Nuclear energy is dead

The disaster in Japan likely means the end of nuclear energy, in the US and abroad, and a greater reliance on natural gas.

By Jim Cramer Mar 14, 2011 8:58AM

jim cramerthestreetWith the nuclear-powered reactors in Japan still smoldering, it's not easy to know what to do. It is easier to pretend to know what to do or to take a blind stab. Or just to cash out. As easy as it was 25 years ago when Chernobyl exploded.

 

When that happened, the world panicked. All sorts of disaster scenarios existed, in part because of the amazing lack of information coming out of the Soviet Union and the radically escalated levels of radiation showing up in Sweden, which triggered the first word of the accident.

 

The lack of knowledge directly affected subsequent trading. Food and restaurant stocks were hit especially hard because people thought Chernobyl was uncontainable and no one would be able to eat anything but canned food until the radiation cloud dispersed. Yes, it was that scary.

 

This time around we know more about the event, but, again, because of radiation fears and the ongoing nature of the tragedy, snap judgments will be as wrong as they were back then. In 1986, I tried to keep calm, but my investors didn't and many went into cash.

 

Post continues below:

 

But there was one thing we were certain of: The process of building a nuclear power plant would become so long and arduous that the fuel would be effectively finished.

 

That's what happened here in the U.S. The rest of the world, so energy-starved, kept building them. The older ones in our country, ones that were as vulnerable as Chernobyl, began to get decommissioned faster. The new ones were scrapped. They were very expensive to build anyway after the Three Mile Island debacle, and the fuel was never considered a serious source of energy again in America.

 

Instead we switched to coal and natural-gas power.

 

I think that if the current nuclear incident is contained, some people may say that the power plants held up even after a worst-case-scenario earthquake. I think that's a pipe dream even if nothing else occurs.

I see a wave of rebuilding, with natural gas being the preferred fuel. It's the fastest to build and the cheapest. I think if a country is tabula rasa, as Japan is now, it will opt for natural gas entirely because it is much cleaner than coal.

 

That means huge construction jobs with massive shipping requirements to Japan. It means materials and machinery will be in short supply and China's government-mandated slowdown will be countered.

 

To build plants, you need steel, concrete and, most importantly, aluminum and aluminum turbines. I suspect all of those commodities will jump in price, along with the iron ore and copper needed to create the steel and rebuild the electronic infrastructure.

 

This money will all be provided by Japan, so it will serve as a giant and quick stimulus to the world's infrastructure and infrastructure-related businesses. The most obvious players include Alcoa (AA), U.S. Steel (X), ArcelorMittal (MT), Vale (VALE),BHP Billiton (BHP) and Freeport-McMoRan (FCX).

 

That should be the case immediately today, although overall fears, a la Chernobyl, might initially put a damper on the market. That would cause these stocks to go down slightly with the rest of the market.

 

They are, however, the go-to names if the smoke clears and people believe the worst is over. If not, then I think they would be more late-day or second-day plays.

 

At the time of publication, Cramer was long Alcoa and Vale.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Follow Cramer's trades for his Charitable Trust.

 

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140Comments
Mar 14, 2011 1:21PM
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Cramer is trying to get people to buy gas stocks so he can make money on the gas stocks he has as they increase in price, then when people forget and the price starts to plateau, Cramer will sell and laugh all the way to the bank.  If you don't think Cramer isn't above using his position to manipulate the market for his benefit, you're being naive.
Mar 14, 2011 1:19PM
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To Stephen Kinosh: Henry Ford didn't build the first automobiles, Karl Benz did. But don't feel badly. Unfortunately, over 80% of Americans believe that Ford invented the automoble, when he was just the first to implement assembly production.
Mar 14, 2011 1:15PM
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This sounds rather myopic, especially when you consider that Jim Kramer is the man who tried to convince us that Lenny Dykstra is some kind of financial savant! Do us all a favor Jim: keep honking the horns, slapping the buzzers and talking a million miles an hour, because since you don't offer any sound financial advice, at least I can plop my 2 year old in front of the TV and allow her to be entertained.

Mar 14, 2011 1:14PM
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Only uneducated fools disbelieve global warming.  You probably don't believe in evolution either.

