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Iran's Nuclear Ambitions Highlight the potential of Uranium and Nuclear Power

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One bonus of the global recession is that it wiped a lot of incompetent hedge fund managers and energy speculators from the canyons of Wall Street. As the Gordon Gecko sycophants regroup and look for the next Big Thing, maximizing profit while minimizing risk, the landscape looks very different than it did a year ago. In such a climate, it is uranium, not oil and natural gas that would seem to have the brightest future for one simple, overriding capitalist principle -- supply and demand.

Whatever agreements are reached at December's global climate warming summit in Copenhagen, they can only boost uranium's appeal, as the carbon footprint of a nuclear power station consists primarily of the carbon cost of mining uranium fuel, not a nuclear power plant (NPP)'s operation. According a University of Wisconsin study, NPPs only emit about 17 tons of carbon dioxide per megawatt, little more than wind and geothermal power, the lowest sources. In contrast, coal has the highest carbon emissions at about 1,000 tons per megawatt. Accordingly, expect to see many nuclear power cheerleaders emerge in Copenhagen.

Consider -- two years ago, London's World Nuclear Association in May reported that worldwide, 256 reactors were either in the planning stage or under construction. Even Ukraine, site of the infamous 1986 Chernobyl disaster, has announced plans to build 22 new nuclear power stations, while the United States, site of the 1979 Three Mile Island partial meltdown accident, has 23 reactors being proposed. These new reactors would be in addition to the 439 nuclear power reactors worldwide in 31 countries generating 372,000 megawatts reported by the International Atomic Energy Agency, an increase of 58 percent, all needing fuel.

According to the Wall Street Journal on November 29, "Iran announced a massive expansion of its nuclear program. President Mahmoud Ahmadinejad unveiled in a cabinet meeting plans to build 10 more nuclear facilities for enriching uranium."

The nuclear issue even impacted last year's U.S. presidential election, as Republican nominee John McCain committed his administration, if elected, to begin planning for the eventual construction of 45 new nuclear power plants in the United States by 2030, twice the number currently on the drawing boards.

Europe is also interested in expanding its nuclear power industry, which represents 45 percent of the world's currently operating nuclear facilities and 33 percent of new reactor construction. European nations currently operate 197 nuclear power plants generating 169,842 megawatts, and 12 European countries are planning or considering proposals for up to 67 additional reactors.

The story is the same in Asia. South Korea relies on nuclear energy to produce 45 percent of the country's electricity and Japan is not far behind, relying on nuclear power for 30 percent of its energy needs.

Asia's economic powerhouses China and India are interested in nuclear energy as well. India is increasingly interested in nuclear electrical power generation despite the fact that nuclear currently accounts for a paltry 3 percent to 4 percent of the country's power needs; India has 19 planned and proposed nuclear power reactors.

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Like India, China is a relative newcomer to nuclear power generation, deriving only 2.3 percent of its electricity from nuclear power, compared with the United States' nearly 20 percent. Of China's 11 current NPPs; the oldest, Qingshan-1, only came online in 1991. China's Commission of Science Technology and Industry for National Defense in its 11th Five-Year Plan for the Nuclear Industry said China will prospect for and develop indigenous uranium deposits in order to expand the nation's ability to produce 40 gigawatts of nuclear power electrical generating capacity by 2020.

Further accelerating China's move towards nuclear power, on 26 November Prime Minister Wen Jiabao announced his country's plan to cut carbon-emissions intensity 40 to 45 percent by 2020 compared to 2005 levels. Carbon intensity is the emissions produced per unit of economic output, and in order to meet the target, China is apparently committing itself to implementing ambitious energy-efficiency and fuel-switching policies. Since most renewable and alternate non-fossil energy is in the power sector, this would mean a much higher percentage of China's total electricity generation to meet these goals will need to come from non-fossil fuel sources, including renewables and nuclear energy.

To be on the safe side, China is also developing a national uranium reserve, to commence in 2010.

Despite Beijing's ambitious attempts to expand uranium production in Xinjiang and elsewhere however, local sources will be insufficient to meet domestic needs despite country-wide prospecting. Analysts predict that within less than a decade China's planned nuclear power reactors will consume 44 million pounds of uranium annually, as more than 16 provinces, regions and municipalities have announced intentions to build nuclear power plants within the next eight years -- a total of 77 planned and proposed new reactors.

The revival of interest in nuclear power in the wake of record high oil prices and despite environmentalists' opposition will prove a boon for uranium-producing nations. Current global production of uranium is approximately 40,000 tons annually. The math of the analysts quoted above on China's needs means that without increased production, China alone would consume 55 percent of current world output within a decade.

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Canada currently leads world production, with 25 percent of the world's output, followed by Australia. Kazakhstan is currently the world's third-biggest uranium miner. The three countries currently account for more than half of global uranium production. Other uranium mining nations include the United States, the Russian Federation, Portugal, Namibia and Niger, but those seeking reliable supplies must needs look to the "Big Three."

Kazakhstan contains the world's second-largest uranium reserves, estimated at 1.5 million tons. In 2006 it produced 5,279 tons of uranium, 21 percent more than in 2005.

But Kazakhstan has ambitious plans to massively boost its output of the silvery metal, as evidenced by this year's production. Kazatomprom, the country's national nuclear corporation, said in a press release last month that the country boosted uranium output an eye-watering 61 percent year-on-year in January-September to 9,535 tons, 3 percent above the government's target for the period. Part of the reason for Kazatomprom's success was opening five new mines last year. According to Kazatomprom's statistics, global uranium output in 2009 is projected to be 11,000 tons in Canada, 9,430 tons in Australia and 12,800 tons in Kazakhstan.

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