NUCLEAR POWER, NOT A JOKE, A BIG DEAL

After John McCain stated that France gets 80% of its electricity from nuclear power and that the US could just as well, a number of blogging pundits made his comments into a big joke. They said it would take 700 new nuclear power plants. The USA currently operates 104 (if memory serves).

The latest nuclear deal, between Russia and the USA, is a big deal. The deal, a "civilian nuclear pack", will allow billions of dollars of nuclear trade to develop. As always, the word trade implies that we get something and they get something. Russia has an abundance of natural resources, including vast unexplored Siberian Plains. One of the nice things about Russia's oil production is that each time Russia challenges Saudi Arabia for the number one spot on the list of producers, Saudi Arabia develops another oil field. Over the next several years, Saudi Arabia will increase its production capacity from around 9 million barrels per day to 12 million. Some reports suggest that Russia is struggling to increase its oil production. I believe recoverable reserves will expand dramatically over the decades in which prices rise. Besides, Russia produces more than oil from these plains.


Russian resources include uranium. Until the signing of this "civilian nuclear pack", western users of uranium generally bought from other suppliers (including Canada and Australia). There are a couple of more angles to this trade. The USA has, to date, insisted that Iran, a country which has called for the annihilation of another country, not be allowed to enrich uranium. Russia has joined with China, the USA and 4 European Nations to encourage Iran to find another way to acquire nuclear power supplies. Russia has repeatedly offered to enrich uranium for Iran.

Under the "civilian nuclear pack", international fuel enrichment centers will be established. Access will be granted to nations who agree to use the uranium only for peaceful purposes. Russia stands to sell mega-tons of uranium as a result of this treaty. By the way, the US Congress has the option to vote against this treaty within 90 days of its submission. If they fail to vote against it, the treaty will be considered to have been approved by the congress.

There is yet another side to the story. Democratic leaders, including the Senate Majority leader, Harry Reid, have fought the production of energy in the US for a number of years. These leaders constantly fatten appropriation bills with boondoggle research projects that fatten the pockets of politicians and lobbyist while stifling innovation and preventing the USA from using its natural resources. For example, under great pressure this past week, the subsidy for corn ethanol was reduced from 51 cents per gallon to 45 cents per gallon. People around the world are literally starving and the response of the US congress is to pay farmers 45 cents per gallon to put food into car engines! The members know that their actions are harmful to the many but they are reluctant to go against the farm lobby.

Equally atrocious was the addition of another $400 million dollar boondoggle. The claimed reason to spend another $400 million of the public's hard earned dollars is to increase research. To date, billions of dollars have been spent by private companies to develop cellulostic ethanol. No one knows which idea will ultimately work best. The words, innovation and invention are almost interchangeable and they mean that before the moment of inspiration the answer was not known. GM, for example, has covered its bets. It has made significant investments in two companies which use totally different processes to convert raw materials into liquid fuels.

The ultimate invention might be done in a basement lab anywhere in the world except that the dreams of many have been crushed time and again from unfair government intervention. Who is willing to spend ones private dollars to try if the government is going to hand over $400 million to ones competitors. Sure, there will be a scramble of applications trying to win the grant of the $400 million but the net effect will be less actual money going into research.

Harry Reid has as much to do with the current high price of gasoline as anyone. The failure to drill for oil in ANWAR and along the east coast has cost Americans plenty. The politicians argue that the additional oil from ANWAR would have reduced the price of gasoline by a penny or so. They don't know, but they know that congressmen have made more than a pretty penny off the fight. Another big battle has been in regard to the storage of nuclear waste. Harry Reid, in his leadership role in the Senate, has cost our country countless of millions of dollars, great harm to the environment and possibly even the lives of our soldiers. Nuclear power construction has been stalled and many a nuclear power plant has had to come up with alternative storage even though a perfectly good underground storage facility has been constructed. The deal with Russia will solve this problem as Russia will either reprocess or store nuclear waste for other nations.

When the x-ray machine was discovered, doctors were excited to use this new technology. In the early years of use, many doctors died due to over exposure. Of course, after we became aware of the dangers from radiation, we have tried to protect everyone from it. Unfortunately, people love sun rays too much. Millions of people suffer from over exposure to the suns rays. When you have a moment, do a little research and compare the number of people who die each year from sun ray exposure to the number of people who die due to over exposure from nuclear waste.

DEATH BY COAL

If you want to be depressed, take a look at how many people die as a result of coal power generation. Even after reading this rant, you will probably be surprised at the deaths from coal relative to the deaths from nuclear. And, for those who actually believe the drivel of Al Gore, the ratio of the CO2 produced by coal compared to the CO2 produced by nuclear power is in the same neighborhood as the ratio of death by coal compared to the death by nuclear. The USA currently gets about 50% of its energy from dirty coal. By the way, Al is making 100's of millions of dollars off his global warming thesis even though his arguments were based on flawed science. His most obvious mistake was in regard to the rise of the earth's temperature as a result of the rise in CO2. The data actually showed a correlation not a cause. Indeed, the rise in CO2 occurred before the rise in temperature. It appears more likely that the CO2 increase was caused by an increase in temperature, not the other way around. Since the peak in temperature that occurred in 1998, the CO2 level has continued to rise after the temperature has leveled off and recently declined. This fact supports the alternative view that there is no cause and effect relationship. The burning of coal does pollute the atmosphere and cause the death of people. CO2 is not a pollutant but the "oxygen" for the earths plants. The ocean naturally absorbs and "sequesters" millions of tons of CO2 naturally. The amount that is absorbed is a function of the water temperature. The water temperature today is much cooler than it was 1000 years ago.

No, it is not a joke, the USA should and will dramatically increase its nuclear power production. The agreement with Russia is going to free up the industry from three angles. 1) The availability of uranium. 2) The safe enrichment of uranium under the watchful eye of the IAEA. 3) The safe reprocessing and storage of spent fuel. Under these new circumstances, nuclear power plants will be built as fast as the massive steel collars and other components can be manufactured (Japan has been running its facilities flat out for a good while).

From memory, world wide there are currently 35 nuclear plants under-construction and 90 planned. The USA only has one under construction and only about 9 far along in the permit process. Again from memory, the planning process is underway for 28 new plants in the USA. It would take a lot of years to go from 104 to 700 plants in the USA but new plants are finally enjoying the benefits of "mass production". Both the cost of construction and the time taken to construct have fallen and are expected to continue to fall. A recent article stated that electricity can be produced for less than 4.5 cents per kilowatt.

The scramble in the auto industry is to produce plug-in hybrids. With such vehicles, many a driver would not use any gasoline during his daily commute to and from work. Should the day come when the internal combustion gasoline engine is a relic of the past, we will likely need at least 700 nuclear power plants. Investors should not take nuclear power as a joke!