Thorium Investing Update
America's Nuclear Crisis is Real
The U.S. nuclear industry has a really bad PR problem.
Although significant nuclear power growth is anticipated across the globe over the next few decades, the U.S. is unlikely to add much in the way of nuclear.
There are a couple of reasons for this...
The first, and most obvious, is the dirt-cheap price of natural gas. Even with massive subsidies, nuclear simply cannot compete with natural gas.
The second reason is image. Although the United States has been spared the aftermath of catastrophic nuclear meltdowns, images of Chernobyl and Fukushima haven't gone gently into that good night. What's worse, since the Fukushima disaster, the domestic nuclear industry has been under a media microscope. These days, it doesn't take much to reinforce nuclear's negative image.
No Imminent Threat to Public Health
A couple of weeks ago, it was discovered that six underground nuclear waste tanks in Washington State had been leaking.
A spokeswoman said there was no imminent threat to public health, but also admitted concern, as they didn't have any information about the actual extent of the leak or how long it's been going on.
How anyone can assume the absence of an imminent threat without knowing the extent of the leak or how long it's been going on is beyond me. But that's how press releases work. And if you don't read between the lines, you may miss something important.
In any event, the leaking tanks certainly dealt another blow to nuclear's PR problem. And quite frankly, unless the U.S. nuclear industry figures out a way to integrate safer, more advanced technologies, I don't see much hope for it beyond the life of those reactors currently in operation today.
Certainly other countries aren't sleeping on safety issues...
In fact, as I mentioned earlier this year, China, India, Japan, and Norway are all actively working on advancing a new generation of thorium reactors with the hope of ushering in an era of safer, more efficient nuclear power production.
The question is, will they pull it off?
A Thorium Solution?
Although thorium advocates claim thorium reacts much more efficiently than uranium — while producing waste with a shorter lifespan and a much higher melting point (making it meltdown-proof, in theory) — there are still some who believe the advantages of uranium are overstated.
Both the Union of Concerned Scientists and the Department of Energy have stated thorium isn't as safe and efficient as claimed. But make no mistake; advanced research into thorium continues to develop rapidly...
Just last month, a researcher at the University of Oslo discovered a technique that allows for a 95% reduction of radioactive waste by mixing weapon-grade uranium with thorium. According to Doctoral Research Fellow Sunniva Rose, if we were to mix the uranium from nuclear weapons with thorium, we could use more of the energy and produce much less hazardous waste.
She notes the solution is to recycle the uranium repeatedly from nuclear waste, saying: “Each round of recycling makes the uranium a bit poorer, but it is nevertheless possible to extract more energy by recycling the waste seven or eight times.”
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Of course, without recycling, the thorium method isn't particularly valuable — and probably won't be until the price of crude uranium increases substantially.
And quite frankly, by then the cost advantage on renewables and energy storage bolstered by inexpensive natural gas will likely be so low, I'm not sure this kind of thing will be of much interest for power producers in the U.S.
Still, those who continue to actively advance thorium technology seem to be getting closer and closer to getting thorium reactors online. And certainly, we'll continue to monitor that progress.
In the meantime, in the world of power production, we remain very bullish on natural gas infrastructure stocks and new, advanced renewable energy technologies.
And for those who remain loyal to the nuclear bulls, your best bet would be to focus on nuclear developments outside of the U.S. — particularly in China, India, South Korea ,and Russia, where there is an enormous amount of nuclear power currently in planning and construction phases. These four countries alone are expected to provide 44% of nuclear power's growth over the next 20 years.
But here in the United States, it's still all about oil and gas, plain and simple... and finding the best domestic oil & gas producers that'll give you the most bang for your buck.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor''s page.