Obamas nuclear error

$54 billion in loan guarantees make little policy or political sense

Today’s guest post is by Daniel J. Weiss, Senior Fellow and Director for Climate Strategy at American Progress.  For more on the Texas reactor, see Toshiba tells San Antonio its new twin $13 billion nukes will cost $4 billion more! The city balks. This looks like a job for clean energy.”

President Barack Obama’s proposed FY 2011 budget includes some important proposals to invest in clean energy, but it also includes a nuclear bombshell.  The budget will seek at total of $54 billion in loan guarantees for nuclear power.  This would require a $36 billion increase over the existing $18.5 billion for nuclear loan guarantees, a program created under the Energy Policy Act of 2005 – none of which has been issued yet.  And while they loan guarantee proposal cheered some pro-nuclear senators, it has not garnered their support for comprehensive, bipartisan clean energy and climate change legislation.

None of the four “top-tier” project proposals inspire confidence: all have “rising cost estimates, delays related to reactor designs, and credit downgrades,” according to Taxpayers for Common Sense.

For instance, one of the top four pending applications for a loan guarantee for reactors in Texas may be withdrawn by the utility proposing it, NRG Energy.   The project was supposed to be a joint venture with San Antonio’s municipal utility, but the latter is having second thoughts due to enormous estimated cost increases that would bring the project from the initial $5.4 billion to at least $17 billion.

“The San Antonio city council was poised to approve a $400 million bond issuance in late October but held back when new numbers came to light that indicated the nuclear project could cost more than it expected.”

The nuclear industry wants loan guarantees because Wall Street investors are unwilling to lend money to these projects because of their high level of risk – they are too prone to default.  The Congressional Budget Office found that nuclear investments are very risky.

“CBO considers the risk of default on such a loan guarantee to be very high””well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources.”

Despite this high potential for losses from default, The Hill reports that the nuclear industry wants a very low assumption of default risk to lower its credit costs.  It

“wants to keep the ‘credit cost’ at 1 percent or below the anticipated total cost to build a new plant. A company would be required to pay DoE $100 million to reduce the risks for a $10 billion project, but industry critics have sought a much higher percentage.

“The guarantees would mean the government would step in to repay 80 percent of a loan should a company default.”

Since the going rate of a nuclear power plant is $8 billion or more, such an approach could stick taxpayers with at least a $6 billion bill for every plant that defaults.  A $54 billion loan guarantee program with a fifty percent default rate could cost taxpayers billions, and provide no electricity benefits.  During this time of trillion dollar deficits, this is a very imprudent use of taxpayers’ money.

The nuclear energy industry has sold itself as a large potential source of low-carbon electricity.  The Energy Information Agency has predicted that by putting a price on global warming pollution under the American Clean Energy and Security Act, H.R. 2454, would lead to a big increase in electricity generated by nuclear power.

According to the Energy Information Administration’s 2010 Annual Energy Outlook business as usual scenario, electricity generation from nuclear power will increase by 9 percent from 2010-2020, and only another .3 percent by 2030.  It is important to note that EIA assumes that new plants will be much less expensive than real world experience.  Under ACES, nuclear electricity will increase by 11 percent from 2010-2020, and by 77 percent from 2010 to 2030.  Putting a price on global warming pollution would make nuclear power more economically competitive.

If EIA’s projections are accurate, then enactment of global warming pollution reductions would provide a huge boost in nuclear energy generation without additional loan guarantees beyond the existing program or the ACES Clean Energy Deployment Administration that can provide up to 30 percent of its funds for loan guarantees for new nuclear technologies.

Tripling of the loan guarantees is also dubious political strategy because it provides huge subsidies for nuclear power without securing the support of pro-nuclear senators for comprehensive, bipartisan global warming pollution reduction legislation.

USA Today noted that

“Obama’s pitch to expand U.S. nuclear power is seen by some members of Congress and analysts as an effort to win GOP support for his legislation to reduce greenhouse gas emissions, passed by the House of Representatives last year but pending in the Senate.”

Indeed, Senator Lisa Murkowski (R-AK), whose state is suffering more than any other from global warming, spoke positively about the loan guarantee proposal, calling it “a good first step toward expanding our use of clean nuclear energy.”  She is also the author of the “Dirty Air Act,” to block the Environmental Protection Agency from establishing limits on global warming pollution.  Senator Murkowski has yet to join Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT) in their efforts to craft a bipartisan bill.

