Meltdown fears cast cloud on nuclear energy

Fears about nuclear safety that took a generation to overcome were resurfacing Monday after explosions at a Japanese atomic energy plant.

'We do not expect significant direct effects': Cameco CEO

A Red Cross rescue worker, in red, is scanned for signs of radiation upon returning from Fukushima to his hospital in Nagahama on Monday. (Associated Press Photo/Kyodo News)

Fears about nuclear safety that took a generation to overcome were resurfacing Monday after explosions at a Japanese atomic energy plant.

Uranium fuel rods were fully exposed twice Monday on a third nuclear reactor at a northern Japan power plant already reeling from explosions at two other reactors.

The plant was damaged and its backup power put out of commission during Friday's earthquake and tsunami.

World reaction was swift.

Shares in Canadian uranium producers took a hit; Switzerland froze plans to build new nuclear plants; Germany raised questions about its nuclear future and opposition to atomic reactor construction mounted from Turkey to South Africa.

Cameco Corp. lost more than $8, or 22 per cent, falling to $28.39 at the open, before rebounding to close at $31.70, down 12.7 per cent.

Denison Mines was also down sharply, shedding 76 cents, or 23 per cent, to $2.43 within minutes of opening; it remained around that level through the trading session. Uranium One Inc. lost almost 30 per cent to close at $4.31 on Monday.

"We do not expect significant direct effects on Cameco's business in the short or long term," CEO Jerry Grandey told a conference call with investors and the media Monday.

The company organized the call to deal with questions about the impact of Japan's problems on the uranium industry.

Zirconium tubes for fuel bundles are manufactured at Cameco’s metal fabrication facility in Cobourg, Ont. The uranium producer's shares fell 13 per cent Monday. ((Cameco Corp.))

The sell off in the company's shares was "largely driven by emotion," Grandey said.

But the concerns in Japan are casting fresh doubt on a controversial energy source that has seen a resurgence in recent years amid worries over volatile oil prices and global warming, following years of fear sparked by the disasters at Chornobyl, Ukraine, and Three Mile Island in the U.S. 

"The nuclear renaissance is over," Tom Adams, an independent energy consultant based in Toronto, told CBC News.

Adams predicted there would be questions about the continued operation of a number of reactors. But that doesn't mean nuclear technology is gone for good," he said, saying work was underway on small-scale reactors which appeared promising.

"But the basic design concept of the big power reactors that we have in operation today," he said, "is leading to a whole range of new and very difficult questions."

The setback for nuclear may be an advance for natural gas, Adams said.  Natural gas is a major Canadian export and produces less carbon than oil when burned.

Europe must wake up

"Europe has to wake up from its Sleeping Beauty slumber" about nuclear safety, Austrian Environment Minister Nikolaus Berlakovich told reporters in Brussels.

He suggested an EU-wide stress test for nuclear plants, much like European banks have been tested for their ability to cope with financial shocks.

Yet some experts and officials say those fears are overblown, given the exceptional nature of Japan's earthquake and ensuing tsunami. The Japanese blasts may slow the push for more nuclear plants, but appear unlikely to stop it, given the world's fast-growing energy needs.

The governments of Russia, China, Poland and even earthquake-prone Chile say they are sticking to their plans to build more reactors. Spain warned against hasty decisions.

Japan had planned to add 14 plants to the 55 it already has. China has been looking to add 77 facilities to its collection of 13, and India had been looking to more than double its capacity.

"I think they're going to be re-examined, definitely," said Marin Katusa, market strategist with Casey Research in Vancouver. "There's going to be a lot of questions."

U.S. to stick with nuclear program

While some of the plans may be scrapped, Katusa said, he sees many of the nuclear expansions going ahead despite the devastation in Japan.

"They don't have a choice. They may be delayed, but eventually nuclear is a real candidate and all of these countries are trying to increase their energy diversity, and they're trying to grow," he said.

The U.S. government said it will stand by plans to expand its nuclear energy industry by offering companies tens of billions in financial backing.

Administration officials said the U.S. would seek lessons from the Japanese crisis but said the events there would not diminish the United States commitment to nuclear power.

Cameco 3-month chart

"It remains a part of the president's overall energy plan," white House spokesman Jay Carney said. "When we talk about reaching a clean energy standard, it is a vital part of that."

But elsewhere, governments began reconsidering.

Switzerland ordered a freeze on new plants or replacements "until safety standards have been carefully reviewed and if necessary adapted," Energy Minister Doris Leuthard said. The decision put on hold the construction of nuclear power stations at three sites approved by Swiss regulatory authorities.

Switzerland now has five nuclear power reactors that produce about 40 per cent of its energy.

In Germany, the government said it is suspending for three months a decision to extend the life of its nuclear power plants. That also means two older nuclear power plants will be taken off the grid shortly — at least for now — pending a full safety investigation, Chancellor Angela Merkel told reporters.

"The pictures from Japan show us that nothing, even the worst, is unthinkable," EU Energy Commissioner Guenther Oettinger told Germany's Deutschlandfunk radio.

EU to look at emergency preparedness

The European Union called a meeting Tuesday of nuclear safety authorities to assess Europe's preparedness in case of a nuclear emergency.

Meanwhile, opposition voices rose up in Turkey to renounce or scale back governments' nuclear expansion plans.

And anti-nuclear groups staged rallies around France, the world's most nuclear-dependent country, as the government sought to reassure the public that the risks remain minimal.

Environmental group Earthlife Africa said it wants South Africa, the only African country with an existing nuclear plant, to follow Germany's example. But South African government officials want to expand nuclear power.

Statistics from the International Atomic Energy Agency show there are 442 nuclear reactors in operation worldwide, with 65 new facilities under construction. Construction last year was started on 14 new reactors — in China, Russia, India, Japan and Brazil.

In 2005, in comparison, ground was broken for only three reactors.

With files from The Canadian Press and The Associated Press