And both for what you thought I was saying: That nuclear power is The Answer to America’s (or the world’s) energy woes.

But I’d like to remind everyone reading this — pro, con, neutral, apoplectic or apathetic about nuke power — that I freely admitted in the first two parts of this series that I don’t know enough about nuclear energy generation to make an informed decision about its prospects. I never said atomic power was a panacea, or even that I believe it is. I only pointed out some realities about nuclear power generation so far in the United States…

First, that as far as I could discover from a good deal of research time, it has killed or sickened few, if any. Secondly, I reminded readers that the overwhelming majority of Americans favor nuclear energy, a fact that seems not to warrant much mention in the mainstream media’s portrayal of the debate. Also, I put a few numbers to some of the hazardous realities — both to humanity and the environment — of conventional American energy production. A side note on this:

One less-than-adoring reader observed that if I were to mention the tens of thousands of deaths related to coal mining, then injuries and deaths related to uranium mining should also be pointed out. Of course, I considered this when I wrote Part Two, in which I touched on the dangers of coal mining in my discussion of the human costs of American energy production…

According to my research, uranium mining was only recently resumed in the U.S. after being halted in the early ’90s. Since its resumption in 2001, domestic uranium mining has been predominantly “open-pit” — which is far less hazardous and manual-labor intensive that conventional underground mining (like for much of our coal). Long story short: I couldn’t find much on the dangers of modern uranium mining in America.

However, this reader’s letter spurred me to some further digging — which led me to some old newspaper stories and other sources indicating that uranium mining in Utah, Colorado and other places in the American Southwest (mostly in the 1940s and ’50s) may indeed have sickened or killed a number of miners and residents of mining communities. In fact, many of these people and their families have received payments under a 1990 law called the Radiation Exposure Compensation Act.

Again, specific numbers were hard to come by — but since I’m nothing if not objective, I felt this was worth mentioning. Also, since the U.S. currently imports more than 80 percent of the uranium used by domestic reactors, the dangers of mining the metallic fuel in Russia, Australia, and other major supplier nations must be considered (finding hard info on this is another matter, however).

Lastly, I must once again thank Whiskey & Gunpowder readers for their voluminous feedback — pro, con and otherwise. Special thanks to the numerous bona-fide experts who wrote in to express support for this series, among them a former U.S. Navy nuclear submariner and numerous active and retired nuclear engineers…

Now, back to the business of neither defending nor exalting American nuclear power generation — but considering it as objectively as I can.

From Ukraine, With Bile…

Always on the tongue-tips of those who’d thwart the spread of nuclear power in America is the 1986 reactor meltdown and explosion at Chernobyl, Ukraine. Of course, this disaster embodied all of our worst fears about nuclear energy — and I, for one, would never try to minimize or understate the horrors those in surrounding territories (especially Belarus) have experienced for the last 22 years because of the accident. I also agree with nuke-power’s harshest critics on one point at least: We’ll likely never know the true extent of the incident’s impact…

However, even the most jaded of nuke-haters would have to grudgingly admit that in the history of nuclear power around the world, Chernobyl has been an anomaly, albeit one of the most terrifying sort. To make an informed assessment of the risks of nuclear power, one must look at the whole picture. That picture includes 31 nations that are generating nuclear power in 439 plants — apparently without significant loss of life or destruction of the environment so far, Chernobyl excepted.

Although I admit I have no data or expertise to base this on, I still think it’s a ridiculous notion to believe that a Chernobyl-type nuclear disaster is anywhere near as likely to occur here in the uber-regulated, hyper-litigious U.S. as in the run-down, cash-strapped, infrastructure-challenged, sacrifice-all-for-the-motherland former Soviet empire. I, for one, have little fear of a nuclear power disaster here in my own backyard — but would not be the least bit surprised to hear of another one in Russia or other zones within the former Communist bloc, or in environmentally unconscionable China.

Today, around 20 percent of U.S. electricity is derived from nuclear sources, while a full 30 percent of the E.U.’s electricity comes from nuclear power. Ditto this figure for ultra-green Japan — though they plan to ramp up to 41 percent by 2014 and 60 percent by 2050.

