2 energy industry stocks take hit on Japan quakes

AP News
Posted: Mar 14, 2011 5:45 PM
2 energy industry stocks take hit on Japan quakes

The crisis engulfing Japan's quake-damaged nuclear power reactors rattled share prices Monday of two Louisiana-based energy industry players, one with plans to build new reactors in the U.S. and China and another that uses the plants to generate electricity for utilities and wholesale markets.

Shares of The Shaw Group Inc.., based in Baton Rouge, slid 9.2 percent, or $3.54, to close at $34.87 after trading as low as $27.61 earlier in the session. Shaw has a 20 percent investment in Westinghouse nuclear power and has contracts for several new nuclear plants in the United States and China.

Shaw chief executive Jim Bernhard said in a statement late Sunday, before financial markets had opened, that he doesn't expect Japan's problems to affect those projects.

"At this time, we do not believe there will be an impact on Shaw's nuclear projects currently under construction in the United States and China," Bernhard said. "Our customers have indicated they intend to move forward and we believe the construction timelines will continue as planned."

Shaw spokeswoman Gentry Brann said the company has contracts to build eight nuclear units in the United States and six in China. Four are under construction in China and four are under construction in the United States, she added.

Shares of New Orleans-based Entergy Corp., which operates regulated power utilities in Louisiana, Mississippi, Arkansas and Texas, fell 4.9 percent, or $3.60, to close at $70.09 after falling as low as $69.32 during trading Monday. Entergy owns or manages 12 nuclear plants in the United States.

Entergy Nuclear spokesman Mike Boling said company officials have been monitoring Japan's crisis.

"Our officials have been participating with others in the industry and seeing what we can learn from the damage to the Japanese plants," Boling said.

Industry groups have said it is too early to tell what effect Japan's earthquake would have on the U.S. nuclear industry. An anti-nuclear group called for a halt on domestic nuclear activity, including the construction of new plants and the relicensing of older generators. A utility analyst said he didn't believe the crisis would kill the U.S. nuclear industry but he expected delays in licensing new plants and in the relicensing process overall.

After Monday's market close, Entergy issued a statement that its nuclear plants were designed to withstand earthquakes and flooding _ and federal safety standards require that the plants be designed to stand up against any natural disaster more severe than any recorded historical event.

Washington, D.C.-based Public Citizen said the Japan crisis demonstrated "nuclear power's Achilles' heel" and called it "sheer folly to pour resources into building and maintaining nuclear reactors in the U.S." The group called on the federal government to stop relicensing older nuclear reactors, stop construction of new ones and end federal subsidies for nuclear power projects.

In Japan, water levels dropped precipitously Monday inside a stricken Japanese nuclear reactor, twice leaving the uranium fuel rods completely exposed and raising the threat of a meltdown, hours after a hydrogen explosion tore through the building housing a different reactor. The mounting problems at the Fukushima Dai-Ichi plant are compounding immense challenges faced by Japan's government to send relief to hundreds of thousands of people on its quake- and tsunami-ravaged coast.