Chile Goes Atomic? Why the Japan of the Americas Still Wants Nuclear Energy

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This article was written by Tim Padgett with Aaron Nelsen in Santiago

During President Obama’s visit to Chile this week, he and President Sebastián Piñera were supposed to have ceremoniously signed a nuclear energy cooperation agreement. Instead, the pact, under which Chile would gain U.S. nuclear technology and training, was quietly inked last Friday by top diplomats. It was a nod to the chilling shadow cast by the nuclear-reactor emergency that followed Japan’s massive March 11 earthquake and tsunami – the sort of temblor-and-tidal wave disaster that is all too common as well to Chile, which just last year was hit by an 8.8-magnitude quake.

In fact, Chile – which, like Japan, sits along the Pacific Rim’s epic loop of volatile fault lines known as the “ring of fire” – is home to the strongest earthquake ever recorded, the 9.5-magnitude Valdivia quake of 1960, whose resulting tsunami was felt as far away as Alaska, on the opposite end of the planet. Not, you’d think, the best place to install something as potentially dangerous as a nuclear reactor. That is, until you consider how similar Chile is to Japan economically as well as geographically. The South American nation, a mining and export power of 17 million people, has Latin America’s highest per capita GDP ($14,000); it’s considered, with Brazil, the region’s most developed country; but it’s starved for energy to feed its tiger-like growth, which could approach 6% this year – a boom whose longevity is also important to U.S. trade.

Chile has about 15,000 megawatts of generating capacity – and by the end of this decade it will need to double that. But right now it has to import all its oil and most of its natural gas, and a quarter of its electric power comes from coal. Unless Chile wants to rely on even larger quantities of fossil fuels, it has to develop cleaner, greener energy sources at home. Yet less than 3% of its capacity comes from renewable sources like water, wind or sun. (Brazil, by comparison, gets about 80% of its energy from renewable sources.) So while Chile has to get more aggressive in those areas, earlier this month Piñera insisted that his country also “has to prepare itself for the world of nuclear energy.” He was echoed by his Mining and Energy Minister, Laurence Golborne: “Chile has to be open to considering the nuclear alternative.”

Problem is, 86% of Chileans, especially in the wake of the Japan meltdown, disagree. And 58% also oppose a major new hydroelectric project, known as HidroAysén, in the country’s pristine southern Patagonia region – one of the few areas of drought-prone Chile where hydropower potential is abundant. The proposed $3.2 billion venture, which would put five hydro plants on the Baker and Pascua Rivers, could give Chile 2,750 extra megawatts. But although HidroAysén officials insist the project will be environmentally sound, most Chileans fear that damming the waterways will harm Patagonia’s unique ecosystem.

So unless Chile can find some way to burn red wine, one of the country’s most popular exports, its future as the Japan of the Americas could collapse like the mine that trapped 33 Chilean miners deep underground for 70 days last year. Which is why the country has to start showcasing the same pluck and ingenuity that miraculously rescued those men, but in the energy arena. And many experts believe the answer lies in the same northern Atacama Desert where the mining drama played out. That barren expanse bears more than gold and copper: the potential for solar, wind and geothermal power there is enormous. So, those experts add, is the Pacific Ocean, whose muscular currents course along Chile’s 4,000-mile-long (6,435 km) coastline.

Until those investments are made, however, nuclear power looks to many Chilean officials like an equally reliable path to greener energy independence. But even with U.S. help, as well as cooperation from France, it could take as many as 15 years before Chile has a nuke up and running – and the costs of developing it will likely increase as new, post-Japan safeguards make nuclear energy in quake-prone countries like Chile more complicated. “Nuclear technology can be adapted to almost any situation, [but] to the point that it’s too costly to build,” Julio Vergara, an engineering professor at the Pontificia Universidad Católica de Chile and a former board member of Chile’s Nuclear Energy Commission, told Dow Jones this month.

All of which may force Chile to think less about nuclear and harder about renewable. Either way, environmental activists demonstrated against Chile’s nuclear plans during Obama’s visit to Santiago earlier this week. Timing can be everything in politics – and nature, even if all the way across the Pacific, couldn’t have compromised things for Obama and Piñera more than it did this month.