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Why Nuclear Energy Will Prevail and Not Merely Survive

Fletcher T. Newton, Byron Little, Uranium Exploration and Development

Uranium is an abundant and remarkably efficient source of energy. It is found everywhere in the earth's crust, even in seawater. Although there are many challenges associated with maintaining or expanding the world's output of electricity produced from nuclear energy, finding enough uranium to fuel the world's reactors isn't one of them. The only question is, “At what price?” The recent upsurge in the price of uranium may seem ominous, but when viewed from a historical perspective, today's spot market price of just over $41 a pound for U3O8 is nowhere near the high prices seen in the late 1970s. At the same time, the nuclear industry is more safety-conscious, more sensitive to environmental issues, and more understanding of public concerns than ever before. Leading environmentalists are now among the most vocal supporters of nuclear energy -- and one important reason for their support is the fact that the world's uranium reactors will never run out of fuel.

The uranium production industry follows the same economic principles of any other extractive industry (e.g., increased prices lead to increased production while excess production leads to decreased prices), with four critical distinctions:

(1) events in the uranium mining industry move at a snail's pace compared with other industries;

(2) because uranium's first use was to associated with the produ