The Associated Press reported that long-time opponent of global warming legislation Senator Lamar Alexander (R-TN) said

“‘I see an evolving attitude on energy by the president,’ said Sen. Lamar Alexander, who has called for 100 plants to be built in the next 20 years.”

Yet Senator Alexander continues to oppose comprehensive clean energy jobs and reductions in global warming pollution legislation.

In 2009, the Senate Appropriations Committee (subs. req’d) approved Senator Robert Bennett (R-UT) proposal to add $50 billion in nuclear loan guarantees to the pending Recovery bill.  Fortunately, it was dropped due to the opposition of the Obama administration and the House Appropriations Committee.   Senator Bennett remains a fierce opponent of reductions in global warming pollution, yet his proposal was revived by the administration for the 2011 budget.

Nuclear power will likely play a role in the effort to reduce global warming pollution.  Yet it does little good to provide Senate nuclear proponents with an expanded loan guarantee program without first securing their support for global warming pollution reductions, such as the bill that Senators, Kerry, Graham, and Lieberman are drafting.  At the same time, tripling the loan guarantee program before the existing funds are exhausted does not make fiscal sense.   The Obama Administration should withdraw this flawed proposal or failing that, Congress should reject it.

JR:  I’ll go even further.  Nuclear power plants have basically price themselves out of the market for new power:

The loan guarantees might sucker a few utilities to bet their entire balance sheet on nuclear power plants.  Fundamentally, however, we are in a low growth market for nukes (and coal) thanks in part to the growing popularity of energy efficiency and demand response coupled with state renewable energy standards, which are pushing cost-effective wind, solar PV, solar thermal, geothermal, and biomass into the market.  And the relatively low price of natural gas is leading to increased power generation of that relatively clean fuel.  There simply is no niche for high-cost nuclear — unless you pass a climate bill that raises CO2 prices and leads to a reduction in coal power generation.

You can’t push on a string, not even a nuclear-powered one.

For more on the complicated issue of how one scores the nuclear loan guarantees Bernie-Madoff style, see “How did $50B high-risk, job-killing nuclear loans get in the stimulus? Fraudulent budget gimmickry.

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34 Responses to Obamas nuclear error

  1. SecularAnimist says:

    Daniel Weiss wrote: “Nuclear power will likely play a role in the effort to reduce global warming pollution.”

    Yes, the nuclear industry surely will “play a role” in the effort — it will seriously undermine and slow the effort by squandering resources that would be far more effectively spent on efficiency, renewables, smart grid technologies, etc.

    Unfortunately, it appears that Obama is not just proposing to waste billions of taxpayer dollars on nuclear as a “carrot” for the GOP. Obama and Energy Secretary Chu appear to be genuine nuclear “believers”.

    The worst thing about a nuclear expansion is that it is a massive waste of time and resources, when we have no time and no resources to waste.

  2. Leif says:

    Sighting of these Nuclear behemoths with related cooling requirements would appear insurmountable as well in today’s political climate. Some rich folks don’t even want to look at a windmill. I have never been one to say no nukes as much as I hate them. Look at a modern day Nuclear ship. You have ~5000 people all within a thousand feet of a Nuclear reactor and nobody gives it a thought. That ship can come to town and tie up at a dock and not a word from anyone. (Well maybe N.Z., Japan, etc.) Those plants are built regularly, almost mass produced even, and could easily be housed within a community with the excess cooling heat distributed as an additional community resource. (Home heat, Green houses, Perhaps sited next to a CSA and utilizing the same thermal salts to extend night production,…) Not wrecking environmental havoc dumping waste heat into the river some place.
    So my view is: You can have ALL the nuclear you want that is proven to be cost effective and deals with the nuclear waste on their dime. Not subsidized by me.

  3. That dang 50 percent default rate would be such a killer for the nuclear industry if it were true but it’s not. Let’s take apart the CBO quote:

    CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources.