By all measures, however, France is foremost among nuclear nations. Nearly 80 percent of their electricity comes from the 59 active nuclear power plants on Gallic soil. They are also the largest net exporter of electricity in the world. And so far, France’s most serious nuclear accident happened not in a power plant, but in a nuclear particle accelerator — when three workers without proper protective clothing entered a contaminated area in 1992.

True, France and other nuclear-power-friendly nations face some future challenges in dealing with the waste — such materials can only be refined down and reprocessed to a certain degree, then what’s left has to be stored.

Or does it? As you’ll learn in a minute, there may be another solution to nuclear waste storage issues…

Further, it must be noted that nuclear waste products take up thousands (more likely millions) of times less space per kilowatt/hour of electricity generated than the toxic byproducts of coal-mining. Like radioactive nuclear waste, the oceans of black-water “slurry” coal mining generates cannot be processed for return to the environment. It must be forever stored in lifeless holding ponds, where it slowly leaches into the Earth — or occasionally bursts its dams and annihilates entire towns or river systems (Google: Buffalo Creek flood and Martin county sludge spill)…

This isn’t even to mention the tremendous reduction in greenhouse gases (GHG) — even when those resulting from uranium mining are factored in — that nuclear power offers over coal-fired power plants, which are by far the world’s leading source of both electricity and GHG. Of course, this advantage depends upon the far-from-proven notion that GHGs are causing the ruination of Earth…

My point is the same as it has been all along in this series: For fear of making the nuclear power they hate seem more appealing, the mainstream media is loathe to point out anything positive about it anywhere on Earth, quick to overstate the impact of “disasters” like Three Mile Island, and silent about the REAL environmental horrors of coal mining (the toxic waste, not the CO2).

Space: The Final Landfill…

Everyone on either side of the nuclear debate agrees that the storage/disposal of high-level nuclear waste is a major issue. In the U.S., over 70,000 tons and counting of this hazardous material is currently being temporarily stored at over 120 sites in 39 states nationwide. The Government’s big plan for this waste is to bury it deep in the desert at Nevada’s Yucca Mountain. However, the date at which this facility becomes operational has yet to be determined.

Originally, the site was to be up and running by 1998. But now, 10 years later, the Yucca Mountain project remains stalled by legal wrangling and insufficient funding, and has yet to accept a single ounce of nuclear waste. The most optimistic projections had recently pegged its possible opening date at 2017. But according to a February 19 article in the Las Vegas Review Journal, the U.S. Department of Energy (DOE) has now abandoned that target date, and is reluctant to set a new one…

This is not to mention concerns over the site’s suitability for long-term storage of high-level nuclear waste. Many have challenged Yucca Mountain’s location as being too close to major fault lines and to the local underground water table.

So what’s the solution, you’re asking?

Well, maybe I’m just a stupid rube, but I’ve been wondering for more than a decade why we don’t simply blow nuclear waste out into space…

I’m no rocket scientist, but it seems to me that if a pair of relatively simple and cheap solid rocket boosters can provide the bulk of the thrust necessary to propel the 2,250 ton mass of the Space Shuttle and all its fuel tanks and payload into outer space, similar units could certainly do the same thing for nuclear waste. By my math, less than 50 such launches could erase the half-century’s worth of the stuff we’ve accumulated. And one or two per year could dispose of our nation’s ongoing production of nuke waste, even if we were to double the amount of electricity we derive from nuclear sources.

I’m no accountant, but I’d be willing to bet that this would ultimately prove cheaper than building and maintaining a bunch of “Yucca Mountains” all over the U.S., such that the increasing use of nuclear power would necessitate. And even if it weren’t cheaper, I say it’s money well spent to jettison high-level nuclear waste from planet Earth forever. Now, I know what a lot of you may be thinking: What about a malfunction? Wouldn’t a mid-air explosion rain radioactive waste and debris down into the ocean and atmosphere?

