Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
All the drama currently unfolding in Iran is reaching a crossroads, or maybe a fork in the road, or, more likely, a spaghetti junction on the freeway.
There certainly is turmoil and a tangle of events unfolding, with many Middle Eastern countries now getting involved, intentionally or unintentionally. Of course, with the effectiveness of modern communications platforms, there’s a torrent of news, but sadly, certain people are becoming more and more skilled at presenting fake news. So one has to carefully examine the news items to see if they are intentionally misleading, placed by some government or formal organization, or possibly placed by some person having fun operating from a basement at home.
Anyway, all in all, what has repeatedly emerged from the Iran drama is the word “nuclear.”
So the U.S. used big bunker-busting bombs to disrupt nuclear “things.” So one has to ask, “Why did they do this? What “things,” and what for? What is the nuclear fuss?”
Another term linked to nuclear in Iran has been “enriched.” So what is this?
Well, let me explain. Way back, a century ago, physicists started to realize that scientific theory said that there was, in principle, a huge amount of energy locked up inside the nucleus of an atom.
The calculations said that if you break a nucleus in half, so to speak, then the energy would come out. But atoms are very small, so the energy would be very little. However, if you can get millions of atoms to do this in rapid succession, that would add up to a huge amount. Imagine a dramatic break at the start of a game of snooker, in which the white ball causes balls to fly off all over the table. Physicists call that a chain reaction when it happens to atoms. One atom splitting, when it is given a good chop, is called fission. The atom which is easiest to fission is uranium because it is the largest naturally occurring atom and is on the verge of splitting anyway.
During World War II, under the Manhattan Project, the first atomic bombs, as they were called then, were developed. The term “atomic” is actually wrong. Instead, today we use the correct term and refer to nuclear weapons.
They used uranium. That is a big snag.
There are two different isotopes of uranium. An isotope is a nucleus which is slightly different to its sibling by having one, two, or three neutrons extra. Two different isotopes behave exactly the same as each other chemically. So you can’t separate them chemically, like separating a mixture of sugar and salt by dissolving them differently. The only difference with isotopes is the weight of a couple of neutrons — in other words, incredibly small.
The snag is that uranium comes in two isotopes. There is U-235, and the other is U-238. When you dig uranium out of the ground, it comes out as 99.3% U-238 and only 0.7% of U-235. But it is the U-235 which will go bang in a nuclear weapon. So natural uranium will not work in a nuclear weapon. Ideally, you need pure U-235 to make a good bang.
So scientists have to take the natural uranium and remove U-238 atoms, one by one, and put them aside.
That process is called enrichment. It is incredibly difficult to do.
Actually, fabricating a nuclear weapon is not too difficult. The really difficult process is producing the enriched uranium. For a weapon, you need to enrich to 90%.
After scientists saw the big nuclear explosions during WW II, they said something like; ‘Gee whizz, look at that blast, I wonder if we can do that slowly, and extract the energy gently?’ The answer was yes. That is called a nuclear reactor.
You don’t want a bang in a reactor. It turned out that you only need an enrichment of about 5% for a conventional nuclear reactor. For a modern Small Modular Reactor, you need about 10% enrichment, or maybe 15%.
As a result, some years ago, international nuclear authorities got together and decided that an enrichment level below 20% is considered commercial, but above 20% is going towards the military. No country needs to go above 20% if it has peaceful nuclear intentions.
Over the last few years, it was determined that Iran had enriched quite a significant quantity of uranium up to about 60%. People asked why. When no acceptable answer was provided, it was worrying.
So the U.S. decided to destroy the 60% enriched material, or at least to bury it under tons of rubble.
So that is why the word “nuclear” has been a significant feature in the Middle Eastern drama.
Dr Kelvin Kemm is a South African nuclear physicist and has been a CFACT Senior Advisor for over two decades. He is Chairman of Stratek Holdings, a nuclear project management company, and is past Chairman of the South African Nuclear Energy Corporation (Necsa).He has given both Congressional and Senate briefings in Washington DC. He has been guest speaker at over 20 US universities, and most recently gave a guest presentation in New York City. He has presented evidence to the Legislature of the State of Maine concerning nuclear power.
Through its state-owned nuclear energy company Rosatom, Russia under Vladimir Putin has extended its tentacles deep into Africa. Early in this century, Russia began escalating its outreach, offering its significant expertise in nuclear energy to emerging African nations eager to utilize the continent’s ample uranium resources to power their futures.
