Doug Casey: Glowing Prospects for Uranium

The Energy Report: Next month, at the sold-out Casey Research/Sprott Inc. "When Money Dies" summit in Phoenix, you're on tap for a presentation entitled "The Greater Depression Is Now." Your colleague, Marin Katusa, is on the roster too, talking about "Making Money in Energy." Marin recently told us there's a buying opportunity for uranium companies. Given Fukushima's repercussions in terms of the nuclear energy industry, are you bullish on uranium? 

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Doug Casey: Absolutely. It's unquestionably the safest, cheapest and cleanest form of mass power generation. That's not to say that there aren't problems, as the Fukushima incident made clear. As much of a disaster as that was-a combination of earthquake, tsunami and radiation leakage-so far it's just been a big industrial disaster. I daresay that if government hadn't been so involved in nuclear power these last 50 or 60 years, the technology would have been much further along. Nuclear power would be much safer, cheaper and cleaner than it is today. We might, for instance, be using thorium, which appears to be better than uranium in many ways. We would almost certainly have much smaller, cheaper, and robust reactors.

So, yes, I'm a huge uranium bull. If you want mass power, you need nuclear power. And today that means uranium. I'd say uranium is a great place to be for at least the next generation.

TER: But considering the fact that governments remain involved and people are even more squeamish about nuclear power post-Fukushima, won't we see a stall in nuclear power and development?

DC: That's possible. But, the hysteria is mainly going to affect the Western world. China and India recognize they have no alternative to nuclear power. As you know, the growth is in China, India and other emerging economies; it's where the most of the world's people live. The Western world is small by comparison, and getting smaller. These other places will continue full steam ahead with nuclear.

TER: Porter Stansberry, whom you know well, recently told us to expect the U.S. to become a net exporter of natural gas in the not-too-distant future. Do you see that as well?

DC: Quite likely. Let's talk about peak oil first, though. I think that the Hubbert peak theory is accurate, and for good geological reasons-but understand that peak oil doesn't mean we're running out of oil. Rather, it means that we're running out of easily available, cheap light sweet oil. And we are.

However, technology is always improving, enabling economic recovery of oil and natural gas in places where it previously wasn't possible. Horizontal drilling and the fracking process have opened up gigantic reserves of gas, scores of trillion of cubic feet in some basins in the U.S. So, yes the U.S. could become a huge exporter of natural gas. It's entirely possible. It could happen in other regions of the world as well, but probably not with gas at its current prices.

The gas is available, but because it's very underpriced relative to other forms of energy, it probably won't be produced until the price doubles or even triples from where it is now. That would bring it more into historical alignment with oil prices, which I expect will themselves go higher as well.

TER: How is it that the oil prices have remained relatively high and gas is still so low? Given the differential of the two price points, why aren't we seeing a conversion from oil-dependent cars, for instance, to natural gas?