I’m no engineer, but it seems to me that if we can build space shuttles that can repeatedly endure the intense heat and stress of lift-off and atmospheric re-entry, we can build a container for nuclear waste that can withstand whatever trauma an in-flight worst-case scenario might include.

All I’m saying is that the nuclear nations of the world should seriously and objectively look at the idea of deep-space nuclear waste disposal. I have a feeling that the reason why the U.S. government hasn’t already initiated such a program is because it certainly would be more expensive in the short run than Yucca Mountain. Currently, that project squeaks by on a relatively thrifty $400 million-a-year budget. Launching a deep-space disposal program would likely cost tens of billions of dollars…

In other words, it’s business as usual on The Hill: Do what’s cheapest now and let future generations deal with the consequences of our stinginess. This makes a kind of twisted Machiavellian sense, really. Why should politicians spend money they could be using to fund things that buy them votes and grab them headlines — things like welfare programs and subsidies for “green” energy boondoggles like ethanol — on something the public isn’t clamoring for, and that likely wouldn’t get them a drop of ink in the press?

After all, votes come from public opinion, which is driven by the mainstream media. And there are two reasons why the heads of most media outlets don’t want America (or the world) to find a real solution to nuclear waste. One, because by all indications, they simply hate and fear nuclear power. Two, because solutions rob them of stories. Think about it: If the nuke-waste problem gets solved, they can report it only once. But if nuclear waste continues to stack up at power plants and other sites nationwide, while Yucca Mountain’s opening date gets farther and farther away, they can milk the story dozens of times, from all kinds of angles…

This is too bad, because I’ll bet if we put our might and main into it, a deep-space waste disposal program could be up and running in just a few years.

The Scum of All Fears

“What about terrorists?” is one thing that’s always mentioned when the talk turns toward nuclear power. A legitimate question…

Per beefed-up Nuclear Regulatory Agency (NRC) security mandates after 9/11, nuclear power plants in the U.S. are now more secure than just about anything besides military bases. They’ve got barriers, cameras, armed guards, the works. It seems highly unlikely that a cell of terrorists could arm and equip themselves sufficiently to take control of one without prior detection of their plans by any number of law enforcement agencies.

A direct attack on a reactor stack or containment pool with an aircraft, however, remains remotely possible — though less likely now that pilots are armed, hand-held weapons are restricted on planes, and the military are on a higher state of alert to scramble intercepting fighters. Nuke plants are built to withstand hurricanes and earthquakes, but not jetliners. Opinions vary as to what exactly would happen should such an attack occur. Industry sources claim that the likelihood of an airplane penetrating the reactor core containment structure is low. NRC studies concur with this assessment…

Bottom line: Though theoretically possible that terrorists could enact a 9/11-type attack against an American nuclear power plant, it would take far more money, planning, skill, and coordination than may be possible today. Conversely, however, it would be relatively simple for terrorists to attack more conventional power-generation facilities — and with perhaps more disastrous results. Case in point:

I went fishing with a cousin of mine just three days ago on a major river in the American mid-Atlantic region, which I won’t name here. On the particular section of river we were fishing, there stands one of the largest non-federally-run hydroelectric dams in the U.S. It’s classified as a “medium height” dam, which means it’s around 100 feet tall.

The only thing preventing boats from reaching the face of this dam is a sign, some warning lights, and a couple of buoys. That’s it. If you wanted to risk the ticket, you could literally motor right up to the face of the dam. Also, a major road traverses the top of this dam, and a huge reservoir lay behind it. Similar to the situation below the dam, nothing except signs and rules are in place to prevent a boat from reaching the backside of the dam…

Now, let’s just say that a terrorist cell here in the U.S. wanted to try to wreak havoc with a major metro area’s energy infrastructure, annihilate numerous riverside towns, and kill a few thousand people or more. They wouldn’t need pilot training, a jumbo jet, guns or more than $50,000 or so to do it. All they’d need is a pair of cheap aluminum 20-foot boats with outboard motors, a rented U-Haul van of the largest size, 15,000 lbs. of ammonium nitrate/diesel-fuel bomb fixins, and three of their own who have a hankering for celestial virgins…

At a prearranged time, both boats, loaded with explosives, could motor to corresponding points at the top rear and bottom front of the dam at its mid-section. The truck-driver then cruises over the dam in his U-Haul bomb, stops on the roadway between the two boats, and ignites the whole deal simultaneously with radio-controlled detonators.

