‘I love a sunburnt country, a land of sweeping plains…’
You have to admit it: Australia is like no other place on Earth.
It’s a vast place and, in its own way, oddly beautiful.
And as a continent, we have some of the most untouched spots of wilderness in the whole world.
But are we killing it with carbon?
Despite the naysayers, most scientists say yes. And they also say that something has to give.
A devastating report earlier this year revealed that due to climate change, the Great Barrier Reef has lost half of its coral cover in the last 27 years.
And that’s just one stat. You wouldn’t want to read the rest.
So what can we do? And what does this mean for us as investors?
Let’s start with the facts.
So far, we know that burning coal creates carbon emissions. And we know that these emissions are disastrous for climate change.
Yet Australia is one of the world’s largest exporters of coal and our government still maintains a preference for coal-based energy.
Why? Well, it’s cheap. And it’s comfortable for many Australians, because it’s what we know.
Although maybe not for long!
In my mind, there’s no question whether technology is the future of energy. The only question is, which technology?
Shock report spells out doom ahead
It’s not just Australia that’s on the hot seat.
A few weeks ago, the entire world was put to shame after the release of a special report from the Intergovernmental Panel on Climate Change (IPCC).
The report revealed that while an increase of 1.5° would be bad, an increase of 2° would be catastrophic.
And it looks as if the planet is headed in that direction.
So what would it take for us to heat things up by 2°?
I don’t know. And like many, I certainly don’t want to find out.
But not everyone is concerned.
Ex-Prime Minister Tony Abbott once said:
‘Government policy should be about getting prices down, it shouldn’t be obsessing about emissions.’
I wonder, though…will he be eating his own words in 10 years’ time?
I mean, we all ‘love a sunburnt country’, but maybe not in the way it seems to be eventuating.
As an investor first and foremost, I won’t make this too political. There are other newsletters out there for that.
But if the motivations for the sceptics are indeed economic — the ‘coal is the cheapest option’ argument — then maybe we’re missing a trick that will work for both climate worriers and sceptics alike.
A way to reduce our carbon footprint, but also have proven reliable power.
The nuclear option may just be the answer…
Some energy experts have suggested that the move to nuclear power is the single best way of transitioning to a future of electrical vehicles (thereby reducing said emissions).
And luckily, Australia boasts some of the largest reserves of an innovative nuclear power source in the world…the element uranium.
When it comes to electrical vehicles, the world’s ahead of us.
So why is Australia still scuffing its toes in the dirt?
Well, it seems we’re not ready to take on that strange new world:
But are we really as incapable as what the powers that be have led us to believe?
As Amanda Stoker, the Liberal National Party senator for Queensland, recently said,
‘It’s madness that while we mine and export uranium to nations such as India, equipping them with cheap and plentiful energy, we struggle with high energy prices and poor dispatchability at home.’
Just like solar and wind, Australia could be a world leader in nuclear too. We’ve got the product, we’ve got the space.
And I’d venture we’d have the know-how if the politicians could just move out of the way.
So, is uranium a realistic option? And why is it driving some investors, like me, nuts with excitement?
Now that the Paris Agreement is tracking governments’ transitions to environmentally friendly energy sources worldwide, this is shining light on a whole new arena in the energy sector.
Especially in uranium — 33% of which is produced by Australia.
This gives investors an exciting opportunity to buy into a rapidly growing resource.
It’s still under the radar, but maybe not for much longer.
Since 2016, uranium spot market prices have been climbing. Though they’re still not high enough to encourage any sort of mass investment in new mines any time soon.
In fact, uranium mines are actually shutting down production because of the low prices. It’s been like this for almost a decade.
But still, the amount of nuclear-generating facilities is on the rise.
452 operational power plants and 55 nuclear plants are currently under construction according to the World Nuclear Association.
The growth in the nuclear sector is set to increase demand by up to 13% for uranium concentrate as these plants begin operating.
All the while, supply is dwindling due to the depressed prices.
Demand increasing, supply decreasing…it doesn’t take a PhD in economics to see the opportunity here.
This is why smart investors are paying attention to the energy debate…
Renewables, coal, gas, oil, or even nuclear…if you can work it out before the herd, then you’ll be in pole position.
Look to technology for the answers. It’s usually the safe bet.
It’s going to be a tense few months leading up until the end of the year.
The IPCC report will come into the spotlight again this December at the Katowice Climate Change Conference in Poland.
It’s here where the Paris Agreement will be reviewed.
Until then, I’d be keeping my eyes peeled for these growing new opportunities for innovation in nuclear power.
It could end up being the ‘old’ technology at the heart of an unstoppable green energy boom.
Contributing Editor, Tech Insider
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