Through its state-owned nuclear energy company Rosatom, Russia under Vladimir Putin has extended its tentacles deep into Africa. Early in this century, Russia began escalating its outreach, offering its significant expertise in nuclear energy to emerging African nations eager to utilize the continent’s ample uranium resources to power their futures.
Long before the first and second Russia-Africa summits (October 2019 and July 2023), President Putin had been touting Russia’s nuclear energy cooperation with Africa since his first year in office. Putin signed numerous agreements with African nations for construction of nuclear power plants long before the first summit, though until recently, many of those agreements lay dormant.
South Africa was the first, in 2004, followed by Nigeria (2012 and 2016), Algeria (2014), Ghana (2015), Tunisia and Zambia (2016), Sudan (2017), Rwanda (2018), and Ethiopia, the Republic of Congo, and Uganda (2019). Kenya (2016) and Morocco (2017) both signed Memoranda of Understanding.
In 2023, after military coups had ousted elected governments in former French colonies Burkina Faso, Niger, and Mali, Russia was quick to sign a Memorandum of Understanding on nuclear energy. This bold move drew international attention as part of Russia’s information propaganda on social media toasted its preparedness to support these states’ development initiatives.
Today, the first fruits of those long-term agreements are moving forward. Russia and Nigeria began discussions in 2011 on an agreement for the design, construction, operation, and decommissioning of Nigeria’s first nuclear power plant. Nigeria then selected two potential sites, and in 2019, Rosatom signed an agreement to develop energy in Nigeria for peaceful purposes.
In 2014, Russia signed a $50 billion strategic partnership with the Republic of South Africa to significantly increase its nuclear power generation capacity. Rosatom promised to provide up to eight nuclear reactors to South Africa by 2023, enabling the foundation of the first nuclear power plant based on Russian technology on the African continent. South Africa’s first (and only) active nuclear power plant at Koeberg was built by the French group Areva.
But, according to a Carnegie report, the controversy over corruption arising from the deal triggered “strong pushback and legal challenges from South Africa’s institutional checks and balances, civil society groups, and independent media.” The verdict was that the Kremlin had overreached, leaning too heavily on the legacy of Cold War era relationships forged with leaders of national liberation movements. In 2017, a South African court voided the deal as illegal and unconstitutional.
When the current South African government in 2023 announced new plans to build new nuclear power plants to generate much-needed electricity, the move was immediately criticized by opposition politicians over the obvious fact that Rosatom was the government’s “preferred partner.” The new proposal came a day after the government approved an agreement with the U.S.-sanctioned Russian bank Gazprombank to restart a gas-to-liquids oil refinery that had been out of operation since 2020.
By February 2025, however, South Africa’s growing estrangement with the United States led President Cyril Ramaphosa to flesh out his nation’s participation in the BRICS group to pursue further action on nuclear energy with Russia—and possibly Russian ally Iran. The government wanted to add 2,500 megawatts of capacity at its Koeberg nuclear power plant and did not want to restrict bids from Russia and Iran.
Earlier this month, South Africa’s environment minister upheld a 2017 decision granting state-owned power utility Eskom authorization to build and operate a 4,000-megawatt nuclear power station in Duynefontein, near the existing Koeberg nuclear power plant. This victory over environmental groups also put a new deal with Russia on the table – one deemed necessary because the U.S.-South Africa agreement for nuclear fuel and equipment, upon which Koeberg Unit 1 relied for reactor fuel, had expired in 2022.
Meanwhile, in nearby Namibia, already a major oil producing and uranium exporting nation, it was reported in April that Russia was seeking a nuclear agreement. With reports that Namibia could supply up to 10% of global demand for nuclear fuel, the nation’s uranium production has been on the rise. In August, Namibia endorsed a bid to join the Nuclear Suppliers Group, the international body that sets rules for export of nuclear technology and materials to prevent their use in weapons.
Also in August, Russia signed a nuclear energy cooperation agreement with Niger and fellow members of West Africa’s Alliance of Sahel States – a major step in securing Russia’s foothold in the region. The Sahel States and Russia plan to collaborate on electricity generation, nuclear medicine, infrastructure development, and specialist training. The agreement came after a pullout of U.S. and EU military forces which prompted Russia to voice support for the new regime. Niger, like Namibia, has significant uranium reserves.
