It happened last April after the massive Gulf oil spill. And now it's happening again in Japan.
Following the Macondo Gulf blowout in 2010, the main concern was how to make the production of offshore oil less dangerous. I knew this would mean big profits for the companies that can make drilling safer.
Last summer, I suggested to my readers that they invest in those companies. Here's what I said at the time...
"It would be a huge mistake to write off offshore oil. You can't just legislate it out of existence.
"But watch the US government try. In fact, I bet the US government will once more overreact and foist extremely strict regulations on the offshore industry.
"And the US government won't be the only one. Several other countries (Norway, Australia, India, and others) are contemplating a tighter regime of regulations and testing protocols in order to prevent another massive oil spill such as the one in the Gulf of Mexico.
"But offshore production isn't going away! A big chunk of this money is going to go to the best offshore drilling and exploration platforms that technology can offer."
We don't know a lot about how the Japanese nuclear crisis will play out. What we do know, however, is that disasters bring stricter building standards.
We can already see the broad strokes...
It won't mean the end of nuclear power. That's what the environmentalists (like Greenpeace) want. But it ain't gonna happen.
Most governments simply aren't in a position to drop their ambitious nuclear plans. The use of solar, wind, thermal, and hydro will all increase. But none of them have nuclear's ability to provide clean (barring unexpected disasters!) energy on a mass scale.
The efforts you should pay attention to won't be the noisy anti-nuke "green" campaigns. They will be the much quieter efforts by governments to make nuclear power safer. More regulations are certainly coming our way. Consider...
- Of the more than 400 nuclear reactors around the world, about 90 are operating in areas of significant seismic activity.
- Japan itself is sitting on aging capacity.
- Think the US is no Japan? Think again. 39 out of 50 states have moderate-to-high seismic risk.
The nice thing is, we don't need to know the details of the new regulatory framework. We can guess that the emphasis will be on earthquake-resistant construction. Future nuclear reactors will have higher and thicker walls, even more redundancy, and failsafe backup electricity systems that actually work.
The market has already given us a peek into the future. The nuclear-related ETF, NLR, got hit hard last week. In fact, all its holdings were down... all, that is, but one. Kajima rose 2%. Kajima hails from Japan. It builds commercial, residential, and institutional buildings - including nuclear power plants - with high-rise and earthquake-resistant construction technology.
Kajima isn't listed in the US. But other companies with equally impressive construction technology are. These are the companies that give you the potential for making up to 180% gains in the next year or so. So take a look at the global companies that provide construction and engineering services to the power generation, operation, and maintenance industries.