Yokka married ?? I am sure its not legal in Australia yet .Are...

Yokka married ?? I am sure its not legal in Australia yet .
Are you from Canada Yok ? (lol).
Back to business....things go in cycles ..."stick to the fundamentals" is my motto.
A good read below.
If we have the U @ depth ..the rest will look after itself.
regards
Q


Richard Mills - Ahead of the Herd | October 11, 2011
Email Article0 Comments.Today I’m speaking with Dennis Higgs, Executive Chairman of Uranerz Energy Corp. TSX and NYSE Amex – URZ. Dennis has been involved in the financial and venture capital markets for over twenty-five years.

Rick: Lets touch on the global uranium market Dennis.

Dennis: Okay, in our opinion, supply and demand in the global uranium market are not balanced. For 2010 global production was 139, maybe 140 million pounds of uranium. The 440 nuclear reactors in operation worldwide require approximately 180 million pounds to keep them running. So you’ve got a 40 to 41 million pound shortfall. That’s being covered right now by the U.S./Russian HEU agreement that’s due to end in 2013, and then of course there are some stockpiles; U.S. government stockpiles and utilities’ stockpiles. But the bottom line is there is an unbalanced supply/demand.

Rick: The Russian’s have said they are going to definitely end that program in 2013.

Dennis: Yes, it’s widely believed that the program will not be renewed. So, I think over the next couple of years, you’re going to see a large part of this imbalance; that suddenly there is going to be a shortfall that they can’t cover. And you’ve also got 62 new nuclear reactors being built and coming online, and of course that’s going to increase the demand for uranium, so how’s all this demand going to be filled? Ultimately, it’s quite likely that it’s going to have a strong impact on the price of uranium.

Rick: I don’t mean to sound insensitive, but when you think about it, for an astute investor in the uranium sector, Fukushima could be a blessing in disguise. Like I said, I don’t want to be disrespectful to the Japanese people, but that was an old style reactor nearing the end of its life. It was built on a fault line, and way too close to the ocean, and it was a matter of not if it’s going to happen, but when.

Dennis: If you consider that it was a plant that was built some 40 years ago, probably designed 45 or 50 years ago, and then as you say it was nearing the end of its life and to have it hit by the most powerful earthquake ever to hit Japan, and a subsequent tsunami. The fact that it survived as well as it did is, I don’t call that a nuclear disaster, I call it a nuclear miracle. And as one of the analysts recently wrote, if anything, the event at Fukushima highlights the safety of nuclear power rather than the other way around.

Rick: A hell of a lot safer, for people and the environment, than coal mining.

Dennis: Exactly. I think part of the problem is that generally people are afraid of the unknown. I was recently shown a chart that described how much radiation the average person in North America is exposed to. I think the average person would be quite shocked to realize that they are being irradiated every day; by the sun, when they jump in an airplane and travel, by getting, of course, an x-ray for either a dental or medical x-ray. I mean, we’re all being irradiated. It’s the fear of the unknown, I think, that’s caused part of the reaction.

Rick: I think it is too. People just don’t understand how clean and actually how safe nuclear energy is.

Dennis: Yes. It’s the cleanest and the safest form of energy, one day of course we’ll all wake up to that fact. And when I say cleanest and so on, I’m also talking about power generation that is economic, rather than something that’s being subsidized like wind or solar. Those types of power or electrical generation, you know, they’re compliments, but they can’t handle the base load, and of course, they need to be subsidized. They’re a very expensive form of electrical generation, so we’ll see what happens in the future with regards to how much compliment we get from solar and wind.

Rick: Exactly, no power from one if the sun doesn’t shine, and no power from the other if the wind doesn’t blow and neither suited for base load power generation.

I think Germany is proving right now that they cannot get along without nuclear power.

Dennis: Yes; I saw a report recently where someone had estimated what it was going to cost for Germany to replace or change its plants. And it was a staggering number, and then on top of the cost of changing the facilities was the increased cost of fuel and so on. So they may have a shock coming, and I personally don’t know if Germany will ultimately end up shutting down its nuclear plants as currently proposed. I think they’re being politically correct for the country for the moment, but ultimately, I don’t know if they’re going to end up shutting down those facilities. But having said that, from a nuclear or uranium standpoint, it’s pretty low on the scale of relevance when you consider that they have 17 reactors in Germany, and in Switzerland they’ve got another five plants. And so combined they add up to about five percent of the total reactors worldwide. When you consider that there are 62 nuclear power reactors currently under construction, which is a 14% increase from the current number of reactors running right now, at the end of the day, Germany becomes insignificant in the global demand for uranium.

Rick: You mentioned a 40 – 41 million pound shortfall of uranium to power existing reactors and then more to power the ones that are being built and in the planning stages, where is this uranium going to come from?

Dennis: Well that’s a very good question. The difference between the mined supply and the required supply to keep the existing global nuclear fleet running, is this 40 million pound deficit. So you’re right, where is it going to come from?

Well, you need new mines to come on stream, you need to increase production from existing mines, and we’ll see how easy or difficult that is to accomplish. The HEU agreement with Russia is likely to be shut down and there are U.S. government stockpiles, but those are not an infinite supply either, and that’s all going to come to an end, so we’ll see what happens.

Rick: What’s the uranium market in the U.S., where you operate, like?

Dennis: Well, the U.S. of course has 104 nuclear reactors operating right now, the U.S. has the largest fleet of nuclear reactors of any country in the world. So the U.S. is the largest market for uranium. Now looking at just last year, there were 51 to 55 million pounds required just to keep the existing U.S. nuclear fleet running. And the mined supply last year in the U.S. was about 4 million pounds. So the U.S. is producing only about eight percent of the required uranium to keep its fleet running.

The U.S. is the biggest market for uranium and they are a very small producer, we’re very fortunate to be developing our mines in an area where we have the largest market for uranium.

Rick: What is up with the U.S. being so dependent for its energy on foreigners?

Dennis: That’s true, and of course Uranerz is actually a U.S. company, so we would be a domestic U.S. producer, which is a good thing.

Rick: People talk about the shortage in rare earths and cobalt, both being strategic minerals, but when you really consider it, when you get down to the basic need of powering a modern society, just consider how much oil the US imports, and now we’re looking at another major energy source that they’re just not self-sufficient in.

Dennis: It’s going to be very interesting to see how this all washes out.