One of the first things that sprung into my mind on Friday as we saw the huge tsunami waves wreaking havoc in Japan was their nuclear power plants. Japan has a very limited supply of natural resources for generating electricity so they began to rely upon nuclear as their economy developed. In fact, with 53 active reactors Japan was 3 behind the U.S. and France in the number of active nuclear power plants.
This morning as news spread of yet another reactor issue and video of women and children being screened for radiation poisoning the shares of Uranium production companies such as Cameco plunged. In fact the Uranium ETF - URA which is comprised of 23 companies involved in the production of uranium dropped over 20% at one point which is very dramatic for a single session.
It remains to be seen how long the effect will last but there is little doubt that this incident will once again cast a shadow of doubt over the entire industry. The thought of radiation poisoning (a silent and deadly killer) is far worse than putting up with a little pollution which is why Coal is one of the few things that is up today. It also appears that the Natural Gas ETFs are perking up as well as the low prices and abundant supplies are very attractive in light of current events. There is little doubt that natural gas will play a bigger role in our energy future however the severe price spikes in the past decade still has energy producers leaning toward coal.
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