As the U.S. and European Union reconsider partnerships in the region following coups and rising authoritarianism, and as China is increasingly seen as an abusive partner, Russia is filling the void left behind, offering support in exchange for long-term strategic leverage. Today, Russia has active nuclear sector agreements with at least 15 African nations, and Rosatom holds about 70% of the global export market for new nuclear plants.
Russian involvement has spread across the entire African continent, from Morocco, which in 2022 signed an agreement to win Russian support for a nuclear power plant, to Egypt, where construction of a $30 billion nuclear power plant near El Dabaa under a 2015 agreement with Rosatom is nearing completion – with project completion expected by 2029.
Russian investors have also agreed with Zimbabwe to build small modular nuclear reactors to boost energy capacity from 2,600 MW to 4,000 MW by 2035. A 200 MW solar nuclear power plant in Mali is in the planning stages, as is a possible nuclear power plant in Ethiopia. In a deal with Rwanda to build nuclear power stations, Russia will also train Rwandans in nuclear energy. An agreement with Burundi covers nuclear infrastructure development, legal regulation, research, radioisotope production for industry, and many other areas.
Zambia and Russia have agreed to make that nation a hub for nuclear science via a partnership with Zambia’s Radiation Protection Service. Under a 2019 agreement, Rosatom is working with Uganda on nuclear infrastructure, radioisotope production, and education, as the nation prepares to begin using its uranium deposits by 2050. Rosatom, in 2024, signed an agreement with Guinea to develop floating power units to supply electricity for its Baimsky mining plant.
Meanwhile, the U.S. Office of Nuclear Energy held its first-ever U.S.-Africa nuclear energy summit in Accra, Ghana, in May 2024, boasting that the event “laid a foundation for sustainable nuclear energy growth” across the continent. Never mind that Russia was far, far ahead.
At the event, then U.S. Ambassador to Ghana Virginia E. Palmer pledged to Africans that “The United States is your 100-year nuclear energy partner.”
But African nations today well understand that deeds, not words, make for a good partnership.
Australia holds the world’s largest uranium reserves and, despite its shifting policy of limiting the number of mines and states that have banned them, is the world’s third-largest uranium exporter. Happy to export it, but too dim to use it ourselves.
That Australia, among the world’s largest uranium exporters, doesn’t rely on nuclear power astonishes those from the 30 countries where you’ll find nearly 450 nuclear reactors currently operating – including the French, Americans, Canadians, Japanese and Chinese. Another 15 countries are currently building 60 reactors among them. Nuclear power output accounts for over 11% of global electricity production. But not a lick of it in Australia.
With Australia’s grand wind and solar ‘transition’ in its death throes, getting rid of Australia’s idiotic ban on the use of nuclear power is top priority amongst anyone gifted with common sense, logic and reason.
BHP Billiton is one of Australia’s leading miners, and its mineral extraction operations include uranium mined at its Olympic Dam mine in Australia’s Far North (see above).
Known as the ‘Big Australian’, BHP has had its fair share of the costly and chaotic delivery of wind and solar in Australia’s renewable energy capital.
Back in September 2016, its Olympic Dam operation was shut for the best part of a fortnight after a vigourous spring storm resulted in the automatic shutdown of SA’s wind power generation fleet, plunging the entire State into darkness – for days in some places – and that cost hundreds of millions in lost production.
Earlier that year, BHP killed off plans to expand its Olympic Dam operations, simply because power costs in South Australia were running out of control – on one occasion BHP Billiton was forced to pay $2.57 million in a single day for electricity – that would normally cost them around $250,000 – due to a total and totally unpredictable collapse in wind power output.
So, if any corporate entity has a stake in obtaining reliable and affordable power, it would be BHP.
Hence BHP’s move to get rid of the ban and allow Australia to join every other country in the G20 that benefits from ever-reliable, safe and affordable nuclear power.
BHP pushes Anthony Albanese to remove “prohibitions” on nuclear energy in net zero transition The Australian Geoff Chambers 6 June 2023
Mining giant BHP is pushing the Albanese government to remove “prohibitions” on nuclear energy to help achieve 2030 and 2050 climate targets, amid fears that restricting power sources in the grid will hold back the clean energy transition.
The Australian can reveal BHP, one of the world’s biggest uranium miners, made the pitch to Treasury ahead of the May 9 budget.