    The logic of this sentence doesn’t even make sense. First of all, a utility is not going to build a plant if it’s uneconomic to begin with. Second, construction costs aren’t the only factor in determining if a plant is economical. The primary cost indicator of competitiveness are levelized costs. Third, there’s no historical data to back up a 50 percent default rate and in fact this 50% rate that’s also cited in a GAO report is an assumption that “reflects an illustrative example for informational purposes only.”

    Nuclear power plants have basically price themselves out of the market for new power

    I take it you haven’t seen EIA’s levelized cost assumptions from their AEO 2010? If you look at the total levelized unsubsidized costs of the emission-free technologies, nuclear is a little bit more expensive than biomass, gas w/CCS and geothermal. Nuclear comes out ahead of coal w/CCS, hydro, wind and solar. The wind and solar cost numbers are enormous without incentives.

    It’s clear that more nuclear alone doesn’t guarantee a climate bill, but as numerous studies have shown, including the one pointed out by Mr. Weiss, you don’t get to huge CO2 reductions without nuclear. But just because a model projects those numbers, it doesn’t necessarily mean it’ll be easy to do.

    Much of the risk in building new reactors is due to the new and untested federal licensing process to build new plants. With experience, the risk should go down. But since this licensing risk is a function of the federal government’s regulatory process, only the federal government can offset that risk.

    David Bradish

  4. SecularAnimist says:

    David Bradish wrote: “First of all, a utility is not going to build a plant if it’s uneconomic to begin with.”

    Of course not — unless the taxpayers and the rate payers are compelled to absorb all the costs and all the risks up front, including the risk that the nuclear power plant won’t be profitable to operate if and when it is completed.

    Which is exactly why your industry has been loudly and clearly proclaiming that no new nuclear power plants will be built unless the public is holding the bag for all the risks.

  5. Which is exactly why your industry has been loudly and clearly proclaiming that no new nuclear power plants will be built unless the public is holding the bag for all the risks.

    Ever heard of equity? In order to receive a loan guarantee, a nuclear company has to put down at least 20 percent of its own money. If we’re talking $6B-$8B to build a plant, at least $1.2B-$1.6B is required from the utility. And if the utility defaults, their money is lost first. There are very few electric utilities out there who could sustain a loss like that. Thus, they have just as much stake if not more on making sure that building new plants are successful.

    I agree with you. It would be unreasonable for taxpayers to shoulder the complete risk. That’s not the case, however.

  6. We need to talk more about water use and nuclear plants — this needs to be factored into discussions.

  7. Doug Bostrom says:

    Tyler Hamilton says: February 1, 2010 at 5:37 pm

    “We need to talk more about water use and nuclear plants — this needs to be factored into discussions.”

    Yes. If you’re Australia w/your population clustered near the ocean it’s dead easy to dispose of waste heat. 1,000 miles inland cohabiting with water resources under pressure and it’s not quite the same picture. This is one of the context issues w/nuclear power that undermines it as a panacea for fossil fuel replacement. Cooling is largely “free” at all current installations but there has never been any pressure to confront what happens when cooling costs more money.

    We’ve gotten used to all sorts of “free” stuff, like borrowing the planet from our descendants and not giving it back. Whether the change in behavior we’re facing appears in the form of subsidies or direct billing, it seems pretty obvious that once we square up to actually paying our energy bills juice will turn out to be more expensive than we thought.

  8. Bill Waterhouse says:

    Clarification please – do the Obama budget proposals or the cap-trade bill promote Hansen-named 4th generation nuclear? Looking for discussion of Hansen’s positive view.

  9. Richard Brenne says:

    As many have pointed out the ideal siting of all our nuclear power would be 93 million miles away.

    But the topic of nuclear needs to not be swept off the table so quickly.

    I’ve never been a fan of nuclear but the equation has changed since the 1960s. First we thought problems were local, including coal burning and nuclear weaspons blasts.

    It took a long time to realize these problems were regional, like acid rain and nuclear radiation.

    It took climate change from both nuclear winter possibilities and fossil fuel summer certainties to help us understand that all these problems are global.

    So nuclear might not be what we want, but as James Howard Kunstler says, “Do we want to talk about this with the lights off or on?”

    James Hansen and James Lovelock agree, and those are just the Jameses.

    The equation has changed since nuclear activism was so appropriate, especially against weapons (and we need to retain and ideally increase that activism).

