Japan quake not seen slowing U.S. nuclear revival

By Bernie Woodall

LOS ANGELES (Reuters) - A resurgence of nuclear power in the United States likely won't be stalled by this week's earthquake in Japan that shut the world's largest nuclear plant, industry watchers said.

A 6.8-magnitude earthquake on Monday killed 10 people and flattened homes in northwestern Japan. It also started a fire at the seven-reactor, 8,212-megawatt Kashiwazaki-Kariwa nuclear power plant that burned a transformer, spilled several hundred barrels containing radioactive waste and vented some radioactive waste.

Radioactive water and air that leaked is minuscule, far less than scientists say will harm humans. But the event is causing Japanese officials to take another look at the nation's aggressive effort to increase the country's nuclear power generation within a decade in order to satisfy 40 percent of electricity needs. Currently, nuclear power accounts for almost a third of Japan's electricity.

Within a decade, a U.S. nuclear power renaissance is expected to be in full swing. No U.S. nuclear power plants have been ordered since 1978, the year before the Three Mile Island accident in Pennsylvania.

"The incident in Japan will enter into the debate, but the fundamentals that led to the nuclear resurgence are still strong. Nuclear power will remain an important piece of the power equation," said Junaid Chida, a partner at the law firm of Dewey Ballantine, which specializes in project finance.

Those fundamentals include the desire of federal, state and local politicians as well as utilities to make the emissions-free energy that nuclear power provides. Also, after an estimated $3 billion to $4 billion to bring a new reactor on line, it will make relatively cheap, reliable baseload power.

Dimitri Nikas, director of utilities and project finance at Standard and Poor's, agrees.

"The incident in Japan will ensure that people are acutely aware that nuclear generation is not without risks, but I'm not sure it's big enough or significant enough to get companies to derail their plans," said Nikas.