Nuclear is Still a Good Bet.

The Japan crisis has put quite the negative spin on the nuclear industry. Ever since that tsunami flooded the backup generators and threatened the cooling system, pundits from all over the world have been criticizing the nuclear industry. Nuclear energy kill. Nuclear energy is dirty. Nuclear energy is costly to clean up. Nuclear energy kills babies.

Yup, pretty much all the arguments have been made to attack the whole sector. With that, we have seen the fall of all Uranium stocks, which has resulted in anyone with half a clue of the field to quickly buy up shares. Already, all of the Fukishima cooling systems have been restored. Although it took sometime, it was hardly the Chernobyl that the harshest critics were declaring. Most critics decided the fact that the reactors were 40 years old and due for closure was an irrelevant fact, or the fact that most reactors today are 10 times safer than the ones in Fukushima. I don't need to add a link for this, this information has been out there since the beginning - find it yourself.

What we do know is countries are playing politics over this. Angela Merkel has hurt Germany's reputation on the international circuit through foreign policy blunders, and has now decided to continue her mid life crisis by screwing around with Germany's energy policy. Don't get me wrong, Merkel has been a tactical political genius as Chancellor, but hey - we all mess up eventually. Merkel decided to shut down 50% or so of the nations nuclear reactors in a knee jerk reaction to the Japan quake for maintenance. This was not done for social responsibility, more so a move to increase her national popularity which has been sinking fast. Best part of the story was Germany had to import energy from France because of the shortage they created. How does France create energy? From nuclear reactors. Yeah, Merkel was being socially conscious in the same way a hypocrite is.....um...hypocritical? Ok, I haven't slept all night the wit isn't there.

The best part was China and Russia, both staunch advocates for anti corruption and human rights, decided to embrace the nuclear issue. China issued a statement that they would halt nuclear reactor production, only to quietly reverse this a month later. Why? Well turns out China is facing an energy crisis, and nuclear energy is the best option. Why (you ask like a five year old child)? Nuclear energy is cheap, it's clean, and it's had three major accidents in the last century. Three Mile, Chernobyl and Japan. And if anyone suggest that other power sources never had accidents - ahahahahahha. Exxon Valdez spill, the Gulf spill and countless others. What about wind or solar? Sorry, sun doesn't shine all day and the wind doesn't blow all the time. Plus, the maintenance and construction costs of these energy producers are far too great for these products to be an ideal solution. Don't get me wrong, I would love for every house to have solar shingles to fully power themselves, the fact is the technology just isn't there yet.

So why did Uranium stocks bust after Japan? (BTW - uranium is the fuel that powers nuclear reactors, if you want to know how nuclear reactors work drop me a comment and I'll post a cool youtube video) Well, some shrewd philosophers decided that one incident will deal a significant blow to a trillion dollar industry. In short, they're completely wrong. First, right now we're 30% short in yearly uranium production compared to the demand. What's been covering the difference is the conversion of Russian nuclear warheads to nuclear fuel rods, and right now those stockpiles are getting low - and the program ends in 2013 (I totally plagiarized that from a website).

The demand is there for nuclear power. Saudi Arabia (French Press) just said they plan on building 16 nuclear reactors in the next 20 years. Paladin, a nuclear producer, already said that uranium demand is likely to exceed supply (yes biased source, shoot me). China will build nuclear reactors, and I'm pretty sure India has a few planned as well as quite a few other countries - I think about 60 reactors are currently being built globally. Back to China, in 2007 China allocated 50 billion to build 32 nuclear plants - those projects aren't just going to stop. On March 11, China planned on building 6 more nuclear plants over the next 10 years. Basically, they're not stopping. Besides, let's look at what the head guy in China said about halting nuke plant projects:

"We will temporarily suspend approval for nuclear power projects, including those that have already begun preliminary work, before nuclear safety regulations are approved," read a statement from the State Council.

Temporarily, meaning their going to keep building them, and actually safer. And they'll need  uranium fuel to power them.

Right now, UUU, CCO, HAT, PDN, URE and a few others are decent stocks to look at. Disclosure, I'm in on UUU.

I do believe that we will have safer, cleaner energy eventually. However, it will come when it is economical, and practical.