Japan Steel Works Stock Soars by More Than 8% As China Doubles Its Nuclear Plans
As a patriotic and competitive American, I am worried about the long term effects of the difference in stimulus investments between my country and China. We spent $3 billion dollars subsidizing the purchase of new automobiles for individual people and are spending an untold amount of money helping other individuals to purchase homes through the gift of $8,000 in tax credits to new homebuyers.
In contrast, China is building infrastructure that will enable it to combine already low labor costs with very low electricity costs to become an even more formidable competitor in manufacturing the hard goods that enable us to live comfortably in a world that offers many challenges. The most recent evidence of just how serious the Chinese are in building capability that will provide returns for many decades is an announcement by Japan Steel Works (JSW) that sent its stock soaring by more than 8% yesterday, while Americans were celebrating Labor Day in a time where it is considered to be “good” news when “only” a quarter of a million people lose their jobs each month.
The announcement that had such a positive effect on JSW, the world’s primary manufacturer of very large steel forgings suitable for the main components of large, central station nuclear steam supply systems, was that it had doubled its recently increased forecast for the number of nuclear power plants planned in China. According to a Bloomberg.com article titled China to Build More Nuclear Plants, Japan Steel Says (Update2) , the current forecast is for China to build 22 reactors in the 5 years ending in 2010 and 132 more in the following years. Just last year, the total forecast for Chinese nuclear power plant planned was 60 units.
China, the world’s largest energy consumer after the U.S., is increasing spending on atomic energy as part of a 4 trillion yuan ($586 billion) economic stimulus and as it curbs greenhouse gas emissions. Japan Steel Works is counting on the rising reactor demand as the global recession curbs sales to customers such as carmakers and electronics companies.
“The potential for investment in nuclear power is huge,” said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. “Only a small number of companies in China have the right to develop nuclear power projects, but the country is open to foreign companies to help build reactors and to provide equipment.”
Given what I have recently learned about how the construction process is proceeding with the first Westinghouse AP1000 units in China and what I have tried to share with all of you with regard to the total production cost of electricity from US nuclear power plants, I am very worried about the implications of further Chinese production of new nuclear power plants. Of course, as a former swimmer, whose response to competition was a redoubling of my own efforts since there was nothing I could do to slow anyone else down, I believe that the proper response to this announcement is a bit of admiration plus a renewed effort to improve conditions for reactor manufacturing and construction in the US.
We have a lot of inherent attributes and advantages, but we cannot prosper if we continue to allow anti-nuclear activists to hobble our efforts, slow down progress at the NRC, or divert shared resources to individual gifts and subsidies. That includes the strange concept of having all taxpayers, even the hard working people who struggle to feed and shelter themselves and their families, to help rich people spend tens of thousand of dollars putting decorative solar panels on the roofs of their spacious homes.
Our stimulus package included about $90 billion in subsidies for non-nuclear alternative energy projects and not a new dime for new nuclear power plants, not even an increase in the co-signature loan guarantee program. That program, which should cost taxpayers nothing, would result in a vast investment of private money that would create both tens of thousands of good, technical, durable jobs, but also capital assets that will be able to produce emission free, affordable electricity for a couple of generations. Please become someone who asks the most important question that every three year old learns – Why?
