The debate regarding the future source of clean and “green” energy in America and the world rages on as it has for decades. Ever since M. King Hubbert, Ph.D., released his report on “Peak Oil” in 1956, the belief that there is a finite amount of oil in the earth and that production of oil would peak at some point and then decline while demand would continue to rise due to a growing globalized economy, the United States and other big consumers of oil have been working to develop reasonable and sustainable replacements for oil.

According to Hubbert’s report, the world has already passed its peak in oil production. With the burgeoning demand for energy not likely to stabilize let alone decline thanks in part to the growth and development of economies like China, Brazil and India, oil prices are ultimately expected to continue to increase.

#-ad_banner-#Factor in the efforts by advocates of “climate change,” and there are plenty of reasons to expect higher energy prices and incentives to find a replacement for the dirty fuels oil and coal. For investors, the opportunity is to capitalize on a fear factor that will eventually subside.

Two popular “green” alternatives to oil and coal are wind and solar energy production. The problem with these options is that they are currently inefficient and ineffective. Wind, even in windy places, only blows enough to create electricity with wind turbines about 30% of the time. Solar energy production requires the sun, which doesn’t shine 24 hours a day. Eliminate massive government subsidies and these two alternative energy industries would die on the vine. They are both expensive and impractical, and it is easy to imagine the federal government, with its huge deficits and budget problems, eliminating these taxpayer-funded subsidy programs.

The most likely solution to the world’s energy problems is the most controversial — nuclear. The recent disaster in Japan has helped exacerbate fear-mongering about the risks of nuclear energy and aid in the stalling of the development of nuclear power plants — plants that can provide more energy safely and less expensively than any other form of clean energy. [My colleague Nathan Slaughter, editor of StreetAuthority’s Scarcity & Real Wealth, agrees. See: “5 Reasons I’m Still Bullish on Uranium Stocks.”]

You may at first disagree with me on the safety issue, but rest assured more people are killed every year in America by explosions in the home from natural gas (50 or more per year) than die in the world from nuclear energy. What’s interesting about the current nuclear event in Japan is that it is only the third event to happen in the world in more than 30 years.

It is difficult to defend the Chernobyl disaster of 1986. The former Soviet Union should be viewed as negligent and directly responsible for the problems there. But Three Mile Island in Pennsylvania in 1979 was the last nuclear power mishap in the United States. The meltdown resulted in no deaths directly related to the accident. The amount of radiation the average resident living within 10 miles of the power plant was exposed to was less than an average X-ray and at most was still only one-third the amount an average American is exposed to in a year. So far in Japan, the three deaths at the nuclear power plants are from accidents, not from exposure to radiation.

Ultimately, nuclear power is not going away. Japan announced last week it was cancelling its plans to build new nuclear reactors. As a result, many related investments are trading lower than they did during the height of the Japanese crisis in March. I think Japan is more likely to put these projects on hold until they determine how to build new plants that can better withstand the assault of earthquakes. The rest of the world will also likely find itself more dependent on nuclear energy in the future.

Here are two ways to profit…

1. Global X Uranium ETF (NYSE: URA) — I’m a big fan of exchange-traded funds (ETFs). They are a great way to gain exposure to a number of trends. This fund normally invests 80% or more in stocks of companies in the Solactive Global Uranium Index. It is non-diversified, meaning all the companies in it are related to the uranium industry. However, it is diversified within the industry, eliminating the risk of buying the wrong company in the right industry. URA is down more than 35% from its peak this year, but I think it’s a solid long-term bet. A return to its all-time high would mean a gain of nearly 75%.

2. DAXglobal Nuclear Energy Index (NYSE: NLR) — This fund tracks the DAXglobal Nuclear Energy Index. As with URA, it is non-diversified, but it is invested a little differently than URA because it tracks a different index. NLR is down more than 20% since its peak this year. A return to its all-time high of $45 would mean a gain of 100%.

There are a couple of other ETFs in this space: PowerShares Global Nuclear Energy Portfolio (NYSE: PKN) and iShares S&P Global Nuclear Index Fund (NASDAQ: NUCL), but my bias is to the first two I described above for a practical reason: liquidity.

Liquidity is critical for trading and investing. It allows for a more efficient trading process. When you are ready to buy or sell, there will generally be someone there to take the opposite side of the trade. Illiquid securities generally have wider spreads (the difference between the “buy” and “sell” price, also called the “bid “and the “ask”). Liquid stocks have narrower spreads, which is better because you’ll get a more favorable price and most importantly, when you need to sell, it is easier to be able to control your sell price.

URA’s 90-day average volume is 618,000 shares and NLR’s 180,000 shares per day. On the other hand, PKN averages 13,000 and NUCL averages 9,000 per day.

Action to Take –> Consider investing in nuclear energy. Don’t believe the hype —  nuclear energy is not going away. The negativity surrounding nuclear energy is due to current events and has created a terrific opportunity to get positioned for a nuclear energy’s rich future.

P.S. — I don’t know if you’re aware of this or not, but a 20-year energy agreement between the United States and Russia is about to expire. The problem is, this deal supplies 10% of America’s electricity. When the Russians refuse to renew the agreement, the U.S. will face an entirely new kind of energy crisis. This disruption could send a handful of energy stocks through the roof. Keep reading…