 

You can believe in Santa Claus all you want, but chemistry and physics do not believe in your god.

 

Global warming happens regardless of the denials of fools and wishful thinkers.

Mar 14, 2011 1:11PM
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If when Henry Ford built the first automobiles, the engine blew up when started and he stopped because of that, we would still be riding horses.

 

We learn from failure, and failures happen.

 

We learn from this and build better and stronger.

 

Sooner or later an accident will happen., ANyone remember the last great blackout that brought the eastern seaboard to a halt?  SHould we stop using electricity because of that?  No we look to build more safeguards.  We learn from failures.

 

Cramer, stick to reportin on stock and things you know a little about. 

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Global warming is a code word for the oil is going to run out in twenty years. It's a bit less scary then just coming out and saying we are all going to freeze to death in the dark without any food in twenty years.
Nuclear power can be safe if you design the reactors with safety in mind. Right after three mile island there was a group of nuclear physicists who proposed a completely safe reactor.
The reactor would have part of it's fuel in the coolant so that if the coolant leaked out the nuclear fuel left in the reactor would not be enough to continue to burn and burn until it melted down and exploded. 
A simple yet brilliant solution to the problem yet nobody has taken them up on the design and built them that way.
Plus we generate twice the nuclear electrical power France does and France uses only nuclear power plants. So who is behind in nuclear power the US or France? 
Mar 14, 2011 1:10PM
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Cramer is an IDIOT. Gee Jimmy, a bus crashed in NY, maybe bus industry is dead.  What a load of crap, nuclear supplies 20% of our electricity.  If we don't grow up in this country and realize all sources of energy have costs and risks, we will cease to be a significant world economy.

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Cramer your ability to move your lips before you engage your brain has not changed much. If you had any knowledge of the different type of reactors that are currently being used and the ones that are failing in Japan you would not be making such a generalized statement. Don't you have a button on your TV set that describes you? Hit the button "dope' dope;dope"!

 

If anything this situation is more of a reason to to continue to add new style nucluer facilities to take these old ones off line and utilize the remains as safe storage for spent rods.

 

You should be ashemed of yourself for being SO self serving.

Mar 14, 2011 1:08PM
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US Energy policy?: No US drilling, no coal, no nuclear. Imported oil priced at the mercy of OPEC and if Cramer is right natural gas prices will go through the roof. Supply and demand, baby. Can't even use whale oil like our forefathers. Any venture capitalists out there ready to invest in a buggy whip manufacturer and maybe a national chain of blacksmiths?

Mar 14, 2011 1:08PM
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being a COLD WAR PATRIOT and a graduate BIOLOGIST-CHEMIST if this country abandons nuclear power a revolution is needed.
Mar 14, 2011 12:56PM
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just goes to show,anybody can be a reporter!wow,dumbest thing i've read in a while.
Mar 14, 2011 12:56PM
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Pat:

 

You are retarded if you believe in global warming. It is a trillionaires

scheme to rip off you and me on a unprecedented level. Give me a

break that earth has been cooling and warming for millions of years.

We have not put a dent in it. By the way why does Al Gore plan to make

billions off selling buying carbon credits. God, idiots like you perpetuate

the lies and deception these criminals prey on.   

 

See who stands to make the most off global warming BS Lets see

Goldman Sachs - most if not all the investment banking giants -

politicians. Hmm one thing in common - all owned or part of the

Zionist world domination. Check the facts government - finance - media

anything with money - power control they own.

Mar 14, 2011 12:50PM
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I think maybe rejecting all nuclear power plants because of the design failure under extreme stress of one type of light water reactor, is somewhat premature. The concept of the heavy water reactor like the Candu type reactors used for years in Canada, provides a lot of operating efficiency benefits, significantly improved security vs this kind of disaster (does not need to have the huge cooling pumps which can fail, relies on specific internal geometry to keep any reaction going known as "criticality", which if it were to ever be geometrically disturbed would result in the reaction stopping, and has a shut down system which changes this geometry...killing the reaction.... automatically in the case of any natural disaster or major disturbance) ,with significantly lower seismic risks. In addition this kind of reactor can run on a variety "natural" and waste fuels vs enriched uranium, and even burn surplus plutonium form scrapped nuclear weapons, or run on Thorium a safer, cheaper, and more abundant fuel. 
Mar 14, 2011 12:49PM
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Cramer. Please, for the love of the market, stop giving investment advice. What you fail to understand is the rest of the world has pretty well already woken up to the truth and danger of global warming, even if the scientifically illiterate U.S. has yet to catch up.

