Imagine you invented a machine that
revolutionized travel. You know your invention could cut local and long distance
travel time substantially and vastly improve the ability for business to
deliver freight efficiently. The invention would add trillions to global GDP.
If released, your invention would no doubt be universally used and admired.
However, based on the initial safety assessments, analysts predict that if
used widely your invention would cause the deaths of 300,000 Americans per
year and countless more around the globe. Would you still release it?
If not, imagine a world without cars.
It turns out that car accidents are among the
leading causes of death in the US, and yet few of us would give up the
luxury, convenience, and autonomy of owning an automobile. We've decided the
benefits are worth the risk.
Now, the bigger question: why isn't this same measure
used when judging nuclear energy?
A partial meltdown at Japan's Fukushima Dai-ichi plant as a result of the largest recorded earthquake
to hit Japan has set off a renewed bout of nuclear hysteria. Uranium stocks
are selling off, foreign ports are being closed to Japanese goods, and iodine
tablets are selling out along the West Coast. Germany took abrupt action
after the first Fukushima leaks were reported, with Chancellor Angela Merkel
ordering the immediate shutdown of all nuclear plants built before 1980 and a
moratorium on new plant construction.
While it is true many people in the immediate
vicinity of Fukushima face radiation sickness or even death, especially those
brave workers staying behind to stop the leaks, it is important for investors
to rise above this global panic. First off it is important to keep in mind
how unusual and horrific the events in Japan actually were. The aging
Fukushima plant was exposed to the twin disasters of a 9.0 magnitude
earthquake and a once in a century tsunami. Although there are very few
places in the world where such a scenario is even possible, alarmists are
applying the concern globally, even to plants thousands of miles from an
ocean or a seismic fault line.
It is also important to recall that even with the
latest disaster there have only been three or four nuclear events worth
mentioning in the 60-odd year history of commercial nuclear energy. Although
there may very well be deaths associated with the Japanese meltdown in the
months and years to come, the only reactor incident to cause civilian deaths
to date was Chernobyl, a poorly run facility in the bankrupt late-Soviet
Union (amazingly built with no containment vessel). Three Mile Island, the
only other major incident before Fukushima, exposed surrounding residents to
radiation equivalent to a chest X-ray and wasn't shown to even increase their
risk of cancer.
In comparison, other forms of energy
generation have led to significant deaths and environmental risks. The
burning of fossil fuels pumps greenhouse gasses into the atmosphere. Coal
mines collapse, trapping and killing miners. Oil tankers and offshore
derricks spill petroleum into the ocean. But these risks are more tolerated
than nuclear concerns. The difference lies in the fear of radiation.
Perhaps due to its invisibility, or its
mysterious and often long-delayed effects, or perhaps as a relic of Cold War
propaganda, the threat of radiation exposure provokes an irrational,
emotional response. As a result, nuclear power is often held guilty until
proven innocent.
But radiation is not nearly as pernicious or
outright dangerous as the media leads us to believe. In the US, by EPA
regulations, nuclear plants are expected to annually release radiation
less than what any passenger receives on one flight from LA to New York (a
route I travel quite often). Living in a brick or concrete building for a
year will give you twice the dose of that flight. A chest X-ray will give you
over 80 times the dose of your brick-walled apartment. A nuclear plant worker
is allowed 10 times the dose from a medical X-ray scan per year. Still, the
worker would have to receive double his maximum yearly dose to have a
measurable increase in cancer risk - and 4 times that dose in a day to
show any signs of radiation sickness.
The risk is truly minuscule, especially when
we consider the alternatives. As much as President Obama likes to talk about
"renewable energy" and "green initiatives," the reality
is that there is no clean source that can provide energy nearly as inexpensively
as our current sources. This means that a switch to entirely
"green" sources, including wind, solar, and hydro, would cause the
average American's standard of living to drop by an order of magnitude. So,
the viable alternatives to nuclear energy are limited to coal, oil, and
natural gas. Each of these poses significantly more health and environmental
dangers than nuclear.
Coal is the worst offender. Ironically, the
average coal plant releases 100 times more annual radiation than a
comparable nuclear plant. This comes from the airborne release of fly ash,
the byproduct of coal combustion. Fly ash contains radioactive uranium,
thorium, radium, and other elements - along with toxic heavy metals like
mercury, lead, and arsenic. These substances tend not to burn, so they are
highly concentrated in the ash that is released into the atmosphere and
groundwater. Coal plants are the leading cause of mercury contamination in US
fish, of which a quarter are now believed to be unsafe for consumption. Even
the non-toxic particulates coming out of coal plants cause lung disease far
from their source.
Oil and natural gas are lesser offenders, but
still far dirtier than nuclear. Both release nitrogen oxides and sulfur
dioxide which can come down to the Earth as acid rain. Oil combustion
releases heavy metals, particulates, and leaves a toxic sludge that must be
disposed. Natural gas is the cleanest of the three, but still produces carbon
monoxide and several greenhouse gases.
These conventional fuels have proven to be more
harmful to human health and environmental well-being than nuclear, but they
are not held to the same safety standard at any level of production - from
mining of ore to power generation to disposal of wastes.
Meanwhile, generating nuclear power is currently
half as expensive as burning fossil fuels. Uranium is abundantly available
and known deposits could sustain current production levels for the next
century.
It seems the greatest risk in nuclear power is
a massive PR problem. Most people I see on the beach near my home in Los
Angeles don't seem to mind soaking up solar radiation, AKA sunlight, day
after day - even though tanning causes 1.5 million skin cancers in the US
every year. Like with their cars, people get that you can't do anything
worthwhile without taking a risk. Apply sunscreen, fasten your seatbelt, and
move on with your life, right? Only with nuclear power does it seem any
risk is too much.
As the costs mount for 'strategic' wars to secure
Middle Eastern oil and the world seeks cleaner fuels to power homes,
businesses, and perhaps even fleets of electric cars, politicians and the
public are going to be forced to face their fear of nuclear power. As the
French are known to say about their nuclear program: "no oil, no gas, no
coal, no choice." Eventually, reason prevails,
and the truth is that nuclear power is hands down the best option available
for powering the 21st century.
The Fukushima meltdown may mark a high point
in anti-nuclear hysteria. As a result, investors should not treat
nuclear-related stocks as if they were...radioactive.
John Downs is an Investment Advisor Representative in
the Los Angeles office of Euro Pacific Capital.
To learn about our products and policies, please visit www.europacmetals.com or call at (888) GOLD-160.
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