A Nuclear Energy Future for the U.S.?

Brian Hicks

Written By Brian Hicks

Posted May 20, 2013

Nuclear power could be top priority with a new U.S. Energy Secretary.

In a nomination bid that could give a helping hand to the nuclear power sector, the Senate confirmed Ernest Moniz as the new head of the Department of Energy in a bipartisan 97 to 0 vote.

Moniz is a nuclear physicist and teacher at the Massachusetts Institute of Technology. During his tenure at MIT, he also served as director of the Energy Initiative and was a former member of the Blue Ribbon Commission on America’s Nuclear Future.

nuclear plantHe also has experience in government, having served as DOE undersecretary.

Moniz believes in a balanced approach when it comes to American energy. He has been met with opposition from environmental groups for his support of natural gas, which they believe contributes to CO2 emissions and encourages the use of fracking.

The new appointee also believes nuclear power is the main source of providing clean energy to the public while reducing carbon emissions.

In an article he penned for The Atlantic, Moniz called for “advanced passive safety systems” and “smaller module reactors (SMRs)” as a way of maximizing efficiency and cutting unnecessary costs.

Moniz also acknowledged current budget constraints of the federal government, which is why he believes SMRs would be the best way of introducing widespread usage of nuclear power for a cheaper cost.

Above all, he promotes research and development as the most important step in providing cleaner energy for the future.

American Nuclear

Nuclear power makes up 20 percent of U.S. energy consumption.

According to the U.S. Energy Information Administration, there are 65 active nuclear plants in the United States across 31 states – all containing 104 reactors. Thirty-six of these plants have two or more reactors online.

Ernest Moniz stands a very good chance of making nuclear power a larger energy producer in the United States, and his views coincide with the Obama Administration’s efforts to use a clean energy source that produces fewer emissions.

Aside from renewable energy, nuclear is the only form of energy that emits zero pollutants in the forms of CO2, nitrogen oxide, and sulfur dioxide.

And there is the cost factor.

After startup costs and other capital expenditures, nuclear power is cheaper than coal or gas-powered plants. Uranium is also an energy source that can be used less than coal or natural gas while still yielding effective output, on par with other energy sources.

Most of the cost for uranium lies in enriching and processing.

Operation, maintenance, and fuel costs are low when compared to fossil fuel energy.

The good news for Moniz and his nuclear agenda is that the United States has not been as overly cautious as Europe in response to the Fukushima tragedy in Japan.

According to a Gallup poll conducted one year after the nuclear catastrophe in Japan, 57 percent of Americans believed nuclear power was safe, with 40 percent believing it unsafe.

But even though Americans are generally in favor of nuclear power, there is still a not-in-my-back-yard mentality, especially in regards to nuclear waste.

A current nuclear waste bill circulating in the Senate would create the Nuclear Waste Administration – a federal agency that could come in handy if Moniz and President Obama plan to spend more investment and political capital on nuclear.

Information from the Nuclear Regulatory Commission cites only one early site application under review for a new power plant facility. An early site application is approval for location alone, and a separate combined license application, or COL permit, is necessary for the actual construction of reactors.

Exelon Corporation (NYSE: EXC), System Energy Resources Inc., Dominion Resources Inc. (NYSE: D), and Southern Company (NYSE: SO) were all granted early site permits around the country through various subsidiaries.

As of April this year, 18 COL applications have been submitted to the NRC – 10 under review, 6 suspended, and 2 approved.

Southern Company received permission last year to construct two new nuclear reactors on the Vogtle power plant near Atlanta, the first approval since 1978.

There is no guarantee that Moniz will push current applications through the approval process, but his favorable stance toward nuclear power will create an atmosphere of receptiveness and innovation within the nuclear the field.

Since he has a direct line to the president’s ear, his suggestions and measures could be invaluable.

Companies Going Nuclear

What are the companies that will benefit if nuclear goals are expanded?

Since federal law forbids foreign ownership of nuclear reactors, American-based companies will have the best chance of flourishing under a DOE that is friendlier to nuclear energy.

Dominion Resources has two nuclear plants in Virginia, one in Wisconsin, and another in Connecticut.

Since Moniz is also a supporter of natural gas, his position could be more helpful to oil and gas companies waiting for approval from the DOE regarding natural gas and liquefied natural gas export facilities.

And Dominion may also benefit from this, since the company deals quite extensively in natural gas. Dominion has been looking to add an LNG export terminal to its existing Cove Point export facility in Maryland.

GE (NYSE: GE) provides advanced nuclear reactors with Hitachi under GE Hitachi Nuclear Energy, based in North Carolina. There are many GE reactors around the country.

The multinational company has taken heat in the last few years since it was GE-made reactors that faltered at Fukushima, but the American company may have a chance to salvage its nuclear credibility if overhauls are on the political agenda

And so far there have been no problems with GE reactors in the states.

Uranium mining companies may also find themselves in a good position if there is to be a revamping of nuclear energy policy.

On the West Coast, uranium mining is a rich industry.

Uranium One (TSX: UUU) has operations in Wyoming. Uranium Energy Corp. (NYSE: UEC) engages in the field of exploration and development, with a processing plant in Texas. The company also has mining activities Wyoming, Utah, New Mexico and Arizona.

From an investment angle, there are two fronts pertaining to future growth of nuclear power – the West Coast for uranium extraction and the East Coast for reactor construction and other nuclear aspirations.

The nuclear waste industry will be another key area of growth within the nuclear sector.

The government has made no real effort to reprocess nuclear waste in the wake of Fukushima, and there are concerns that recycled waste could wander into the wrong hands. Mixed oxide (MOX) is made from reprocessing – a combination of uranium and plutonium.

It can be a valuable fuel source, but it is also used in nuclear warheads.

In the wake of government concerns, it appears disposal will be the number one avenue.

With the government unable to substantially solve the nuclear waste issue thus far, many are saying the best way to deal with the problem is to leave it up to the private sector.

If there is more nuclear investment, there is a goldmine waiting for companies that can find meaningful solutions on how to get rid of excess nuclear waste.

Nuclear investors have plenty of fields to choose from, and all of these industries stand an equal chance of gaining higher ground.


If you liked this article, you may also enjoy:

Angel Publishing Investor Club Discord - Chat Now

Brian Hicks Premium


Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.