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[TTHQ Staff]

BEING STREET SMART
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Sy Harding

IS IT TIME TO RECONSIDER NUCLEAR ENERGY? September 17, 2004 .
Once upon a time the world recognized there is a finite amount of crude oil and coal in the earth, and that long before they become totally depleted they will become increasingly scarce, demand will outpace the dwindling supply, and prices will soar. So the U.S. began leading the world to less dependence on fossil fuels, building on its successful experience with nuclear power in submarines. The first nuclear-powered submarine, the USS Nautilus, put to sea almost fifty years ago, in 1955. By 1962 the U.S. Navy had 26 nuclear subs and 30 more under construction. By 1989 there were more than 400 nuclear-powered subs worldwide, the largest fleet being that of Russia . The U.S. added 11 nuclear-powered aircraft carriers, and 9 cruisers. On the home front, utility companies were provided incentives to switch their polluting oil and coal-fired electric plants to nuclear power, and soon there were dozens in operation, and dozens more under construction.

But that road toward energy that would be independent of foreign oil encountered a bump along the way that unexpectedly became a complete road block - at least in the U.S.

On March 29, 1979 , reactor #2 at the Three Mile Island nuclear power plant in Pennsylvania suffered a partial meltdown. Fueled by panic and fed in part by questionable information (including not a little from lobbyists for the powerful oil companies), demonstrations and class action lawsuits succeeded in halting all plans for new nuclear plants in the U.S., and created years of costly delays for those already under construction.

The Seabrook plant in New Hampshire is a classic example. Its completion was delayed for years, at a cost of several extra $billions, with several of the original power companies that joined together to fund the construction brought to the brink of bankruptcy. The plant did eventually come on line in 1990. But no utility has given a thought to trying to build another. Meanwhile annual emissions from fossil fuel-fired power plants in NH are estimated to be 44 tons of sulfur dioxide, 8 tons of nitrogen oxide, and 4,986 tons of carbon dioxide.

Were the fears created 25 years ago by Three-Mile Island justified, or was it another case of having nothing to fear but fear itself?

It's been 50 years since the US nuclear fleet was launched, and the US Navy has now accumulated over 5,500 nuclear reactor years of accident-free experience.

There are 103 nuclear power plants operating in the U.S. The first privately financed nuclear plant came online 45 years ago. Three Mile Island was the only nuclear accident in that entire period. Not one death has been attributed to the partial meltdown at TMI. People living around TMI filed 2,000 law suits, claiming a variety of health injuries would show up in the future from possible exposure to radiation. In 1996 all cases were dismissed, with the court saying, "The parties have had nearly two decades to muster evidence in support of their cases."

There are now 437 nuclear power plants world-wide. To quote the World Nuclear Association, "The nuclear industry has an excellent safety record, with over 11,000 reactor years of operation spanning four decades."

But there was the meltdown at the Chernobyl nuclear plant in Russia , the worst nuclear accident ever. Nuclear supporters claim it was an aberration that had been predicted due to the reactor's obsolete design and lack of maintenance. But it was a nuclear accident, and it claimed 40 lives, with estimates that up to 2,000 Russians may eventually have their lives shortened by long-term effects.

Nuclear power supporters respond by asking how many more thousands of people have died from accidents over the last 50 years in coal mining and oil field accidents and fires, to say nothing of wars fought over oil resources? They ask that we compare the 45-year safety record of nuclear power plants to the risks presented by other industries, citing the 1984 explosion at the Union Carbide cyanide plant in India that killed 8,000 and injured 500,000. Or the risk presented by the tons of poison gases, and other weapons of mass destruction, including thousands of nuclear weapons, stored by the U.S. military in multiple locations around the country.

Meanwhile, if the future belongs to nuclear energy as the U.S. once thought, the rest of the world is eating our lunch. There are currently 30 new nuclear plants under construction around the world, including 4 in China, 9 in India, 3 in Japan, and 6 in Russia, countries which like the U.S., are most dependent on foreign oil for their growing economies. Another 32 are in the planning stage. By comparison there is only one nuclear plant currently under construction in the U.S. , and none in the planning stage.

What are the chances of nuclear power returning to favor in the US ? Industry leaders say that after TMI nuclear plants were made impossibly expensive to build in the face of so much concerted opposition, and that the US population is still not ready to embrace nuclear power - but may be in another five or six years.

If not we'll just have to hope that the present emphasis on windmills and battery operated cars will solve the problem.




Sy Harding is president of Asset Management Research Corp., publisher of The Street Smart Report Online at www.streetsmartreport.com and author of 1999's Riding The Bear - How To Prosper In the Coming Bear Market, which warned in 1999 of the approaching bear market (and that it would be the most severe since 1929), just 9 months before the Dow topped out on January 14, 2000.

Since 1990, Harding has been frequently ranked in Timer Digest's Top-Ten Market-Timers for the stock market, gold, and bonds.