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MARSHALL LOEB
The coming rebound of nuclear power
Commentary: A generation later, it's worth another look
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy Marshall Loeb, MarketWatch
Last Update: 7:00 AM ET Aug 19, 2006


NEW YORK (MarketWatch) - As more and more heat waves, hurricanes and other natural catastrophes batter the world, the mood among people just about everywhere is turning increasingly green.
The feeling is strong that global warming is not a phony fear but a real, rapidly growing and dangerous force. Moreover, the only way to stop it -- or merely slow it -- is to reduce the carbon dioxide emisions produced by the burning of fossil fuels that power industrial plants as well as planes, trains and automobiles.
And the surest way to accomplish that is to depend more on nuclear power instead of oil, gas and coal. Consequently, the nuclear industry is beginning to show signs of revival if not renaissance.
It's about time.
For a quarter century, nukes in the United States have been dormant.
Though 103 reactors now produce 20 percent of the nation's electricity, no new nuclear plant has won Nuclear Regulatory Commission approval to begin operating since 1978. This is a result of widespread fears among the public after the near meltdown at Three Mile Island, Pennsylvania, in 1979 and the meltdown at Chernobyl, Ukraine, in 1986.
But many other nations have surmounted those apprehensions. Nukes generate fully 78 percent of France's power and about 33 percent of Japan's.
Finally, the U.S. may be beginning to catch up. Not only have the safety records abroad been impressive, but the stiff rise in oil and natural gas prices has been daunting, and the political, military and terrorist threats posed by some foreign producers (Iran, Venezuela, etc.) have been fearsome.
Then there is the happy fact that nuclear power is far cleaner than fossil fuels, notably coal, which produces 52 percent of the nation's electric power and poses no problems of global warming in an environmentally sensitive world.
According to C. Randy Hutchinson, senior vice president of Entergy Nuclear in Jackson, Miss., many utilities have declared that they are filing applications with the NRC to construct and operate 15 to 20 reactors. Among them: Entergy Nuclear, Southern Company, Duke Energy, Progress Energy, Dominion, South Carolina Electric Gas and Electric, Constellation Energy, among others.
Each will cost close to $2 billion or so.
Expect construction of the first plants to begin about 2009-2010. But don't expect them to begin producing juice any time soon. The complex process of designing, winning regulatory permissions and building a plant devours at least a dozen years. At best, the first of the new nukes will start coming on line in about 2015.
But even before that, large numbers of people stand to benefit. Among them are producers of many sophisticated goods (steam generators, turbines, pumps, specialty steel and alloys), skilled craftsmen and professionals (pipefitters, welders, engineers, architects), uranium miners, and, of course, shareholders in companies that make and build the plants.
Alas, there aren't many of the last mentioned in the U.S. Only General Electric remains. And its nuclear business -- designing and building reactors and providing services and nuclear fuel -- is about $1 billion a year. Westinghouse, long the other major U.S. manufacturer, sold out in 1999 to British Nuclear Fuels Ltd., which in turn sold the business early this year to Japan's Toshiba.
However, many of the new nuclear plants are planned to be in the U.S. South, and railways, trucking and barge lines in the region are likely to benefit from a broad pickup in traffic.
Says Richard Myers, executive director of the Nuclear Energy Institute, a trade group: "All roads now lead to nuclear power. It's not the total solution to our energy challenges, but it is part of the solution."
The numbers are so big that being only part of the solution could be dramatically profitable.
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Reporter Ismat Sarah Mangla contributed to this article.
Marshall Loeb, former editor of Fortune, Money, and The Columbia Journalism Review, writes "Your Dollars" exclusively for MarketWatch.

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