    Now, whatever we collectively decide with nuclear on the table, we need an infinitely greater degree of coal activism, ultimately phasing out large-scale fossil fuel use, human causes of methane and deforestation.

    Pulling back and looking at the really big picture and the entire equation is what we most need to do. And Leif (#2) hits his usual grand slam while the best I can hope for is to be hit by a pitch.

  10. Mike#22 says:

    There is a plausible case for upgrading some coal plants to nuclear.

    The infrastructure is there already–transmission, cooling, turbines, rail, etc.

    Generation III plants are orders of magnitude more safe than the plants we have now.

    Nothing is perfect.

  11. Doug Bostrom says:

    Mike#22 says: February 1, 2010 at 8:26 pm

    “Nothing is perfect.”

    And perfection can indeed be the enemy of good, or good enough for the time being, anyway.

    Richard Brenne says: February 1, 2010 at 8:16 pm

    “The equation has changed since nuclear activism was so appropriate, especially against weapons (and we need to retain and ideally increase that activism).”

    I can well remember attending my first and only antinuclear gathering long ago, during the Reagan Recession. I dropped out immediately because the folks there could not seem to discriminate between 35,000 ready-go-go warheads and a few large handfuls of nuclear plants.

    Nuclear plants are any sensible engineer’s nightmare in terms of complexity and lack of inherently graceful failure, but they do have the marvelous advantage of existence.

  12. evnow says:

    It seems to me Nuclear will have to be part of the mix – we need baseload.

    I’d support nuclear that
    – replaces coal
    – reprocesses nuclear waste or uses Thorium (LFTR)

    If China & India can work on Gen4 – so can we ….

    Atleat this way we can call their bluff / bait&switch.

    Joe, what is your take on LFTR & the below linked site ?

  13. mike roddy says:

    David Bradish,

    Your numbers are way, way wrong, and corrupt besides. Look at levelized costs from ethree, commissioned by California, or the Lazard study. Or, go here, to see what happened in Texas when they wanted to add two more nuclear plants. It turned out to cost $18 billion:

    EIA has always been a pro nuclear and fossil fuel agency, especially with all of the administrators promoted during the Bush years. In the study you cited, they even say coal CCS is cheaper than solar and even wind, a ridiculous claim. They are corrupt, just like the Supreme Court and 75% of our Congressmen.

    Solar thermal has never approached the capital costs of the Texas plants. And solar does not include these costs:

    1. Fuel (projected to go up; uranium is finite)
    2. Meltdown insurance. A big accident could bankrupt our government.
    3. Waste disposal. Still not solved? That’s because it never will be.
    4. Decommissioning. A huge cost, shoved on taxpayers 30-40 years in the future. That’s too far ahead for most spreadsheets, so it’s not counted.
    5. Huge water consumption.

    Nuclear is a giant diversion, and costs a fortune. It is strictly a product of vested interests, including big corporations, banks (who love government guarantees), and even coal, since they realize all of nuclear’s problems and love competing with them. They fear wind and solar.

    The best nuclear can do for spokesmen are Stewart Brand, a space cadet with no relevant education or experience, and James Lovelock, who knows nothing about utility costs. The other Jameses don’t tout it, they just want every avenue to be explored. In other words, nuclear has nothing. Time for real renewable power.

  14. Chris Dudley says:

    It seems to me that the NRC has been relicensing plants willy-nilly but they are showing their age with over a quarter of them leaking tritium. I expect we will see either a major accident that closes just about everything down but the Navy or a revisiting of the relicensing that has been going on to avoid such a catastrophic failure. Thus, I expect many more plants to close than will be built over the next decade and a half or so. If there is going to be federal assistance, it would be much better to focus it on contingency planning for the immediate shutdown of all reactors and bringing up renewable capacity to the level where disruption can be avoided. It would also make a great deal of sense to close, at least temporarily, any plant where a Price-Anderson liability payout could cause the Federal Government to default on its obligations. Plants like Indian Point built in very high property value areas should not be operating during the current fiscal situation. The solvency of the country is currently at risk.

  15. Your numbers are way, way wrong, and corrupt besides.

    My numbers? If you take a look at Mr. Weiss’ article, he cites EIA too.

    Look at levelized costs from ethree, commissioned by California, or the Lazard study.

