Lost among reports of the hottest July on record was something that could very well change the U.S. energy landscape for years to come.
And that spells profit opportunities for you…
I’m talking about the first nuclear reactor built from scratch on U.S. soil in over 30 years. On July 31, it began delivering power to the electric grid.
The reactor, located in Georgia, is generating 1,110 megawatts of energy. That’s enough to power half a million homes. The reactor is expected to operate for up to 80 years.
It’s the latest evidence that attention is turning back to nuclear power. And it fits perfectly into one of the most important Great Distortion themes: New Energy.
Here’s how Inside Wall Street editor Nomi Prins put it back in June:
I’m extremely bullish on nuclear energy. It plays a major role in helping countries transition to New Energy economies.
Whatever your views are on nuclear energy… we know that the world will need a lot more energy over the coming decades. The EIA estimates a 50% increase in global energy use by 2050.
And I expect a lot more federal funding to come for nuclear energy projects to meet our growing energy needs.
In fact, as I know from my own conversations on Capitol Hill, nuclear energy is one policy area politicians across the aisle agree on. And where government money goes… the markets follow.
In other words, nuclear power capacity is set to grow further, and it’s not just a U.S. phenomenon. Countries around the world are turning to nuclear as well.
Today, I’ll show you why, and how it could boost stock prices in an underfollowed sector.
A Boost to Nuclear Demand
The spread of nuclear power over 30 years ago can trace its roots to another energy crisis: the 1970s oil shock.
Today, the world is facing another energy crisis. With unstable fossil fuel prices taking center stage ever since Russia launched its invasion of Ukraine, nuclear power is making headlines again.
That’s because of the role nuclear power can play in energy security while supporting the clean energy transition.
Nuclear power’s reliability and long-lasting plant life make it an attractive option for energy security.
At 92%, nuclear power has the highest capacity factor compared to other energy sources. That means nuclear power plants are operating at maximum capacity 92% of the time.
Plus, the operational life of a nuclear plant is double that of a gas or coal-fired one.
It also allows countries to diversify their energy supply away from fossil fuels while producing energy domestically.
And nuclear is an attractive option for the clean energy transition.
For example, even though only two additional nuclear reactors have started delivering power to the U.S. grid in the past seven years, nuclear still makes up nearly half of the nation’s carbon-free electricity.
That makes nuclear the nation’s largest source of clean energy in 2022 according to the Department of Energy.
And it’s not just the U.S. noticing nuclear power’s emerging role in energy security and clean energy.
Sixty new reactors are being built in 15 countries around the world, including China and India. Another 100 are planned or on order, while over 300 additional reactors have been proposed.
These plants are complex feats of engineering and require a very specific type of fuel for operation.
But there are vulnerabilities in the supply chain for this fuel, and efforts are underway to shift how it’s sourced.
That combination of growing demand and supply chain overhaul is your opportunity to profit.
Shifting the Uranium Supply Chain
Most nuclear reactors use a specific type of uranium as their fuel, known as U-235. That’s because U-235 atoms are easy to split apart as part of the nuclear fission process for generating energy.
However, U-235 is pretty rare and only found in trace amounts naturally. So it must be enriched and concentrated to be useful as nuclear fuel.
But there’s just one problem: By some estimates, Russia accounts for 43% of global uranium enrichment capacity.
That leaves the world’s nuclear industry vulnerable to any supply disruption… just like we saw in natural gas and oil markets following Russia’s invasion of Ukraine.
But with the global commitment to build more nuclear reactors, countries are also moving to pass legislation that would give a boost to sourcing and enriching uranium domestically.
Regular readers will already know about the ADVANCE Act. Here’s how Nomi explained it back in May:
We did not need another reason to be bullish about the biggest energy renaissance in decades. But Washington just gave us another one…
A group of U.S. senators introduced a nuclear energy bill in April – the ADVANCE Act. Co-sponsors include Tom Carper (D-Del.), Shelley Moore Capito (R-WV), and a host of other senators across the aisle.
The bill’s goal is to make America a leader in nuclear energy. That includes helping the U.S. deploy the next generation of nuclear reactors.
Make no mistake, our country is the world’s single biggest producer of nuclear energy. Yet, America’s nuclear industry has been in decline for decades.
With the ADVANCE Act making its way through Congress, nuclear could be staging a resurgence.
And just last month, the U.S. Senate passed the Nuclear Fuel Security Act. Its goal is to boost domestic uranium production and enrichment.
And it saw broad support from Republicans and Democrats alike… a rare show of unity in today’s polarizing politics.
Here’s more on that from Nomi:
Senator Barrasso’s Nuclear Fuel Security Act passed a Senate vote before the recess to be included in the NDAA 2024.
That amendment would support domestic production of enriched uranium. And it underscores the momentum for U.S. nuclear energy and uranium that I’ve been pounding the table on for the past two-plus years.
We are still waiting for Congress to reconvene. We’re also waiting for the House and Senate to agree on the final version of the NDAA. And it still has to go to President Biden’s desk.
But the near-unanimous bipartisan Senate support for the Nuclear Fuel Security Act – and the ADVANCE Act before it – are positives.
Legislation with bipartisan support has the best chance of passing Congress. A recent survey showed that 94.5% of bills that passed the legislature in 2022 were bipartisan. So, if history is any guide, these acts have a strong chance of passing into law.
That means uranium miners and processors are seeing a tailwind from two big catalysts: more demand for uranium from new reactors coming online, plus a boost from policies to shift the uranium supply chain away from Russia.
The price of uranium is starting to reflect these realities. Uranium prices have jumped 74% just in the last two years. But they’re still 58% below the prior all-time high set back in 2007.
With more nuclear reactors coming online and efforts to shift the supply chain away from Russia, I expect uranium prices to keep climbing. That will benefit the small number of companies around the world that mine uranium.
You can get exposure with the Sprott Uranium Miners ETF (URNM). It’s a pure play on companies mining uranium, and it also gives you exposure to physical uranium.
Best regards,
Clint Brewer
Analyst, Inside Wall Street with Nomi Prins
P.S. On August 26, Nomi is releasing a new briefing on a breakthrough energy technology she calls “Project Infinity.” As much as $130 trillion could flow into the energy companies behind this breakthrough. Tech billionaires like Jeff Bezos, Bill Gates, Peter Thiel, and OpenAI CEO Sam Altman have already invested. And Nomi found a way for everyday folks to get on the ground floor for $2.
As an Inside Wall Street reader, you can be among the first to watch Nomi’s new briefing on August 26. There, she’ll give details on what “Project Infinity” is, and how you can position yourself to capture a slice of that influx of capital. Simply register for it here with one click.