BHP’s intervention came weeks ahead of Opposition Leader Peter Dutton’s budget reply speech in which he put nuclear power and gas at the heart of the Coalition’s future energy blueprint.
Mr Dutton’s declaration that in the 21st century “any sensible government must consider small modular nuclear as part of the energy mix” was met with fierce opposition from Prime Minister Anthony Albanese and Energy Minister Chris Bowen, who rejected nuclear as an option.
BHP’s Olympic Dam mine in South Australia is home to the largest known single deposit of uranium in the world and the miner’s Xplor division in April announced it would expand its exploration focus beyond copper and nickel to prospective uranium and lithium projects.
BHP’s leadership in recent months has firmed up the company’s focus on uranium and the benefits of nuclear power, and told the government more must be done to protect energy security, affordability and decarbonisation.
“Reducing barriers to the energy transition … should include removing unnecessary restrictions on new sources of energy supply (such as existing prohibitions on nuclear energy),” BHP told Treasury.
The company also said the government must ensure “environmental approval and land access processes are effective at achieving environmental, heritage and social objectives while delivering timely and predictable outcomes for project proponents”.
In its pre-budget submission, BHP warned Treasury that federal and state governments continue to adopt divergent approaches on energy and climate policy, which “has the potential to increase transaction costs and discourage investment”.
“The government’s Rewiring the Nation initiative and Capacity Investment Scheme are useful in this regard but may not be enough to support a low-cost and orderly transition.”
The latest Department of Resources quarterly report in March projected uranium export values would double from $605m in 2021-22 to around $1.2bn by 2027-28.
“Uranium prices are forecast to lift, from $US51 a pound in 2022 to above $US60 a pound by 2028 (in real terms). This is expected to encourage stronger production from Kazakhstan, Australia, Canada and Namibia,” the report said.
“Australian exports are forecast to increase, from 4933 tonnes in 2021-22 to almost 8000 tonnes by 2027-28.”
The department’s Office of the Chief Economist forecasts higher global uranium demand as “nuclear deployments continue to expand”.
Increased demand is being reported in China, Japan, South Korea, Eastern Europe and the Middle East.
“With new reactor deployments growing, stronger investment in supply will likely be needed to avoid a supply deficit emerging towards the end of the outlook period. While uranium costs are only a small share of overall costs for nuclear power, the current price trajectory provides strong incentives to potential suppliers, and is likely to encourage greater investment in uranium production over time,” the report said.
“In the short term, this will likely be met through higher output from traditional suppliers. New output is expected from Australia’s reopened Honeymoon mine (from 2024).”
Speaking at The Australian’s strategic business forum in Adelaide last year, BHP chief technical officer Laura Tyler said nuclear energy “has to be a part of the conversation” and uranium should not be discounted as a baseload power source.
“I would like to think that Australia could consider it as part of the whole. When you think about where we will see reliable baseload, if you don’t have the storage … then you need the baseload, because you’ve got to keep hospitals and things running 24/7, you’ve got to be able to keep big business running 24/7,” Ms Tyler said.
“If you’re not prepared to do oil and gas or coal, then what is it going to be based on? There’s a very shoot-from-the-hip response to uranium, because it’s difficult to manage, it’s not as simple as maybe oil and gas but at the same time … its consequences can be big.”
With nuclear accounting for around 10 per cent of global electricity generation, rising to almost 20 per cent in advanced economies, the International Energy Agency says “nuclear power can play an important role in clean energy transitions”.
“Nuclear power is an important low-emission source of electricity. For those countries where it is accepted, it can complement renewables in cutting power sector emissions while also contributing to electricity security as a dispatchable power source,” the IEA says. “It is also capable of producing low-emission heat and hydrogen. More efforts are needed to get nuclear power on track with the net-zero emissions by 2050 scenario.” The Australian
Coalition backs BHP nuclear push The Australian Geoff Chambers 7 June 2023
Opposition energy and climate change spokesman Ted O’Brien says global businesses will shift investment away from Australia unless the nation embraces the potential of zero-emissions nuclear technologies.
In response to mining giant BHP’s pre-budget push for the government to remove prohibitions on nuclear energy, Mr O’Brien said Australia’s industrial and resources sectors that are desperately seeking to reduce emissions cannot be “ignored”.
