Will China’s New Five-Year Plan Force U.S. Utilities to Ration Your Electricity?

Will China’s New Five-Year Plan Force U.S. Utilities to Ration Your Electricity?

According to China’s Ministry of Land Resources, China plans to build up “sufficient reserves” of uranium and other minerals, in a new five-year government plan. The ministry said it would be stockpiling strategic reserves of uranium, copper, aluminum and other key minerals because of rising demand for those commodities. The Chinese also wish to avoid supply disruptions by hoarding uranium and other minerals, over the next few years.

Until now, you’ve probably taken for granted a steady, reliable source of electricity. A large part of your dependable energy came about because of the nuclear energy generated by the 103 nuclear reactors in 30 states. Without a steady supply of uranium to power those nuclear reactors, the U.S. electrical transmission network suffers a 20 percent loss. China’s new five-year plan to stockpile uranium had better be a Wake-Up Call to U.S. utilities. If they missed the import of China’s announcement, we are all going to be in a heck of lot of trouble before this decade ends.

Since June 2004, we have warned of supply disruptions for uranium. David Miller, who has since become President and Chief Operating Officer of Strathmore Minerals, argued at the time, “In my opinion, no one has any extra uranium to sell on the spot market. There’s just not excess inventory that people are unloading in the spot market.” We interviewed Miller again in November 2005, for an article entitled, “China Demand for Uranium, World Growth in Electricity Demand to Drive Uranium Price Higher.” Miller warned us, “China is the future wild card… what they are planning for nuclear is probably the most aggressive program in the world.” Miller added in his explanation, “All the new production is already factored into the future market for uranium. We’re underwater right now without building one more nuclear power plant.”

In mid April, during an interview with Sprott Asset Management Market Strategist Kevin Bambrough, we asked him about the Chinese. He answered, “Why shouldn’t they have strategic uranium reserves to supply their nuclear reactors? It makes sense to have a good stockpile of uranium considering the relative cost of nuclear power versus anything else.” And now, the Chinese plan to build up a strategic reserve of uranium for their aggressive nuclear program.

In another interview, also published in April, Gene Clark, CEO of TradeTech LLC warned us, “In reality, the U.S. utilities, which tend to wait longer to contract, may be the ones on the losing end because the Chinese and the Indians will contract early. The implication of current group-think is that the Chinese and Indians are not going to be able to find enough uranium for their new plants. But, they are committing for supplies way out into the future. When the U.S. utilities come to the market, they’re going to look around say, ‘Oh blankety- blank, what happened? Where’s the uranium?’ They’ll be the ones that sat around. I think that is what’s going to happen unless things really change in the way contracting is done in the United States.”

U.S. utilities have been cautioned, warned and advised that the Chinese demand for uranium could very well create a serious energy crisis for the U.S. grid. Nuclear reactors help supply the baseload generation for the U.S. electrical grid. Nuclear power plants provide stability to the electricity transmission network. About one-fifth of electrical generation is derived from nuclear power. Nuclear plants are running at more than 89 percent capacity. U.S. utilities are fiddling around like Nero, who watched Rome burn, hoping that promises of increased uranium production will stem the dramatic uranium price rise.

Severe strains in natural gas supplies, combined with the ongoing uranium supply squeeze, could very well put U.S. consumers on rations for their electricity. Can’t happen, you say? Ask the Brits about how business was conducted in their country, in late 1973 and early 1974, during the Arab oil embargo crisis. Or more recently, California’s rolling brownouts.

An electrical energy crisis is in the making, while U.S. utilities are patiently hoping or praying the price of uranium stop climbing. UxC President Jeff Combs wasn’t kidding when he urged U.S. utilities, during our interview, to “support the expansion of (uranium) production in the United States.” And if you don’t let your local utility know about the upcoming electrical energy crisis, then perhaps it will be your lights they may someday be turning out. The irony of ironies: All of those sweet anti-nuclear folks in Vermont, who depend upon nuclear energy for more than 70 percent of their electricity? They’ll be the first to suffer the most, if U.S. utilities don’t respond to China’s five-year plan.

Why you should fuel your generator with natural gas

Why you should fuel your generator with natural gas

For those people who have invested or thinking about investing in a power generator for back-up power needs, extra electrical needs, or portable electrical needs, a big consideration should be the type of fuel that is used. There are many sources of fuel for providing electrical energy from the generator including gasoline, natural gas, diesel, solar, wind, and a few other fuel sources as well. The type of fuel selected for a generator can have big impacts on everything from the environment, cost, and electrical output. Sources like gasoline and natural gas are non-renewable where as solar and wind come free and are renewable. For continuous, high energy output, gasoline and natural gas are better fuel sources. These are just a few of the considerations. Natural gas, however has some major points over the other fuel sources and is recommended in this article.

Why is natural gas a good fuel source for generators? Well first of all, a lot of homes use natural gas to fuel stoves, ovens, and even fireplaces. Those who have paid the gas bill will often find it is much cheaper than the electrical bill. For those unlucky people with electric ranges, electric water heating, and other electricity dependent heating, the high price of electricity is a big cash vacuum. The price of natural gas is very good compared to other fuel sources as well. The energy output provided verses the cost is better than that of diesel and gasoline.

When it comes to generators, most backup generators work better with natural gas because the supply is already coming to the location. Most homes have a pipeline for their natural gas that can be harnessed by backup generators to supply electricity when other sources are not working. Automatic transfer switches can determine when there are blackouts or other electrical problems and supply electrical power produced from the location’s natural gas source. This means that there is no need to purchase any additional fuel for the generator as it is already pulling from a decent costing fuel source in natural gas. This can not be achieved with some of the other fuel sources as well.

Another reason natural gas should be used in power generators is it’s energy production which is comparable to that of gasoline and diesel. For people who have natural gas products, the energy output is not even noticeable but the cost is. Natural gas makes the energy to cost ratio efficient. For portable generators, the same output can also be achieved as natural gas can be supplied to the generator much like how a barbecue grill is supplied. This makes supplying fuel to portable units easy as all that is needed is a canister of natural gas that just needs to be plugged in to the fuel line.

Natural gas is also cleaner than both diesel and gasoline. Natural gas will cause less engine buildup and lead to longer lifetime of a costly generator. There are also natural gas conversion kits for many types of generators that allow changing the fuel type. These conversion kits can help extend the usefulness of old generators by using natural gas as the fuel type instead.

Natural gas is not only a good energy source for homes but also a good one for portable or emergency power generators as well. They provide high, continuous amounts of energy at a very efficient cost to both residential and business users.