    The Lazard study on slide five says the same thing as EIA (pdf) which is that the levelized costs for solar and other renewables increase dramatically without incentives.

    The CEC study you mention, talk about corrupt. The levelized cost of electricity from a nuclear plant was reported as $342/MWh in the base case merchant plant analysis. This figure is more than four times the high case from MIT’s 2009, “Update on the Cost of Nuclear Power” as well as multiple times in excess of estimates from the Energy Information Administration, Electric Power Research Institute (p. 1-12, pdf), and National Research Council (p. 58) to name a few.

  16. fftf says:

    Mike – Nuclear needs about the same cooling as solar thermal (per energy produced). This is basic physics.

    Yes nuclear has to deal with decommissioning, you cant just declare bankruptcy and walk away, like what happened with CA solar plants. That is a plus for nuclear though.

    Nuclear is the only controllable, scalable and economical clean source of energy humanity knows about. A fact. It also happens to be the safest one, once one compares numbers (deaths per TWh).

  17. SecularAnimist says:

    fftf wrote: “Nuclear is the only controllable, scalable and economical clean source of energy humanity knows about. A fact.”

    If by “fact” you mean “blatant falsehood”, you are correct.

    Building new nuclear power plants is not going to make any significant contribution to reducing GHG emissions from electricity generation — particularly not within the time frame that such reductions are needed.

    All the nuclear industry propaganda in the world is not going to change that.

    The only thing that the nuclear industry’s propaganda and entrenched political power is going to accomplish is to squander precious resources that would be far more effectively invested in efficiency and renewables, thereby hindering rather than helping the effort to reduce GHG pollution.

  18. Doug Bostrom says:

    “Nuclear is the only controllable, scalable and economical clean source of energy humanity knows about. ”

    There’s monomania for you.

    “Building new nuclear power plants is not going to make any significant contribution to reducing GHG emissions from electricity generation — particularly not within the time frame that such reductions are needed. ”

    SA, you write much that I agree with, and I agree with you on this but not in a way I find agreeable. It’s more or less reasonable to level the same charge against any technology more modern than fossil fuels, because fossil fuel generation is so bulky and our substitution requirement is staggeringly large. There are some places where nuclear plants may be preferable, many where they are certainly not. The same applies to virtually any form of improved generation given the short amount of time available to fix this problem.

    This fractious failure to form a coalition of more progressive technologies– to hold our noses, practice a modicum of tolerance and cooperate– is a terrible error. Deployment context is key and without fostering a bit of pragmatism in ourselves and others, a willingness to compromise seeking perfection where perfection is not truly possible, we are screwed.

  19. SecularAnimist says:

    Doug Bostrom wrote: “This fractious failure to form a coalition of more progressive technologies– to hold our noses, practice a modicum of tolerance and cooperate– is a terrible error.”

    If I believed that building more nuclear power plants was an effective means to reducing GHG emissions from electricity generation, I would agree. Given the grave danger of unmitigated anthropogenic global warming, I might even agree that we just have to “hold our noses” and accept the very real, very serious problems and dangers of nuclear power as the “lesser evil”.

    But I don’t believe that building more nuclear power plants is either a necessary or an effective means to reducing GHG emissions.

    I believe it would be — and given the entrenched wealth and power of the nuclear industry and its influence over so many politicians, that it WILL be — an enormous waste and misdirection of resources, that will hinder rather than help the effort to reduce GHG emissions.

    It’s not that I think expanding nuclear power is a useful but unfortunately undesirable solution because of the waste storage problem, or the danger of meltdowns or terrorist attacks on nuclear plants or nuclear fuel transport, or the mountains of toxic waste produced by uranium mining, or the inherent national security dangers of nuclear technology proliferation — I don’t think it is a solution, or any part of a solution, at all. On the contrary, it is part of the problem, and will make the problem worse.

    Concentrating solar thermal power plants on a mere 3-5 percent of the USA’s desert lands could produce as much electricity as the entire country uses. The commercially exploitable wind resources of only four midwestern states could produce as much electricity as the entire country uses. Those are only two examples of the vast solar and wind energy resources of the USA — free, clean energy that lasts forever, that can be readily harvested using today’s mature technologies.