“While BHP is Australian born, it brings a global perspective and is uniquely positioned to reflect on the most cost-effective and efficient technology options to reduce industrial emissions,” Mr O’Brien told The Australian.
“BHP makes it clear that global businesses are looking at Australia’s ‘unnecessary restrictions’ on zero-emissions nuclear energy as an inhibitor to innovation, investment and efficiency. The stark reality is that capital is fluid and moves around the world in search of better market conditions.”
In his post-budget reply speech last month, Opposition Leader Peter Dutton put nuclear power and gas at the heart of the Coalition’s future energy blueprint.
Mr Dutton is expected to develop gas and nuclear policies ahead of the 2025 election, pitting the Coalition’s energy plan against Anthony Albanese’s “renewables revolution”.
With high inflation driving up interest rates and Australians copping record energy bills, Deputy Opposition Leader Sussan Ley on Wednesday said the government must implement an “affordable, reliable” plan.
“The policies they have on energy are not the policies we had, or would have,” Ms Ley said.
Mr O’Brien said many Australian businesses are “committed to reducing emissions, but are desperate for practical solutions that are cost-effective”.
“It’s no surprise that businesses are looking around the world at the role of zero-emissions nuclear energy in driving deep cuts to industrial emissions and wanting the same opportunity here in Australia,” he said.
Queensland Nationals senator and former resources minister Matt Canavan said he supported BHP for trying to “talk sense” to the government about removing barriers to nuclear energy. The Australian
Mixed signals on nuclear power stations will scuttle AUKUS submarine deal The Australian Ted O’Brien 6 June 2023
AUKUS will not succeed if the Australian government remains ideologically opposed to nuclear energy and the national security committee keeps sending mixed messages about our capability to manage nuclear technology.
AUKUS is Australia’s biggest military venture since World War II and the most complex manufacturing program we have ever embarked on, on par with the post-war automotive program and the Snowy Scheme.
AUKUS must succeed – the future of our nation and the stability and security of our region depends on it.
Putting this at risk is Anthony Albanese’s ideological opposition to the technology that lies at the heart of the AUKUS arrangement. That technology is nuclear energy. Nuclear reactors in submarines are smaller versions of the reactors used in today’s power plants and are similar in size to next-generation micro-reactors that soon will generate electricity in the US and Britain.
Both generate energy, although submarine reactors also enable propulsion. It is untenable for an Australian prime minister to oppose such technology.
Australia is to become one of only seven nations to operate nuclear-powered submarines under the AUKUS deal, joining world heavyweights the US, China, Russia, Britain, France and India.
But there’s one enormous difference between these nations and us: they all have civil nuclear energy industries and we don’t.
Between them, these nations operate 273 nuclear power reactors and are busily constructing 39 more, while the size of their workforces range from 64,500 in Britain to 200,000 in France. These thriving civil nuclear industries aren’t a coincidence – they are integral to successful nuclear ecosystems in these nations.
Foundational skills in engineering, physics and mathematics are required, whether in the civil nuclear industry or in the nuclear submarine industry. Indeed, as I learnt on a recent trip to the US, many of those working in the civil nuclear industry are former submariners. Creating lifelong career paths, including post-service job opportunities for submariners who are highly trained and skilled in nuclear technology is how it works there.
The Royal Australian Navy’s six Collins-class boats each require a crew of more than 40, compared with the nuclear-propelled Virginia-class that demands a crew at least twice that size.
Australia will need a committed and capable workforce to operate its own fleet of nuclear-propelled submarines, a task that will be more difficult in the absence of a civil nuclear industry.
It’s not just about submariners, though. Although we will need some industrial assistance from our AUKUS partners, making AUKUS a success also will require an expansion of Australian industry and skills, especially with hundreds of thousands of components needed to build and maintain the submarines.
We need to enhance our own sovereign manufacturing capability, and not just for a one-off procurement job but ideally for a broader mix of industries that will leverage nuclear technology for decades to come.
Yet, despite the obvious contradiction, Albanese continues to oppose nuclear energy. The problem is bigger than the Prime Minister, however. There’s also a split in the national security committee, which he chairs.
The national security committee is Australia’s peak decision-making body on matters of national security and consists of the government’s most senior ministers. If there were something on which these ministers might all align, you would think it would be AUKUS.
