Should the U.S. Go Nuclear-Free?

For the second time since the Fukushima disaster and the third time in over 40 years, Japan is entirely nuclear-free. With proponents and opponents battling fiercely over the future of nuclear power in Japan, let’s take a look at whether the United States should be nuclear-free.

Japan’s nuclear notions
Japan’s last operating nuclear plant went offline this week for an inspection, and public pressure has kept any restart date questionable. After embracing nuclear power more than four decades ago, Japanese are split over the future of this energy source.

Prime Minister Shinzo Abe and utilities are all for firing up the nation’s 50 idle reactors to keep supply steady and avoid major blackouts. But the general public and environmental groups remain skeptical on nuclear notions, citing everything from general safety concerns to an unprecedented opportunity to embrace alternative energies.

No-nuclear nation
If the United States shuttered its 104 nuclear reactors, 20% of our nation’s total electricity supply would immediately disappear. With 20% of that 20% to its name, Exelon Corporation (NYSE:EXC)’s 19,000 MW of nuclear capacity alone would cut 4% of the United States’ power.

With the recent rise of natural gas and renewables, a decline in nuclear might not seem so bad. Natural gas has already surpassed coal as our largest source of electricity, and wind power alone is expected to triple capacity in the next three years. Crude oil is a relic of the past for electricity, and we’ve managed fine with recent coal closures.

Source: EIA.gov

Fuel sources have come and gone over the past 60 years, and we’ve still got plenty of power today.

Precedent for a predicament
But survival alone isn’t the ultimate goal, and cutting out nuclear may hit closer to home than we think. Even before Edison International (NYSE:EIX) announced that it would shut down the remainder of a faulty Southern California nuclear plant, extended outages pushed wholesale power prices through the roof. For more than a year, South Cali prices clocked in 12% higher than North Cali as the area fired up expensive (and more polluting) alternatives to keep power pumping to Los Angeles and San Diego.

Over on the East Coast, Entergy Corporation (NYSE:ETR)’s anticipated closure of its Vermont Yankee nuclear plant pushed up natural gas futures contracts. The day the utility announced the closure of its 604 MW plant, the forward basis swap for January 2015 (the month after Yankee goes offline) increased around $0.50 per MMBtu, an approximate 7% spike.