An Inside, Uncertain Lookat Nuclear Power’s Future

It was the evening of a long day for a high executive of a company that manufactures nuclear reactors. “How can you remain with a firm that is selling these reactors?” I asked him. “When is your company going to get out of the atomic power industry?”

“The sooner the better,” he replied with firm conviction. “The nuclear division in our company is draining away the profits from the fossil fuels division, but our president still remains faithful to his commitment to nuclear energy,” he said with a skeptical shrug. “What about. Westinghouse and General Electric?” I inquired. “They all want to get out,” he asserted, with almost a shout of candor.

The businessman was telling it straight, unlike the flashy corporate ads and messages in the monthly electric bill to customers. Economically, the nuclear industry is crumbling plants. Cost of construction, unreliability, and the cartelized, rising price of uranium are the major dollar-and-cents reasons. Of course the safety questions afflicting the entire nuclear fuel cycle have not gone away either.

For some time the nuclear reactor manufacturers have been caught in a squeeze. They are losing money. They do not have orders for new reactors but their overhead and staff costs remain. The entire industry has received no more than two domestic reactor orders in the past year. It is pressing for a bigger federal subsidy bailout.

State governments, most lately Wisconsin, have passed laws which, by conditioning the construction of new plants, have imposed a virtual moratorium. California’s condition is an acceptable radioactive waste disposal system and one does not exist anywhere in the country.

Two recent books on the economics of nuclear power show why many banks have quietly soured on atomic electricity.

One of the books titled “Light Water: How the Nuclear Dream Dissolved” (Basic Books, New York) is by Irvin C. Bupp, n economist, and Jean-Claude Derian, a physicist and ngineer. The authors have spent about 15 years “in close rofessional association with the nuclear power programs of our espective countries, France and the United States.” It is seful to cite their observations:

“For nearly a quarter of a century the theology of nuclear ower–unchallenged and unchallengeable–was accepted by a ariety of diverse interests…Rarely did those who seized on uclear power as a means to their own ends know its actual conomic and technical status. Instead, the information vailable to them was part of a catechism whose basic function as to answer infidels and sustain the faith of the converted. he result, a circular flow of self-congratulatory claims, preserved the discrepancy between promise and performance.”

Bupp and Derian did not spare the government in their cool analysis: “By serving as soapboxes for the economic claims of the reactor manufacturers, the Atomic Energy Commission and the Joint. Committee (on Atomic Energy in Congress) significantly amplified the flow of misinformation and decisively altered the commercial strength of these companies at home and abroad.” The other study is by Saunders Miller, an investment analyst with the firm of Dain, Kalman and Quail in Minneapolis.

The conclusion of his book, “The Economics of Nuclear and Coal Power” (Praeger, New York)–is that “to rely upon nuclear fission as the primary source of our stationary energy supplies will constitute economic lunacy on a scale unparalleled in recorded history, and may lead to the economic Waterloo of the United States.”

In commenting on Miller’s study, the Dow Jones publication, Barrons, stated: “If the top executives of every electric utility in the nation–not to mention the utility regulators–read Saunders Miller’s new book…most nuclear plant construction plans would be scrapped.”

Miller touches on vulnerable nerve points when he asks: “Are boards of directors prepared to weather a storm of shareholder suits in the future because of imprudent management now?…We question if either an interpretation of most state fiduciary laws or ERISA (the 1974 federal pension law) would consider direct or indirect investment in nuclear plants to be qualified for investment by trusts, insurance companies and pension funds if all of the facts regarding the enormousness of economic risks in connection with nuclear plants were fully understood.”

The next arena for the atomic power opponents is likely to be the shareholder meeting rooms and the dockets of the Securities and Exchange Commission.