Too bad, eh?

Normally, as an investor, I’d feel left out, but today, I’ve got reason to believe that this event is set to happen over and over, each time churning out profits that you can take! But before I tell you the ticker of this NEP company, let me set the scene for the industry that will make these profits possible…

The Nuclear Power Industry — Set to Rise

There are 104 operating nuclear reactors in the U.S. All are creating precious raw energy. But for time’s sake, I want to talk about only 56 of them — namely, the 56 plants that have operating licenses expiring within the next 12 years:

Many of these plants are on the energy-demanding East Coast — needless to say, they can’t just close down. So the plant operators have to take some important and expensive actions to keep these plants up and running. Actions that can and will make this NEP company loads of profit.

The company I’m recommending will be booking contracts and locking in profits for the next 12 years! Just read what its CEO said about some recent opportunities:

“With electricity demand on the rise, the value of nuclear power technology as the most efficient and environmentally friendly source of energy available today is clearly being reassessed. With our broad range of core competencies in engineering, analysis, manufacturing and testing, we are well positioned to take advantage of additional opportunities for construction projects in the U.S.”

Recently a “major project” announcement has helped push the company’s stock up 25 percent in less than two months — but that’s not where it ends. Remember, there are 56 nuclear plants that may need service or new units built — and this company is the first (and possibly the only one!) in line. Here’s why…

The Complex World of Nuclear Equipment…

Imagine how many hundreds of thousands of components go into a gigantic nuclear plant. This includes everything from wire bundles and circuit boards to valves and switches and massive steel vessels that are the size of a large house.

Really, every nuclear reactor is an incredibly complex system of systems. There is a giant containment dome that isolates a nuclear core. The core is part of a system that heats water. The hot water exchanges heat with another fluid. The heated fluid turns a turbine. The turbine generates electric power. Regulating systems control the power that gets distributed into the outside grid. For all the heat and power, there has to be a way to cool things down on command, as well.

Over time, the nuclear core bombards the nearby metal and equipment with radiation. Plus, the heating and cooling cycles take a toll on equipment and machinery. Thus, the metal in some components becomes brittle. So periodically, equipment and components have to be repaired or replaced. There is nothing fast, easy or cheap about performing work on a nuclear power plant.

All in all, inside a nuclear plant, there is a vast array of shielding and valves and piping and wiring and switches and control units. All of this suffers from wear and tear over time. There is a massive library of technical specifications, training manuals, training and safety systems and much more to make the whole thing run. And every nuclear plant has a small army of highly trained technical personnel, as well as security forces.

So as you can imagine, almost every component of a nuclear plant has to be “certified” in some way or another. That is, anything and everything that is even remotely close to the “nuclear containment” zone must meet the highest level of specifications. This is for safety purposes, of course.

A License to Profit…

How can anyone keep track of all of this? It is certainly not easy. But every nuclear reactor is licensed by the U.S. Nuclear Regulatory Commission (NRC). The NRC issues a license to operate only if the operator can demonstrate that it has figured out how to account for all of the systems, training, personnel requirements and everything else that you need to run a safe plant.

Under provisions of the Atomic Energy Act, the NRC issues licenses for commercial power reactors to operate for up to 40 years. Then the NRC may renew the licenses for up to another 20 years. Why 40 years? Congress selected a 40-year license term on the basis of economic and antitrust considerations, not technical limitations. Even after 40 years, there’s a lot of life left in a well-maintained nuclear plant.

Still, licensing and re-licensing are complex processes. The NRC-mandated paperwork extends to hundreds of thousands of pages, even millions of pages in some instances. The technical specifications are just mind-boggling. Many of the pipes and welds, as well as other metal objects, have to be X-rayed and inspected for quality.

Most U.S. nuclear power plants were designed in the 1960s and 1970s. Most plants were built in the 1970s, or completed in the 1980s. After the Three Mile Island incident in 1979 — when there was a partial loss of nuclear containment — new plant licensing in the U.S. came to an abrupt halt. Many plants under construction went on to be completed. But due to public and political concerns about nuclear power, there has been almost nothing in the way of new nuclear design or construction activity for the past 30 years.

Indeed, due to the lack of business in the 1980s, 1990s and early 2000s, many nuclear equipment vendors just closed their doors. The ones that haven’t closed, basically, have a license to profit…

Until we meet again,
Byron W. King
June 5, 2008

Nuclear Equipment Providers was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

So why am I writing an essay series on nuclear energy?

Let me be clear from the beginning: I’m NOT writing this piece to defend the scientific merits of nuclear energy, because frankly, I couldn’t articulate them. Nor am I arguing the specific economic pros and cons of nuclear power; I haven’t been able to assemble credible figures from sources I consider impartial. I’m writing this simply because I believe the forces preventing the large-scale implementation of nuclear energy in the U.S. are motivated not by scientific, economic, or even environmental concerns — but overwhelmingly political ones.

