Is Nuclear Power Dead?

All the eyes around the world are watching Japan, especially regarding its nuclear crisis that is still unfolding. Needless to say, it is a natural disaster which is radiating its impact to all the important markets across the world. After all, it is the worst nuclear accident since the former Soviet Union Cheronbyl disaster in 1986. The price of uranium, the fuel for nuclear power plants, has been driven down over 50% almost overnight. The prices of all the uranium stocks are plummeting accordingly.

While we cannot underestimate the extent of this nuclear crisis, is it really the dead end for the future of the nuclear power? Absolutely not! Simply ask the question: do we have enough electricity? If you have any common sense, the answer is not at all. We need much more electricity than it can be produced. Not only Western countries consume more and more energy, the fast growing economies like China, Brazil and India require more and more electricity as well. In the US, about 20% of electricity is produced by nuclear power plants. What can fill the gap if all the sudden the nuclear power goes away? The world will be in a very dark hole if this happens. I think there is a panic reaction to what is happening in Japan, which is likely an overkill, just like what happened during the BP disaster with the deepwater drilling. Now no one is talking about it and everything returns to normal. Those who dared enough to put some money to work at the peak time of the BP disaster have definitely earned a good profit. Fortunately I was one of them.

So I'm closely watching the development of the Japanese nuclear crisis. As soon as there is any sign of easing of the crisis, I think the uranium market will recover. URA is an ETF which tracks uranium companies. No surprising it has dropped over 20% in the past few days. I already got in at the current price around $15 and will consider to add more if it further goes down. I'm confident this will turn out to be a good opportunity to invest in the long term uptrend for uranium.