America Needs Nuclear Fuel Of Some Sort

Every time I attend a materials conference, somebody mentions the American nuclear energy sector's need for uranium.  The Megatons to Megawatts program ends this year.  The Russian government will be free to sell its surplus warhead uranium on the world market.  The US nuclear sector will need a new source of supply.  I see four options.

1.  The US government liberalizes permitting for uranium deposit exploration.
2.  US utilities operating nuclear reactors buy more uranium on the world market.
3.  North American uranium miners rapidly expand production at existing mines.
4.  The US energy sector explores alternatives to uranium-fueled fission reactors.

Option #1 is in keeping with the federal government's liberalized approach to granting permits for oil and gas exploration on federal lands.  The problem is that the whole uranium fuel cycle has become a political football thanks to the Fukushima disaster and the renewed controversy over storage at Yucca Mountain.

Option #2 pits US energy companies against other utilities around the world.  This is how the free market normally works.  The risk is that the inevitable hyperinflation of the US dollar will make it prohibitively expensive for any US companies to source raw materials outside the US.  This includes energy sources.  I do not expect uranium to be exempt from this dynamic.

Option #3 is probably feasible in the short term, given that increased demand from utilities for uranium supply will drive the price up in the US and encourage miners to produce more.  This will of course cause them to exhaust proven mineral reserves at an accelerated rate.  We're back to option #1 for more exploration.

Option #4 is a no-brainer.  Notice the title of this blog article says "nuclear fuel," which does not necessarily mean uranium.  I'm intrigued by the possibility of thorium fuel cycle reactors, which cause fewer problems than reactors powered by uranium.  The EPA has clear standards for handling thorium.  It's not like you can eat the stuff, but the safety standards are known to industry and thus not a barrier to operations.

Watch this blog for more commentary on thorium developments.  I would attend the Thorium Energy Alliance annual conference if there were enough hot chicks there to make it worth my while.  

Financial Sarcasm Roundup for 08/06/12

It is time for business malcontents to take their turn at my whipping post.

Let's lead off with Helicopter Ben in his own words.  The esteemed Fed Chairman told a rapt audience that economists should frame their studies as a window into human happiness.  I get the hypocrisy.  He expects the public to accept economists' interest in their well-being.  It should be obvious that no one at the Fed really believes this line.  He must be aware, at some level of his psyche, that a massive monetary stimulus can destroy the well-being of the prosperous middle whose wealth he claims to champion.  The degree of doublethink needed to mouth these words must be staggering.  The Fed already wields enormous influence over the career paths of economists who define consensus thinking.  Ben's audience this time was an obscure academic association that would probably never have me as a member.  No one must be allowed to escape the conditioning program.

The never-ending saga of the Yucca Mountain nuclear waste disposal site has entered a new phase of completely unnecessary meddling.  A federal court has delayed deciding whether the NRC's delay in finalizing a waste disposal site deserves further delay.  This is sickening.  Apolitical scientific experts settled on Yucca Mountain decades ago as a safe place for spent nuclear fuel and the federal government has spent money since at least the Reagan Administration to prepare the site.  The NRC's totally political decision to play to a handful of Nevada voters will now jeopardize the safety of communities around the country where nuclear plants must store spent fuel in unstable configurations.  Way to go, geniuses.

Another political genius is displaying his wondrous knowledge in Maine, dismissing wind energy to satisfy the objections of locals who like a pristine view.  Boutique or not, wind turbines diversify the energy sources available to utilities at peak times.  Ratepayers outnumber lodge tour guides; the former should be up in arms over pandering to the latter.

Greece played the financial media for suckers once again, entertaining the European troika and touting promises of renewed growth by September.  The troika isn't fooled by these empty promises but you'll never hear that from them.  The fake happy talk coming out of both sides of everyone's mouths will continue until the bond market calls Brussels' bluff, and then the Fed pushes the red button launching its trillion-dollar swap lines.  Shell is pulling cash from European banks to avoid getting hit in the crossfire.

I'm done for now.  There will undoubtedly be more stuff to ridicule pretty soon.

Time To End All Energy Subsidies And Feed-In Tariffs

The collapse of Solyndra will hopefully put a nail in the coffin for government loan guarantees targeted at specific industries.  Unfortunately, hope is not a method.  Solar technology is actually becoming extremely cost-effective completely on its own and probably won't need any subsidies.  We should take the same approach with funding other energy developments.

The oil depletion allowance is the mack daddy of energy subsidies.  Read that IRS publication carefully and you'll note that it also covers minerals and timber.  The depletion allowance is not merely a freebie handed to deep-pocketed industries that fund political campaigns.  It is easy to see how this tax break encourages accelerated reductions in our nation's vital economic resources that would otherwise be uneconomical without a tax break.  It makes no sense to help oil producers pump more crude than their sales forecasts and long-term contracts will justify. 

Nuclear power gets plenty of free help.  That should end along with the design preference for lightwater reactors.  Thorium-salt reactors are the future and allow for safer, smaller designs. 

I suppose we'd have to phase out feed-in tariffs just to be fair.  Such a mechanism distorts a free market in electricity by mandating different cost structures for renewable sources than for non-renewables.  The government's proper role, as guarantor of "the commons," is to invest in infrastructure like long-distance transmission lines that bring renewable sources within everyone's reach.  Good transmission lines that bring Montana's wind and the Southwest's sunlight to every grid operator are a much more appropriate public policy objective than cost-diluting tariffs. 

Full disclosure:  No investments in any energy companies at this time, with the exception of a sweat equity investment in a wind energy startup that never paid me for my services, has had no contact with me for about three years, and looks like it has had no real activity after I left.  Oh well. 

The Limerick of Finance for 05/08/11

Big kudos for nukes in Japan
We need to build more while we can
The energy's cheap
With profits to reap
It's foolish to talk of a ban

Nuclear Paranoia Grips West

Europe is getting slow in its old age.  Italy has unilaterally approved a one-year moratorium on the construction of new nuclear plants.  That country had a token amount of nuclear power but got spooked by Chernobyl.  The EU is getting timid too, calling for stress tests at the rest of the world's nuclear plants.  If those stress tests are anything like the tests conducted for Europe's banks, they won't mean much.

Hopefully such fears will not infect the U.S.  New nuke approvals here are inching ahead.  Meanwhile, Turkey is undaunted in its plan to build its first-ever nuke plant.  Kenya has an ambitious plan to power 90% of its energy needs with nuclear energy.  It's cool that less-developed countries see nuclear power as the key to their continued development and energy independence. 

The West needs to get over its fear of nuclear power.  The emergency in Japan will pass.  The world's need for baseload power will not. 

Nota bene:  No positions in nuclear-related companies at this time. 

Consumer Spending Rose Due To Gas Prices

Think again, recovery fans.  That 0.7% rise in consumer spending in February came from higher gas prices, not from any increase in disposable income.  Those gas prices are going even higher thanks to unrest in the Middle East.  If you think civil war in Libya is nasty, you haven't seen anything yet.  Once it spreads, you'll be thinking hard about giving up dining out just to fill your gas tank.  It's too bad some people are using the disaster in Japan as an excuse to turn off nuclear plants (like these panicking politicians in Germany).  The world is going to need that nuclear power.