$1,000 Per Pound Uranium?
My latest MoneyandMarkets.com column is up ...
Could uranium hit $1,000 a pound? (by Sean Brodrick) An industry insider told Sean Brodrick that uranium could hit $1,000 a pound. Here’s his argument.
To read that story, CLICK HERE.
I hope what comes across in the MoneyandMarkets.com column is my friend's target is higher than I'm comfortable with. Of course, I've been too conservative on uranium before, LOL! But I think a Peak Oil scenario where gasoline is $15 per gallon would wreak economic hardship on North America. I really hope it doesn't come to that.
My editor did a good job this week, because I had too many thoughts in my original story. Here are some things that were cut out ...
ON PEAK OIL ...
The mounting confrontation with Iran is just the latest driver of oil prices. Longer-term, fundamental forces should drive oil to $77 per barrel this summer. And we could see oil move a lot higher than that.
I’m talking about the fact that Saudi Arabia, which has a reputation as America’s best friend among Middle East oil producers, seems to be having second thoughts. King Abdullah of Saudi Arabia told Arab leaders recently that the American occupation of Iraq is “illegal.” He also canceled a dinner meeting with President Bush and instead gave a warm welcome to Iranian President Mahmoud Ahmadinejad in early March. That was amazing considering that Sunni Saudi Arabia and Shiite Iran have a long and bitter rivalry.
Iran recently announced it would no longer accept US dollars as payment for its oil. If Saudi Arabia follows suit, that might kneecap the greenback’s standing as an international reserve currency.
ON THE US AND NUCLEAR POWER
This is the part where steam comes out my ears. There are 28 applications for new plant licenses from now until 2009. Just 28? There should be double or triple that number, if we’re going to survive our oncoming collision with peak oil! Making matters worse, these applications have to go through miles of red tape, and the Department of Energy doesn’t even have the staff to process them all in a timely fashion.
The US has to get on the stick and start building a lot of new nuclear plants soon. By electrifying railroads and building electric cars (with tax breaks to make them affordable) right here in the USA, along with conservation and pursuing alternative fuels, we could rev up our economy and eventually tell OPEC to go stick its oil where the sun don’t shine.
ON GLOBAL WARMING
The Amundsen Sea Embayment, a two-mile-thick piece of the Antarctic ice sheet the size of Texas is thinning rapidly, scientists say. This is a big deal because while we know that the Arctic ice cap is also thinning rapidly, and Eskimos will probably enjoy ice-free summers in a few decades, the Arctic ice is mostly over water. The Antarctic ice sheet is mostly over land. As it melts, sea levels will rise. We have about 10 years to turn things around, scientists say.
How much will sea levels rise? The UN Intergovernmental Panel on Climate Change (IPCC) predicts global sea level could rise by 7 to 23 inches by 2100. However, that study is roundly criticized for being too conservative, thanks to political pressure. Other scientists say we could see the seas rise from 3 feet to 16 feet in a matter of 30 to 50 years.
Do you want to visit Disneyworld after sea levels rise 16 feet? Bring a snorkel! Much of the state of Florida is going to be an underwater theme park. And it’s not just Florida. Two-fifths of the world’s major cities are located on coastlines.
Climate change is a natural process that is being hurried along by coal-fired power plants. Coal accounts for about 40% of global emissions of carbon dioxide, a greenhouse gas that traps heat in the atmosphere. Now for the bad news. There are over 800 coal-fired plants under construction in three countries – China, India and the US. They’ll emit as much as an extra 2.5 billion tons of carbon dioxide.
So what to do? We can build nuclear power plants instead of coal-fired plants. An operating nuclear power plant emits ZERO greenhouse gases. Every 1,000 megawatt reactor saves 3.4 million tons of coal a year and eliminates 34,000 tons of polluting sulfur dioxide and 11,000 tons of nitrogen oxide.
Coal’s Dirty Little Secret
And that’s the other part about coal plants. You want irony? Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants.
That’s because coal is saturated with impurities, including uranium and thorium, as well sulfur, mercury, arsenic and other poisonous heavy metals.
Over one million people die each year from air pollution caused by coal-fired power plants. That’s over 100 people per hour. Thousands more children are born with birth defects thanks to mercury poisoning from coal pollution.
So how about “clean coal” technology? Sure … let’s bet the house on an unproven technology. We DO know that clean coal raises the cost of coal-fired energy enormously … pretty much wiping out the advantage that coal has over nuclear power.
