Are We on the Verge of a Nuclear Revolution?

The U.S. Nuclear Regulatory Commission has been working to nail down rules about nuclear waste. The topic is tricky and we still don't have a good plan. However, what if we're thinking about it the wrong way? There are a few companies working to prove that we are.

Shove it in a mountain
Yucca Mountain was to support a centralized nuclear waste dump -- the idea being to centralize and protect -- but it's completely understandable that Nevada is fighting back. It doesn't want to be known as the nuclear waste state.

(Source: Daniel Mayer, via Wikimedia Commons)

However, nuclear waste may not be waste much longer. Big recent news on that front came out of Bill Gates backed TerraPower. This private company is partnering with Babcock & Wilcox (NYSE: BWXT  ) on its "Generation IV traveling wave reactor (TWR)." That's a fancy name for an incredibly complex technology. However, the coolest part of the new plant design is that it uses depleted uranium as a fuel.

The Babcock & Wilcox/TerraPower alliance is up against stiff competition, however, because General Electric (NYSE: GE  ) is working on an advanced nuclear power plant design, PRISM, that also uses spent nuclear fuel. To be fair, these fourth-generation technologies aren't ready for market, but GE and TerraPower are working hard on this massive technology advance. It would, overnight, turn nuclear waste into nuclear gold.

In fact, it would allow nuclear facilities to be paired up. Fresh uranium would be fed into a typical nuclear power plant with its spent fuel used to power a second. Existing sites could simply be expanded, helping to cut down on the red tape of getting new locations approved.

Who wouldn't love that?
If, or perhaps when, GE and the TerraPower/Babcock & Wilcox technology is built, there should be near universal applause. Uranium miners Cameco (NYSE: CCJ  ) and Rio Tinto (NYSE: RIO  ) , however, won't be so happy. Right now the outlook for uranium demand is fairly bright, with notable reactor growth in Asia. China alone is expected to see an increase from 19 reactors last year to nearly 60 by 2022.

However, if GE, Babcock & Wilcox, and TerraPower perfect a nuclear plant that uses nuclear waste, some of Cameco's projected demand could go away even if nuclear power plants still get built. That would be particularly bad for Cameco, which focuses exclusively on uranium. Rio Tinto is far more diversified, so Rio would probably be just fine even if it chose to sell its uranium operations.

Another option
Cameco and Rio, however, might like another option being proposed. Although a fringe idea, it has been suggested that natural gas and oil drilling sites could be used to store nuclear waste. Although every oil well isn't a candidate, the idea is similar to Yucca Mountain—put the stuff within thick protective layers of rock. That's exactly where we're pulling oil and gas from with hydraulic fracturing.

If the United States could get its head around that idea, the Yucca Mountain fight would go away. Of course it would be replaced with smaller fights around the country, which might be worse. However, Cameco and Rio would be pleased to see GE's potential fuel source shoved well out of reach.

Outside the box
Nuclear power makes up around 20% of the power generated in the United States. It isn't going away. That means nuclear waste is and will remain a big issue. The Nuclear Regulatory Commission may need to look outside the box, or into a well, to solve the problem. Or, if GE, TerraPower, and Babcock & Wilcox have their way, technology could solve the problem for us.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 24, 2014, at 6:07 AM, gregM wrote:

    Commercial TWR’s aren’t expected for another decade. All those reactors being built for the next decade will be the standard light water U235 reactors.

  • Report this Comment On March 24, 2014, at 12:47 PM, jpanspac wrote:

    Not all nuclear waste is spent fuel. There's plenty of radioactive garments, pipes, tools, etc. that need to be disposed of.

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Reuben Brewer

Reuben Gregg Brewer believes dividends are a window into a company's soul. He tries to invest in good souls.

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