A Moribund Nuclear Manufacturing Industry Shows Sign of Life

Renewed calls for building new nuclear reactors to cope with a worrisome energy future have become a popular theme on the campaign trail for candidates like John McCain, but any effort faces a serious obstacle—the moribund state of the nation's nuclear manufacturing industry.

There is some good news for nuclear energy's boosters, because several large companies are leading an effort to revive nuclear-energy-related manufacturing. Most of the proposed projects are still conceptual or in the planning stage, but they appear to be gathering some new momentum.

Over the past few years, power companies and utilities across the United States have been filing or preparing applications—nearly two dozen at last count--to build new nuclear reactors, spurred by concerns about energy demand and desires to find cleaner (and cheaper) alternatives to coal, which provides almost half of the country's electricity.

To do so, however, they'll need a range of custom parts, from steam generators to pressurizers to special engines, all engineered to extremely precise standards. Finding them in the United States won't be easy, because the plants that once built and assembled these items have long since closed down.

Today, Tokyo-based Japan Steel Works has a near monopoly on manufacturing the most significant component for nuclear reactors, the steel containment vessels, and a three-year waiting list for new orders, as companies from the United States, China, Europe, and elsewhere rush to place orders.

But the American landscape is slowly starting to evolve, thanks to some private companies with a keen interest in advancing nuclear power. Take Areva, the French nuclear energy giant. Areva's CEO for North America, Tom Christopher, says the company expects to announce in October plans to build a nuclear-parts plant in the United States that would produce big components (though not the huge steel reactor vessels themselves).

Another effort is getting underway in Louisiana, where two companies, Shaw Group Inc. and Westinghouse, have teamed up with the state's governor, Bobby Jindal, to build a facility at the Port of Lake Charles, near the Gulf Coast, to produce large nuclear components. The plant, which is projected to open in mid-2009, would make "modules" for a new Westinghouse reactor design aimed at bringing down the cost of building new units. Louisiana State University researchers, in an analysis of the project, estimate that the new facility could produce about 9,000 jobs over the next 15 years and potentially several billion dollars in earnings.

The prospect of new nuclear plants is also helping to energize manufacturing for uranium enrichment facilities, which make nuclear fuel. One firm, the United States Enrichment Company, is now working with companies in 10 states to make customized parts that it will need for its American Centrifuge Plant in Ohio, a massive enrichment facility expected to come online in 2010. Some of USEC's partners are undertaking $100 million-plus facility expansions to accommodate the increased workload. That translates into more jobs.

Overall, the new centrifuge plant is expected to help create more than 6,000 jobs, including temporary ones. Many of the companies involved in this nuclear manufacturing burst are European, not American, mostly because foreign countries are much more reliant on nuclear power. France, as nuclear proponent Sen. John McCain is quick to note on the campaign trail, gets about 80 percent of its electricity from nuclear—and it's foreign companies such as Areva that tend to have the expertise, familiarity, and in many cases interest to undertake these projects.

Proponents of U.S. nuclear manufacturing, of course, have their detractors. Some groups, like the Union of Concerned Scientists, have cautioned against a resurgence of enrichment activity in the United States, saying that it hurts American efforts to contain enrichment operations elsewhere, such as in Iran. Others, like the environmental group Friends of the Earth, have criticized the amount of money the federal government is coughing up to promote new nuclear reactors in this country, which of course would be the main driver for any revived manufacturing.