Again, I’m no engineer, but I’m betting three times as much of the same readily available ingredients that Timothy McVeigh and Terry Nichols used to annihilate the Murrah Federal Building in Oklahoma City (along with 168 Americans) would do enough damage to cause that dam to fail. Take a minute to Google a picture of what that building looked like after 5,000 lbs. of fertilizer bomb got through with it and you’ll be as convinced as I am.

My point is this: Even if terrorists could successfully attack a nuclear power plant, there are thousands of other targets that are much more realistically within their scope — and with far greater odds of mass destruction and carnage.

But nobody in the media seems too worried about this, only the one-in-a-million chance of an attack on a nuclear power plant.

A Decent Start: 100 Years of Cleaner Energy

Critics frequently cite the finite world supply of uranium as a reason not to invest in nuke energy. According to March 2007 estimates from the International Atomic Energy Agency (IAEA), the world supply of uranium would last around 200 years at current usage levels. This is not counting the extraction of uranium from seawater — which is technically possible, but not economically practical at the moment (it may be, however, in the future)…

But let’s say that nuke power expands radically around the globe (which is more or less inevitable), and this supply becomes realistically only around 100 years’ worth. That’s still a century of almost CO2-less electricity generation, which any politician can tell you is all the rage nowadays. If a few key governments would put a little effort into making deep-space waste disposal a reality, this could buy the world a lot of time to develop truly sustainable clean energy sources.

Again, I’m not being an advocate here, just calling it like I see it. I realize that there are some big “ifs” in this nuclear power equation. IF we can prevent disasters. IF we can contend with the waste. IF we can keep it secure. IF we can safely decommission aging plants…

One thing’s for certain, though: Some major nations worldwide with spotty records on pollution, the environment and security aren’t going to hold off on nuclear power because of its risks. Take a look at this map:

China, Russia, the Ukraine and Iran are all building plants. I have to think that these nations (and quite a few others) will be less concerned with reactor quality control, the environment and the responsible storage of nuclear waste products than we are here in the U.S. — or in France or Japan…

This means that America can either sit back and wait for other nations’ nuclear problems to pollute the world while we’re busy trying to figure out cleaner ways to burn coal — or we can be proactive in developing solutions to the problems that face nuke power, along with other nations that seem to know what they’re doing around an atom. That way, we can help indirectly ensure that the inevitable expansion of nuclear power doesn’t contaminate us all.

Either that, or we could go to war with nations we don’t think are going to handle nuke power properly. We could strike a pre-emptive blow for Mother Earth, as long as we don’t use nuclear weapons, of course.

Needless to say, I suggest this “option” only to be wry — though I wouldn’t put it past the militant fringe of the environmental movement to advocate it. After all, going to war for the Earth is the eco-terrorists’ MO…

No, as I see it, the most conscientious course for the planet is, once again, one in which the United States invests, innovates and leads by example.

Whether the “talking heads” and pundits like it or not.

Rebuking, not nuking,

Jim Amrhein
Freedoms Editor
April 17, 2008

Nuclear Reactions, Part 3 was originally featured on Whiskey and Gunpowder

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

With no new reactors having come online since 1996 and with the rapid collapse of new construction in the 1980s, a nuclear revival would indeed represent a return from the dead for the troubled industry. Like a cat with nine lives (and endless government subsidies), the nuclear industry is being marketed worldwide by 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.

The bottom line question: If once burned, should the utilities and the public buy a new round of power plants from nuclear salesmen? The best way to evaluate this is to rely on the sound business principle that places high value on accurate projections and past performance. The commercial nuclear industry has been around for half a century, so the prudent approach would be to look at the industry’s track record.

