More Uranium Going Online
An Explosive Opportunity:
Uranium and Uranerz Energy Corporation
There is a remarkable opportunity emerging in a market where demand growth is running into a serious wall of tightening supplies.
And we’re about to witness a dramatic shift in control for this supply.
I have talked about this change before in many of my past letters
But the time to act on this change is running out. Literally.
By the end of the year this shift will take place. And it will put America at a major disadvantage.
The global market is about to run headlong into its first major supply deficit; one that will be controlled by a major world player that doesn’t play ball with the West.
Major institutions, such as JP Morgan, are predicting that prices will more than double within the next few years.
But I think that’s being conservative.
There is strong evidence that prices will go even higher; including a recent political change in a major economy.
There has never been a better time to speculate on these events.
In this special edition letter, I am not only going to introduce you to this explosive opportunity, but also introduce you to a Company that is poised to take advantage of this upcoming explosive market.
Analysts are already shooting out buy signals for this Company with prices much higher than where the Company trades today.
Industry experts are already touting that, “this Company is primed for growth” and “sees (its) current price as a gold-plated bargain.”
But before we get into the details of the Company, let’s talk about this explosive sector opportunity first.
Uranium: The Next Explosive Commodity
Before you shut down the prospects of uranium, let me explain why I believe this sector is primed for explosive growth in the coming months and years.
Not only is uranium one of the cheapest and most efficient sources of energy in the world, its also one of the cleanest.
While we continue to hear talks of alternative energy such as wind, solar, or hydro, uranium is the only alternative energy source amongst them that actuallycreatesenergy – the others simply capture and store it.
Because of its ability to produce constant and uninterrupted energy, it is perfect for baseload capacity – meaning that it’s always on.
There are only three sources of baseload energy available to us: fossil fuels (coal and gas), hydro, and nuclear.
The Cost of Power
No other form of energy is as cost effective as nuclear.
Solar energy is the most expensive at $250 per megawatt-hour (MWh), while nuclear is the cheapest at around $40 per MWh. In some countries, nuclear only costs $30 per MWh.
Nuclear power plants also have the highest percentage of electricity produced relative to the total capacity of the plant. To draw a comparison, nuclear plants have a capacity of 89.6%; coal 72.6%; natural gas 37.7%; heavy oil 29.8%; hydro 29.3%; wind 26.8%; and solar 18.8%.
Environmental Benefits
Many environmentalists havenow turned pro uranium.
That’s because every one pound of uranium used instead of coal decreases CO2 emissions (CO2E ) by around 45,000 pounds.
Let’s put that into perspective:
Apassenger vehicle produceson average 4.8 metric tons of CO2E every year, or roughly 10,582 pounds.
That means every pound of uranium used instead of coal removes the equivalent CO2E that four cars produces every year.
According to the World Nuclear Association, current reactors require approximately 176.7 million lbs. of uranium each year.
If we were to remove all of the nuclear power plants that are currently in operation and replaced them with coal plants, the CO2E added would be like adding more than706.8 millioncars onto the road!
No wonder why public opinion on the nuclear sector is suddenly turning positive.
Even environmentalist Robert Stone, an award-winning documentary filmmaker, has now changed his views on nuclear energy:
“I’ve considered myself a passionate environmentalist for about as long as I can remember…It’s no easy thing for me to have come to the conclusion that the rapid deployment of nuclear power is now the greatest hope we have for saving us from an environmental catastrophe.”
He recently released his latest documentary, “Pandora’s Promise,” which explores the transformation of anti-nuke environmentalists into believers of the benefits of nuclear power.
The documentary aims at debunking a lot of the nuclear myths that came post-Fukushima.
Japan, Fukushima and Abe
A resource-poor nation, Japan’s economic growth potential is limited by demographic decline and its dependence on energy imports.
That’s why nuclear power has been a key part of Japan’s energy diversification and security strategy for well over 40 years.
But since the Fukushima meltdown in 2011, which devastated the nuclear sector, all but two of the country’s 54 reactors have been taken off line. As a result, imports of fossil fuels have risen dramatically to compensate.
The high cost of continued fuel imports is destroying Japan’s current focus on restoring economic growth and achieving the 2% inflation that Japan Prime Minister Shinzo Abe has promised.
Abe wants to seeJapan’s inflation rate at 2%and has told the Bank of Japan (BOJ) to hit that target by printing more money and doing whatever it can to stimulate the cause.
Despite the insane monetary policy, there is no way Japan can achieve growth without first lessening the effects of energy on the economy.
Power utilities in Japan have already increased liquefied natural gas imports by 18% year-on-year in 2011 and by 5% year-on-year in 2012.
According to BP’s 2013 Statistical Review of World Energy, Japan consumed41% morefuel oil in 2012 compared to 2011, from 577,000 barrels per day to 811,000 barrels per day.
In May 2013 alone, Japan spent $5.4 billion on imports of liquefied natural gas, $11 billion on crude oil (electricity accounts for just under 20 percent of oil product consumption) and nearly $2 billion on coal.
If Abe wants to achieve his 2% target of inflation, heneedsget those reactors back online.
Abe Gets His Wish
Last month, Japanese voters gave Abe and his Liberal Democratic Party (LDP) control of the upper house of parliament, meaning that for the first time in six years the LDP will have control of both chambers of The National Diet, Japan’s bicameral legislature.
Essentially, Abe’s control over both houses would be like Obama gaining control of both the Senate (upper house) and the House of Representatives (lower house).
With this new control, Abe will undoubtedly make turning nuclear reactors back on a priority.
Growing Demand Worldwide
Despite the growing rhetoric of countries – such as Germany and Switzerland - phasing out of nuclear power, nuclear power continues to march forward.
While Germany immediately took eight reactors offline and has publicly stated it will phase out its remaining nine reactors by 2022, starting in 2015, it ironically still supports foreign nuclear power and will use public money to guarantee the construction of power plants in other countries
Since Fukushima, Germany has become a net importer of power from France, relying on more costly French nuclear power.
For now, Germany has enough money to continue this for some time. But I don’t believe the nation will continue paying for expensive imported French nuclear electricity when it can do it on home turf at a much cheaper price.
China – The Next Largest Consumer
It’s impossible to talk about world energy without talking about China.
The nation, like many others, reevaluated its nuclear power program since Fukushima, and suspended nuclear plant approvals for a couple of months.
However, that didn’t last long as the government has already decided to continue with its nuclear power developments.
That means they’re on track to quadruple their nuclear capacity by 2020.
The country already has 26 reactors under construction.
By 2050, Mainland China is looking to ramp up to 400 gigawatt (GW).
In order to fuel 400 GW, China will need195.4 million poundsof uranium per year for its power plants – that’s more uranium than all of the world’s current consumption per year.
Don’t Believe Everything You Hear
Despite what you hear, nuclear is isn’t shrinking – its growing rapidly.
Since 2007, total new reactor builds (under construction, planned, and proposed) have increased by 57%, from 349 to 548 as of September 2012.
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