The US government hopes that a large number of nuclear plants will be built in the US over the next 20 years to cut the country's need for oil. But GE (NYSE: GE) CEO Jeffrey Immelt says they will not be built without incentives from the Feds.
According to the FT, "Immelt said only five to 10 US nuclear power projects were likely to go ahead unless there was a carbon-pricing framework to create incentives for utilities to build more." That may be true, but GE should be quiet about championing aid for building those facilities. GE and Hitachi (NYSE: HIT) have a joint venture to build nuclear plants, and the parties would not want to be seen as sell-serving.
The comments raise a difficult issue. The government and utilities both know that the long-term future of cheap oil looks bad. But building nuclear plants take years, is expensive, and requires passing government safety standards. Over the next decade it may actually be cheaper to continue to use fossil fuels even it the price of oil stays high.
GE will make a lot of money on the move to nuclear fuel, but that does not mean that its call for government help is wrong.
Douglas A. McIntyre is an editor at 247wallst.com.
The week in preview: New quarter earnings kick-off
Comfort Zone Investing: Keep your recovery expectations real
Will Americans have to slim down to fit into their cars?
Reader Comments (Page 1 of 1)
11-19-2007 @ 12:26PM
Brockage said...
"We are the Saudi Arabia of coal" -- The US isn't going to walk past that inexpensive energy source for decades to come -- not to mention it is in the interest of the political parties to curry favor with voters of coal areas , especially in the West for Democrats.
11-19-2007 @ 12:34PM
bob said...
As long as it is transparent, I support GE. I am an employee in the incandescent lighting industry.Our facility is closing. It is located in Cleveland. If incandescent lighting must go. If it is that detrimental to the environment and CFL's are safer, than I welcome the opportunities that will arise. My boss, Jeff Imelt will be doing the right thing for all of us. On the other hand, if it is solely based on the inability to manage an industry that exists in a Developed Nation, than I am sadly disappointed. I have always believed in Jeff's Integrity, I am grateful to have worked for such a company. I can just hope that GE and other Corps. take this unique opportunity (the dollar is in decline) to invest in the Great Lakes Region. Ge is energy , Ge is transportation. Euclid Ave , "main street " Cleveland, is tying to build a new bus system.Why the "power's that be" don't install a monorail that is powered by alternate fuel , is beyond me. Think Renaissance.