Money – Life – Environment

The Uranium Story Part 1: The Reality of Nuclear Power

Reality Nuclear Power Uranium

This will be a multi-part series on the reality of nuclear power and why uranium is my commodity of choice to achieve the most asymmetrical returns versus risk into this decade.  This post presents the facts of nuclear power and uranium as one of the best ESG investments available.  It might even be the greatest investment of the decade.

I don’t believe there’s a more important, more unloved, and undersupplied commodity than the uranium market.  Why uranium?  Uranium is the fuel that powers the world’s nuclear energy fleet.  By extension, nuclear energy is one of the most neglected, yet vital energy source in the world today.  Nuclear energy is almost carbon free.  A nuclear power plant can supply low carbon electricity, 24 hours a day, every day, in all seasons, at scale, for decades.  The only product of a nuclear power plant is water or steam.  That’s it.  I will try to address the fears of nuclear energy one by one.  Give yourself a chance to re-think your assumptions of nuclear energy if you care about climate change.  Truths are not told, only realized.  

Reality of Nuclear Radiation and Chernobyl

Let’s talk about the most notorious nuclear plant accident, Chernobyl.  It has been 35 years since Chernobyl.  If there was radiation sickness and cancer, we should have well documented cases of it.  So where is it?  The evidence.  I bet some medical research center has done this with a dedicated research center specifically to Chernobyl radiation research.  What do you know! There is!  And it is called the Chernobyl Tissue Bank (CTB) and here is a statement by Professor Gerry Thomas, Director at CTB.

“I can understand that people may be nervous about nuclear power.  I was too, until I started working on the health effects of the Chernobyl accident.  Now, 35 years later, we can say that the only health effect caused directly by exposure of the population leaving near the site of the Chernobyl accident has been an increase in thyroid cancer in those who were children at the time of the accident.  Unlike many other cancers, thyroid cancer has a very good prognosis, ironically because it responds extremely well to treatment with high doses of radiation.

Scientific studies, which take account of how diseases change in a population over time, have shown no increase in any other types of cancer even in those who lived closest to the power station.  The reason for this is simply that the doses received by the population were too low to cause significant health effects – like any toxin, the health effect is related to the dose.”

That’s our findings 35 years later.  If the worst of our imagination is reality, we should see radiated, cancered, mutants running around or dying cancer patients in Europe.  News outlets would run segments on the anniversaries of the incident.  They’d cover the radiation effects, and the suffering caused by Chernobyl… But they don’t.

Fukushima Daiichi and Three Mile Island

The Fukushima Daiichi accident in 2011 was the largest nuclear disaster since Chernobyl, which put all the nuclear and uranium industry into a fear-induced bear market that still hangs heavy today.  The whole world saw it on live television and the drama overwhelmed the actual science and facts with fear.  All of Japan shut down their reactors due to the backlash from the public.  The first and simplest question to ask is how many people died and why?   If a number of sources are true, there has been no radiation deaths.  The United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) 2020 Annex B report (nine years after 2011) states in the summary of Section VII. HEALTH IMPLICATIONS:

“no adverse health effects among Fukushima Prefecture residents have been documented that are directly attributable to radiation exposure from the FDNPS accident.”

The report further states the cancer risk due to radiation exposure in the public and workers are too low to be discernible and there is “no credible evidence of excess congenital anomalies, stillbirths, preterm deliveries or low birthweights related to radiation exposure”.

The deaths from the nuclear incident were from evacuation.  In fact, it was probably a pre-mature evacuation due to the low dosage of radiation.  Remember, they built Fukushima Daiichi in 1971.  We are now half a century ahead.  There is a high potential to design and enhance safety.  Cars and planes were not as safe in 1971 as they are now.

Oh, and Three-Mile Island?  No one died there.  No one.

Reality of Nuclear Safety

Despite the lack of investment and support, the nuclear power industry has probably one of the best safety records of all energy sources in deaths caused and prevented per unit of energy produced.  It is even better than wind or solar.  I assume wind and solar require working at dangerous heights during installation.  Nuclear’s safety record is impressive for a technology with comparatively little in the way of investment, support, and innovation.