Bottom line: We need to build a lot more nuclear plants and we need to build them now. Three quarters of new energy capacity in the global pipeline is from coal. ALL those plants need to be replaced by alternative energies (nuclear/wind/tidal) if we’re going to leave our kids any kind of world to live in. Since 1990, according to the World Resources Institute, American greenhouse emissions rose 18 percent while Chinese emissions rose 77 percent. China may pass America as the No. 1 emitter of greenhouse gases as soon as 2010. The clock is ticking. Get on the phone to your congressman today.
SIX FORCES THAT COULD DRIVE URANIUM PRICES DOWN
Nothing is written in stone. And I see six things that could potentially send uranium down for short periods. On the other hand, I think any pullback is a buying opportunity for the longer-term.
First, speculators are buying about 80% of short-term uranium supply. Eventually they’ll want to sell it … but I would expect those sales could be years away.
Second, Kazakhstan is a huge source of uranium – as much as 51% of new uranium coming on the market between now and 2015. But what few will talk about is Kazakhstan has a highly corrupt business and political climate. To me, it looks like there is risk that things could take a turn for the worse in Kazakhstan.
Third, the Russians could start exporting more uranium into the US market … except it sounds like the Russians need their uranium for their own ambitious nuclear program.
Fourth, recent drivers of uranium prices were the floods at Cameco’s Cigar Lake Mine in Canada and ERA’s Ranger Mine in Australia. ERA wasn’t catastrophic, but Cigar Lake was. Production that was supposed to start in 2008 has now been delayed until 2010 with full production expected in 2012. Mind you, the rock at Cigar Lake is sandstone – a porous, treacherous material for mining if there ever was one. It wouldn’t surprise me to see this project delayed further.
Fifth, the US Department of Energy (DOE) is studying plans to increase sales from its uranium stockpiles to 5 million pounds U3O8 equivalent per year for 10 years. However, the DOE has made it known it doesn't want to interrupt the normal market dynamics, and even if it did, that five million pounds would be a drop in the yawning chasm of demand.
Finally, then there is the Australian Labor Party, which is expected to lift its ban on new uranium mines when it meets this month. Australia has some of the richest uranium deposits in the world, and speculators could take the end of the ban as a signal to sell. I don’t see this as a risk to prices in the intermediate-term. It takes years to get a new mine online. In the meantime, I think there is tremendous upside potential in small, little-known Australian miners that are already doing the prep work to bring mines online as soon as possible once the ban is lifted.
Could uranium hit $1,000 a pound? (by Sean Brodrick) An industry insider told Sean Brodrick that uranium could hit $1,000 a pound. Here’s his argument.
To read that story, CLICK HERE.
I hope what comes across in the MoneyandMarkets.com column is my friend's target is higher than I'm comfortable with. Of course, I've been too conservative on uranium before, LOL! But I think a Peak Oil scenario where gasoline is $15 per gallon would wreak economic hardship on North America. I really hope it doesn't come to that.
My editor did a good job this week, because I had too many thoughts in my original story. Here are some things that were cut out ...
ON PEAK OIL ...
The mounting confrontation with Iran is just the latest driver of oil prices. Longer-term, fundamental forces should drive oil to $77 per barrel this summer. And we could see oil move a lot higher than that.
I’m talking about the fact that Saudi Arabia, which has a reputation as America’s best friend among Middle East oil producers, seems to be having second thoughts. King Abdullah of Saudi Arabia told Arab leaders recently that the American occupation of Iraq is “illegal.” He also canceled a dinner meeting with President Bush and instead gave a warm welcome to Iranian President Mahmoud Ahmadinejad in early March. That was amazing considering that Sunni Saudi Arabia and Shiite Iran have a long and bitter rivalry.
Iran recently announced it would no longer accept US dollars as payment for its oil. If Saudi Arabia follows suit, that might kneecap the greenback’s standing as an international reserve currency.
ON THE US AND NUCLEAR POWER
This is the part where steam comes out my ears. There are 28 applications for new plant licenses from now until 2009. Just 28? There should be double or triple that number, if we’re going to survive our oncoming collision with peak oil! Making matters worse, these applications have to go through miles of red tape, and the Department of Energy doesn’t even have the staff to process them all in a timely fashion.
The US has to get on the stick and start building a lot of new nuclear plants soon. By electrifying railroads and building electric cars (with tax breaks to make them affordable) right here in the USA, along with conservation and pursuing alternative fuels, we could rev up our economy and eventually tell OPEC to go stick its oil where the sun don’t shine.
ON GLOBAL WARMING
The Amundsen Sea Embayment, a two-mile-thick piece of the Antarctic ice sheet the size of Texas is thinning rapidly, scientists say. This is a big deal because while we know that the Arctic ice cap is also thinning rapidly, and Eskimos will probably enjoy ice-free summers in a few decades, the Arctic ice is mostly over water. The Antarctic ice sheet is mostly over land. As it melts, sea levels will rise. We have about 10 years to turn things around, scientists say.
