Once there was a time when America bestrode the nuclear world as a colossus. Names such as Einstein, Oppenheimer, and Manhattan Project helped to win World War II and contributed to many peacetime applications as well. Over the ensuing decades, the United States allowed other nations to take the lead in the development of nuclear power.
Recently I wrote an article depicting the French Leader Sarkozy celebrating the multi-billion-dollar agreement with India to build a new generation of safe nuclear reactors for the next 25 years. We have become a nation asleep at the switch while the world is developing cheap, non-carbon electricity. Many countries, especially Asian nations, are building reactors with many proposed to come online in the future. France is the world leader, building facilities in England, Finland, China, Italy, and India among others. Even countries rich with oil such as Saudi Arabia and Iran have goals of building nuclear power generation. Doesn’t that show the winds of change are blowing?
Jeff Immelt, Ceo of General Electric (GE), has gone on record decrying the snail's pace at which nuclear plant construction is proceeding in the United States. He noted that we are building only one plant during a time of mass unemployment and mounting national debt.
Additional new nuclear plants are springing up elsewhere. South Korea gets a significant amount of electricity from nuclear and Korea Electric Power (KEP) has been competing with giants for nuclear plant construction. Taiwan is beefing up its power grid by going nuclear as well. The Russians have signed nuclear agreements with Iran, China, Venezuela, and Nigeria. Yet the US dragged its feet. It is apparent that America has no time to lose in the nuclear race.
Actually this crisis presents a singular opportunity for alert readers to make large profits in a rapidly growing sector catalyzed by volatile world developments. Under our very noses we are witnessing the possible loss of our oil supplies via such threats as the closure of the naval choke hold, Suez and Hormuz. There was little coverage over the weekend of the explosion in Northern Sinai of the Egyptian-Israel-Lebanon-Jordan natural gas pipeline by terrorists and it's believed a renewed interest will arise in light of recent events in the Middle East. Now investors are celebrating Mubarak’s departure, however a leaderless nation with a power vacuum may be the perfect environment for a geopolitical explosion.
I propose the following seven-step program to rebuild our nuclear legacy and, at the same, provide profitable opportunities for readers.
1. Overhaul the Federal Nuclear Loan Guarantee Program so that domestic mining companies such as UR-Energy (URG) and Uranerz (URZ), construction companies such asShaw Group (SHAW) and ABB (ABB), and component suppliers are given reasonable and competitive repayment loans.
2. Take advantage of public sentiment, which is rising in favor of the expansion of nuclear energy to power our growing need for electricity. This outreach will help to relieve our dependence on foreign fossil fuels. Nuclear can provide an inexpensive source of energy for many years for the benefit of our homes, businesses, and the environment.
3. Build new plants, which will create many high-paying, skilled-labor jobs in mining, plant construction, engineering, and ancillary industries which make components that go into these facilities.
4. Institute a national reawakening, which would make us competitors internationally and help to reduce our growing trade deficits.
5. Streamline federal laws that will act to eliminate red tape and bureaucratic boondoggling that are now hindering the growth of these vital industries. For example, Duke Energy(DUK) proposed the purchase of Progress Energy (PGN), a deal that would create the nation’s largest utility. Duke has stated that it would like to build new nuclear plants, adding to the 12 units at seven sites in the Carolinas and Florida. It is actively seeking regulatory approval to build six new Westinghouse reactors. Such approval should be accelerated.
6. Develop new methods of nuclear waste disposal in the US. The French have been pioneers in this area; for years they have been successfully recycling nuclear waste for usable energy through Areva Corportion. It is time to disarm the critics of nuclear energy by changing the negative mindset resulting from Chernobyl and Three Mile Island.
7. Refute critics of these new programs who say they are too costly. I maintain they would pay for themselves in new jobs for plant construction, engineering, and mine development.
A final note should be mentioned concerning the private dinner held by President Obama of the US and President Hu of China. A number of important partnerships were concluded at this meeting by companies such as Duke Energy, China Power Investment Corporation, Alcoa (AA) and Shenhua Group. It is interesting to note that Alcoa CEO Klaus Kleinfeld said that the Hu-Obama Summit helped push the joint initiative forward. He said if it were not for this private dinner, “The agreement would not have happened in a speedy fashion.”
The importance of such arrangements in which nuclear energy plays a vital role must not be overlooked. The platforms are in place. All that's needed is for American legislators and administrators to efficiently provide the stimulus to move the development of nuclear energy forward in order to reclaim our legacy.
Uranium prices are over $70 a pound as China, Russia, and India look for clean and cheap energy solutions. I wrote an article back in December entitled Reveille for the American Nuclear Industry. Since that time, a lot of investors, utilities, and legislators have woken up. President Obama signed an executive order to speed up and streamline mine development in order to spur job growth. Energy independence and clean alternative energy is gaining popularity in Washington as evidenced by Obama’s recent State of the Union Address. Uranium stocks have soared since my early October buy signal to readers. It is important to monitor the few juniors who are aggressively looking to grow their uranium pounds in the ground by possible acquisitions or exploration -- what better time than now for these companies to this? Look for additional acquisitions and consolidations in 2011. Cameco (CCJ), Denison (DNN), and Paladin (PDN) are all looking to expand their operations and resources.
Would you like to receive a daily newsletter highlighting key opportunities in precious metals, uranium, rare earths and lithium? If so, click here.