Talk about Money: Whether to invest in a nuclear future

Every time I drive past the signs at Santa Cruz’s borders declaring the city to be a “nuclear-free zone,” I think about the mistakes we’ve made regarding energy and wonder if we’ll do better in the future.
Then I think about how my clients should invest in America’s energy future, in ways that will be profitable for them but environmentally responsible.
In part, Santa Cruz’s signposts reflect American attitudes toward nuclear power after the 1979 accident at Three Mile Island. Plans to build 100 nuclear reactors in the U.S. were canceled after the accident, even though it caused no deaths or injuries.
In contrast, the energy source we embraced in place of nuclear power — coal — leads to hundreds of deaths a year in mining accidents and is a major source of the carbon emissions blamed for global warming.
Now, under President Obama, the three-decade moratorium on building nuclear plants in the U.S. is ending. A new generation of nuclear power plants is on the drawing board.
This opens opportunities for investors in companies that supply and operate nuclear plants. Yes, nuclear still raises concerns, but so do coal and petroleum — a point made horrifyingly evident by the recent oil spill in the Gulf of Mexico.
Environmentalists say we should shift our energy focus to wind, solar and geothermal power, because they’re safe and clean. But how much of our energy needs could they really serve?
“Solar, wind and geothermal will never meet more than 20 percent of our of peak power demands,” said scientist and radio talk-show-host Bill Wattenburg, in response to an e-mail. “And at 20 percent dependency, there will be serious problems when the sun is not shining or the wind is not blowing. Europe sees this now. You must always have standard coal, natural gas or nuclear plants on standby to make up what the other cannot supply.”
So, what’s an investor to do? To me, it seems traditional energy offers better investment values than green energy.
Every year, the world consumes more oil than we find. That imbalance could widen if deepwater oil drilling is banned as a result of the Gulf spill.
The world’s growth engines are the emerging economies of Asia. According to Asia-based author Marc Faber, the U.S. consumes 25 barrels of oil per person, per year; China 2.2 barrels; and Mexico 7.3. Car sales in China are booming. If the Chinese were to consume as much oil per person as Mexico does now, China would take 30 percent of the world’s oil production. That would send oil prices soaring.
As for coal, socially conscious investors would have to swallow hard before buying a coal stock. But the Chinese are building hundreds of coal-fired energy plants. And here in the U.S., about half of our electricity comes from coal.
As one coal executive being grilled by TV reporters said, “Everyone hates coal. But no one wants the lights to go out.”
Mark Rosenberg is a financial consultant for Financial West Group in Scotts Valley, a member of FINRA and SIPC. He can be reached at 831-439-9910 or mr********@fw*.com.