A Nuclear Energy Revival

Written By Nick Hodge

Posted January 13, 2010

Nuclear energy is once again making news.

And when something is making news, someone is making money.

The news was littered with stories late last year of the United Arab Emirates, their nuclear cooperation deal with the U.S., and the $40 billion nuclear program that ensued.

Those reports went viral, spawning all sorts of discussion about a nuclear boom in the Middle East. It was enough to generate headlines like, "UAE Could Spur Nuclear Power Rush," and enough to briefly get excited about the companies in the running for potential contracts, like Areva (PA: CEI), GE (NYSE: GE), and Korea Electric Power (NYSE: KEP).

A consortium including Korea Electric Power, Hyundai Engineering, Samsung C&T, and Doosan Heavy Industries eventually won the contract in December. They’ll build four nuclear reactors in the UAE for $20 billion… and earn another $20 billion to operate the plants for 60 years.

And after lifting a moratorium on nuclear expansion in 2008, the United Kingdom gave the go-ahead to ten new nuclear power stations last month.

That’s two major announcements in one month. So it’s time we started looking at this trend for personal gain.

Nuclear’s Growing Pros

You’re all well aware of nuclear’s cons: Waste disposal and safety issues are what have prevented a nuclear renaissance over the passed few decades.

But now, a growing and power-hungry global population is making nuclear a viable option once again.

In a world where "emissions" has become a dirty word, nuclear is increasingly gaining traction in energy and political circles — both on the left and right. And I can say for certain that safe nuclear is more of a reality than the idiomatic clean coal.

While several nuclear plans were initiated around the globe last year, not one new coal plant was built here in the States. In fact, 26 of them were defeated or abandoned.

And improvements are being made…

Westinghouse is marketing a reactor called the AP1000 which takes a new, passive approach to safety. It requires half as many safety valves, 83% less pipes, and 33% less pumps.

Areva is building the European Pressurized Reactor (EPR), which has four emergency core cooling systems instead of the usual two.

And GE is pioneering the Economic Simplified Boiling Reactor, designed for better natural circulation so there is less reliance on pumps.

To cap off this resurgence, The New York Times reported: "The Nuclear Regulatory Commission is also considering a proposal that it give approval to a handful of standardized, completed designs, rather than approving each plant’s design individually after construction had begun. The hope is to cut a 10-year construction process in half."

The Path to Nuclear Profits

In a recent article, my colleague Chris DeHaemer put forth his 11 black swans for 2010. One of them predicted uranium to surge to $90 per pound:

The price of uranium launched in 2007 up to $145 a pound. Now, after the crash, it is back to $40 a pound. But the same demand that drove uranium up is still there. China is currently building eight nuclear power plants and has another twenty in the planning stages; Britain is building ten. Egypt, India, Sweden, South Korea, and most of Africa are building or seeking to build nuclear energy facilities.

The World Nuclear Association just had a meeting which concluded uranium demand is increasing and at the same time, previous production projections have dropped off due to the credit crisis. Companies like Cameco (NYSE: CCJ) will benefit.

I also think Cameco is a good bet. And you can get broad exposure by holding an industry ETF, like Market Vectors Nuclear Energy (NSYE: NLR).

But for a real shot at legendary nuclear returns, you’ll want to take a look at this groundbreaking report.

It details a company with a new nuclear fuel additive process. The company has a proprietary way of bonding metal oxides to nuclear fuel, making plants much safer and more economic.

What’s more, they also own mining rights for 100 years worth of the minerals they need to make the oxides.

With this technology, investors that take early action are in for an easy triple. Click here to read all about it today.

Call it like you see it,

Nick Hodge


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