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Nuclear Energy

Exploring Alternative Energy:
Nuclear Power

Paper prepared by:
Brian Bell & John Kozoriz
Management 6366
April 17, 2007
UNIVERSITY OF TEXAS OF THE PERMIAN BASIN
Exploring Alternative Energy: Nuclear Power

Overview

           The principal fuel behind nuclear energy is uranium.   Uranium was discovered in 1789 by a German chemist, Martin Klaproth. It took until the 20th century for uranium to be used. A splitting of uranium atoms into a chain reaction releases energy inside a nuclear reactor. This creates heat energy produced by fission (splitting the atom) that boils water into steam. This steam drives a turbine generator, which produces electricity. Nuclear power generates 16% of the world’s electricity. Nuclear power offers a safe and economical way to meet anticipated growth in American energy demand, according to an
October, 2006 report by the Progressive Policy Institute, a policy arm of the Democratic Leadership Council (DLC). The report praises nuclear power as a key weapon against asserted global climate change and air quality concerns. (Dines, 2007)

           However, is uranium the answer to our energy crisis? Uranium is 500 times more abundant than gold and as common as tin. Although abundant in the earth’s crust, it is scare in the mined and useable form to be processed in nuclear reactors. The supply constraints can be traced back to the end of the cold war when the United States and the former Soviet Union started converting enriched uranium from dismantled atomic weapons into nuclear fuel for peaceful purposes. That program, and huge incentives offered to uranium companies by the Nuclear Regulatory Commission, flooded the market with excess supply. At the same time, demand shrank.   The price of uranium fell sharply. Some companies sold themselves to French, Canadian and British corporations, which now dominate the industry. (Dines, 2007)

           Today times have changed. For a long time after the Cold War ended, uranium was out of style. The uranium-mining industry was in a deep depression. When Russia and America reduced their nuclear-weapons stockpiles, all that uranium was dumped on the market with a screw-the-miners attitude that was devastating, which is why the price plunged from $43.40 in May 1978 to as low as $7.10 in Dec 2000. (Dines, 2007)

           With the political crisis and global warming associated with oil production, a shift to exploring alternative energies is slowly emerging. With a seemingly insatiable and growing demand for energy, alternative energies such as nuclear are becoming much higher in demand. With the increased demand for uranium, there are many mining exploration companies seeking to find more uranium. A tone of uranium fuel can keep a large power station running for two weeks. The global prediction suggests that over the next 50 years, the world’s demand for electricity will double or triple. The world’s demand for electricity leaves only nuclear energy as a reasonable alternative available for creating vast amounts of electricity that does not contribute to air pollution, global warming and acid rain. (Sapphire S MacAllister, www.ResourceWorld.com, Feb 07)

            Currently, there are 442 operable commercial nuclear power plants in the world which produce in total 370,721 megawatts of electricity per year. In addition, there are 28 commercial nuclear power plants under construction which will produce 22,510 megawatts of electricity and a further 62 plants planned and 160 proposed.   Presently, the United States gets 19% of its energy from nuclear power; and there is circumstantial evidence to believe that the demand for nuclear energy in the United States and the world abroad will continue to rise. Governments cannot overlook the advantages of nuclear power. Mesa Uranium Property in New Mexico confirmed a breathtaking 13.0 feet of 0.719% U308, and 14.4 feet of 0.513% U308. La Jara Mesa has 7.28- million pounds of U308 measured and indicated mineral resources, and an Additional 3.173-million pounds of uranium as inferred mineral resources on the property. (Dines, 2007)

            Two of the world’s largest Uranium deposits lay in the bottoms of two Canadian lakes. There is a strong commitment to developing and promoting mined Uranium.
There is no formal exchange for uranium as there is for other commodities such as gold or oil. Uranium price indicators are developed by a small number of private business organizations, like the Ux Consulting Company, LLC (UxC), that independently monitor uranium market activities, including offers, bids, and transactions. Such price indicators are owned by and are proprietary to the business that has developed them. The Ux U O price is one of only two weekly uranium price indicators that are accepted by the uranium industry, as witnessed by their provisions that call for the future uranium delivery price to be equal to the market price at or around the time of delivery. (Dines, 2007)