The Internet loves to talk about the potential of thorium to supplant or complement uranium-based nuclear reactors. Circulating ideas talk about many advantages of thorium fuel compared to uranium fuel, such as lower operating pressures, greater abundance, lower risk of creating weapons, and little to no long-lasting nuclear waste. That all sounds great, but how truthful are such claims? How feasible is it for nuclear producers such as Exelon Corporation (NYSE:EXC) to source thorium fuels, or for nuclear technology leaders such as General Electric Company (NYSE:GE) to design reactors capable of consuming thorium?

I thought it would be helpful to reevaluate the purported benefits of thorium with an investing twist after stumbling across WhatIsNuclear.com, a website run by a group of nuclear engineers helping the public better understand atomic energy. I've learned a lot about the nuclear industry from the group and want to share my learnings with the investing community.

What are the major differences between thorium and uranium?

Thorium fuel is fertile, which means it undergoes a series of neutron-induced nuclear reactions to produce an isotope of uranium, U-233, that is fissile. Fissile material is capable of sustaining nuclear chain reactions to produce energy. Any thorium-based reactor uses the Thorium-Uranium fuel cycle, while most reactors currently in operation today operate on the Uranium-Plutonium cycle and begin with fissile-ready fuel (U-235 or Pu-239).

The Thorium-Uranium fuel cycle offers the distinct advantage of avoiding the production of high-level waste transuranics, or elements heavier than uranium, that remain environmentally toxic for over 10,000 years (they do still produce nuclear waste, however). That's good news, because the current best solution for disposing transuranics is throwing them into geologic repositories and bolting the door shut for dozens of centuries. General Electric and others are working on commercializing next-generation reactors capable of consuming transuranics -- possibly reducing their volume by 96% -- but not producing waste in the first place would be even more advantageous.

It has been proposed that several current and yet-to-be-constructed reactor designs can be loaded with thorium fuel. But one of the more promising reactors designs, the Generation IV Molten Salt Reactor, has yet to be commercialized. There are multiple global research projects attempting to corral the technology, but it will quite some time before such designs are deployed for commercial use for power generators such as Exelon.

What are the disadvantages of thorium fuel?

Many people talk about the benefits of thorium compared to uranium without addressing the disadvantages. A fair and balanced approach makes WhatIsNuclear.com an incredibly valuable resource. The group reports several downsides to thorium fuels. First, the industry doesn't have decades of experience working with the element as it does with uranium. Like it or not, that's a big factor in the willingness to invest in the technology. Unless the economics are indisputable, Exelon may not want to take on unknown risks when it knows uranium designs work just fine. A lack of interest from producers could also dampen the prospects of General Electric investing in such designs.

Second, the Thorium-Uranium fuel cycle produces more toxic short-term waste than the Uranium-Plutonium fuel cycle. The large amounts of radiation emitted from the decay products is more difficult to shield, which requires more expensive disposal methods to be implemented. Exelon already paid $142 million into the nation's nuclear waste disposal fund in 2013 and has yet to dispose any of its 14,400 metric tons of waste. How much more expensive would waste from a thorium reactor be to dispose?

Is thorium really more abundant than uranium?

Even I have talked about the abundance of thorium as an advantage over uranium, but it turns out that's only partially true. In the Earth's crust, thorium is about 400% more abundant than uranium. But uranium is 8,250,000% more abundant than thorium in the Earth's oceans. It may sound like a useless statistic, but processes for extracting uranium from seawater have already been demonstrated -- it just costs 400% more than current market prices. It may become the standard in the future.

It's also worth pointing out that China and India have higher reserves of thorium than uranium, which has a lot to do with their pursuance of the technology. When coupled with their exploding energy consumption it becomes quite clear why both countries are attempting to commercialize thorium-based nuclear designs.

Are thorium reactors proliferation proof?

Not quite. While the risk of building weapons is reduced with the Thorium-Uranium fuel cycle, the owner of a thorium reactor could certainly extract bomb material from the process. The idea of being proliferation proof stems from the absence of plutonium creation. But the Uranium-233 created from the fuel cycle can make a mighty fine bomb, although it's a bit more difficult to extract enough material. Nonetheless, it's actually been done before. This shouldn't have much of an impact on the commercialization efforts or its use by responsible entities such as Exelon and General Electric. Remember, the lower risk of bomb-making feasibility is still an advantage.

Foolish bottom line

There's room for thorium-based reactors in a modern nuclear industry. It's important to remember that the often talked about advantages come with often neglected disadvantages, though. I believe the technology will be commercialized eventually and could provide a substantial amount of energy -- India aims to produce 30% of its energy needs from thorium -- but it's important to keep your expectations in check. For the foreseeable future, Exelon and General Electric will stick to uranium-based reactor designs.