Talk about a makeover. Nuclear power, once an environmentalist's worst nightmare, has transformed into the darling of greenies everywhere, with Greenpeace co-founder Patrick Moore even publicly proclaiming his faith in fission.

Why the change of heart? We've covered it here before, but essentially, in the quest for alternative energy sources, nuclear power is the obvious choice, a giant among wimps. Its technology is well-understood, with controllable production that doesn't depend on cooperating weather patterns or agricultural crops. Add that to the fact that reactors don't produce any greenhouse gas emissions, and suddenly, nuclear looks pretty sweet.

But you can't have nuclear power without fuel - a fact that has sent uranium prices skyward in recent years.

Uranium's had an exciting millennium so far. In 2003, it began a parabolic rise, with its spot price more than quadrupling from 2004 to 2007. Eventually prices hit $138/lb last June, before pulling back; today, it bounces from $75 to $95, about its price in the 1970s when adjusted for inflation. (See the two-year price of uranium here.)

Part of that's due to a massive shortage of ready-to-use uranium; global demand for the mineral already outstrips supply by 139%. And there's no end in sight. The world's 439 operating reactors aren't nearly enough to satisfy global power needs, so 35 more are under construction - with another 319 either in planning or proposal stages.

As those reactors come online, they'll need even more uranium. But production has been slow to rev up after a lull following the Cold War, and new mines haven't opened quickly enough to keep pace with demand. For the foreseeable future, the shortage will continue.

More-Predictable Demand 

What makes uranium especially interesting is that demand for the mineral is far more predictable than other metals, since uranium's price is really only a small factor in calculating total nuclear power costs. Once operational, reactors are very cost-effective to keep fueled at high capacity - just 26% of what it costs to maintain an oil or coal-fueled plant; meaning if electricity demand ever did decline - highly unlikely - utilities would be more likely to cut back production at plants with higher fuel costs, like those fossil fuel generators, than nuclear plants. So uranium demand depends mostly on operational reactors, and less on economic fluctuations.

As these new power plants start producing, uranium prices will probably ease a little in the short term. But the world's insatiable thirst for electricity - especially in China - will keep uranium going up long term.

You can now get in on uranium by purchasing yellowcake futures. In 2007, NYMEX partnered with the Ux Company (which runs the Ux U3O8 index, a weekly uranium price tracker) to start offering monthly contracts of 250 lbs of yellowcake. There have also been rumblings recently about possibly introducing physical uranium contracts on the London Metals Exchange.

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