  20. Chris Dudley says:


    Hum… Let’s see. Since about 1950 there have been about 11,000 coal mining deaths is the US and probably nuclear power has produce the same amount of power worldwide. So the Chernobyl accident alone leads to from 30,000 to 60,000 cancer deaths so it is not so clear that you have the safety order correct.

  21. mike roddy says:

    DOE is practically chartered as an arm of the nuclear industry, but EIA does it differently: they basically record what industry tells them for their published tables. I learned this in the course of many emails and phone calls with them in CO2 research I did for a magazine article two years ago. EIA not only accepts the data directly from the industry sector under study, they incorporate the methodology.

    Let me guess- EIA used the $5.6 billion figure for the San Antonio plants, not the $18 billion figure.

    In other words, they are not a research agency, and nobody quotes them for things like the cost of power. Lazard, on the other hand, has reason to be objective. Their 15 page analysis of levelized cost with various timelines and subsidy tiers is the best available- you can google it.

    Nuclear is a non starter if we are going to get off coal and gas in any serious way. Other reasons include major emissions from the behemoth plant construction and treatments themselves.

  22. Richard Brenne says:

    Mike (especially #13) –

    Very good points, I can see you’ve written and thought about this a lot – very impressive.

    I don’t have a dog in any particular fight – not since Michael Vick went out of business, anyway – it’s just that when I hear Lovelock Hansen, Kunstler, Toby Dittrich and others about this they sway me with their evidence just as you can.

    I would love nothing more than to see solar, wind and other renewables meeting energy demand, but after implementing solar for over three decades and wind for even longer solar and wind are I believe less than 1 per cent of all energy sources (not just electrical generation) in both the U.S. and world.

    So the problem appears to be one of scale. While I’ve attended nuclear fusion conferences and many nuclear physicists I’ve spoken to don’t see fusion generating more energy than it requires for a century if ever, I still agree with Cal Tech Physics Provost David Goodstein when he says he can only see a solar and/or a nuclear fusion economy (long, long term) operating on anything like the scale we’ve been operating our fossil fuel economy.

    Nuclear fission is rife with the problems you and others mention here, there is no doubt, but fourth generation and breeder reactors need to be explored, as does fusion. I don’t think trying to sweep them off the table of discussion with what often appears (not by you or others here) to be a knee-jerk reaction is helpful or democratic.

    I thought our host Joe did a masterful job of talking about nuclear in his radio debate with Colonel Kurtz or whoever from the Hermitage Foundation: Joe said let the market decide (I think with the feeling that it will not decide on nuclear), ideally with carbon pricing as part of the process.

    Then there’s the question of what to do with the 35,000 or so nuclear weapons we have stockpiled globally. Do we bury them or convert them to energy if we can?

    One interesting thought experiment is to compare coal and nuclear across the board in all categories including mining accidents, black lung and radiation deaths of miners, civilian deaths and illnesses due to accidents and smoke, CO2 emissions and resulting climate change, which will dramatically effect each of us as no number of nuclear power plant accidents probably could.

    Your points about the construction and decommissioning of nuclear power plants are good ones, but I think when we do the full-cost accounting and place them side by side, we’ll see that while nuclear is rife with the problems you mention, the problems with coal are many times worse.

  23. Leif says:

    Richard Brenne, #22: Good post
    …”many nuclear physicists I’ve spoken to don’t see fusion generating more energy than it requires for a century if ever.” (As you point out, it works perfectly on the sun for free.) My understanding is that a significant amount of money has been spent to acquire this bit of knowledge. Now that we have it, would not it be proper to put that program on a subsistence or even mothball diet and shift that money to proven short term prospects. Green jobs, come to mind. It ain’t like we got money to burn as I recall. Once the Solar infrastructure is in place and paid for, that equipment is is making real green money for the rest of it’s days.
    Of course the Anti-Science folks may become Nuclear fission experts and fight.

  24. Chris Dudley says:

    Richard (#22),

    For the weapons grade uranium, we have quite a lot of depleted uranium with which we can mix the enriched uranium to return it to its natural level. This would be a better use for the depleted uranium than use in armaments.

    For the plutonium, transmutation is what is needed, but doing that in power reactors, especially those located close to population centers is a large risk, and only does a part of the job since high level waste is produced. Most likely, accelerators will be needed to deal with that.