When we do, we find a string of broken promises, product failures, massive subterranean leaks of liquid nuclear waste, cost overruns, overly optimistic projections, stranded debts, bankruptcies, bond defaults and a mountain of toxic waste that grows daily and cannot be removed for safe disposal. This dismal track record includes a series of catastrophic accidents and near-accidents, the most memorable of which are the 1979 near-meltdown at Three Mile Island and the 1986 Chernobyl disaster.

When President Nixon declared Project Energy Independence in 1973 during the first Arab oil boycotts, he promised an ambitious nuclear power program that would lead to 1,000 reactors deployed across the nation by the end of the 20th century. Only 104 commercial reactors are in operation within the U.S. today. Of these, 48 have already been granted license extensions that are typically for 20 years beyond their original “useful life” cycle, and utilities have already filed or plan to request extensions for another 33 plants.

In 1954, Lewis L. Strauss, chairman of the U.S. Atomic Energy Commission (now the Nuclear Regulatory Commission), issued the now infamous prediction that nuclear power would provide “electricity too cheap to meter.” In reality, nuclear power has turned out to be the most expensive form of electricity ever foisted off on the American public.

The Nuclear Regulatory Commission claimed that the plants were safe, and the risk of a catastrophic accident was too slim to calculate. Yet as early as 1970, the Three Mile Island reactor safety systems failed, and the plant came within 30 minutes of a meltdown, leading to an evacuation of the area around the plant.

In 1986, multiple explosions at the Chernobyl reactor in the former Soviet Union blew off the reactor containment lid, spewing more than half of the radioactive materials thousands of feet into the air, so that the radioactive isotopes circled the Northern Hemisphere. The area around Chernobyl has been declared a “dead zone,” and radioactive vegetables are still showing up in the Ukrainian markets today. While the death toll can be disputed, it has been estimated as high as 60,000 and still growing.

The government promised that there would be a long-term solution for the storage of high-level radioactive waste, primarily from spent fuel rods. As of November 2006, the Department of Energy’s proposed long-term waste depository at Yucca Mountain, Nevada, is mired in scientific controversy, legal challenges and a growing admission by all concerned that it won’t prove large enough to contain the waste being created by existing reactors — let alone deal with the radioactive waste from new ones.

Based on this dismal performance, nuclear power remains a flawed technology plagued by faulty economics. From a business perspective, we must advice, caveat emptor! Buyer beware! This time the burden of proof must be placed squarely on the shoulders of the industry and its advocates. Before the utilities and the public rush to join the nuclear revival, they should critically examine past performance and demand experimental proof for claims that this generation of nuclear plants will be economically viable, climate-friendly and accident-proof.

The industry should also be required to publicly calculate the cost per kilowatt-hour of electricity from a new nuclear plant, including all subsidies; the full cost of all waste disposal for a 10,000-year period, with such waste required to be kept out of the biosphere; and the full cost of “entombing” or decommissioning the reactor. Should such a calculation be made, it would reveal the true cost of nuclear energy as many times more expensive than existing, commercially available renewable sources.

Regards,
Jerry B. Brown, Ph.D.
Rinaldo S. Brutoco, J.D.
James A. Cusumano, Ph.D.

The Truth About Nuclear Power was originally featured on Whiskey and Gunpowder

It could be a bumpy ride, though. I’ll tell you about forces that should drive uranium higher, as well as a few that could drive it lower in the short term.

2007 Could Bring an M&A Feeding Frenzy in the Uranium Mining Industry

Two weeks ago, I attended the 2007 Vancouver Resource Investment Conference. The size of the conference blew my mind! There were way more exhibitors than last year, and the hall was jampacked with investors looking for Canada’s natural resource bargains.

They were finding them, too — in gold, silver, lead, zinc, nickel, diamonds and many other things. And my favorite metal, uranium, is so hot that the exhibitors set up a special “Uranium Alley” so investors could find these companies more easily.

As I talked to miners at the conference, a couple of things became clear:

Staff is at a premium. Rockhounds love what they do, but even they can’t do it forever. And when the price of uranium cratered in the 1980s, staffs were decimated. About 20,000 engineers and geologists worked in the uranium sector in American companies during the last uranium boom. That number is about 400 now, too many of whom are close to retirement age. So if you can find a company with a fairly “deep bench” of uranium mining experts on its payroll, those guys are worth their weight in gold.

