The Reemergence Of Nuclear Power: A Case For Thorium

Includes: LTBR
by: Amit Bilgi

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It's clear that there are some serious problems with traditional fossil fuel energy sources. Everything from environmental damage to rising costs can render one to consider possible replacements for our primary source of power. Enter nuclear energy. Sure, it may have a bad rap due to Fukushima, but there's much more to this than what happened in Japan. Analysis released by Paragon Report last year indicates that we are on the brink of a nuclear renaissance, defined as a massive reemergence of nuclear power in the world. The report argues that there are plans to build over 160 nuclear power plants in a multitude of countries as high costs of fossil fuels in many emerging countries may render nuclear power the best, if not only, option available. Granted, such a shift may take years or decades to achieve, but what does this entail in the meantime?

Uranium is the most immediate type of nuclear energy people think of and the status quo is doing a barely adequate job of perpetuating its use. In addition to the aforementioned nuclear plants, with most being uranium, the implementation of the element has been shaky at best. For instance, for almost two decades, the United States has had a deal with Russia to acquire high-enriched uranium from former Russian nuclear weapons and convert it into low-enriched uranium that can be successfully used in nuclear fuel -- a program known as Megatons to Megawatts. The program has been fairly successful, with about 470 metric tons of uranium being converted into fuel. Unfortunately, the program is set to expire at the end of year, with no intention to renew or replace the accord. Although this source of uranium will cease, it's unlikely that we will see a halt in this progression toward a nuclear renaissance as uranium mining will continue, primarily in countries like Canada, Australia, and Kazakhstan, with the lattermost using uranium as a major driving factor in their economy.

Yet, even if there is an ample supply of uranium, is it necessarily the best source of nuclear power? The answer seems to be "no" for two primary reasons. First, uranium is susceptible to a serious amount of nuclear waste. When uranium fuel rods are fully used or when a power plant or equipment is decommissioned, the result is a mass of radioactive waste that must be dealt with. Current disposal methods are overwhelmingly on-site with the plant itself, which lends itself to potential mishaps on its own. As for the intrinsic problem with nuclear waste, it's the environmental damage that switching to an alternate form of fuel was supposed to solve in the first place. Leaks into the soil or groundwater can immediately affect wildlife and eventually make its way up the food chain to humans.

However, let's assume that the waste issue is taken care of. Arguably, the largest problem the public has with uranium power, especially of late, is with the potential for nuclear meltdowns a la Fukushima. The fear is that overheating of the internal core of a nuclear reactor can cause part of the fuel to exceed the melting point, above the threshold of any coolant operating properly and thus literally melting down and causing myriad problems, both immediate and long term. As a feasible solution to these issues has yet to be developed, maybe it is time to switch away from uranium as a nuclear fuel source and over to something else -- perhaps thorium.

Thorium has become the latest "fad" of the energy world, if you will. Over the past few years, a few different publications have come out discussing the merits and possibilities of using thorium as a source of nuclear fuel. This coupled with India's push toward thorium has made the element quite popular among the alternate energy crowd. Thorium isn't much different than uranium in a very broad sense, but a few distinctions where it counts make it far superior as an energy source.

As background on how thorium reactors work, let's look at the element uranium itself. It has two isotopes (or for those who haven't taken chemistry in a while, the element has two different "forms" it can take). One of which is fissile, meaning it can engage in a nuclear reaction, and the other is fertile, the opposite. The only naturally occurring isotope of thorium is fertile and thus cannot be part of a nuclear reaction, that is, unless it is kick started by something else -- in this case, uranium. I believe noted nuclear engineer Kirk Sorenson provides a good analogy to explain this:

"It's kind of like when you go camping and there is wet wood and there is dry wood. You can start the fire with dry wood, and if you get the fire hot enough, you can even burn the wet wood. Thorium and Uranium 238 are both like the wet wood - if you dry them out to the form of turning them into fission material, then you can burn them for energy."

The point is that the reaction is just different enough to sidestep a lot of the problems associated with traditional uranium energy. For one, the fact that thorium is inherently fertile means that there are no substantial fears of someone (e.g., terrorist groups, corrupt governments, etc.) attempting to convert the material into a nuclear weapon. The additional benefits appear in the application itself.

One of the more commonly cited flavors of thorium reactors is the Liquid Fluoride Thorium Reactor or LFTR (pronounced "lifter"). The reactor uses the same kind of thorium fuel cycle explained above, but in the context of a molten core comprised of fluoride. Functionally what happens is that the thorium fuel is melted and combined with also-melted fluoride and is used as the fuel source in the core of the reactor. It's important to note this particular fact, since it is the case that the core and fuel source are already melted, a feared "meltdown" is impossible. The fluoride used is solid at room temperature, so in the worst case scenario where the reactor fractures and the material flows out, the material simply solidifies and nothing further would happen, thus avoiding the majority of the meltdown issues associated with uranium power.

Moreover, LFTRs have the added benefit of having very little waste. In fact, it can actually reduce the net amount of waste in the world by consuming the waste that already exists. It may sound like science fiction, but nuclear waste could serve as the very hot fire in Sorenson's analogy and be used to jump start the thorium reaction. Whatever waste LFTRs do produce is minor and far less radioactive compared to uranium, so disposal will not be as large of an issue.

Understandably, this sounds quite utopian and unfortunately that is the primary issue right now. Although the Oak Ridge National Laboratory has a reactor running that is very similar to a LFTR, these kinds of reactors do not exist in the commercialized magnitude necessary to solve the imminent alternate energy crisis. That is, not yet. There is a fairly large revival of research and development companies looking into mass produced thorium reactors, some of which focusing on the LFTR. Sorenson's company, Flibe Energy, is solely intent on designing and marketing a fully commercialized version of the reactor. Since the company is private, the average investor wouldn't be able to get very involved with the project.

This is where a company like Lightbridge (NASDAQ:LTBR) comes into play. A $20 million company that's been public since just after the dotcom crash, Lightbridge is making some headway into thorium and nuclear overall. The company recently patented a few designs for thorium reactors that operate a little differently than LFTRs. One of the benefits of Lightbridge's design is the ability to incorporate thorium fuel with many already-existing nuclear reactors, thus removing the need to install and fund massive new equipment. The company's stock isn't exactly in a position to surge quickly, as this seems to be the quintessential long-run high risk/high reward play (the company reported a net loss for the past two years).

So what does all of this entail for the average investor or someone just concerned about our global energy consumption? It's clear that fossil fuels aren't going to cut it for much longer and eventually we'll need to find a replacement. Nuclear could very well be what we need to progress, but there is of course the slight hiccup with thorium. Much of the research and development has already been done by Oak Ridge, Flibe, and others. It's just a question of funding and demonstrating commercialization that's preventing this idea from truly getting off the ground.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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