L: Politics as usual. Got it. So, we keep staying away from coal, especially thermal coal. What about uranium? That's been in the news a lot lately as well, with Japan doing an about-face on its nuclear program.

Marin: Yes, the new president of Japan basically stated that Japan has no choice but to bring its reactors back online. But it's not going to happen as quickly as the market wants it to happen, so while we've made good money on uranium plays in the last few months - and I'm very bullish on uranium - we've taken profits on our winners in our energy letters. We still have core holdings.

Actually, we've written that we believe that Fukushima is the beginning of the fourth great bull market for uranium. With the Chinese, Russians, Koreans, and other countries committing to nuclear energy as part of their energy matrix, even after Fukushima the trend is very solid. By 2020, there's going to be another 88 reactors online. And already today, the US imports over 90% of the uranium it consumes.

To put that into perspective, consider that in 1960, the US was the world's largest uranium producer. At the time, there were over 1,000 uranium mines in the US, producing over 36 million pounds of uranium every year. Today, there are eleven uranium mines, producing 3.4 million pounds a year. So America is producing less than 10% of what it produced in 1960, and yet is more dependent than ever on nuclear energy.

One in every ten homes in America is powered by Russian uranium.

L: Wow... I can see why you're still bullish. What else do you like these days?

Marin: One of the most interesting and powerful market dynamics I see today is the European addiction to Russian natural resources. That can't change quickly, and there is a great potential for profit. The way we approach it in our letters is to ask ourselves how we can profit from the Putinization of Europe. It's not just oil and gas, but uranium as well, and non-energy resources. We've found several profitable niches.

L: Okay. But getting back to the original question, if Doug Casey is right about the Greater Depression gathering force this year, that would seem bearish for energy. How do you strategize for that?

Marin: I think there's a good chance Doug is right. So, in our newsletters, the first things we look at are management, cash, and expenditure programs in the specific jurisdictions the companies operate. We want companies that have a lot of cash, and will not need to go back to the market any time soon. From an equities standpoint in the resource sector, that's the ultimate Achilles heel of most resource companies. The reality is that most are, as Doug likes to day, burning matches.

L: Sure, but you don't want companies that are just sitting on cash.

Marin: Of course. We want companies that have the cash and the ability to advance a project that will deliver value. They need to have a project with technical merit, in a place where they can get it permitted - we use the same 8 Ps you do. Most important is that even if they do have the cash, get permitted, and drill a successful well, do they have the infrastructure to deliver that oil to the market and make money doing so?

Energy is very different from mining. Certain wells are extremely expensive to drill, and you don't really know what you'll get until you do drill them. Once you do, you know right away if it worked out, what you have, and you can go into production if it all works out. Mining exploration is much cheaper, and the big capital expenditures don't come until after you know what you have, and have done a feasibility study on it.

L: I get it; a big mine can cost several billion dollars to build, but you can drill a grid of holes that outline an ore body for just a couple million bucks.

Marin: Yes. A single oil well in Kenya can cost north of $65 million.

L: $65 million! I can build a modest but significant gold mine for that much.

Marin: Yes, you could build a 25,000 to 45,000-ounces-per-year gold mine for that. But on the positive side, when you make your discovery in the oil patch, the path to cash flow is very short and fast, so the impact on share prices can be explosive. That's why I love energy stocks.

L: Sure; the Casey team likes volatility. And I also see your point about infrastructure. With metals, if you have a concentrate that's valuable enough - not to mention gold or silver dore bars - you can transport your product anywhere in the world. But if you've got a well that's more gas than oil, and there's no pipeline network in the area that can handle it, you've got a product you can't sell.

Marin: Exactly.

L: Okay, let's talk about political risk - "resource nationalism" being the bogeyman of the day. Where are your favorite places in the world to invest? Are you willing to pay a premium for the safer jurisdictions?

Marin: That varies by sector and the type of commodity. Some places are not workable for uranium exploration, for example, even though they are good for other kinds of mineral exploration.

So I'm very bullish on WISR uranium production in the US. That is a term we created, so readers will see it here first: Warm In-Situ Recovery. WISR has much lower cost of production than other in-situ recovery projects in the US, comparable to those in Kazakhstan, but with much better environmental standards. I think that's going to be a strong trend to bet on over the next five years. I'd stay away from uranium plays in Europe, Africa, and South America - the risk is just too high. We've had a great run on the Athabasca Basin uranium plays, and having made our money, we've taken it back off the table.

For oil-patch plays, I really like the East African Rift in Kenya. We were the first to recommend that area play. We've also taken profits there, but it's very interesting what's going on there. Those are large, world-class deposits being drilled off right now.

I'm also very bullish on certain parts of Europe, where there are great, past-producing oil fields that have light, liquid-rich oil, but have not seen any modern exploration. And yet the people living in those places are paying a premium over global energy prices, because they are so dependent on imports from Russia and the Middle East.

I'd warn people to be very careful about these junior Canadian oil companies that are chasing yield in the western sedimentary basin. I think there are a lot of risks associated with that, so there's little room for error. Because of the differentials - investors have to remember that just because you get $90 a barrel for WTI, that doesn't mean you'll get the same for Canadian oil far from any distribution infrastructure - any bad news can be fatal.

L: So what do you look for in that kind of situation? Very near-term Push? Focus on quick wins, rather than big wins?

Marin: Yes. For example, we recommended Atico and PRD Energy at the Casey conference last September, and both have more than doubled since then. Anything we recommend has to have cash in the bank, management have to be the largest shareholders, and they have to go for assets that matter - can really move the needle, by delivering sustainable cash flow. Like you, we start with the People. That's absolutely critical.

L: Very good. Can you give us a sneak preview of what you're working for upcoming publications?

Marin: We have a lot going on. Right now we're doing a complete analysis of the master limited partnerships and the American oil and gas sector, and a complete analysis on whether the US can actually become energy independent by 2035. I'll also be publishing an interview with a former senior OPEC official I recently spoke with. Also, a trip to Saudi Arabia is in the works - there's a lot in the pipeline.

We're looking at juniors in the right places, because that's where the most volatility is - and the most potential for big profits. But if there is a big global economic pullback, most of these juniors don't have a chance. It's so capital intensive... A single ultra-deep oil well offshore can cost more than $100 million. The little guys won't stand a chance if the market turns negative and stays there for a few years.

Maybe one thing we should highlight is that the game has really changed. It's become so much more expensive, and the big oil companies reserves are decreasing, because of the changing value of their BOEs.

L: Not all oil equivalents are really equivalent to oil.

Marin: Barrels of oil equivalent - BOEs - are the biggest scam in the energy sector today. They say they have a gas component of their production that's equivalent to so many barrels of oil, but they don't define what's in that gas. Is it methane? Butane? Propane? Pentane? All of these have different and changing values. The SEC allows the companies to roll all of this up as "BOE," but they are not all equal. And yet, many companies present their reserves as though their reserves were the same thing as oil. This is very important.

L: How does the average investor know what the real value of a company's BOEs are, then?

Marin: They have to really dig down deep into the PV10s and other technical disclosures. You have to have the ability to understand these reports and to be willing to put in the time into doing so. This is, I'm proud to say, one of our Casey advantages; we do this for all our energy publications. Few others will put out net-back reports as we do. What matters is not how many BOEs companies produce, but what they get back for them after delivery to the market.

I don't mean to be negative, but a lot of people don't get this; and, frankly, they're screwed.

L: That's a technical term.

Marin: [Chuckles] Yes.