It was known as the “Timber Famine” in 18th-century Great Britain. And it was no exaggeration to say that it was a national crisis: Britain was running out of wood.
The first major reason was population growth; wood was the major material and fuel source of the era, used for cooking, heating, and construction. And Britain’s booming population growth created insatiable demand for timber.
The second reason was technological advancement. New machines like steam engines needed a reliable fuel source to generate heat… causing demand for wood to skyrocket.
Soon timber demand outstripped supply. Loggers cleared out entire forests, and timber prices shot up dramatically. British writer Malachy Postlethwayt lamented in 1747, “So great is the scarcity of wood. . . that where cord wood had been sold at six and seven shillings per cord, it is now sold for upwards of fifteen and twenty shillings; and in some places is all consumed.”
But Britain’s timber famine wasn’t just an economic problem—it was a matter of national security.
The domestic iron industry needed wood to fuel its fires. And with the timber shortage came a major risk of having to rely on foreign imports. Moreover, the timber famine also jeopardized the ability for the Royal Navy and merchant fleets to build new ships and repair existing ones.
The solution was clear: Britain needed to switch to a well-known alternative fuel source: coal.
But it didn’t happen without serious resistance.
Those profiting from the timber trade formed a powerful lobby, and the politicians in their pocket made ridiculous, specious arguments against coal.
Coal critics even went as far as arguing that the smell of wood smoke was preferable to coal smoke, and cleverly labeled coal “the devil’s excrement.”
Another criticism was that coal production was too dangerous (compared to logging). But technology fixed that too. Inventions like water pumps and safety lamps dramatically improved conditions in coal mines.
In the end, coal overcame the criticism and became the primary fuel of the Industrial Revolution; and the world became vastly more prosperous as a result of the combination of cheaper, more efficient energy, combined with groundbreaking productive technology (like the steam engine).
The world faces a similar choice today.
Like Britain throughout the 1700s, significant population growth has increased demand for electricity around the world, including in the US. And while there’s no “timber famine” today, there are major challenges in the production of electricity.
Much of this is self-inflicted. Years of climate fanaticism have pushed power companies to shut down coal-fired plants and replace them with inefficient wind and solar facilities.
Look, I like a clean environment as much as anyone. But the reality is that wind and solar simply aren’t as clean as the mainstream narrative would have you believe.
The mining of key input materials like germanium, cobalt, etc. is incredibly filthy. Batteries are filthy. The manufacturing process is filthy. And that doesn’t even get into child labor issues.
Plus, with wind and solar, you have to build in all sorts of extra redundancy for times when the wind doesn’t blow. Or, you know, night time, when the sun doesn’t shine. And all that extra redundancy increases the environmental waste even more.
Despite the costs and limitations, however, the share of wind and solar powering America’s grid is higher than ever before. This is a major reason why the electrical grid is struggling to keep up with surging demand.
Aside from population growth, another key driver of demand is new technology. Similar to Britain in the late 1700s, it’s well known now that our modern technology (AI) consumes massive quantities of electricity.
The net result of this supply and demand imbalance is a major concern for looming electricity shortages.
Elon Musk predicted last March that “the world will face supply crunches in electricity” this year. He’s far from alone.
One of the ventures that I’ve invested in (along with many of our Total Access members) is a technology company that focuses on specialized microchips. And the head of sales told me he was in the Washington DC area last week meeting with various government officials who are prospective customers.
One of the major concerns they expressed to him was that there simply wasn’t going to be enough electricity to meet their needs (hence their interest in our technology, which is designed to consume less power).
They recognize that there isn’t enough electrical production capacity coming on line to match demand. They also understand that demand for electricity can (and likely will) grow much faster than supply.
And it was extraordinary that even government officials were complaining about the intense, bureaucratic regulation at the local, state, and federal level to bring new power plants online. God forbid you have to displace a bird’s nest, which might set you back several years.
In Britain’s timber famine, they solved their supply shortage by turning to a better technology: coal.
Today there is also a vastly superior technology, and that’s nuclear.
We’ve written about this before— the idea that a single rock can power a small city is nothing short of astonishing. But like coal in Britain’s industrial age, nuclear power today has plenty of detractors.
But the latest emerging technology— small scale reactors— dispenses with virtually all criticism. It’s safer, cleaner, and cuts down on 90% of the waste. It’s also cheaper and faster to build, requiring 80% less energy to construct than traditional reactors.
And it has the potential to drive widespread prosperity throughout the world— something cheap energy has always been able to do.
A lot of countries have already woken up to this idea, which is why places like China, India, and even Russia have been rapidly building their own nuclear reactors.
Europe has naturally been shutting theirs down, but those governments are clearly insane. And if you have a problem with their self-destructive decisions then you’re a far-right fascist. Those people are in serious need of psychiatric care.
The US is now waking up from its green fantasy. And as America often does, it’s starting this race from behind… but will probably catch up quickly.
All of this makes uranium, i.e. the fuel source for most nuclear reactors, one of the most critical resources in the world.
Yet the supply chain for uranium is fragile, and the market is painfully underdeveloped. Decades of disinterest in nuclear have kept uranium exploration and production at a standstill, even as global demand is poised to soar.
The US government is acutely aware of this risk. In 2020, Congress established the US Uranium Reserve, allocating $75 million to buy domestically-produced uranium.
But $75 million is nothing. Even with this program, domestic production is expected to fall far short of what’s needed to fuel the next generation of reactors.
Meanwhile, the uranium market is taking notice. Prices have more than doubled since 2021, but they remain well below the levels needed to incentivize new production.
The few publicly traded uranium miners and developers have seen their stocks surge. Yet most investors remain unaware of just how critical this resource will become.
Uranium is also a quintessential real asset— a critical resource that is vital to economic prosperity and new technology.
Yet, again, uranium is in a deficit. Demand already outpaces supply, and that imbalance is only set to worsen.
That likely means skyrocketing uranium prices. And massive profits for the few producers left— many still trading at quite modest valuations.