One solution to the staffing shortage: mergers. If two companies each with three expert rockhounds merge, that company now has six experienced prospectors to work on the best of its projects.

Speaking of projects…

Patchwork quilt of claims lays groundwork for merger mania. Look at a map of any uranium-prospective territory and you’ll see a patchwork quilt of claims. Heck, I could practically see some deals coming to mind across the exhibitor booths, as CEOs of various companies finally got a chance to get together.

I imagine the conversations started something like this: “Hey, you have two working projects in the Athabasca Basin, and I’ve only got one claim there and no time to work it. Meanwhile, you’ve got a stray property near my project in Wyoming. Let’s make a deal!”

These two factors should pump up M&A activity in an industry that is already riding a growing flow of investor cash. I even got the feeling at the conference that if I changed my name to Sean Uranium Inc., suddenly I’d find myself raising a ton of cash pretty quickly.

Well, that’s half in jest. But I’m dead serious about the forces driving uranium, though — forces that are approaching critical mass…

Why I’m Convinced the Second Wave of Uranium’s Bull Market Is About to Begin!

I call uranium the “white-hot metal,” and not only because it glows in the dark. During the course of 2006, the uranium spot market price continually climbed by 99%, from $36.25 to $72 per pound of U3O8. At $75 per pound, the price is now more than 10 times its record low of $7 per pound that it hit in 2000.

The first big move in uranium is over — the next one is about to begin. And if uranium prices DOUBLE from here — which I think could easily happen — some of these small-cap wonders I’m looking at could go to the moon.

I believe we’re poised to enter the “Second Wave” of uranium’s big bull market…probably the biggest bull market the world has ever seen.

Despite the big bull rally in uranium over the past couple years, on a historical basis, it’s still dirt-cheap! Uranium hasn’t come anywhere near its old peak in inflation-adjusted terms. In 1978, uranium topped out at $43.40 per pound — but adjusted for inflation, that’s around $145 per pound in today’s dollars. It’s now trading at $75 per pound. That means uranium could nearly DOUBLE and still not surpass its old inflation-adjusted highs.

That’s why I think we’re looking at $100 uranium by the end of this year — a 39% move from recent levels. Pretty sweet — and even then, uranium will still have plenty of room to run! How high? Let me show you…

Forces That Could Drive Uranium to $100 per Pound…and Beyond

Force #1: The Supply/Demand Gap

Consider these facts…

1. About 16% of the world’s electricity came from 440 nuclear reactors last year, according to the World Nuclear Association. Currently, there are 28 reactors under construction around the world and another 62 being planned:

2. An additional 100 plants will be built in the next 10 years, with 40 of them in Asia.

3. Bottom line: By 2050, scientists estimate the world will need about 900 more nuclear power plants to keep up with growing energy requirements.

As a result, the undeniable reality is that demand for uranium is outstripping supply. In 2005…

• Supply from mines was 102.5 million pounds
• Demand was 171 million pounds
• The gap was 68.5 million pounds.

Totals for 2006 aren’t in yet, but demand probably topped 180 million pounds. And as new nuclear power plants come online, that demand will grow. A typical 1-gigawatt nuclear reactor requires around 200 metric tonnes of natural uranium per year. During startup, a new nuclear plant can use TRIPLE its normal requirements.

The fact is production from world uranium mines now supplies only 62% of the requirements of power utilities. The rest is made up from rapidly dwindling stockpiles, mainly old Russian nuclear warheads that are converted to material for power plants. That agreement expires in 2013, and won’t likely be renewed, since the Russians have a very ambitious nuclear program of their own.

Moreover, here in the U.S., utility consumption of uranium outpaces U.S. uranium production by more than 20-to-1.

Force #2: Crisis at Cigar Lake

Uranium prices were already climbing steadily when the nuclear power industry was rocked in October by disastrous news out of Cameco’s Cigar Lake Mine.