Japan, being that such a huge portion of their population is centered near the coasts, has some of the highest exposure to GW than any other industrial country outside of perhaps northern Europe. They have taken conservation, efficiency, and clean energy to heart. What they most certainly will NOT be doing int he wake of this tragedy is replacing all of their nuke plants with coal and natural gas plants which will exacerbate GW with their CO2 output.

As for the future of nuclear development in the U.S., seriously, how many current or potential sites sit on major fault lines? Next to none, making this disaster a pretty big non-issue outside of southern California. The only reason people would use this as an excuse not to build nukes here would be out of sheer ignorance. Ignorance your column is only reinforcing.

Mar 14, 2011 12:45PM
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GO FUSION

 

 It is safe, the problem is to keep the reaction going on, if something happens it just stops.

  • It does not depends on economies of scale, small facilities will be feasible as well as large.
  • Give for research at MIT, they already have a prototype, keep the USA ahead.

Island with a palm tree

Mar 14, 2011 12:43PM
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just some information for this person writing this article oil and gas are more of a problem then nuclear power.

 

Car pollution facts - Health effects

- About 80 people per DAY are killed in the USA from car induced air pollution
- 1996 EPA estimate: cars, trucks, and buses are responsible for over 3,000
  cases of cancer
- China's 14 largest cities: air pollution kills 50,000 newborn babies 
- Chinas 14 largest cities: air pollution 400,000 cases of respiratory illness every year
- In the formerly beautiful Hangzhou China, the sky is grey from car exhaust fumes.
- Car exhaust has also been linked to Asthma, Bronchitis, and other health hazards
-If you think bad air affects only other people, think again. New information shows
that air pollution from traffic increases the chance of heart attack for everybody
breathing that air. The results are in the Journal Lancet.

Mar 14, 2011 12:41PM
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I clicked on the link to this article half expecting to read something intelligent, then I saw the author.... Nuff said.
Mar 14, 2011 12:35PM
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Lets put this in a language Cramer can understand:

Cramer -short on knowledge, long on panic. Oh and maybe just trying to make everyone rush out and buy natural gas related stock which he may own lots of, so profit on disaster. And then sell for a profit before the doomsday scenario fails to materialize.

 

Mar 14, 2011 12:34PM
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so sick of hearing ignorance instead of common sense.  nuclear is not dead and this will not kill it.  why are you missing the whole point?  this IS the worst case scenario and guess what?  no china syndrome, no chernobyl.  The structures are holding up as they were designed to....under the worst case scenario.  I really really wish that all the nuclear operators in the US would turn off all the plants.  Then when you have no electricity at all for days on end and you have pay the equivalent of your mortgage payment for the little you get....and when its cold, rainy and no stiff breeze (what alternatives??)...you can sit by yourself, burning wood and polluting the atmosphere to stay warm and cook, and remind yourself how foolish and shortsighted you were.  And don't bother with your petty comebacks about stupid technicalities....the REAL technicalities can be found in nuclear power plants and those technicalities are worth fighting for and preserving.
Mar 14, 2011 12:26PM
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Let's don't be total nitwits on this issue.

 

We have a worst case scenario, reactor designed in 1960 before plate tectonics were understood, completed in 1971 - built by the sea at sea level.

 

You have the largest earthquake ever recorded in Japan.

 

Score:

 

Earthquake - perhaps hundreds killed.

Tsunami - likely over ten thousand killed.

Powerplant - likely no one killed.

 

You couldn't design a more stringent torture test for a powerplant; taking the oldest one you have and putting it through a record disaster.

 

Will the power company be out billions to clean up the site - "you betcha."

 

Will lessons be learned and applied - that's the way engineering works.

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