The Payoff for Nuclear Power Looks Dim

SAN FRANCISCO -- A flurry of interest in nuclear energy has bolstered hopes that it will help meet the country's growing energy needs without saturating the atmosphere with greenhouse gases.

But this resurgence of interest may be creating a mushroom cloud of hype that's blocking the view of reality.

Shares of NRG Energy(NRG Quote) began rising last week after the company submitted plans to build two new reactors at its existing South Texas facility, a move that was applauded by pro-nuclear members of Congress who vowed to push through approval.

The growing interest in nuclear energy stretches well beyond the borders of the U.S. and into Europe and Asia, lifting the stocks of companies in the industry. The Dax Global Nuclear Energy Index has risen more than 45% over the past year and 81% over the past two years.

To take advantage of nuclear energy's tail winds, securities firm Van Eck recently rolled out its Market Vectors Nuclear Energy(NLR Quote) exchange-traded fund, which invests in the companies listed in the Dax index, such as Cameco(CCJ Quote), USEC(USU Quote) and Hitachi(HIT Quote).

But the industry continues to face vexing problems -- from a shortage of engineers and reactor parts to where to store spent nuclear fuel. All of these serve to tie the hands of regulators and power providers looking to increase nuclear's contribution to the nation's energy mix.