JAPAN NUCLEAR WOES UNLIKELY TO HALT LATIN AMERICA PROJECTS

Sao Paulo, March 17 (WSJ)- The unfolding nuclear crisis in Japan is unlikely to stop any of the Latin American projects which are being restarted after two decades of stagnation, but it could increase opposition to the development of new nuclear-power plants down the line.

Argentina and Brazil are spending billions of dollars to complete nuclear-power plants abandoned in the 1980s, and are eyeing new plants, while Chile is for the first time contemplating the use of nuclear power as a way to diversify away from pricey fossil-fuel imports and drought-prone hydroelectric power. Mexico has one nuclear power station and is studying the possibility of building another.

That may all be called into question as a result of the stream of nuclear emergencies declared in Japan, after the north of the country was rocked by a magnitude-8.9 earthquake and then by a devastating tsunami.

The consequences are likely to have the most impact in Chile, where concerns had already been heightened after a massive earthquake hit that country just over a year ago. The long, narrow Andean country is located at the crucial meeting point of the Nazca, South American and Antarctic continental plates, and holds the unenviable record for the most powerful earthquake on record, a magnitude-9.5 temblor which struck near the city of Valdivia in 1960.

Despite this geological risk, sites have been identified in Chile for possible construction, and the head of Chile's Nuclear Energy Commission, Jaime Salas, said the development of nuclear energy isn't off the table in the wake of the events in Japan, and asked for time to see how Japanese authorities respond. Energy Minister Laurence Golborne said the Japan tragedy would provide important lessons for Chile.

But experts said even more safety measures are likely to be demanded as a result of the most recent events in Japan, which could drive up construction costs beyond what is affordable.

Safety requirements "may increase costs so much as to make it unfeasible," said Julio Vergara, a professor at the Pontificia Universidad Catolica de Chile and a former board member of Chile's Nuclear Energy Commission.

In Brazil, there is little seismic activity at all and the most recently registered quakes occurred deep below the surface in the remote northwest of the country, close to the border with Peru. Still, some officials have warned that nuclear-power plans will have to be re-examined around the world.

"I think [the Japan earthquake] changes the way in which we will examine the nuclear-power plants supplying energy," said Senator Jose Sarney, who is president of the upper house in Congress. "If, in the past, there were some restrictions, I believe that now, with this problem in Japan, we will have to stop for a bit and think”.

"I don't believe [Brazil's nuclear-power program] will be paralyzed, but evidently we will have to take more measures for care and revision. At the same time, the government must analyze our plants in the light of what happened in Japan," Sarney said, speaking to the Senate news agency.

Brazil currently has two nuclear-power plants, located in Angra dos Reis in Rio de Janeiro state, which account for just 3% of Brazil's power output, and a third is under construction at a cost of $5.1 billion. But the government plans to increase that significantly through 2030, and last year said it was looking for sites to build at least four new plants.

Earthquake-prone Mexico has a nuclear power station in the Gulf coast state of Veracruz which provides 3% of the country's installed generating capacity. A study on the feasibility of building another station is under way, although a decision hasn't yet been made. Deputy Energy Minister Carlos Petersen y Vom Bauer said Monday that the Japanese nuclear plant problems don't mean the study will be canceled, local media reported.

Argentina, meanwhile, is far less prone to earthquakes, and two major investments are already underway, which are less likely to be affected. But there is an extensive development program down the line.

"Argentina is going to continue with its planned nuclear investments," Economy Minister Amado Boudou said in a phone interview Monday.

Argentina restarted its nuclear-power program in 2006 amid worsening shortages of natural gas used to heat homes and fuel conventional electricity-generation plants. Argentina currently has two nuclear power plants -Atucha I, built with Siemens AG (SI, SIE.XE), and Embalse, built with AECL. The 360MW Atucha I, located on the Parana river in northwestern Buenos Aires province, came online in 1974, followed by the 650MW Embalse plant a decade later.

The government has already started a $1 billion life-extension upgrade of Embalse, located near the city of Cordoba, which supplies power to northeastern parts of the country. A third nuclear plant, Atucha II, is scheduled to come online later this year, more than 24 years later than planned, generating some 750MW, or about 3% of Argentina's total power output, and a fourth plant is planned to come into operation in 2016-2017.

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