Cameco planned to bring Cigar Lake online in 2008, with 7 million pounds of uranium in the first year and full-scale production of 18 million pounds annually thereafter. Keep in mind, 18 million pounds is more than a tenth of last year’s total global demand of 171 million pounds. That’s like the global oil market losing Saudi Arabia’s production!

In 2008, uranium demand was already expected to exceed supply by 25 million pounds. With Cigar Lake seriously delayed, that gap will be 32 million pounds. Put another way — the shortfall in uranium is going to soar by 30% just in 2008.

Sure, Cigar Lake will be brought into production eventually. But meanwhile, demand keeps building up. Uranium consumers around the world can see this squeeze coming, so the race is on. That explains why spot uranium prices basically doubled in the course of a year, and the stocks of near-term uranium producers vaulted higher.

Cigar Lake could be a force driving uranium prices this year both UP and down. I’ll tell you more about that in just a bit.

Force #3: China, the Uranium-Devouring Monster

China deserves mention as a force all its own. How hungry is China for uranium? The Chinese are hot-footing it through the Australian outback with bags of cash, investing in the best small companies sitting on large quantities of uranium. And no wonder! China plans to import 2,500 metric tonnes of Australian uranium per year by 2020, as it builds 24-30 new atomic power plants.

The really bullish news is that China’s total expected annual uranium demand is three times as much — 7,500 metric tonnes. And it will use every pound of it, as China plans to construct two new 1,000-megawatt nuclear reactors every year, including two coming online this year.

Force #4: Global Warming Trumps Everything

Fact: The 11 hottest global temperature years (since records began in 1861) have been since 1990.

The ice caps are melting at an alarming pace. And whether it’s hurricanes in the Atlantic or typhoons in the Pacific, storms are whipping up with an intense fury. Unless your name is “ExxonMobil,” there is very little argument about why this is happening. A normal global warming cycle is being worsened by man-made pollution — greenhouse gasses that trap heat.

And though people rant and rave about gas-sucking SUVs, the biggest source of greenhouse gasses (apart from methane-farting cows and other livestock) is coal-fired power plants. People point to the fact that China is building a new coal-fired plant every week and shake their heads. Well, here in the U.S., we have about 150 new coal plants planned or already being built. Many of these are using “old-coal” technology for cost savings.

It’s almost as if China and the U.S. are engaged in some kind of suicide pact. And I doubt it’s going to have a happy Hollywood ending.

There is hope, though. Awareness of the crisis of global warming is becoming so acute that major corporations are joining forces with environmental groups in an unprecedented alliance to push for quicker action on global warming. The alliance of greens and Corporate America is called the U.S. Climate Action Partnership, and we’re talking some really BIG names here: Alcoa, BP America, DuPont, General Electric, FP&L Group, and more. One of the solutions to global warming is nuclear power.

Here’s why: An operating nuclear power plant produces zero greenhouse gases. Compare that with your average coal plant, which can spew 3.7 million tons of carbon dioxide (a greenhouse gas) into the air every year, along with hundreds of tons of heavy metal-laden ash.

I expect public awareness on this issue to grow over the next few years and the public to start demanding utilities make the switch. This boosts nuclear power in two ways — increasing demand for uranium at power plants and lifting bans and overregulation on mining.

Force #5: Peak Oil and Peak Natural Gas .

In 2006, global oil demand grew 0.9%, thanks to steady growth in China and the Middle East. The world used 84.5 million barrels of oil per day last year, according to the International Energy Agency. That’s nearly 31 billion barrels, and the most oil used in a year…EVER. What’s more, world demand is forecast to rise 1.6% this year to 85.77 million barrels a day.

Worldwide oil and gas reserves are becoming depleted at an ever increasing rate, with many analysts convinced that we are fast approaching Peak Oil and Peak Natural Gas.

In fact, the former Soviet Republic Belarus, which was hardest hit by the Chernobyl nuclear accident, is pulling out all the stops to accelerate its nuclear energy program. Reason: President Alexander Lukashenko is desperate for an alternative to Russian natural gas that is fast rising in price.

