That’s Japan’s prime minister, Fumio Kishida, on why he’s restarting seven of the country’s idle nuclear power plants.
When we think of the energy crisis, we tend to think of the record gasoline prices and spiraling energy bills in America.
Or the battle between Russia and Europe over oil and natural gas imports.
But as you’ll see today, Japan is also going through an energy crisis.
And its shift back to nuclear points to one of best contrarian bets in the energy market today.
The Daily Cut is a big ideas e-letter we created for all Legacy Research subscribers.
It’s the publisher of Teeka Tiwari, Jeff Brown, and Nomi Prins.
There’s lots to cover…
We publish 19 paid research advisories… covering hundreds of recommendations. Plus, we put out six free daily e-letters. It takes me and my team hours to read it all each day.
Most folks don’t have that kind of time. So we comb through it. Then we bring you the most timely and compelling moneymaking ideas.
And one of the ideas we’ve been writing about is what I call the “Fourth Great Energy Shift.”
The first was when we started burning wood for heating and cooking.
That happened as early as 1.5 million years ago. It gave us energy-rich food. And it allowed us to survive harsh winters.
The second shift happened around 6,000 BC. That’s when animal power allowed us to farm at scale. This paved the way for settled societies and large cities.
The third shift was in the Industrial Age, which kicked off in Britain in the 1760s. We no longer just burned wood. We also began burning coal, oil, and natural gas.
In the fourth shift that’s now underway, we’re moving away from burning carbon-based fuels. And we’re moving toward a range of alternatives…
Solar and wind are the best known. But nuclear power will also play a crucial role.
For decades, green activists have demonized nuclear power.
And after the accidents at Three Mile Island in Pennsylvania in 1979… and Chernobyl in the Soviet Union in 1986… folks didn’t take much convincing.
Then, on March 11, 2011, came the worst nuclear accident since Chernobyl.
One of the largest earthquakes in recorded history hit off the coast of Japan. It unleashed a 50-foot tsunami that stuck the Fukushima Daiichi nuclear power plant on the northwest coast.
Three of its reactors melted down. This released radioactive material into the air and into the Pacific Ocean.
After the accident, 80% of the population turned against nuclear power. And the government had shut down all 54 of the country’s reactors by 2012.
So it turned to natural gas and other fossil fuels to fill the gap.
Today, Japan generates about one-third of its electricity from burning natural gas. That’s up from about one-fifth before Fukushima.
The problem is Japan imports about 90% of the natural gas it burns. And about 9% of those imports are from Russia.
That reliance on natural gas is now problem for two reasons.
The first is energy security.
Japan has joined in the international sanctions against Russia. And it knows that leaves it in a vulnerable position. If Russia shuts off its natural gas exports, Japanese electricity prices will spike.
We could also see brownouts… and blackouts… due to insufficient electricity supply.
The second reason is the energy shift.
As Kishida put it, nuclear is necessary for the country’s “green transition.”
Talk about a redemption – nuclear has gone from being a Public Enemy No. 1 in Japan to a green fuel. The country has 10 reactors currently operating and another 16 up for restart approval. And it aims for nuclear power to provide at least 20% of its electricity by 2030.
Folks there are starting to understand that splitting uranium atoms releases a lot of energy, but no carbon.
In a recent poll, just 40% of Japanese now oppose nuclear power… down from 80% after Fukushima.
That’s the message colleague Nomi Prins has for her readers.
If you don’t know her already, Nomi is an investigative journalist, best-selling author, and former global investment banker.
She tracks five big-picture investing themes for her readers.
And one of them is the energy transition, or New Energy. As she explains it…
Throughout history, investment opportunities have emerged when we use less of one resource and more of another. In the late 19th and early 20th centuries, people made fortunes from electrification. They also made fortunes from the growth of the oil and natural gas industries. That will happen again as we transition away from fossil fuels.
For the first time in a century, lots of new energy technologies are becoming possible on a large scale. These include wind, solar, and geothermal. But nuclear power will play a major role in helping countries transition to carbon-free energy.
That’s why Japan is front and center on her radar right now. Back to Nomi…
Nuclear power is the only feasible way for Japan to meet its climate and energy security goals. The Japanese are starting to understand this.
Today, Japan generates just 6% of its electricity from nuclear power.
But up until Fukushima, the country expected to generate up to 40% of its electricity from its nuclear reactors.
It’s a good bet that Japan will attempt to hit that target again in the years to come. This would imply more than 500% growth from today’s level.
Right now, there are 55 nuclear power plants under construction globally.
These are largely concentrated in China, India, Russia, and the United Arab Emirates.
Globally, plans for another 90 are in the works, and more than 300 have been proposed.
The extra demand from these new plants alone will send the price of uranium higher. It will also boost share prices in companies that mine and refine uranium.
Even better, the price of uranium… along with uranium mining stocks… are way below their highs.
You’ll hear more from Nomi on that in tomorrow’s Daily Cut… plus a way to play it.
And if you want more of Nomi’s insights on the energy markets… she’s holding an emergency briefing online this Wednesday at 8 p.m. ET.
There, she’ll explain an oncoming event she’s spotted that could destroy investors’ portfolios … her new strategy she’s developed just for this… and how prepared investors can potentially 10x their money.
So go here to sign up. You won’t want to miss it.
Regards,
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Chris Lowe
Editor, The Daily Cut