April 2010 will mark the 40th anniversary of the first Earth Day. In the first installment of this column in June 2008, I wrote about participating in events that day as a freshman in high school. From an environmental perspective many of the most obvious problems from that era, including acid rain and polluted waterways–epitomized by Cleveland's Cuyahoga River catching fire in 1969 and recorded for posterity in the Randy Newman song, "Burn On"–have been addressed and conditions have improved dramatically on many fronts. Environmentalists will say there are still many problems that need solving and they're right, but this milestone anniversary is also a good time to take stock of where we stand in terms of the environment and all things green and what the future might hold for advisors and their clients with a desire to make green investments.
As has often been stated in this column, one of the biggest challenges facing the global economy is finding sustainable and affordable sources of energy. The problem of meeting the planet's energy needs is inseparable from the problems facing the environment. Even those who pooh-pooh the idea of climate change caused to some degree by man-made carbon emissions can get behind the idea of cheap and clean energy. Some of that will likely come from further development of wind and solar power, but there are also tremendous opportunities afforded by applying new thinking and new technologies to energy sources we already have.
Yes Nukes
There's no doubt that as a society we face challenges, some of which seem insurmountable, but the optimist in me says the same has been true in every age and some of my recent reading gives me cause for some optimism about our energy future. Let's start with nuclear power, which is finding a renewed acceptance in the U.S.
In February the Obama Administration announced $8.3 billion in loan guarantees to build two new nuclear reactors in Georgia. The 2011 Obama budget would triple–to $54.5 billion–the amount available for loan guarantees for nuclear construction. In announcing the loans, President Obama noted that the new reactors would reduce carbon pollution by 16 million tons a year, compared with a similar coal-powered plant.
The biggest problem with nuclear power has always been the radioactive waste it produces. New technology has been developed for nuclear waste recycling in France (which never abandoned its nuclear programs and generates more than 75% of its electricity from nuclear power) reportedly offering the potential for getting more energy out of the same nuclear material, thereby producing less waste.
All this sounds promising, but it was an article by Richard Martin in the January 2010 issue of Wired ("The New Nuke" ) that really got me excited.
It seems that in 2000 an engineer at NASA's Marshall Space Flight Center, Kirk Sorensen, who was researching nuclear-powered propulsion, discovered some research conducted in the 1950s by the Atomic Energy Commission on producing nuclear power using the element thorium, rather than uranium. Sorensen became convinced that thorium could solve most of the nuclear industry's biggest problems.
Unlike uranium, thorium produces tiny amounts of waste material and that material is dangerous for only a few hundred, rather than a few hundred thousand, years. Martin writes that, "Because so plentiful in nature, it's virtually inexhaustible. It's also one of the few substances that acts as a thermal breeder, in theory creating enough new fuel as it breaks down to sustain a high-temperature chain reaction indefinitely."
If you're wondering why our nuclear program opted to use uranium rather than continue to investigate and develop thorium as a fuel source, think back to the 1950s. The U.S. and the Soviet Union were engaged in a massive buildup of nuclear weapons and weapons-grade plutonium is a byproduct of uranium-fueled nuclear reactions. Thorium, on the other hand, does not produce byproducts that can likely be turned into weapons by terrorists or anyone else.
