The country’s economy has long been tied to the price of oil. Now, it could be tied to the cost of uranium as well.

Worried that shortages of natural gas could limit energy supplies and hold back economic growth, the Government has decided instead to develop nuclear power, a strategy which would unlock vast new sources of energy but also link the country’s energy future in part to the price and availability of imported uranium.

Described alternatively as the fuel source of the future and the key ingredient of the world’s most terrible weapons, uranium is a relatively common element, mined like any other. At huge open pits and from deep shafts, millions of tonnes of earth are dug up and sifted to recover specks of the grey metal, which are then processed into highly radioactive fuel rods, the key component of a nuclear power plant.

With oil prices at record levels and increasing concerns over greenhouse gas emissions, the world is once again embracing nuclear energy, and policymakers are all wondering the same thing: how much uranium is really out there?

As interest in nuclear energy waned in the 1990s and the early part of this decade, investment in locating new deposits fell far behind the quantities spent on the search for new oil and gas fields. Even today, after several years of high uranium prices, the total spent on exploration barely equals the cost of a single deepwater drilling rig.

The most widely respected estimates put forth by the Nuclear Energy Agency (NEA), an intergovernmental group that tracks supply and demand of nuclear power, said the world has 100 years of known uranium and secondary reactor fuel sources left at current rates of consumption. The glut of new reactors proposed around the world could reduce that figure substantially.

But the NEA notes that resource estimates could rise in line with new investment in exploration efforts.

Without more thorough resource estimates, the question of uranium availability has become a political football, with nuclear power opponents casting doubt on future reserves, and the nuclear industry arguing that resources are practically limitless when forecasted technology improvements are taken into consideration.

Many experts take the latter view, with the important caveat that supplies may be strained in the short-to-medium term.

Some, however, particularly on the political left in Europe, are not ready to accept the rosy assurances of the industry at face value, and have doggedly stuck to predictions that world uranium production could peak in as little as 30 years.

A report by the Energy Watch Group (EWG), a body of experts assembled by Hans-Josef Fell, a Green Party representative in the German parliament, warned last year of an imminent exhaustion of affordable uranium resources, which cost less than US$130 (Dh477) per kilogram to take out of the ground.

“A shortage can at best be delayed until about 2050,” the report said.

The EWG called into question the data used by the NEA, which issues its so-called “Red Book” estimates of total uranium resources every two years, finding that forecasts for undiscovered reserves are speculative and should not be relied on in decisions about future energy sources.

“The probability to turn these figures into producible quantities is smaller than the probability that these quantities will never be produced,” the report said. “Since these resources are too speculative, they are no basis for a serious planning for the next 20 to 30 years.”

But Ian Hore-Lacy, a spokesman for the World Nuclear Association (WNA), an industry trade group, said resource pessimists were distorting the forecasts to pour doubt on resources that have a high probability of being found.

“The Greens, who are criticising, just don’t know what they’re talking about,” he said. “There’s a fundamental misunderstanding about what known resources mean.”

He pointed out that until recently, very little investment had flowed into finding new resources because interest in nuclear power was low and uranium prices hovered in the single digits, reaching a low of $7 per pound in 2001. With renewed interest in nuclear reactors, the price shot up to a record of $120 in May of last year. It held at about $65 last week.

“Nobody knows what’s in the Earth’s crust,” Mr Hore-Lacy said. “The way you find out is by spending a lot of money looking for it.”

Mr Hore-Lacy noted that between 2005 and last year, as the price of uranium rose and mining companies increased exploration efforts, known resources increased by 15 per cent.

Compared to the oil and gas industry, the amount invested each year in uranium exploration has barely equalled the cost of a single deepwater drilling rig. According to the WNA, a total of $774 million was spent last year looking for new uranium deposits. By contrast, Exxon Mobil, the world’s largest oil company, spent $7 billion last quarter alone to find and develop new oil and gas fields, and was widely criticised for not spending enough.

With some reservations, the NEA also sees the amount of known resources increasing in the long term. But analysts say that supplies could be strained in the more immediate future.

The increase in prices for oil and natural gas has driven up projections for nuclear power faster than anyone expected.

For example, in its world energy outlook for this year, the US Energy Information Agency forecasted that nuclear capacity would grow to 498 gigawatts in 2030, which was 13 per cent higher than the agency’s forecast in 2006. The agency’s forecast for 2025 capacity is 31 per cent higher than the forecast it issued in 2003.

At the same time, readily available fuel stocks are rapidly decreasing.

Approximately 40 per cent of the world’s nuclear fuel now comes from secondary fuel sources – disassembled nuclear weapons and reprocessed uranium waste – but that figure is expected to decrease to 20 per cent by 2013. Robert Vance, a nuclear analyst at the NEA, said new uranium mines will soon be needed to meet increasing demand.

Delays at some of the world’s largest uranium mines illustrate the challenge for the industry.

The Cigar Lake mine in Saskatchewan, Canada contains some of the world’s highest quality uranium ore, and was expected to increase global production by 17 per cent this year. A flood in one of the mine shafts, however, means Cameco, the company behind the project, is now predicting production will start in 2011 at the earliest.

“The difficulty right now is production,” said Mr Vance. “Before the price rise, there was no incentive for people to go out and develop the mines.”

Mr Vance said the price rise has had the secondary effect of encouraging reactor operators to improve fuel efficiency, albeit not as quickly as the industry would like.

“We’re not seeing a huge cut in the demand for uranium; these are incremental,” he said.

A new type of nuclear reactor, the breeder reactor, remains the ultimate solution to the question of uranium resources because it converts a much higher proportion of the uranium into usable fuel during operation and can improve fuel efficiency 50 to 100 times. A breeder reactor is already mining in Russia but the technology is not commercially viable at current uranium prices.

Breeder reactors are also beset by a thorny political problem, since many designs require plutonium or enriched uranium, which can be used to make nuclear weapons. Uranium enrichment lies at the heart of the current dispute between Iran and Western nations over the development of its nuclear program.

Many emerging nuclear nations, including the UAE, have forsworn uranium enrichment, and say they are solely interested in pursuing existing light-water designs.

The possibility of conflict between Iran and the US or Israel, and the effect that would have on oil supplies, highlights a key advantage of nuclear energy for major consuming nations struggling with questions of energy security. The largest uranium resources are located in Australia, Kazakhstan and Canada, countries considered unlikely to disrupt supplies to industrialised nations and, indeed, the UAE.

This strategic advantage, combined with the need to reduce greenhouse gas emissions, means major consuming nations will take the necessary steps to address the resource challenge, even at great expense.

With current designs, and barring a major disruption to operations at existing mines, Mr Vance was confident that the growing nuclear industry would have access to the uranium it needs.

“Our conclusion is that even under a high-case scenario, from now until 2018 the so-called existing and committed mines will be sufficient to meet that demand,” he said.