An earthquake led to a tsunami that led to the Fukushima nuclear meltdown in Japan. It was almost a perfect storm and it rightly frightened the world, leading Japan to shutter all its reactors and others to rethink their nuclear exposure. But Japan is back on line and it shows why Cameco's (NYSE:CCJ) uranium growth story has legs.

Let's get this right
To be completely fair, the Fukushima meltdown was awful. However, it was handled relatively well, considering the potential for destruction. And, on some level, it was a good call for Japan to reexamine its nuclear power plans and make sure it had the right technology to safely run its nuclear fleet.

Uranium prices have been on the decline. Source: Cameco.

However, the country quickly found out that nuclear has a place at the electric table. Without nuclear power, Japan had to import more carbon-based fuels like coal, natural gas, and oil to make up for the 30% of the island nation's power nuclear once supplied.

An island without many natural resources of its own importing enough fuel to replace 30% of its energy needs had the impact you might expect: Power prices went up. For example, utilities' fuel costs in Japan have basically doubled since before the Fukushima event. That, as you might expect, has led to large rate hikes on customers. In fact, the country has been pushed into a trade deficit, as the costs of its imports exceeded the revenues from its exports driven largely by the importation of fossil fuels.

But it's not just the cost of electricity that's at issue. Before the nuclear shutdown, Japan was able to meet about 20% of its energy needs with domestic fuel sources. After the shutdown that fell to just under 6.5%. So the shutdown put Japan's energy security at risk, too.

Japan goes nuclear, again
All of these reasons go into why Japan is turning its nuclear power plants back on. But the Japanese petri dish also provides a backdrop for the entire world. Everything that's true in this one isolated island is roughly true elsewhere, too, in varying degrees, which is an interesting story in and of itself, supporting Cameco's projection that uranium demand is set to outstrip uranium supply in the coming years. Cameco is the largest publicly traded uranium miner, providing the fuel that powers nuclear electrical plants.

A look at Japan's nuclear fleet. Source: U.S. Energy Information Administration.

But here's another reason to like the implications of the Japanese nuclear restart: It ain't over yet. Yes, the big news is that Japan is nuclear again, but the truth is it's only dipping its toes in the water. Commenting on the restart, Cameco CEO Tim Gitzel explained, "Of course, there needs to be more restarts to move sentiment in the markets, so we haven't seen the needle move much in reaction to those events."

According to the U.S. Energy Information Administration, the handful of reactors that have been approved to come back on line provide only about five gigawatts of power. That's compared to the 45 gigawatts or so that Japan's nuclear fleet provided before the shutdown. Around 6.5 gigawatts is gone for good from the old fleet.

But do the math and you see that there are over 30 gigawatts of nuclear power still waiting to be restarted. Power plants that could supply around half of that total have already applied to restart. In other words, the big benefit of having Japan nuclear again hasn't hit yet. As it restarts more and more reactors, Japan will again need to ensure it has the fuel it needs to provide reliable electric power to its citizens. That, in turn, will help shore up the low prices in the uranium market.

Rio Tinto (NYSE:RIO), a large producer of uranium, though it only accounts for about 1% of the giant miner's revenues, noted in its mid-year financial update: "The uranium market continues to suffer from high inventory levels throughout the supply chain, keeping uranium prices under pressure." That's not a big deal for widely diversified Rio, but it's battered Cameco's shares since its main business is uranium.

But add Japan to the bigger picture of some 82 new nuclear power plants being opened around the world by 2024 (most in China and India) and the current supply and demand imbalance starts to look like a temporary thing. Painful for now, but not permanent.

If you are looking for an out of favor sector that has a solid growth story behind it, uranium increasingly appears to fit the bill. And global uranium giant Cameco is probably the best way to play it.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.