But these ministers’ public statements suggest otherwise: just consider the video by Climate Change and Energy Minister Chris Bowen last month, disparaging Australia’s competence in nuclear technology. His criticisms had the effect of undermining our standing among AUKUS partners. Bowen argued that Australia not only lacked the expertise to manage energy-generating nuclear reactors but also that it would take us decades to develop it. Yet, under AUKUS, Australia has assured our partners that we will achieve sovereign readiness to receive our first Virginia-class nuclear-powered submarine by 2032.
Bowen argued that Australia will struggle to store nuclear waste associated with nuclear reactors, ignoring the fact we already do. Australia has safely stored the nuclear waste from the Lucas Heights reactor since 1958.
Yet, under AUKUS, Australia has committed to manage all low and medium-level waste associated with the nuclear-powered submarines and to manage the permanent disposal of high-level spent fuel.
It is not in our national interest for such mixed messages to be sent to our AUKUS partners. In turning a blind eye to this issue, Albanese has allowed things to fester in Labor ranks.
Just last weekend, Queensland Labor’s state conference voted down a motion congratulating the Albanese government on AUKUS by 229 to 140. For AUKUS to succeed, the Prime Minister must lead.
To start, he should drop his opposition to nuclear energy, pull Bowen into line or remove him from the national security committee, and champion a pro-AUKUS motion at Labor’s national conference in August. The Australian
Did you know governments worldwide have spent over $5 trillion in the past two decades to subsidize wind, solar, and other so-called renewables?
To put that in perspective, if you earned $1 a second 24/7/365—about $31 million per year—it would take you 158,550 YEARS to make $5 trillion.
$5 trillion is an almost unfathomable amount of money.
However, even with that astronomical financial support, the world still depends on hydrocarbons for 84% of its energy needs—down only 2% since governments started binge spending on renewables 20 years ago.
That’s all according to Mark Mills in a report from the Manhattan Institute, who concludes that:
“The lessons of the recent decade make it clear that solar, wind, and battery technologies cannot be surged in times of need, are neither inherently ‘clean’ nor even independent of hydrocarbons, and are not cheap.”
With all that in mind, it should be clear that so-called renewables—more accurately, unreliables—have been a giant flop. They are not viable for baseload power—even with $5 trillion in subsidies and two decades of trying. Today, using wind and solar for mass power generation is an artificial political solution that would not have been chosen on a genuinely free market for energy.
Wind and solar power might be useful in specific situations. Still, it’s ridiculous to think they can provide reliable baseload power for an advanced industrial economy. It’s like trying to force a square peg into a round hole.
Nonetheless, governments, the media, academia, and celebrities flippantly push for an imminent energy “transition” as if it’s preordained.
It’s shocking and depressing so many adults think they can magically change the underlying economics, chemistry, engineering constraints, and physics of energy production to suit their childish fantasies and political agendas.
Unreliables—i.e., renewables—will not replace hydrocarbons anytime soon and will certainly not bring about energy security… despite what many “serious” people believe.
When it comes to reliable baseload power, most of humanity has only three choices:
1) hydrocarbons—coal, oil, and gas
2) nuclear power
3) abandon modern civilization for a pre-industrial standard of living.
Aside from friendly aliens delivering a magical new energy technology, most places have no other alternatives.
So, with Western governments intent on going green, sanctioning large energy exporters (Russia, Iran, Venezuela), and shunning hydrocarbons in general (ESG, windfall profits taxes, limiting exploration, burdensome regulations), it boils down to a simple choice.
They can either embrace nuclear energy—which has zero carbon emissions—or give up reliable electricity.
I suspect it won’t be long before Western governments turn to nuclear energy in a big way for two reasons.
Reason #1: Rising hydrocarbon prices.
Reason #2: Concerns about energy security.
Rising Hydrocarbon Prices
First, a necessary clarification.
Sloppy, vague words lead to sloppy, vague thinking.
The term “fossil fuels” is an excellent example of this.
When the average person hears “fossil fuels,” they think of a dirty technology that belongs in the 1800s. Many believe they are burning dead dinosaurs to power their cars. They also think fossil fuels will run out soon and destroy the planet within a decade.
None of these absurd things are true, but many people believe them. Using misleading and vague language plays a large role.
I suggest expunging “fossil fuels” from your vocabulary in favor of hydrocarbons—a much better and more precise word.
