Japan continues to reel from the aftershock of the magnitude 8.9 earthquake and subsequent tsunamis. Among the hardest hit is the nuclear industry, which supplies 30 percent of the country’s electricity.

As of today, there’s still a lot we don’t know about the crisis, which has apparently put three reactors out of commission. My colleague Elliott Gue, editor of The Energy Strategist and Personal Finance, has published an excellent analysis of the situation for his readers. His main points are worth heeding.

First, the situation can’t be compared to the 1986 Chernobyl disaster in what’s now the Ukraine. Unlike the Japanese reactors, that plant didn’t have safety mechanisms to automatically stop the nuclear fusion, so the core never shut down. Once the meltdown began, there was no way to prevent nuclear material from escaping into the atmosphere.

Second, contrary to some media reports, the Japanese reactors’ containment vessels are intact and haven’t been damaged. The explosions occurring at reactors 1 and 3 involved outer housing and roofing of the plant. The containment layer has been tested to simulate the impact of a major jetliner crashing into it.

Third, in all likelihood these reactors will never be used again. But to date there’s been little radiation released, and the seawater cooling strategy does appear to be working to prevent a wider catastrophe.

The loss of life is horrific. The damage to people’s lives and the Japanese economy is still to be calculated. And once again, events have proven the limits of human technology against the forces of the earth. But at least right now, it looks like the worst will be headed off.

You certainly wouldn’t get that impression if you pay attention to the popular and even the financial press, where stories of virtual Armageddon are myriad. And not surprisingly we’ve seen a massive selloff of in all things nuclear the past couple days.

In my view, this drop will be reversed as the situation calms down. For one thing, the countries driving the global nuclear building boom–namely China and Russia–are unlikely to panic and abandon construction programs that are well underway. Both are using far different designs than the Japanese plants are. Although the disaster may drive some modifications, China in particular is anxious to both meet surging power demand and limit its future dependence on imported coal, which has already made electricity prices extremely volatile.

Neither is the US likely to do anything drastic, despite the swell of hysteria in some quarters. Nuclear now contributes some 22 percent of US electricity production and is arguably the cheapest and most reliable baseload power. It’s simply impossible to take that much power off the market all at once, particularly with demand climbing again.

Finally, the two companies in the US now building nukes–SCANA Corp (NYSE: SCG) and Southern Company (NYSE: SO)–operate in states that support them and, again, they’re using far more advanced designs than the Japanese reactors.

There are, however, a couple of situations to watch. One is in California, where the two major nuclear power plants–Diablo Canyon and San Onofre–have long been criticized for their vulnerability to earthquakes. San Onofre is jointly owned by Edison International (NYSE: EIX) and Sempra Energy (NYSE: SRE) and is actually being deemphasized by both companies. Diablo Canyon, in contrast, remains very important for PG&E Corp (NYSE: PCG). Shutting it, though unlikely immediately, would be a blow to the company, which I’ve rated a “sell” for several months due to gas safety and regulatory issues.

Back east, Entergy Corp (NYSE: ETR) is battling with the state of Vermont over relicensing the Vermont Yankee plant. The Nuclear Regulatory Commission (NRC) has now said it will grant a 20-year license extension for the facility but the state–now run by an anti-nuclear governor and legislature–is likely to fight it tooth and nail, which will force a shutdown in 2012.

As I’ve pointed out before, a final shutdown wouldn’t be a financial burden to Entergy, as it’s now only breaking even on the facility. The Japanese crisis, however, could well make things more difficult to keep running the company’s Indian Point plant, which would have a financial impact were it to be shut.

The good news is these risks are now well baked into Entergy’s share price. In fact, the company was upgraded today by a major brokerage on the last two days’ drop in its share price. The Mid-South utilities operation is thriving and more than covers the dividend (nearly 5 percent) on its own by a wide margin.

S&P last week actually raised the credit rating of the Entergy New Orleans unit, a clear sign that division has now fully recovered from Hurricane Katrina. That last is a clear demonstration of the company’s ability to recover from the worst possible disasters. And in my view, it’s an equally compelling reason for Entergy shareholders to weather this storm and stick with this great company. I continue to rate Entergy Corp a buy up to 80.

Here’s my advice on other Utility Forecaster companies that own and operate nuclear plants, all very effectively. Note buy advice is for those who don’t already own these stocks. I don’t believe in doubling down on any one stock.

• CLP Holdings (OTC: CLPHY)–Buy @ 9
• CMS Energy (NYSE: CMS)–Buy @ 20
• Dominion Resources (NYSE: D)–Buy @ 45
• Duke Energy (NYSE: DUK)–Buy @ 19
• Exelon Corp (NYSE: EXC)–Buy @ 50
• Integrys Energy Group (NYSE: TEG)–Buy @ 52
• Sempra Energy (NYSE: SRE)–Buy @ 55
• Southern Company (NYSE: SO)–Buy @ 40
• Xcel Energy (NYSE: XEL)–Buy @ 24

I’ll have more on the situation and how it affects these and other stock on Friday in your regular UF Weekly. I also plan to devote the April Utility Forecaster Feature Article to dividend-paying nuclear power stocks.