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.
With 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.
Follow Cramer's trades for his Charitable Trust.
1. Don't build nuclear reactors in seismically active zones
2. Build reactors at least 200' above sea level
3. House the fuel rods in a steel tank having earthquake dampeners.
4. triple line the fuel rod tank
5. Use a more viscous fluid to cool the fuel rods, gel or foam
6. don't use this disaster to hinder progress.
7. vote out progressives and greenie weenies.
8. Use our massive natural resources, coal, gas, oil, oil shale, oil sands etc
Any rational person, any rational environmentalist understands that nuclear is a safe and practical option when put into perspective with other forms of energy. Unfortunately, policy does not go with what the rational people or experts think. What matters politically is what the mindless masses think. The mindless masses are being led by egotistical, self-promoting airheads like cramer. No matter what the experts think. It is alarmist responses from morons like him that will doom nuclear power.
What do you want people, a 1/1 million chance of a nuclear meltdown or guaranteed global warming? WInd and solar, while they have their place, are only "feel good" options in the big picture since they are inconsistant and cant be used for baseload. What we should be doing is shutting down coal and replacing it with hundreds of nuclear plants. Unfortunatly, the world is now going to be burning a lot more coal.
Same guy who said Bear-Stearns was a solid buy and Lehman Bros was solvent.
I'd rather play three-card monty on a street corner in Queens than take this pompous asshat's recommendation on ANYTHING. If there is one person in the entire financial crisis/crash/collapse who is a certifiable loon, it is Jim Cramer.
Not every country with nuclear plants is plagued with earthquakes and tsunamis. Japan's nuclear plants were built long ago and probably not in the best location for the natural disasters which they experience. It is way too early to say nuclear is dead. In the US we do need to take advantage of the plentiful and cheap nat gas we have...maybe this disaster will make us rethink how we use energy sources out there...there is no perfect fuel...each has its issue/s.
Ms. Williams -- I feel obliged to set the record straight.
1. You are correct that nuclear plants are expensive to construct and maintain, but when you compare the total cost of ownership (TCO) of a nuclear plant to a conventional plant of equal generation capacity, the nuclear plant is about 1/3 the cost. Only hydroelectric has a lower TCO. Fuel costs over the lifespan of a fossil fuel plant far outweigh the TCO for a nuclear plant.
2. Radiation does not "eventually eat through and destroy everything." Many materials are radioactively stable. This means the either do not reach a higher atomic energy state when irradiated, or their radioactive half life is so short (seconds to minutes) that the collateral damage of radiation "leaking" from these materials is insignificant (you will receive more radiation from the sun during a 1 hour tanning session on the beach).
3. You are right that radiation causes cancer and/or death. Radiation (properly used) also saves lives. Go ask many of the cancer survivors who had radiation treatments (like myself with thyroid cancer).
4. Yes, nuclear reactors need a water supply for cooling. With modern reactors, however, the water supply does not need to be inviolable. Effluent water cooling techniques are generally able to return water to the same source within 3-5 degrees of the source temperature. Modern reactors do not irradiate the water, which is limited to the secondary heat exchange and electricity turbine systems.
5. Yes, they produce waste, but its disposal is included in the TCO (1), does not eat through anything (2), much of the waste is used in medical and other industrial processes, with a relatively small fraction (generally cesium and strontium) that needs longer term radioactive disposal (3), and the water is not radioactive waste (4).
6. Modern reactors are easier to control than your car, and only marginally more difficult to maintain.
7. (Not sure to what you are referring here, but...) The radioactive waste (particularly cesium and strontium with half lifes of 30 and 29 years respectively) requires long term storage, but the duration of that storage is a few hundred years, not tens of thousands of years. The structural components of a nuclear power plant (for example, the steam turbines) would not last 100 years without major upgrades and repairs.
Please do a little more research before taking a few factoids out of context in an attempt to enflame an emotional response. Thanks.
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.
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.
By default on market strategy, I almost exclusively take what Cramer says and do the opposite. It's worked out beautifully for me. This latest opinion by Kramer is a typical over reaction following a tragic event. It just goes to show this guy has no common sense and is a reactive not proactive thinker. Follow his advice to the poor house because if you buy into his conjecture that is where you will be.
Only MSNBC would keep this guy on their payroll, he contributes to their decline in credibility.
Not so fast. Every reactor accident has been older first gen reactors which are no longer main stream technology. New 2nd and 3rd gen reactors are designed to shut down and stop the fission process without any human intervention. The rods get hot, they expand and cut off the reaction of the Uranium or whatever else they would be using as nuclear fuel for a particular reactor. It's basic physics and it takes care of itself. Even though these reactors in Japan are old and tired, it still took a devastating earthquake combined with a massive 23 ft tsunami to cause the massive failure.
