Fukushima, Climate Change And Stocks To Watch

With all the electioneering going lately on in the U.S. we think some important observations have gotten lost in the weeds, virtually ignored by the news media.

First is the recent ruling by a specially appointed investigative committee in Japan charged with determining the precise causes of that nation's Fukushima Daiichi nuclear plant disaster in March of last year.

It was widely expected that the committee would conclude the meltdown of the plant's nuclear reactors was not the result of the earthquake itself, but rather of the more unexpected and unpredictable massive tsunami it set off.

There's an important distinction here, in that a tsunami is a considerably rarer event in Japan than an earthquake, and therefore not something you can predict or prepare for to the same extent. Whereas earthquakes - even large ones - are very common in that country, common enough that nuclear plants should be expected to be fully prepared for them.

So if the investigative committee were to say, as was generally assumed, that it was the earthquake, not the tsunami, that caused the Fukushima disaster, it would provide more justification for reopening and restarting Japan's nuclear plants, especially those whose water supply do not depend on the ocean and are not located near the ocean, where they could again be so dramatically affected by a tsunami.

The big surprise was that the committee did not reach that conclusion, but in fact said that you could not rule out the fact that the earthquake, by itself, could have created the kind of damage that would cause at least a partial meltdown.

This sort of outcome suggests that it's going to be back to the drawing board for the Japanese when it comes to energy, i.e., the Japanese will be forced to rely on other forms of energy besides nuclear. And this opens the door much wider than ever before to Japan's pursuit and development of alternative, green energy sources - with all the economic and investment implications that involves. Among these are the great need for other resources ranging from silver to copper to oil to LNG and, of course, to the machinery for extracting these resources.

Another observation that hasn't received much, if any, notice recently is that for the first time, rightly or wrongly, particular climate events such as the drought in Texas have been directly related to long-term climate models.

Keep in mind that what you are reading here is from someone who has never been an apologist for climate environmentalism; rather, I have always been convinced that whatever the particular models the climatologists come up with, they would never be nearly sophisticated enough (despite all the data and computing power behind them) to account for the multiplicity of variables and their interrelationships in defining climate change.

At the same time, I've always felt that it was inconceivable that our species was not doing some damage, in some way - though I've been skeptical about our ability to accurately quantify it, and that's still my belief.