunities - 21st Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The War on Cash!

The Big Nuclear Energy Lie

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

By: DailyWealth

Commodities

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.

http://www.dailywealth.com

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 http://www.MarketOracle.co.uk - 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

Free Report - Financial Markets 2014