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The nuclear renaissance that never was
First published in The West Australian, 26.3.2013
The second anniversary of the Fukushima disaster has come and gone. But here in West Australia, rather than reflection on the lives affected by Australian uranium sold to and used at the Fukushima Dai-ichi reactors, uranium hopefuls are celebrating the re-election of a pro-uranium Government at the same time as promoting the low uranium price to investors as a good time to buy.
An advertisement by Energy & Capital finds an upside in the “life-long consequences” of “one of the worst nuclear disasters on record”. The upside is that uranium prices took a “nosedive” in the aftermath of the Fukushima disaster, China and India “will drive a new nuclear boom that will rival the first oil discoveries of the late 19th century”, and so there’s “no better time to invest in uranium than right now.”
There are two problems with this. Firstly, it is deeply insensitive to the ongoing suffering in Japan. Two years after the Fukushima fires, explosions and meltdowns and 160,000 people remain dislocated in temporary accommodation, often separated from family and friends, and with little hope of a return to normality for some years to come.
Secondly, the presumption of a “new nuclear boom” does not withstand scrutiny. The International Atomic Energy Agency anticipates 1.5 percent annual growth in nuclear power capacity until 2030. That’s not a boom; that’s not a nuclear ‘renaissance’. Growth in a few countries, including China and India, will be offset by stagnation and decline elsewhere.
The nuclear industry often promotes figures on the number of new nuclear reactors that are dangerously skewed, they inflate the number of proposed reactors and fail to indicate the time and cost blow outs of the modest amount of reactors that are under construction. Rather than a renaissance the industry will struggle to maintain status quo.
It is not just those in the nuclear free movement who see a nuclear renaissance as a mirage. The Economist in 2011 dubbed Nuclear power as the ‘dream that failed’, the Chief of General Electric said “It’s hard to justify nuclear, really hard.” Former CEO of Excelon, a US company that operate 22 nuclear reactors, said this; “Let me state unequivocally that I’ve never met a nuclear plant I didn’t like. It just isn’t economic, and it’s not economic within a foreseeable time frame.” Nuclear power has continually failed to deliver cheap energy, disappointing its most faithful supporters and has proved the anti nuclear lobby right time and time again with safety breaches, accidents, cover ups, secrecy, weapons proliferation and failure to develop waste storage. Nuclear power promised to be too cheap to meter – but in reality it has become too expensive to matter.
Despite the past four years of a pro-uranium government in WA, 42 interested companies, 253 tenements with exploration drilling, and millions of dollars in subsidies, there has not been a single uranium mine approved. Instead, BHP Billiton has sold Yeelirrie WA’s biggest uranium deposit; and dissolved its uranium division.
And the world’s largest uranium miner, Cameco, has put Kintyre, WA’s second biggest uranium deposit, on hold stating that development of the deposit is not economically viable. In early 2013 the company wrote down the value of the Kintyre project by US$168 million, and stated that the uranium price would need to jump from its current low to US$67 lb for the project to break even.
Paladin, a Perth based uranium miner has said the uranium price would need to be even higher at US$85 lb to justify any further investment in the industry, and in February 2013 it wrote down its uranium assets by US$123 million.
Despite this back-pedalling by experienced companies, there is no shortage of uranium hopefuls, like Toro Energy, who remain enthusiastic about the price of uranium recovering, despite the lack of evidence to support their optimism.
Toro Energy, a small company with no mines and no proven experience, is leading the charge with WA’s most advanced uranium proposal – Wiluna – a much smaller deposit than Kintyre or Yeelirrie. As its name suggests, Toro is bullish about pursuing this small deposit despite the shaky economics, the lack of investor interest and fierce public opposition.
There are few grounds to suggest that uranium prices will ever bounce back to the high prices seen in 2007. Long term projections do suggest a more modest recovery, but not to the levels that would make most uranium projects in WA economically viable. The demand for uranium is simply not there.
Uranium is different to other minerals. It pushes moral boundaries, it permanently pollutes country and it contributes to the global nuclear waste problem and proliferation risk. Uranium is unwanted, unnecessary, and uneconomic – altogether a bad way for mining investors to lose money.
Mia Pepper is the nuclear free campaigner for the Conservation Council of WA.