From Visual Capitalist, in partnership with Cambridge House

Security and Safeguards

Private and government organizations work together to secure and safeguard nuclear facilities and nuclear or radioactive material.  The World Nuclear Association has some decent articles which define security and safeguarding.  Some high points:

A nuclear power plant does not cause nuclear explosions when things go wrong.  Like any thermal plant any explosions are usually chemical.  If something goes terribly wrong, the danger is radiation.  The uranium inside a nuclear power plant is not weapons grade.  For it to become weapons grade it must be enriched to 97% U-235, whereas for the purpose of electric generation in a nuclear reactor, a grade of less than 5% is needed.  Thanks to the Convention on the Physical Protection of Nuclear Material (CPPNM), and the efforts of the International Atomic Energy Agency (IAEA), security and safeguarding of nuclear facilities and material is done on an internationally cooperative scale.  Additionally, the Nuclear Non-Proliferation Treat (NPT) is an international success in curbing uranium into civil use and reducing weapons proliferation.

There exist only 9 countries with nuclear weapons.  There has not been an incident where a malicious non-state actor succeeded in intentionally misusing nuclear or other radioactive materials.  To date, no operating civil nuclear facility has been attacked by an armed group.  Incidents of cybersecurity, physical attacks, sabotage, and theft are reported and monitored.

Nuclear Waste

Nuclear waste has long been the boogeyman of the public.  The reality is much different than the narrative.  Below is a 2017 picture of all the used fuel (nuclear waste) made by the five nuclear reactors in Switzerland since 1969 (although they recently shut one down).  Those casks are made of steel reinforced concrete containers.  You can even touch them.  Notice, there is not that many and it does not take much space.  Even all the U.S. nuclear waste from 90+ reactors ever produced since the 1950s can fit on an area the size of a football field ten yards high.

Storage of spent fuel elements and high level radioactive waste in Switzerland. The Zwilag

The nuclear industry takes responsibility for its waste.  Most other energy producing companies don’t.  For example, coal plant spew out uncontained, toxic, and radioactive waste.  Burning coal causes air pollution that lead to slow and undramatic (therefore underreported) deaths.  Additionally, developing technology could use nuclear waste as fuel.  Game-changer.  In conclusion, do you prefer low volumes of contained nuclear waste with strict controls on management and disposal, or do you prefer uncontained, super-high-volume waste from fossil fuels?

Wind and Solar

If you think renewables like solar and wind will be better for waste, I wouldn’t bet on it.  How long do solar panels and wind turbines last? Maybe 20 years?  Where do they go after the end of their life, how do we appropriately dispose of them?  If batteries must be part of wind and solar due to their intermittent uptime, how long do batteries last?  What is their carbon footprint when manufactured and how to dispose of them?

I’m not against wind and solar.  They can contribute to the energy mix of the future.  I only ask not to rule out nuclear.  We must ask questions on carbon footprint, waste and pollution for all energy sources to fight climate change.  Germany and Japan are examples of countries who abandoned nuclear.   As a result, carbon emissions increased because there was no viable and ready replacement of all that electricity.  Basically, the reality of abandoning nuclear power, is increased carbon emissions.

Final Remarks

We can’t let bias rule out an energy source to combat climate change.  We must look at reality objectively to make effective choices.  After Fukushima, the Japanese shut down all their reactors…and now they are slowly restarting them in a silent endorsement.  They recognize they need nuclear to meet net zero goals.  Shutting down all of Japan’s 54 reactors increased their carbon emissions because they replaced them with fossil fuels to make up the difference.  The reality is nuclear power safety can be improved through economies of scale, regulation, and innovation.  The world invested in solar and wind to become competitive.  Therefore, we can invest in nuclear to be safe, cheap, and scalable.  In the next post I will go over supply and demand in the uranium sector.

The Father of Climate Change Awareness

To end this long post, if there is any final endorsement of nuclear energy, it is this December 2020 statement by Dr. James Hansen, nicknamed the father of climate change awareness:

“One key finding from our work is that the world will need all available non-fossil energy sources — nuclear energy as well as renewables — to be scaled up during the next few decades as fossil fuel emissions are phased out as rapidly as practical… Thus we believe there is no good basis to shut down nuclear reactors before the end of their operating lifetimes in regions that still produce electricity from fossil fuels. Furthermore, we strongly support development of next-generation nuclear reactors (including small modular ones) as a supplement to intermittent renewables such as solar and wind — otherwise, natural gas is likely to fill the supply void as is currently done (e.g. in Germany). In this context we find it very unfortunate that most environmentalists refuse to let go of longstanding biases against nuclear energy…”

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This blog will cover money management, investing, and life advice within the context of a climate change crisis.  The environment is a major and growing factor in geopolitics, markets, and governments.  It will continue to be a major force in the decades to come.  This blog aims to navigate the ripple effects of environmental change while accumulating wealth and building a more sustainable world.  We will explore reality as it is, with the objectivity to make better decisions in money, life, and environmental stewardship.  So be hungry.  Be greedy.  Don’t settle.  We owe it to those who come after us to build a better future.  

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