Saturday, May 1, 2010

Why is Nuclear Different?

We saw a very interesting observation in a recent World Nuclear News item describing updates to World Association of Nuclear Operators’ structure. The WANO managing director said “Any CEO must ensure their own facilities are safe but also ensure every other facility is safe. [emphasis added] It's part of their commitment to investors to do everything they can to ensure absolute safety and the one CEO that doesn't believe in this concept will risk the investment of every other.” As WNN succinctly put it, “These company heads are hostages of one another when it comes to nuclear safety.”

I think it's true that nuclear operators are joined at the wallet, but why? In most industries, a problem at one competitor creates opportunities for others. Why is the nuclear industry so tightly coupled and at constant risk of contagion? Is it the mystery and associated fears, suspicion and, in some cases, local visibility that attends nuclear?

Coal mining and oil exploration exist in sharp contrast to nuclear. "Everyone knows" coal mining is dirty and dangerous but bad things only happen, with no wide-ranging effects, to unfortunate folks in remote locations. Oil exploration is somewhat more visible: people will be upset for awhile over the recent blow-out in the Gulf of Mexico, offshore drilling will be put on a temporary hold, but things will eventually settle down. In the meantime, critics will use BP as a punching bag (again) but there will be no negative spillover to, say, Chevron.

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