Blind to a uranium fallout

I have to keep pinching myself. I see this enormous change ahead for world energy yet people keep acting as though nothing is happening.

The latest long-term casualty looks like being uranium and the already delayed BHP Olympic Dam big pit along with Campbell Newman's hopes to resume Queensland uranium exports.

I started pointing out the dramatic effect US shale and coal gas would have on the world on Australia Day (I list some of the articles below).

When you believe you are right you don't stop telling readers what's ahead.

Those engaged in the massive trade to ship oil to the US will see big falls so changing the global shipping trade. Owning oil tankers will be a bad business.

China growth will take up much of the oil slack but more US destined production will be shifted back to the US, where there is cheaper energy. Instability in the Middle East will rise.

President Obama and Mitt Romney are back in the campaign trial and no doubt both are engaging in more China bashing. It gets votes but it's not the game.

Last night Dundee Capital Markets cut its near-term uranium price forecast. Given that the uranium price has fallen from $US65 per pound to around $42 this was miserable news for the uranium industry and further fallout from the Fukushima disaster.

But Dundee still forecasts a return to $US65 in the long term. They may be right but as the US becomes a low-cost energy country once again – and one that is slashing its carbon output – and steaming coal prices remain low it's going to be harder and harder to justify higher uranium prices.

Uranium will have another run if in this interim phase we do not slash the cost of renewables, so making uranium the best option to slash carbon emissions even further than plentiful gas takes us.

Clearly the Chinese decision to increase their stake in Curtis Island means they believe that the US revolution will not affect the long-term prices for LNG. I hope they are right because Australia has a lot at stake. But the US shale gas revolution is a very new development and there will be many surprises both boosting and reducing the impact of US gas.

Here are a few of my past commentaries:
On the cusp of a new US prosperity, October 31;
The carbon tax is holding us back, October 1;
Australia's slow-motion energy train wreck, September 6;
Air coming out of the gas boom, August 15;
Kennedy's power play, July 23;
Global tremors from a US gas explosion, May 4;
Australia Day lessons from the USA, Jan 26.
There will be more.