Welcome to our Friday mailbag edition!
Every week, we receive fantastic questions from your fellow readers. And every Friday, I answer as many as I can.
Up first today, a question from reader Brendan about nuclear fusion…
What are your thoughts re: nuclear fusion? Is it close enough to commercialization to make SMR fission obsolete, or do you think the two technologies have room to coexist in the market?
– Brendan V.
Hi Brendan, thank you for your questions.
From my conversations in Washington, I know there are a lot of eyes on nuclear energy right now. In fact, I believe it will be one of the biggest government winners of 2023.
If you’re a regular reader, you’ll know about nuclear fusion. It’s essentially the same process that powers the sun.
Fusion happens when two atoms slam together to form a heavier atom. It creates enormous amounts of energy.
The idea behind fusion is to create the same kinds of temperatures and pressures that exist in the cores of stars.
Now, the important thing to understand is that fusion is very different from fission… which is the current technology that powers nuclear energy plants. And, like you said, it hasn’t been commercialized. Overall, it’s still very much in development.
On the plus side, nuclear fusion reached a major milestone recently. And it could be a game-changer for the future of energy.
In December 2022, a team at Lawrence Livermore National Laboratory’s National Ignition Facility (NIF) achieved fusion ignition. They used as many as 192 laser beams, housed in a 10-story building the size of three football fields.
This was a big deal. For the first time in history, scientists got more energy out of the fusion reaction than they used to make the atoms fuse.
In other words, it marked the point at which a fusion reaction is self-sustaining. That means that, in the future, it will likely make economic sense as a source of energy.
Does this mean that we need to stop innovating other forms of energy? I don’t think so.
SMRs, short for small modular reactors, are a case in point.
They’re a cleaner and smarter solution to today’s bulky nuclear power plants.
Yes, fusion has the potential to provide the world with abundant, low-carbon energy. But we’re still years away from commercializing this technology. And this is why it’s still too early to say if it can “coexist” with SMRs in the market.
Meanwhile, SMRs are the NOW solution for our energy needs. And, as I outlined at my Power Shift 2023 briefing, SMRs are the only realistic solution to permanent energy independence.
You see, SMRs are extremely flexible.
They offer savings in cost and construction time. And they can be deployed incrementally to match increasing energy demand in our country and elsewhere.
Best of all, both sides of Congress are embracing this technology with a new energy bill set to unleash a $4 trillion torrent of government cash into the SMR sector.
I’m very bullish on the whole SMR sector right now. In fact, I’ve found a way you can get in on this trend with as little as $2 a share. For more information, go here to watch a video presentation I put together.
Either way, I’m extremely bullish on nuclear energy in and of itself. That’s because I believe 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.
In fact, the EIA estimates a 50% increase in global energy use by 2050.
Without nuclear energy, the power required to meet this demand would have to be generated by fossil fuels. This increases carbon emissions and results in air pollution harmful for both people and the environment.
That’s why 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.
With all that in mind, you can position yourself to benefit from the ongoing nuclear energy revival. And thanks to this trend, there’s been some major buzz in the uranium space. As a reminder, uranium is the basic building block of nuclear energy.
So investing in uranium is a great place to start. You can consider the Global X Uranium ETF (URA).
The exchange-traded fund (ETF) holds a basket of producers, physical holdings, and property developers. So, it gives you broad exposure to the sector.
And as an ETF, it carries less company-specific risk than investing in individual companies.
Next, reader Brad wants to know about reusable uranium…
If the USA can safely use nuclear power in submarines and large ships, the private sector should follow suit.
Is there someone working on refining “spent uranium” into reusable uranium for SMRs?
– Brad R.
Hi, Brad. Thanks for writing in!
Recycling of spent nuclear fuel is certainly a very interesting topic to me.
Let’s start by establishing some context…
In the U.S. – and you may already know that – there’s enough energy in spent uranium fuel to power the country for over a century. But it’s basically considered waste at this stage…
The EU has the highest share of spent nuclear fuel (SNF) recycling worldwide, driven by the closed fuel cycle policy in France. But even there, most SNF recycling is declared waste today. That’s because recycling just hasn’t picked up speed as it’s still expensive and dangerous.
But while some nations continue to treat used nuclear fuel as waste, many others have started recycling it to generate more power. These include France, Russia, and Japan.
And, yes, advanced nuclear reactor designs have already been developed that can consume or run on used nuclear fuel. As more of these efforts become successful, it will be a game-changer for the industry.
Now, to answer your question about SMRs…
Yes, there are companies currently working on refining used uranium into reusable uranium for SMRs. I can think of one called Newcleo. Privately funded and headquartered in London, Newcleo is one of several early-stage companies that are gaining momentum in the wake of the nuclear power renaissance in Europe. The company raised about $107 million in risk capital in 2021, and then another $320 million last year.
Newcleo is working on SMRs aiming to use so-called MOX technology. This technology makes it possible to recycle spent uranium from conventional nuclear power plants.
Short for mixed oxide fuel elements, MOX is basically a technology where spent uranium fuel is mixed with plutonium dioxide, sometimes also thorium dioxide, and is then used again in nuclear reactors.
Now, the MOX technology itself isn’t really an invention of the startup, but a long-established method. The trick is, of course, getting this to a commercial scale to ensure that it is done economically.
If Newcleo’s efforts prove successful, it would be a game-changer for the industry. But that’s just one company, and I’m sure there are many more…
Note that this isn’t an endorsement (and I can’t provide personalized investment advice). And, again, Newcleo isn’t a public company which you can easily invest in. It’s little more than a startup at this point. But this might push you in the right direction to explore other companies in this space.