If Belarus is embracing nukes, I believe even the most die-hard holdouts won’t be far behind.

Force #6: Nuclear power looks cheaper all the time.

Standard & Poor’s recently published a study showing that the next wave of nuclear power plants should be able to produce electricity at $55 per megawatt hour, versus the average rate of $50 per megawatt hour at a coal plant.

Even the $55 figure may prove conservative, because the second wave of nuclear plants could benefit from standardization. All told, the cost of a megawatt hour could potentially drop to about $44!

That’s right: Nuclear power could end up being cheaper than coal, and without the tons of greenhouse gases and poisonous ashes that coal plants spew into the atmosphere.

Force #7: The Feeding Frenzy Could Get Even MORE Intense Next Year

Most uranium is sold under long-term contracts. But the utilities that contracted for uranium in the future are finding they’re coming up short, and for good reason: When a nuclear reactor is first fired up, it can use TRIPLE its normal amount of uranium oxide.

While the price of uranium is rising, suppliers can still scrape together enough to meet demand. But come 2008, we may reach a tipping point. A lot of uranium users don’t seem to have enough contracts to cover their needs. And many of the contracts they do have are ending — which means suppliers can negotiate at MUCH higher prices.

So if you think uranium prices have been on a tear so far, just wait…2008 could be an even more intense feeding frenzy.

And when you come down to it, we should see prices move well in advance of that. That, in turn, should take the stocks of small, well-managed companies sitting on big resources and potentially send them ballistic!

Can Uranium Prices Come Down Temporarily? Heck, Yeah!

In fact, I’m hoping we get a pullback. That would be a golden buying opportunity.

Here are a few factors that could drive uranium lower in the short-term…

1. Russian imports. Right now, Russia has two choices. It can sell uranium to the U.S. market through the United States Enrichment Corp. (USEC) or it can pay a 116% tariff. But Russian-owned Techsnabexport is working on a new civilian nuclear power deal between Russia and the U.S. You can bet that U.S. utilities, desperate for lower-cost uranium, are pushing hard for this deal, which could come as soon as the first quarter of 2007.

2. Cigar Lake update. Last week, Cameco announced it expects to seal off water flow to its Cigar Lake uranium mine by the second quarter. But it has delayed preliminary cost estimates and timelines, which were supposed to come out in February, until late March.

Does that sound to you like Cameco’s going to get that mine back online anytime soon? It sure doesn’t sound like it to me.

So Cameco is STILL having trouble stopping water from flooding the mine. One engineer I spoke to in Vancouver joked that so much water is pouring in, Cameco should stop trying to mine uranium at Cigar Lake and turn it into a hydroelectric project.

Nonetheless, it would be surprising if the March report isn’t upbeat. Corporations have a way of putting even the worst news in the best light…and maybe Cameco will surprise everybody by reporting actual good news.

On the other hand, if Cameco pushes its timeline for Cigar Lake back by years, uranium could lift off the launch pad.

3. Overspeculation. I like speculation as much as the next guy, but according to a recent update from TradeTech’s Nuclear Market Review, “Speculators are holding about 24 million pounds of U3O8 equivalent.” That is about 22% of global uranium production in 2005.

So if Cameco announces good news on Cigar Lake, or if Russia’s Techsnabexport hammers out a trade deal, speculators could decide to sell, temporarily exaggerating any short-term decline. The Uranium Participation Corp. is holding a bunch of uranium with the intention of selling to utilities at a higher price at a later date. If prices start to go down, the fund could decide to start unloading.

SUMMARY: I expect a pullback in uranium prices this year, but it will be a short-term correction in a big bull market. What I recommend is you put HALF your money to work NOW, then put the rest to work if and when we get a sizeable pullback.

If uranium doesn’t pull back, at least you’re in the game. If uranium does pull back, you’ll average in for a better price.

Good luck, and good trades.
Sean Brodrick

February 7, 2007

7 Forces That Will Drive Uranium to $100 Per Pound in 2007 was originally featured on Whiskey and Gunpowder