For the record, I have nothing against organizations with political agendas trying to influence law, policy, and public opinion — that’s the American Way. And I honestly don’t intend this article to be a hatchet piece on the World Business Academy. To be frank with you, I’d never even heard of the California-based “think tank” (their words, not mine) before Whiskey & Gunpowder’s January 2 publication of an excerpt from their book, Freedom From Mid-East Oil…

However, if they’re going to unilaterally characterize the nuclear industry negatively, misrepresent its degree of acceptance by the public, and summarily dismiss atomic power as a “flawed technology plagued by faulty economics,” they’ll have to be prepared for someone to argue the other side. That’s the American Way, too.

In this series, I intend to give this dialogue some balance. I’m going to do this first by exposing what I perceive as a major bias in the debate; next by contrasting dollars-and-cents economics with the other, unmentioned costs of various energy forms to the Earth and her people; and lastly, by pointing out some of the nuclear industry’s ongoing and emerging successes — and proposing some solutions to its biggest challenges…

Considering the Source

It’s clear from reading the January 2 Whiskey & Gunpowder excerpt from their book that the World Business Academy is pretty-much dead-set against nuclear energy. What I wanted to understand was why…

Their marquis claim is that nuclear energy makes less economic sense than other forms of electricity generation (as though that’s the only measure of an energy source’s worth). As I said before, whether this is true or not is beyond my ability to conclude. However, one thing I will say is this: There are a huge number of factors that must go into any objective dollars-and-cents analysis of nuclear power — far more factors, I might add, than the government subsidies, waste storage/disposal costs, and defunct plant decommissioning expenses the WBA makes mention of in its book.

I’m no accountant, but it seems to me that any calculation of the economic pros and cons of nuclear power must take into account the costs — not just the dollars, but also the human and environmental costs — that society would be spared by the replacement of traditional methods of electricity generation with atomic energy. For example, were every kilowatt of electricity currently generated by coal incineration (around 50% of U.S. power) to be supplanted with nuclear, America’s “carbon footprint” would be slashed dramatically…

Since the prevailing regulatory trend in the U.S. is toward the forced lowering of CO2 emissions, this would carry with it a hefty dollar value in any equation figuring the relative costs of energy. At the very least, going nuclear would ease the burden on other industries that produce CO2, perhaps saving billions in R&D and retooling for lower-CO2 technology, carbon credit purchase costs, and CO2 “pollution” penalties. These costs are all, in one way or another, ultimately passed on to consumers or offset by higher taxes. This isn’t to mention the costs (both human and economic — more on this in the next part in this series) of the mercury contamination that’s escalating in our nation at an alarming rate, much of which is a by-product of coal consumption…

None of these things — plus any of what must be dozens of other pertinent factors, only a few of which I could even list — are mentioned in the World Business Academy’s conclusion on the comparative costs of nuclear energy.

Also, the World Business Academy argues that the current revival in the nuclear energy industry’s prospects is due t

“…a ubiquitous public relations campaign funded by a handful of companies who stand to gain tens of billions if they can talk an appropriately cautious public into buying this ill-fated technology.”

I’ve got three bones to pick with this little snippet…

World Business Academy: Profit is BAD!

What’s so wrong about power companies spreading their side of the story because they want to make a few billion dollars — even if a certain amount of it comes from subsidies? It’s little different (and nowhere near as devious, if you ask me) from pharmaceutical companies running prime-time ads for their drugs so that people will self-diagnose, then flock to their doctors to request these medicines by name.

Also, does the World Business Academy think other industries don’t benefit from government subsidies of one kind or another? How about Big Agri-Biz, driving force behind the left’s precious ethanol (the WBA is bullish on ethanol as a “transitional” fuel, by the way)? And what are government contracts for flu vaccines and drugs for the military but forms of subsidization to Big Pharma?

Come to think of it, what business wouldn’t cash in on government subsidies if they could? And what “business academy” would coach them not to? It’s not a CEO’s fault that our system is corrupt enough that our elected officials can be bribed or coaxed into distorting the free market to their company or industry’s benefit. They’re obligated only to make money for their shareholders…

But I digress. I’m NOT defending government subsidies or the corporate maneuverings that land them. I’m trying to defend what’s left of American capitalism. And as far as I know, every watt of electricity produced in this country is done so by a company that aims to profit. This is how it works. It’s part of the natural yin and yang of enterprise and government in the free market — or at least it’s supposed to be. One doesn’t have to be an economist (or sit on the Board of a left-coast think tank) to understand this.

The sole aim of business should be to profit as much as possible within the regulations. The aim of government should be to ALLOW as much money to be made as is safely and ethically possible. They should erect only so much regulation as reasonably protects the public, the nation, and the environment. Ideally, the end result is the fulfillment of public needs, jobs, salaries, personal spending — and revenue to run the country from income and corporate taxes (the fairness of these is another topic).