Bottom line: these are just some of the reasons why I’m so excited about nuclear energy in general and SMRs in particular today. Positive changes are coming for the industry in the U.S. and worldwide.
Finally, our last question this week is from reader John about the ADVANCE Act making its way through Congress…
I am reading that the S.1111, the ADVANCE Act, currently has a 6% chance of passing. Do you agree with this assessment? If the odds are this low for S.1111 to pass, it seems this recommendation has a much bigger chance of failing than I originally thought.
– John S.
Hi John, thanks so much for your question about the ADVANCE Act recently introduced in the Senate.
The short answer is no. I do not agree with the 6% chance figure.
Let me unpack that. First of all, I’ve been communicating with legislators on Capitol Hill through in-person private meetings, emails, zoom calls, and texts. I’ve even addressed the Senate Budget Committee on legislation for the past two decades.
I can tell you that zero of the people on the Hill I’ve spoken with have ever mentioned the figures you pointed out in any conversation.
But I’ll tell you my impression of the Skopos Labs (SL) figure you provided. I don’t believe the company is robust enough in its analysis to be an optimal indicator for every bill. In order to have a robust system, I believe you should consider all the acts introduced in Congress (there are more than 11,000 per year). I’ve found no evidence SL does this.
Then, you must consider the rank of the member introducing the bill, the bipartisan nature of the bill relative to the composition of Congress, and the momentum of the topic. You also need to consider the language in the bill. That’s because language in bills that might not pass can be reused in other bills that do pass. It’s not clear to me that SL does any of that. Or that it even gets all the 100% passing of laws right.
I’ll give you a quick example. The Clean Water Act passed both houses of Congress and became law in 2021. I can’t find anything about it along the way from SL.
Plus, SL appears to update its chances on bills as they progress. Yet, it doesn’t appear to keep track of those changes in a transparent manner. That provides more leeway to get it “right,” since their figures rise as a bill goes through each step of its process to becoming a law. And, if it doesn’t pass, SL can say it was right because it opened with a small chance estimate.
All that said, here’s why I think the ADVANCE act, or some variation of its language and salient points, has a solid chance of passing.
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It’s co-sponsored by senior ranking bipartisan politicians. This is rare.
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Nuclear energy has traction beyond Congress, as we’ve written before. The Pentagon and Defense Department are behind nuclear. This makes politicians more comfortable about pushing a bill.
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Nuclear power is trending in Washington. That means more bills are being introduced vs. less. We saw this happen with a spate of water bills around the time the $35 billion Clean Water Act was passed. They didn’t all pass. But the big one did.
Seven new nuclear bills were introduced in May alone, including the two we mentioned in our previous write-up. There’s been one in the Senate and six in the House. They are as follows:
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The Nuclear Fuel Security Act, or Bill S.452 – Senator Joe Manchin (D-WV) introduced the bill in the Senate on May 17. This bill calls for the creation of a nuclear fuel initiative that would increase domestic production of uranium.
That was his second of two bills this year.
The first bill was called the International Nuclear Energy Act of 2023, or Bill 826. It was introduced on March 15. That bill calls for establishing cross-country cooperation between the U.S. and its allies, on matters ranging from nuclear plants to energy services.
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House Bill H.R.3553 – Congressman Rob Wittman (R-VA) introduced it on May 18. This bill is to establish a new office at the Nuclear Regulatory Commission. The goal of the office would be to speed up the building and deployment of small modular reactors.
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House Bills H.R.3483, H.R.3484, H.R.3485, H.R.3486, and H.R.3487 – Congressman Byron Donalds (R-FL) introduced these five bills on May 18. Together, they request increased focus for strategic nuclear infrastructure, nuclear reactors, and technology for nuclear energy.
Finally, one of my longtime contacts is a senior staffer for the Armed Services Committee. That’s one of several Washington committees involved in the nuclear space.
He regularly alerts me as to which bills from key areas of bipartisan agreement will be introduced. He also informs me about the chances of them moving forward in the legislative process.
And right now, he’s told me that there’s a lot of bipartisan traction in the House and Senate in nuclear energy. He first alerted me about nuclear being a focus this year in January. So far, he’s been right.
He believes the ADVANCE Act will go to mark-up in June. That means a conversation with the intent of moving the bill forward. From there, it would get scheduled for a Senate floor vote. He believes a positive vote could happen by the end of this year.
The key thing to know is that each step forward of a bill’s process brings more media and investor attention. So even if the ADVANCE Act doesn’t get scheduled for a floor vote until early 2024, these steps move the needle on nuclear focus. And they benefit our recommendations in that space.
And that’s all for this week’s mailbag. Thanks to everyone who wrote in!
If I didn’t get to your question this week, look out for my response in a future Friday mailbag edition.
I do my best to respond to as many of your questions and comments as I can. Just remember, I can’t give personal investment advice.
And if there are any other topics you’d like me to write about, I’d love to hear from you. You can write me at [email protected].
Happy investing… and have a fantastic weekend!
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins
P.S. As I mentioned above, SMRs are the only realistic solution to permanent energy independence. They provide the answer to America’s – and the world’s – energy problems.
And only one company has the license to produce SMR technology in America. The good news is, during my Power Shift 2023 briefing, I explained all the details you need to know to get in on this company. You can get started with as little as $2 a share and see your money go up 20x in the long term.
Just click right here to watch the video presentation I put together.