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Wednesday, December 5, 2007
Three weeks ago, in Forsyth, Georgia, a man called 911. He used the payphone at Stop & Shop. As soon as he placed the call, he jumped in a black pick-up truck and sped away.
The man had just made a bomb threat. He said he'd planted the bomb at Plant Scherer.
Plant Scherer is the largest coal-fired power plant in the United States. It has four turbines. Each one can produce 880 megawatts of electricity.
Plant Scherer's management immediately launched its emergency response team and told security to lock down the plant. It closed the gates and stopped letting anyone in. And it barred employees inside the plant from leaving.
It took five hours for the emergency responders to comb the plant. They found nothing. It was a false alarm.
Police traced the call to the Stop & Shop. The attendant said she remembered a man using the payphone. Another man was with him, she said. But the attendant couldn't identify either man... or the make of their truck.
I do not know why the man in the black pick-up truck made a bomb threat. Maybe he was late to work. Maybe he had a beef with management. Or maybe – and this is my theory – he is an environmental activist mad about the pollution from Plant Scherer.
It turns out Plant Scherer is the largest single source of carbon dioxide emissions in the United States.
The day after the man made his bomb threat, the Center for Global Development came out with its list of the highest CO2-emitting power plants in the world. The survey analyzed 50,000 power plants, run by 4,000 different power companies.
Plant Scherer emits 25.3 million tons of CO2 a year. That's 25% more than the Miller Plant in Quinton, Alabama, No. 2 on the list.
Also, Plant Scherer was the only power plant from the United States in the global top 25. China, Taiwan, and South Korea dominate the list. Plant Scherer came in at number 20. You can see the full study here.
Coal-fired power plants are the world's most concentrated producers of CO2. With all four turbines in operation, Plant Scherer burns through 1,288 tons of coal every hour. That's 12 million tons of coal a year.
Plant Scherer gets its coal by train. It unloads 1,300 coal trains every year. And to make sure it never runs out of coal, Plant Scherer maintains a coal reserve on its property. They call this mountain "the pile." It occupies 90 acres and contains 1 million tons of coal.
Personally, I think coal is an extraordinarily inefficient way of producing energy. The pollution and CO2 emissions are huge. It's dangerous to mine coal (6,000 miners die in China every year). And it's very inefficient to transport. Imagine how much energy it takes to move 12 million tons of coal from Wyoming to Georgia every year – and that's just one power plant.
Could the bomb threat be an early warning sign that the public is turning against coal? It's pure speculation, but I think it might be. And if I'm right, I think it could be good news for nuclear power.
Nuclear power is by far the most efficient form of energy known to man. According to a mechanical engineer at Plant Scherer, to get a million BTUs, fuel oil costs $18, natural gas costs $7.20, coal costs $2.20, and nuclear costs $5.30.
I asked an engineer at Plant Scherer if he thought nuclear was the way of the future and he told me, "if you like to use microwaves, refrigerators, and air conditioning, then nuclear power is the only way."
"Of course, that's just my opinion," he said. "Not the opinion of [the coal-fired power plant] I work for."
Nuclear energy is so efficient, cheap, and safe to produce, it has to be the future. Yet Americans are so skeptical of nuclear power, nuclear investments are cheap.
When I see how clumsy coal is at generating power and how efficient nuclear is, I want to own stocks with exposure to growth in the nuclear industry. You should consider nuclear investing, too...
P.S. The Van Eck Global fund family recently introduced a nuclear energy ETF. You can use its top holdings as a place to get started on further nuclear research. Click here to visit the top 10 holdings page.
THE BIGGEST TREND IN THE WORLD RIGHT NOW
The world's biggest cliché hit the gold markets this week...
Bloomberg reports China's gold jewelry consumption increased 24% from this time last year. It's the latest story of "Chindia" bidding up the price of just about everything in the world.
Although the hype surrounding China and India is enough to make a contrarian wince, a real, multidecade shift is happening in the world's two most populous countries...
Due to free trade, television, and the Internet, more poor people than ever aspire to live like rich people. Asia wants cars, refrigerators, laptops, cell phones, and furniture. It will take decades and huge amounts of steel, coal, rubber, copper, uranium, lumber, and oil to meet those wants.
Will there be busts along the way? Sure... it's simply the nature of a country's lifecycle. A fundamentally driven bull market picks up steam, folks get too optimistic and make silly investments, and trends are projected into the afterlife to justify outrageous earnings multiples. We recommend using the coming busts as buying opportunities for the raw materials that make up the CRB Index. As goes Asian growth, so goes this index.