A French Blueprint to Achieve Energy Independence

Energy independence is a "straw man" in this country, with political and financial pundits tossing the term around despite the fact that there are no real plans to get there. However, we could get there if we start to rethink our energy dependencies. And, in this regard, France is a model citizen.

Just say no
France has decided that it wants nothing to do with fracking, a drilling method that has materially increased the amount of recoverable oil and natural gas in the United States. It can make that choice because it generates the vast majority of its electricity from nuclear power. The decision to ignore a transformational drilling method shows the freedom that energy choice allowed.

Interestingly, the need for energy diversification is also highlighted by France. Saying no to fracking is well and good so long as nuclear fuel is abundant and cost effective. Uranium miner Cameco (NYSE: CCJ  ) doesn't paint such a rosy picture on that front.

There are over 90 new nuclear plants either being built or on the drawing board around the world. Cameco expects this new demand to outstrip current supply. And it believes new mines will need to be brought on line.

Cameco is positioning itself for the demand it foresees with plans to increase production by around 60% by 2018. If uranium costs skyrocket, Cameco will make out like a bandit. France, meanwhile, would feel the pinch of rising electricity costs.

Bigger country, bigger energy needs
That's why using one power source isn't feasible in the United States; a collection of energy sources is necessary to provide for a nation of our size. Luckily we have such a collection, including nuclear, natural gas, renewable energy, and, yes, coal. Everything needs to be on the table.

For example, there's no doubt that old and inefficient coal plants should be shuttered. However, efforts like Southern Company (NYSE: SO  ) building a next generation coal plant featuring carbon capture technology should be pushed.

Southern Company's Kemper plant is the first large scale implementation of that technology. Once complete, it will provide Southern with decades of environmentally friendly coal power. And it is the type of project that could get the country closer to energy independence.

However, that won't happen without other changes, too. For example, Covanta (NYSE: CVA  ) has 41 U.S. electric plants that burn trash. It's entire fleet, which includes a few foreign plants, produces just 1,500 megawatts of electricity. That's tiny, but it shows how rethinking our resources, or refuse, can lead to big things.

The big shift
All of the focus on generating electricity, even if it borders on recycling as does Covanta's business, belies the fact that oil is probably the biggest U.S. issue. However, avoiding a wholesale switch to natural gas for electricity would support a shift to natural gas on the country's highways.

That's the future Clean Energy (NASDAQ: CLNE  ) is working to create. The company has already made inroads with local fleet vehicles like garbage trucks. Now, it is working on the country's long-haul truckers. It's built natural gas fueling stations across the interstate highway system to tap into what it believes is a $25 billion market opportunity.

Building that infrastructure, however, has been costly. That's why Clean Energy is losing money. But as Southern Company's Kemper cost overruns validate, a technology shift can be expensive to get off the ground. That's why everything, including Covanta reusing our refuse for power, needs to be on the table from day one.

Doable?
The United States probably won't stop importing energy, but it has the resources to make those imports much less important. Companies like Southern, Clean Energy, and Covanta, are working to make the best use of what we have in-house. If we open our minds and push the technology envelope, energy independence could be more than just words.

Until that time, oil and natural gas will remain important
Record oil and natural gas production is revolutionizing the United States' energy position. Unfortunately, selecting winners here can be a difficult process. That's why we are offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. We invite you to find out which three companies are spreading their wings by reading the special free report, "3 Stocks for the American Energy Bonanza." Don’t miss out on this timely opportunity; click here to access your report -- it’s absolutely free. 


Read/Post Comments (4) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 23, 2013, at 8:40 AM, FMagyar wrote:

    Unless I'm missing something, LNG is also a finite resource. Interesting to follow the numbers though.

    http://peakoilbarrel.com/

    In 2012 OECD-USA Natural Gas imports increased by 2.9%

    Source Energy Export Databrowser

    Data from BP Statistical Review

    hosted by mazamascience.com

    De Nile, ain't just a river in Egypt...

  • Report this Comment On October 23, 2013, at 9:33 AM, LeakyWallet wrote:

    A complete picture of the comparison with France would include the relative costs of electricity before taxes, who owns the risk of the energy sources (i.e., who cleans up an accident), etc.

  • Report this Comment On October 23, 2013, at 10:35 AM, wcasino wrote:

    The author makes a point, but inaccurately deduces the financial impact of that point. While it is true that uranium is a finite resource and increased demand will drive price up, what the author does not acknowledge is that the uranium cost is only a small fraction of the total cost of running a nuclear power plant. So a large fluctuation in a small fraction of the total operting cost still has a small overal imopact on the total cost of operations. This is why France will be fine, even with a significant increase in uranium ore prices. And that is one reason why the US should increase its use of commercial nuclear power.

  • Report this Comment On October 23, 2013, at 2:10 PM, luckyagain wrote:

    It has been the history of all technology that only after it fails does a solution come along to prevent the failure. This is true of nuclear energy or any other energy source.

    The three biggest failures of nuclear energy have been Three Mile Island, Chernobyl and the Japanese plant. Almost everyone has forgotten about them but all of them are still radioactive and will be for many years. The Japanese plant is still leaking radioactive water into the Pacific ocean and it does not appear likely to stop soon.

    Solar and wind production of electricity has their problems too but they are minor compared to the others. The major problem with solar and wind is that the cost is higher than coal, oil or nuclear at least initially.

    Using solar and wind produced electricity to offset electricity produced by coal, oil and nuclear seems to be the best that can be done for now.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2691894, ~/Articles/ArticleHandler.aspx, 11/27/2014 8:22:41 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement