The oil disaster in the Gulf and concerns over global warming could spur greater interest in building nuke plants. That means new options for investors to explore.
Nuclear energy has been rising on the nation's agenda for years because of growing concerns about the environmental damage and national-security risk from using too much fossil fuel.
Will environmen-talists support nuclear power?
Certainly, memories of the 1979 Three Mile Island nuclear accident and the 1986 Chernobyl meltdown make it difficult for many to embrace nuclear energy. But new plants have compiled strong safety records.
Most critically, nuclear plants don't produce carbon emissions -- which means old fears about potential meltdowns have to compete with environmentalists' efforts to fight global warming.
A key takeaway for investors in this: We'll likely see greater interest in nuclear plants from U.S. utilities if polluted shorelines along the Gulf of Mexico boost support for policies that nudge us away from fossil fuels. Msn.Video.createWidget('PlayerAd1Container', 'PlayerAd', 300, 213, {"configCsid": "MSNmoney", "configName": "player-money-articles-16x9", "player.vcq": "videoByUuids.aspx?uuids=037a7e2e-2a57-405a-8c7e-d72db4d38777,130e63e2-a5e4-4d99-80c0-c3a441c2305a,8d79d4ec-3385-47fd-aafa-8f1c90208ef7,916f7308-28df-408a-b90e-20deb3ca4ec5,e795e870-a149-4c7d-8d74-ccdb7effaedc,709d6480-355f-462c-a896-c056559f6812,2ce2ccbe-bb99-484e-a740-ff064eecbee5,7924fd7e-02d6-43da-b333-61a642b45f4d,92b0fc1b-f83d-424c-a818-8c9794a73df0,ca944d6f-0e7c-4564-a38d-efc1885896ed,40686e66-d1c2-44e0-8a2a-22753f145179,68c92201-f0f6-4e2f-af39-9bbf3b265ac4,842b21c0-1a47-46e2-b20b-90b662034e48,7c694cb8-5313-47f6-b86f-0473b9f307cd", "player.fr": "iv2_en-us_money_article_16x9-Investing-MutualFunds"}, 'PlayerAd1');Msn.Video.createWidget('Gallery4Container', 'Gallery', 304, 150, {"configCsid": "MSNmoney", "configName": "gallery-money-articles", "gallery.linkbackLocation": "bottom_left", "gallery.numColsGrid": "3", "gallery.categoryRequests": "videoByUuids.aspx?uuids=037a7e2e-2a57-405a-8c7e-d72db4d38777,130e63e2-a5e4-4d99-80c0-c3a441c2305a,8d79d4ec-3385-47fd-aafa-8f1c90208ef7,916f7308-28df-408a-b90e-20deb3ca4ec5,e795e870-a149-4c7d-8d74-ccdb7effaedc,709d6480-355f-462c-a896-c056559f6812,2ce2ccbe-bb99-484e-a740-ff064eecbee5,7924fd7e-02d6-43da-b333-61a642b45f4d,92b0fc1b-f83d-424c-a818-8c9794a73df0,ca944d6f-0e7c-4564-a38d-efc1885896ed,40686e66-d1c2-44e0-8a2a-22753f145179,68c92201-f0f6-4e2f-af39-9bbf3b265ac4,842b21c0-1a47-46e2-b20b-90b662034e48,7c694cb8-5313-47f6-b86f-0473b9f307cd;videoByTag.aspx%3Ftag%3Dmoney_dispatch%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1;videoByTag.aspx%3Ftag%3Dbest%2520of%2520money%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1"}, 'Gallery4');"We're pretty bullish on nuclear energy," said Don Wordell, who manages the RidgeWorth Mid-Cap Value Equity Fund (SMVFX). "It's environmentally friendly, and it is low-cost on an ongoing basis." As a play on this theme, he owns shares of Fluor (FLR, news, msgs), which helps build nuclear plants. Other companies in the space, such as Shaw Group (SHAW, news, msgs) and McDermott International (MDR, news, msgs), would also get more business from a bigger build-out of nuke plants.
Utilities that have a lot of nuclear energy in their production mix -- or plan more -- would also get a big boost from an environmental-policy shift that taxed carbon. Unlike competitors more dependent on coal, these utilities' costs wouldn't go up as much in a carbon-tax scenario.
Exelon (EXC, news, msgs), Southern (SO, news, msgs) and Scana (SCG, news, msgs) are three utilities with a decided tilt toward nuclear energy compared with coal, says Roger Conrad, the editor of a top-ranked investment newsletter called the Utility Forecaster. He thinks all three look attractive, in part for this reason. There are also a couple of exchange-traded funds that let you invest in the industry.
What about uranium? Don't be tempted to buy into Cameco (CCJ, news, msgs), Uranium Energy (UEC, news, msgs) or other producers of the nuclear plant fuel as a play on more plants. The reason: Lots of new supply coming online soon will hold down uranium prices, says Tom Winmill of the Midas Fund (MIDSX). The big problem for nuclear One big challenge with nuclear power has always been that plants are so darn expensive, and most of the cost has to be paid upfront. A single plant runs at least $4 billion, says the industry-backed Nuclear Energy Institute, or NEI, and it can cost twice that much. It takes about 17 years for a utility to pay off the investment, says Revis James, the director of the Energy Technology Assessment Center at the Electric Power Research Institute.
That's a long wait in a stock market where quarterly earnings are key, and many investors merely "rent" stocks for a few months rather than invest for the long haul.
But in time, the payoff for utilities with nuclear plants can be huge. Because after construction costs are recovered, nuclear energy is far cheaper than coal once fuel and maintenance are the main costs. "They are a great deal, once you get them done and paid for," says Buzz Miller, the executive vice president of nuclear development at Southern, which operates six nuclear plants built in the 1970s and 1980s and plans to build two more. "A nuclear plant can last 60 to 80 years."
The difficulty for utilities is those first 17 years, James says. This helps explain why China, where upfront costs matter less because of heavy government involvement in the industry, has been charging ahead. In contrast, private-sector U.S.-based utilities are much more reluctant to build nuclear plants.
Worldwide, there are 53 nuclear plants under construction, 137 plants on order or planned and 295 projects under consideration, according to the NEI. In contrast, the U.S. may add four to eight new plants to its 104 by 2017.
Environmentalist opposition has been a hurdle as well and remains strong in some circles. Concern about the impact of a wider meltdown than Three Mile Island's -- and what to do with the waste nuclear plants produce -- remains strong. It wouldn't take much for the "No Nukes" rallies to fire up again.
Continued: The BP effectMore from MSN Money
Big Oil's headache is getting worse5 investing lessons for BuffettSpill creates buying opportunitiesThe 5 best stock funds for 20105 Internet ghosts finding new life1 | 2 | 3 | next >
Rate this Article Click on one of the stars below to rate this article from 1 (lowest) to 5 (highest). LowThank you for rating.UGR('ratCntrl')High var avgRating=0;avgRating=7.555555; if(avgRating!=0){avgRating=avgRating/2;avgRating=Math.round(avgRating*100)/100;var sDisplayText="Average rating: " + avgRating + " from ";var usersCount=27;sDisplayText = sDisplayText + usersCount;if (usersCount==1)sDisplayText=sDisplayText + " user";else sDisplayText=sDisplayText + " users";avgRatingElem=document.getElementById("averageRating");avgRatingElem.innerText=sDisplayText;} View all top-rated articlesE-mail us your comments on this article Discuss in a message board MSN Money InsightNew Investor CenterMarket DispatchesJubak's JournalTop Stocks blogCompany FocusContrarian ChroniclesSmart Spending blogFast AnswersDecision CentersMutual FundsFind Hot StocksSimple StrategiesPower ToolsInvesting for IncomeReal Estate InvestingRecent Articles by Michael Brush5 investing lessons for Buffett 06/22/20105 Internet ghosts finding new life 06/15/2010Is Hollywood a blockbuster investment? 06/08/2010More . . .Fund data provided by Morningstar, Inc. © 2009. All rights reserved.StockScouter data provided by Gradient Analytics, Inc.Quotes supplied by Interactive Data.MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.Msn.Video.createWidget('Gallery8Container', 'Gallery', 500, 230, {"configCsid": "MSNmoney", "configName": "gallery-money-article-site-wide"}, 'Gallery8');msft.msn._ic.cid='rd7ut3wa20d5i9hm8xkvuuk2dtsat3jr';msft.msn._ic.pst=false;msft.msn._ic.pgn=1; Join the discussion!Add a commentShow commentsSort by:Newest firstOldest first_uc2f12('iucGo');1 - 7 of 7PreviousNextJoejam #1Wednesday, June 30, 2010 5:59:33 AMThis isn't even the right question. BP's oil is used for cars and our transportation sector and nuclear is used to produce electricity. Both of these can co-exist if the political will was there. As a country we need to be able to utilize all of our resources (and at the same time do it environmentally safe). People who don't even understand how our energy system works are the ones making a big stink, but don't take away their car or computer or air-conditioner.ReplyReport AbuseChets Kid #2Wednesday, June 30, 2010 6:40:20 AMOh great! Lets let management do the same thing with nuclear that they did in the gulf. A nuclear leak will not JUST kill the plants and animals but all the people too. Do not leave management in charge of anything in this century they did NOT get to where they are by good leadership, they followed the money thru backstabbin and a**kissin!!!!!! ReplyReport AbuseMESIMPSON #3Wednesday, June 30, 2010 7:18:34 AMThere is no choice between nuclear power and oil in the long run. If we want to continue living the lifestyles we do, we’re going to need both energy sources. What we have learned from the BP disaster is that we need to advance deepwater drilling technology and leak containment systems so that it will be as safe as nuclear power plant designs are today.
The big problem for nuclear ..plants are so darn expensive.
There is also the problem of finding a permanent repository for radioactive spent nuclear fuel. Since the folks in Nevada don’t want to put it in Yucca Mountain I would like to offer this suggestion. Let’s cut a deal with Russia and the Ukraine to have it all shipped to Chernobyl. That place is already a radioactive waste dump and probably will be for 1000 years. Now that we’re stuck with it, why not make better use of it?
ReplyReport Abusewordfrominside #4Wednesday, June 30, 2010 11:02:52 AMMESIMPSONInteresting suggestion on nuclear waste disposal. I would have suggested low-population Siberia too.If we can resolve the safety (do you trust American companies to manage these plants? We should build them with Japanese plans and let the Japanese run them) and waste issue, nuclear power is the cheapest source of electricity.ReplyReport AbuseLost Dollar #5Wednesday, June 30, 2010 11:59:47 AMAbout 10 years ago or so, I was watching 60 minutes, and I think it was Ed Bradley who went over to Russia to where the Chernobyl melt down occurred, and he was in one of these Protective suits because the Radiation was so bad (no Life what so ever existed--not even birds chirping). Cancer rates are also very, very high in that immediate and outlying area.
Anyway, I believe at the time the US was looking for ways to develop and contain Nuclear Radiation waste; they were talking about Shipping the Nuclear waste by train to the Yucca Mountain in Nevada because no one wanted the waste, and they did not know what to do with the Bi-Product.
I remember this outfit who had figured out how to use high energy lazers to burn off the waste. I don't know whatever happened to this Company, but I think out of Safety, they ended up not pursuing training the waste across Middle of America for fear of derailment, terrorism, spillage, etc. Also, Senators and many citizens of Nevada were saying, "not in my backyard".
With Nuclear Power, you run the risk of serious injury, death, and catastrophic damages to an entire Region. I am not sure if the risk is worth it because in America, 9 times out of 10, someone is going to say,"Oh Shet" and then if you think BP is bad, wait until you have Nuclear Waste runoff and slow reaction times to contain and quarantine the loss.
ReplyReport AbuseGas Guzzlers #6Wednesday, June 30, 2010 12:23:37 PMMichael.... $4 billion for a new nuke plant here in USA? YOu are funny! This is 1970's dollars.. Today, you are talking about $30 billion nuke plants that deliver only one gigawatt a hour. Why is everyone involved in concentrated solar power, an advanced solar energy technology, still silent lately? We will need a lot of more aluminium for concentrated solar power, so what? I am perfectly aware that many is not crazy about more new aluminium smelters required to supply new aluminium . got any better idea? I think aluminium is great for our energy independence. Why havent we started yet?
ReplyReport AbuseGas Guzzlers #7Wednesday, June 30, 2010 12:27:37 PMCONCENTRATED SOLAR POWER NOW~!!!!!!!!!!!!!!!!!!!!!!!ReplyReport Abuse1 - 7 of 7PreviousNext_ucf13('0'); _iuc2Om1('MSNPortalInlineComments','Initial_Load_Comment_View','http://articles.moneycentral.msn.com/Investing/MutualFunds/tough-choice-bp-or-nuclear-power.aspx?','en-us');Are you sure you want to delete this comment?Report AbusePlease help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease notify us using the Report abuse form below. We will investigate your report and take appropriate action against offenders. We report all illegal activity to authorities.CategoriesSpam or advertisingChild pornography or exploitationProfanity, vulgarity or obscenityCopyright infringementHarassment or threatOtherAdditional comments(optional)100 character limit To add a comment, pleasesign in/*MSN PrivacyLegalAdvertiseRSSHelpFeedbackSite mapAbout our ads© 2010 Microsoft/*Utilities that have a lot of nuclear energy in their production mix -- or plan more -- would also get a big boost from an environmental-policy shift that taxed carbon. Unlike competitors more dependent on coal, these utilities' costs wouldn't go up as much in a carbon-tax scenario.
Exelon (EXC, news, msgs), Southern (SO, news, msgs) and Scana (SCG, news, msgs) are three utilities with a decided tilt toward nuclear energy compared with coal, says Roger Conrad, the editor of a top-ranked investment newsletter called the Utility Forecaster. He thinks all three look attractive, in part for this reason. There are also a couple of exchange-traded funds that let you invest in the industry.
What about uranium? Don't be tempted to buy into Cameco (CCJ, news, msgs), Uranium Energy (UEC, news, msgs) or other producers of the nuclear plant fuel as a play on more plants. The reason: Lots of new supply coming online soon will hold down uranium prices, says Tom Winmill of the Midas Fund (MIDSX). The big problem for nuclear One big challenge with nuclear power has always been that plants are so darn expensive, and most of the cost has to be paid upfront. A single plant runs at least $4 billion, says the industry-backed Nuclear Energy Institute, or NEI, and it can cost twice that much. It takes about 17 years for a utility to pay off the investment, says Revis James, the director of the Energy Technology Assessment Center at the Electric Power Research Institute.
That's a long wait in a stock market where quarterly earnings are key, and many investors merely "rent" stocks for a few months rather than invest for the long haul.
But in time, the payoff for utilities with nuclear plants can be huge. Because after construction costs are recovered, nuclear energy is far cheaper than coal once fuel and maintenance are the main costs. "They are a great deal, once you get them done and paid for," says Buzz Miller, the executive vice president of nuclear development at Southern, which operates six nuclear plants built in the 1970s and 1980s and plans to build two more. "A nuclear plant can last 60 to 80 years."
The difficulty for utilities is those first 17 years, James says. This helps explain why China, where upfront costs matter less because of heavy government involvement in the industry, has been charging ahead. In contrast, private-sector U.S.-based utilities are much more reluctant to build nuclear plants.
Worldwide, there are 53 nuclear plants under construction, 137 plants on order or planned and 295 projects under consideration, according to the NEI. In contrast, the U.S. may add four to eight new plants to its 104 by 2017.
Environmentalist opposition has been a hurdle as well and remains strong in some circles. Concern about the impact of a wider meltdown than Three Mile Island's -- and what to do with the waste nuclear plants produce -- remains strong. It wouldn't take much for the "No Nukes" rallies to fire up again.
Continued: The BP effectMore from MSN Money
1 | 2 | 3 | next >
There is no choice between nuclear power and oil in the long run. If we want to continue living the lifestyles we do, we’re going to need both energy sources. What we have learned from the BP disaster is that we need to advance deepwater drilling technology and leak containment systems so that it will be as safe as nuclear power plant designs are today.
The big problem for nuclear ..plants are so darn expensive.
There is also the problem of finding a permanent repository for radioactive spent nuclear fuel. Since the folks in Nevada don’t want to put it in Yucca Mountain I would like to offer this suggestion. Let’s cut a deal with Russia and the Ukraine to have it all shipped to Chernobyl. That place is already a radioactive waste dump and probably will be for 1000 years. Now that we’re stuck with it, why not make better use of it?
About 10 years ago or so, I was watching 60 minutes, and I think it was Ed Bradley who went over to Russia to where the Chernobyl melt down occurred, and he was in one of these Protective suits because the Radiation was so bad (no Life what so ever existed--not even birds chirping). Cancer rates are also very, very high in that immediate and outlying area.
Anyway, I believe at the time the US was looking for ways to develop and contain Nuclear Radiation waste; they were talking about Shipping the Nuclear waste by train to the Yucca Mountain in Nevada because no one wanted the waste, and they did not know what to do with the Bi-Product.
I remember this outfit who had figured out how to use high energy lazers to burn off the waste. I don't know whatever happened to this Company, but I think out of Safety, they ended up not pursuing training the waste across Middle of America for fear of derailment, terrorism, spillage, etc. Also, Senators and many citizens of Nevada were saying, "not in my backyard".
With Nuclear Power, you run the risk of serious injury, death, and catastrophic damages to an entire Region. I am not sure if the risk is worth it because in America, 9 times out of 10, someone is going to say,"Oh Shet" and then if you think BP is bad, wait until you have Nuclear Waste runoff and slow reaction times to contain and quarantine the loss.
Michael.... $4 billion for a new nuke plant here in USA? YOu are funny! This is 1970's dollars.. Today, you are talking about $30 billion nuke plants that deliver only one gigawatt a hour. Why is everyone involved in concentrated solar power, an advanced solar energy technology, still silent lately? We will need a lot of more aluminium for concentrated solar power, so what? I am perfectly aware that many is not crazy about more new aluminium smelters required to supply new aluminium . got any better idea? I think aluminium is great for our energy independence. Why havent we started yet?
Read Full Article »