Nuclear Powered Desalination

Written By Nick Hodge

Posted August 10, 2010

I don’t normally count watching the Travel Channel as doing research, but I just might start.

Last night I watched as Anthony Bourdain traveled to Dubai, the most luxurious of the United Arab Emirates.

And though the local fare looked incredible, strongly influenced by spicy Indian and Pakistani curries and biryani – an import from the laborers responsible for constructing things like man-made islands and indoor ski resorts – it was their thirst for massive amounts of energy that struck me most.

Several times throughout the show there was reference to this theme; the massive amounts of BTUs it took to make snow in the desert, the copious cubic feet of natural gas burned to desalinate all the water needed to sustain the Shiekh’s oasis.

It’s why per person the UAE consumes 10,538 kilograms of oil equivalent per year – a third more than the United States’ 7,794.

That may soon change. I’ve found a company that can not only drastically reduce their power consumption, but the associated cost as well.

An 80% Cost Advantage

According to a report out this week, the UAE spends $3.2 billion dollars on water desalination every year.

They have 70 plants that account for 14% of the world’s total desalination capacity. And they do it at a cost of $1.94 per cubic meter.

But a breakthrough in both nuclear energy and desalination – controlled by one company – is about to put a major dent in that pricetag.

By pairing portable nuclear reactors with desalination units, this U.S.-based company is selling scalable desalination units that not only provide freshwater, but excess electricity and carbon credits as well.

Take a look at how nuclear powered desalination stacks up against the competition:

Nuclear Powered Desalination

The numbers speak for themselves.

That’s why the company has already received interest from around the globe, including South America, Europe, Africa and, of course, the Middle East.

The CEO has numerous potential buyers and expects to sell “several units” by the end of the year. At a cost of $3 billion for a 650 MW unit, that means the buyer basically gets either electricity or water for free.

Just the Half of It

As the company gears up to reap billions in revenue from nuclear powered desalination, the stock has gone on a tear. It’s up 300% in the past three months, and I still think it’s way undervalued.

Here’s why…

Desalination is only a third of their strategy.

The company will also individually sell the portable nuclear reactors used in its desalination units.

And perhaps its most ambitious endeavor – the one no one is talking about – is building a nuclear power plant here in the States, for which it already has local approval.

Maybe it’s because the company is so small. Maybe it’s because it’s about to partner with a foreign company to import a reactor. All I know is that this profit story is being egregiously underreported.

And that’s why I’m blowing the lid off it with this investor exposé.

Like I said, the stock is up about 300% in the past three months, and my readers are already richer because of it. But it’s still trading for less than $1.00.

And with another analyst initiating coverage on it yesterday with a $3.50 price target, I don’t know how long it will stay that low.

But I know with a nuclear powered desalination unit 80% cheaper than its competitors, this company is headed much higher.

Call it like you see it,

Nick Hodge


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