How much will sea levels rise? The UN Intergovernmental Panel on Climate Change (IPCC) predicts global sea level could rise by 7 to 23 inches by 2100. However, that study is roundly criticized for being too conservative, thanks to political pressure. Other scientists say we could see the seas rise from 3 feet to 16 feet in a matter of 30 to 50 years.
Do you want to visit Disneyworld after sea levels rise 16 feet? Bring a snorkel! Much of the state of Florida is going to be an underwater theme park. And it’s not just Florida. Two-fifths of the world’s major cities are located on coastlines.
Climate change is a natural process that is being hurried along by coal-fired power plants. Coal accounts for about 40% of global emissions of carbon dioxide, a greenhouse gas that traps heat in the atmosphere. Now for the bad news. There are over 800 coal-fired plants under construction in three countries – China, India and the US. They’ll emit as much as an extra 2.5 billion tons of carbon dioxide.
So what to do? We can build nuclear power plants instead of coal-fired plants. An operating nuclear power plant emits ZERO greenhouse gases. Every 1,000 megawatt reactor saves 3.4 million tons of coal a year and eliminates 34,000 tons of polluting sulfur dioxide and 11,000 tons of nitrogen oxide.
Coal’s Dirty Little Secret
And that’s the other part about coal plants. You want irony? Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants.
That’s because coal is saturated with impurities, including uranium and thorium, as well sulfur, mercury, arsenic and other poisonous heavy metals.
Over one million people die each year from air pollution caused by coal-fired power plants. That’s over 100 people per hour. Thousands more children are born with birth defects thanks to mercury poisoning from coal pollution.
So how about “clean coal” technology? Sure … let’s bet the house on an unproven technology. We DO know that clean coal raises the cost of coal-fired energy enormously … pretty much wiping out the advantage that coal has over nuclear power.
Bottom line: We need to build a lot more nuclear plants and we need to build them now. Three quarters of new energy capacity in the global pipeline is from coal. ALL those plants need to be replaced by alternative energies (nuclear/wind/tidal) if we’re going to leave our kids any kind of world to live in. Since 1990, according to the World Resources Institute, American greenhouse emissions rose 18 percent while Chinese emissions rose 77 percent. China may pass America as the No. 1 emitter of greenhouse gases as soon as 2010. The clock is ticking. Get on the phone to your congressman today.
SIX FORCES THAT COULD DRIVE URANIUM PRICES DOWN
Nothing is written in stone. And I see six things that could potentially send uranium down for short periods. On the other hand, I think any pullback is a buying opportunity for the longer-term.
First, speculators are buying about 80% of short-term uranium supply. Eventually they’ll want to sell it … but I would expect those sales could be years away.
Second, Kazakhstan is a huge source of uranium – as much as 51% of new uranium coming on the market between now and 2015. But what few will talk about is Kazakhstan has a highly corrupt business and political climate. To me, it looks like there is risk that things could take a turn for the worse in Kazakhstan.
Third, the Russians could start exporting more uranium into the US market … except it sounds like the Russians need their uranium for their own ambitious nuclear program.
Fourth, recent drivers of uranium prices were the floods at Cameco’s Cigar Lake Mine in Canada and ERA’s Ranger Mine in Australia. ERA wasn’t catastrophic, but Cigar Lake was. Production that was supposed to start in 2008 has now been delayed until 2010 with full production expected in 2012. Mind you, the rock at Cigar Lake is sandstone – a porous, treacherous material for mining if there ever was one. It wouldn’t surprise me to see this project delayed further.
Fifth, the US Department of Energy (DOE) is studying plans to increase sales from its uranium stockpiles to 5 million pounds U3O8 equivalent per year for 10 years. However, the DOE has made it known it doesn't want to interrupt the normal market dynamics, and even if it did, that five million pounds would be a drop in the yawning chasm of demand.
Finally, then there is the Australian Labor Party, which is expected to lift its ban on new uranium mines when it meets this month. Australia has some of the richest uranium deposits in the world, and speculators could take the end of the ban as a signal to sell. I don’t see this as a risk to prices in the intermediate-term. It takes years to get a new mine online. In the meantime, I think there is tremendous upside potential in small, little-known Australian miners that are already doing the prep work to bring mines online as soon as possible once the ban is lifted.
Labels: China, coal, global warming, uranium
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posted by Sean Brodrick @ 8:13 AM
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