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Nuclear Taboo Under Review in Uranium-Rich Australia

While Australia is home to the world’s largest uranium reserves, it has never had a nuclear power plant. Now, amid growing concerns over climate change, the government is weighing whether to reverse its long-held ban.

The state of South Australia, where BHP Billiton Ltd. operates the Olympic Dam mine, is setting up a royal commission to evaluate nuclear power’s impact on both the region’s economy and its carbon emissions. At the same time, the federal government is set to release within months an extensive report on energy that will explore the issue further.

Those reports will follow Prime Minister Tony Abbott’s comments in December that global warming has made the issue worth revisiting. It’s a significant shift in a nation where grassroots resistance to nuclear energy dates back to the 1960s. Still, any push to introduce nuclear power would face legal and political hurdles from community groups.

“This is going to open the door to a proper informed debate and a comparison of nuclear against other low emissions technologies,” said Tony Irwin, director of SMR Nuclear Technology Pty, a Sydney-based company that’s developing technology for small reactors.

The Fukushima nuclear disaster in 2011 tilted global public opinion against nuclear power, and Japan and Germany shuttered nuclear facilities.

Four years later, interest in nuclear power has been revived, in part because it has no greenhouse gas emissions. Kyushu Electric Power Co. has received approval to restart two reactors in Japan, while China is renewing its atomic ambitions with five reactors set to start construction this year.

Coal and Gas

While Australia exports uranium to nations including the U.S. and Japan, abundant coal and natural gas have precluded any pressing economic need in the past for nuclear power.

Coal, though, is now under fire because it’s the biggest man-made source of greenhouse gases. Abbott said in December that nuclear power should be considered to help reduce carbon emissions, calling it the “one, absolutely proven way of generating emissions-free baseload power.” Abbott is a member of the Liberal Party, part of the ruling coalition with the National Party.

Envoys from 190 nations -- including Australia -- will meet at United Nations-sponsored talks in Paris in December to draw up carbon-dioxide emission limits. The current goal calls for policy makers to keep global warming increases to 2 degrees Celsius (3.6 degrees Fahrenheit) by the end of the century.

“The world has a CO2 problem,” said Alan Finkel, president of the Australian Academy of Technological Sciences and Engineering, a group with more than 800 scientists and engineers. “We need large-scale solutions. There is some awareness that nuclear, if well managed and well regulated, can significantly contribute at scale to reducing CO2 emissions.”

‘Open Mind’

South Australia Premier Jay Weatherill also cited climate change when he announced the creation of a commission to study all aspects of the nuclear fuel cycle on Feb. 8.

“I have in the past been opposed to nuclear power -- all elements of it,” Weatherill told reporters. “I now have an open mind about these issues.” The involvement of Weatherill, a member of the Labor Party, means both sides of Australia’s political scene are examining this issue.

A domestic nuclear-energy industry would boost demand for uranium, which has surged 36 percent to $38.20 a pound from a low of $28 in May, according to data compiled by Bloomberg. Australia has 31 percent of the known reserves, according to the World Nuclear Association, and is the third-biggest producer, behind Kazakhstan and Canada.

Uranium traded at $67.50 a pound before the earthquake and tsunami that crippled Tokyo Electric Power Co.’s Fukushima nuclear power plant and triggered the worst atomic disaster since Chernobyl in 1986.

‘Probably Valid’

Creating the South Australian commission is “probably valid, given we are a supplier of uranium to the global market,” Andrea Sutton, chief executive officer of Energy Resources of Australia Ltd., said by phone. The Darwin, Australia-based company is controlled by Rio Tinto Group, and produces uranium at the Ranger mine in the Northern Territory.

The Australian government believes all energy options, including nuclear, should be part of any discussion about the country’s future energy mix, Industry Minister Ian Macfarlane said in an e-mailed response to questions.

There are significant hurdles to introducing nuclear power in Australia, said SMR Nuclear’s Irwin, who once operated eight reactors for British Energy Group Plc and also teaches at the Australian National University. Perhaps most significantly, there are federal prohibitions against the technology.

Conservation Council

A move toward nuclear energy would also face opposition from environmental and community groups. The Conservation Council of South Australia criticized the South Australia review, saying the state should focus on renewable energy instead.

The nuclear debate in Australia isn’t new, and it’s easy to look at history and come to the conclusion that there’s “very little likelihood that anything is going to happen,” according to the Australian Academy’s Finkel.

“The confluence of big environmental considerations, economic opportunity and new technology coming down the line might invigorate the debate,” he said.

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