I find it peculiar that this concept should be so offensive to the World BUSINESS Academy. What system of accomplishing these things would they prefer, I wonder? Governmental control of industry? Not exactly, as it turns out — but I’m not too far off. I’ll elaborate on this in a minute. But right now, on to my second gripe with the above quote from Freedom From Mid-East Oil…

Stare at the pendulum: “I’m scared. Nuke is dead. I’m scared. Nuke is dead…”

That bit in the excerpt about “an appropriately cautious public” gnawed at me, since it implies that the bulk of public opinion is against nuclear energy, or filled with trepidation about it. I didn’t think this was the case, so I did a little digging. Here’s what I discovered:

As you can see, according to a 2005 poll of Americans, just a hair over one quarter of us oppose nuclear energy — while nearly three-quarters of us are in favor of it or are at least open-minded about it…

Does this seem like an “appropriately cautious” public, or one that’s ready to give nuclear energy its day in the sun?

The last axe I have to grind with the quote I highlighted from the World Business Academy’s book excerpt is that last little swipe about nuclear energy being an “ill-fated technology.”

Yeah, tell that to France, the U.K., Finland, Japan, Sweden, and a bunch of other nations that depend on nuclear energy to one degree or another — many of which are thriving on it. I think anyone who’s even remotely objective would concede that it’s a HUGE stretch to imagine that nuclear power is on the decline or doomed to the scrapheap of history. A lot of places worldwide are making it work, including the U.S.A. If anything, nuclear’s star is on the rise globally in a big way.

Bottom line: I’m not as smart, accomplished, educated, or famous as many of those who sit on the World Business Academy’s Board of Directors or are counted among their distinguished Fellows. However, I am smart enough to find a lot to question in what small portion of their book, Freedom From Mid-East Oil, that I have actually read. To me, it smells of spin and hidden agenda — I believe it to be a polemic masquerading as hard-nosed economic analysis of the industry.

My suggestion to those who read it: Do so with the proverbial grain of salt.

I recommend this not simply because of their anti-nuke stance — but more because of what I’m certain is a larger goal of trying to transmute capitalism into some feel-goody engine for social architecture, communal responsibility, and their own brand of leftist morality. Keep reading…

Biz Brother?

A quick browse of the World Business Academy Web site reveals that their raison de être is the “…fundamental redefinition of business as a social partner.” I found this phrase in two places on the “Academy FAQs” page. On that same page was the statement that: “The Academy is engaged in a wide range of activities to support business taking responsibility for the whole.”

Hmmm. So commercial enterprise isn’t supposed to concern itself chiefly with profit, but instead busy itself looking out for me and my fellow man? Companies are supposed to take a holistic view of their place in society, and not simply focus on boosting their own bottom lines any way they can within the law? Business should take responsibility for things that are normally under the purview of other institutions of society: The church, families, communities, legislatures and the courts?

That just isn’t natural. What’s worse, it’s dangerous. Making business my “social partner” would convey upon them a certain amount of power over what I’m allowed to do. That would clearly be a conflict of interest. Rarely is what’s best for me the same as what’s best for Big Business’ bottom line. It would be like making business into a second form of government — or blurring the lines between the two entities to a point where their interests are even more closely aligned than they already are.

I could be wrong, but didn’t they already try something a little bit like this ‘business-meets-government’ thing — in Russia?

Again, I don’t intend all this to be a smear-job on the World Business Academy. I just go where the facts take me, folks. And as a last note on the topic, I want to mention just one other thing I learned about the WBA in my research for this series…

The organization’s co-founder was a WWII veteran, social scientist, academic, author, and futurist named Dr. Willis Harman, a man whose credentials and achievements are impressive — as are many of the Board Members and Fellows of the World Business Academy. However, it’s interesting to note that Harman served as President of an organization called the Institute of Noetic Sciences (ION) from 1978 until his death in 1997…

The group focuses on the power of mind-body relationships, human intuition, alternative health/medicine (including “distance healing” by focusing mind/body energy on others far way), psychic and paranormal abilities, and other such New-Age type stuff. Trust me, I could write a couple thousand words on this — but instead I’ll just encourage you to Google “Institute of Noetic Sciences,” “noetic theory,” “noetic consciousness,” and “noetic science” and see what comes up. Wild stuff, especially that bit about how we’re all evolving toward a new hyper-telepathic species of human called homo noeticus.

Oh, and in the interest of full disclosure: The Institute of Noetic Sciences is listed by Quackwatch as a “questionable” voluntary organization…

But enough New Age gobbledygook, agenda-exposing, quack-stabbing, and objectivity-questioning. On to the surprising, fascinating, and sometimes disturbing under-reported truth behind nuclear energy in America — which is coming soon in Part Two of this series.

Whistleblowing, but not glowing,

Jim Amrhein
Freedoms Editor
March 10, 2008

Nuclear Reactions, Part One was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.