To meet our future energy needs natural gas, solar, geo-thermal and wind won't suffice alone. As natural gas consumption increases, so will the price, dramatically.
Consider that despite taking one of the largest quakes ever recorded, which probably jammed the rods, taking a massive tsunami that stuffed the backup pumps, and suffering hydrogen explosions in their outer buildings, at this point the reactor pressure vessels are still holding, buying time for officials to react and work to cool them, as well as do evacuations in case of the worst.
Lost in all of this is how powerfully they have been built and engineered to hold this long - and yes, stuff like backup systems that can better handle tsunamis will be designed for reactors because of this.
These reactors are built a lot stronger than Chernobyl. I hope they can stabilize and stop them, and am praying for the people there. I must also say that the strength of the engineering even in the face of one of the worst recorded disasters in Japanese history is pretty impressive.
As for power needs, one can't get the megawatts needed to power a modern world by plugging into a tree. There is a solar energy company in Southern New Jersey that powers 130 homes but employs 250 people. Doing the math there will show why such projects are economically unfeasable.
Plants will be improved because of the knowledge from Japan, from a complex that took one of the largest disasters ever to hit that country and still has their containment vessels holding after several days of unimaginably nasty conditions.
One idea I have had for reactors, similar to a fire sprinkler, is metal that melts at a certain heat point, which would release a load of boron to drop right on the core. That would help fight a runaway reactor before the point where hydrogen would be generated.... and it wouldn't need external power or button pushing.
Sensational journalism at its finest. We must keep in mind that as our energy consumption continues to climb we must produce more and more power to maintain our standard of living in the US. Some simple stats; The largest wind farm in the world is in Texas consisting of 650 turbines producing about 730MW of power. The wind farm covers 100,000 acres and cost 1billion + government subsidies. A common nuclear generator in the US produces 1100MW of power per turbine. This single turbine produces 1.5X the power of a massive wind farm. I want to see our nation continue to expand its renewable energy production capacity but for the forseeable future the technology is not there for renewables to be but a small player in our overall energy production unless we all decide to walk and bike everywhere. This will not happen so to discredit nuclear power is irresponsible at the least.
Well not a lot of comments so far but I think the trend will continue; that this article is a load of s*** plain and simple. Thenaill has is right. Cramer is a dim bulb. What about oil? Why was that not the end of oil after the BP spill? Same deal. Oh wait I guess it needs to be an unforeseen natural disaster first (technically two - major earthquake and tsunami) to be cause for a change. Man made negligence to get more profit that results in a disaster doesn't change anything. Or maybe its because you are sitting on a pile of gas stocks and want to start the speculation early? (Save that one for another day but that is another major problem with our stock market, commodity speculation, drives up prices on rumor alone; end that and we will all be better off) I know I'm being extreme but crap articles like this are not what we need. Good fact based reporting is needed and it has been lacking thus far when dealing with the whole nuclear issue in Japan. I see more fear mongering and headlining than anything. I agree nuclear power, as we know it now, is not the long term solution but neither are fossil fuel based energy sources. Pushing natural gas is just another way to try to buy enough time to pass the energy problem onto the next generation while each time making it worse and shorting the time we have to find an answer. In the short term I could see some of the other newer forms of nuclear power being used, those that have less waste, provided that we couple this with better ways to dispose of the new waste and waste we have. I also see greater use of wind power or tidal power and home solar panels to provide a small part of a homes power. I could even see some new natural gas plants and coal plants going in to fill a gap and replace some older more polluting less efficient plants that need decommissioned, but all of this only with the understanding this is SHORT TERM ONLY with greatly increased funding going to research for alternate, renewable energy at the same time, such as fusion power, which will be an option some day and can get here sooner if we fund it more because while solar and wind can and will be players in the renewable energy world future there does need to be some some other primary source, this I know. I have more I could add but i'll leave it at that for now. It is time to stop fact less reporting and knee jerk reactions and focus on what really is, which is a need to find a renewable energy that is beneficial for all and not continue to line the oil mans pockets and dump money into a fossil fuel development hole that will screw us in the long run.
Newer technology should advance the use of nuclear power. Continuing to rely on fuels such as oil and natural gas will only continue to hurt economies, especially those in the U.S. that rely more heavily on car transportation rather than mass transportation such as light rail systems, etc. Switching to natural gas will only exacerbate the problem.
We need a diversity of fuel, including solar and wind. For Subnormal, I have a lot of experience in energy, including alternative energy, and under the right circumstances, wind turbines can work - generate electricity without any emissions! If you can figure out a way to build a power plant that is "totally green" more "power" to you.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.