A hydrocarbon is a molecule made up of carbon and hydrogen atoms. These molecules are the building blocks of many different substances, including energy sources like coal, oil, and gas. These energy sources have been the backbone of the global economy for decades, providing power for industries, transportation, and homes.
Modern civilization has only two choices for baseload power—hydrocarbons or nuclear.
I believe hydrocarbon prices will rise substantially in the months ahead, making nuclear—the only practical alternative—even more attractive than it already is.
There are four powerful trends that I think will push hydrocarbon prices higher.
Trend #1—The End of the Petrodollar System: The US government will soon lose its ability to print money to buy energy—an incredible privilege no other country has. That will have significant consequences for oil prices.
Trend #2—Rampant Currency Debasement: Governments worldwide have no choice but to engage in ever-increasing currency debasement. 2023 could be the year it reaches a crescendo.
Trend #3—Carbon Hysteria and Under-Investment: Governments have redirected trillions in capital away from nuclear and hydrocarbons and sent it to wind and solar. Further, ESG madness, “net zero” goals, and other unfavorable government policies have led to a massive under-investment in hydrocarbons. I expect the carbon hysteria will cause tighter supplies and higher prices.
Trend #4—Geopolitical Turmoil: The conflict between Russia (the 2nd largest oil exporter) and Ukraine has no end in sight. Tensions with Iran could explode at any moment. As a result, geopolitical turmoil could easily escalate, causing hydrocarbon supply disruptions out of Russia and the Middle East.
These are four powerful trends pushing for shortages and significantly higher hydrocarbon prices.
When hydrocarbons become expensive, the world looks to alternatives. And there is only one: nuclear.
Energy Security
Having secure access to energy, which is essential for any economy and any country’s stability, is paramount. That’s why energy security is national security.
Without energy security, any country is in a vulnerable position. No sovereign nation can tolerate being at the mercy of someone else for something as crucial as energy.
Unsurprisingly, many governments inevitably turn to nuclear to help ensure their access to reliable energy. That’s because a small amount of uranium can produce tremendous energy in a nuclear power plant.
According to the Nuclear Energy Institute, a one-inch tall uranium pellet can produce as much electricity as one ton of coal, 149 gallons of oil, and 17,000 cubic feet of natural gas.
It’s impractical for countries without domestic hydrocarbon supplies to stockpile several years’ worth of coal, oil, or gas. On the hand, it is practical for countries to stockpile five years’ worth of uranium for nuclear power plants.
Take Japan, for example.
Japan is the world’s third-largest economy. Before the Fukushima disaster, nuclear power plants produced around 30% of Japanese electricity.
After Fukushima, Japan shut down all of its nuclear reactors.
Japan shuttered its nuclear power plants despite a government policy that requires it to stockpile at least five years’ worth of energy supplies. This policy dates back to the early 1970s when a large regional war in the Middle East disrupted energy supplies and rocked Japan, which lacks its own energy resources.
Uranium is the only feasible way for Japan to meet the terms of this policy. It’s impractical for Tokyo to stockpile five years’ worth of coal, oil, or gas.
Japan has made an emergency exception to this policy because of Fukushima. But without energy security, it’s in a vulnerable position concerning its historical rival China. That is especially true if geopolitical turmoil in the Middle East or Eastern Europe disrupts oil and gas supplies.
It would be ironic to see Japan suffer from another oil shock during the period in which it suspended the very policy to protect it from one. That should incentivize Japan not to delay restarting its nuclear reactors.
In fact, Japan has recently made a dramatic pivot towards nuclear power because it has finally realized there is no alternative for it to meet its energy security needs.
Tokyo has started reactivating its nuclear reactors and implementing pro-nuclear policies.
While Japanese restarts are an important factor determining the market balance, it is not the only one. Even if the Japanese demand for uranium never returns, the 150 new reactors in China could create enormous new demand that will more than offset it over the longer term.
Here’s the bottom line with uranium.
I wouldn’t be surprised to see hydrocarbon prices spike amid a geopolitical crisis, which would be a catalyst for much higher uranium prices.
Regardless, hydrocarbon prices are set to soar for the other reasons I mentioned above. As a result, I expect Western countries will soon become desperate for energy security.
They’ll eventually realize—as Japan did—that nuclear power is the only solution. And when they do, it will turbocharge the uranium bull market that is already underway.
With multiple crises unfolding right now, the next big move could happen imminently.
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