  25. Bob says:

    Joe’s attack on nuclear power costs is missing a key point: as more plants are built, economies of scale will kick in and bring the price down.

    For example, a common fact cited is that Japan Steel Works, which is one of the only (if not the only) manufacturer that makes high pressure vessels for nuclear reactors, is a bottleneck in the process and drastically increases the time to completion and the costs. Additional manufacturers will get into this business if demand skyrockets. Therefore, all claims about this the pressure vessel bottleneck should be explicitly qualified by saying “having only a single steel works involved is not a universal constant” to be intellectually honest.

    There are also many plans on the table to create reactors that can be manufactured in factories and assembled quickly on site. Additionally, as demand increases, enrollment in nuclear engineering programs will increase, which will reduce human resources concerns. These things will not happen overnight, but sending a strong signal to get the industry going in the US will certainly help them happen sooner, which will make nuclear power much more economical. I should point out that since I am not a right-wing ideologue when it comes to economics, I have no problem with public ownership of nuclear power plants (or any other form of electricity). The capital costs in energy systems in general really are killers, so I have no problem with investing public funds to ameliorate the issues with deploying technologies that can replace coal, especially considering that the government paying capital costs of CO2 free generation would pay for itself in the long run by reducing the astronomical costs of global warming, as well as the health issues of coal plants.

    Finally, given that many projections involving renewable power (especially solar power) depend heavily on economies of scale projections, I think it is unfair to simply cite current prices for nuclear as a permanent showstopper, especially when the primary way to reduce prices is to encourage higher demand.

    Of course, only time will tell. But I have a strong feeling that Joe is wrong on this one. Overall, I feel that it is wrong to dismiss nuclear energy on issues that are transient. Joe, I encourage you to take a different approach and instead of saying that nuclear is practically impossible because of costs, discuss ways to make it cheaper because it is hard to ignore that nuclear currently generates more than all of the other non-CO2 emitting power sources combined. If we start working hard now with infrastructure (especially reducing manufacturing bottlenecks and training engineers, which in the grand scheme of things really isn’t that expensive), in a decade or so nuclear can be ready to supplement our buildup of wind this decade and could be the tipping point for eliminating coal plants forever.

  26. David Lewis says:

    For an interesting discussion of nuclear power I suggest the 1985 Forbes magazine article by James Cook that Al Gore quoted from in his nuclear chapter in his book “Our Choice”. Here’s a quote Al picked:

    “For the United States, nuclear power is dead – dead in the near term as a hedge against rising oil prices and dead in the long run as a source of future energy. Nobody really disputes that”.

    Says it all, doesn’t it?

    Not quite. Gore’s argument was that nuclear is dead as an option everywhere. The Forbes article said the opposite. The author of that Forbes article, James Cook, wanted to answer this question:

    “”why did the US fail where the French, Germans, and Japanese succeeded?”

    According to this article, it wasn’t because Americans didn’t know how. As Cook wrote:

    “American engineering, American equipment, American constructors are building plants all over the world and bringing them in at roughly one-quarter to one-third the cost of plants in the U.S. We can do it technically. We have to learn to do it institutionally, rationalizing the process to eliminate the adversarial system that we have presently”

    I’m taking a fresh look at nuclear power, and I am having difficulty understanding what people like Gore, Lovins, and Romm are doing in regard to all debate on nuclear. Do they believe that “messaging” is all that matters, as opposed to truth? Why is it that a power source that the IPCC rates as comparable to renewable power such as wind and solar when it comes to carbon dioxide emissions must be dumped on with arguments of such low quality?

    Can we not expect the best effort from everyone, now that the fate of civilization so clearly is in the balance?

    If this Forbes article is full of lies, why does Gore, in his first major published effort after receiving the Nobel, quote from it?

    The Forbes article, again:

    “As experience everywhere demonstrates, the technology is as sound and productive as its promoters always have claimed it would be”.

    If the thrust of this article is correct, the problem with nuclear in the US is to be found in the US, in the way Americans dealt with it inside their own borders, not in the technology.

    The bizarre make believe culture of safety, where nuclear plants are so tightly regulated the newspapers express alarm over picocuries (one trillionth of a curie) of radiation thought to have leaked from a nuclear plant, while coal smokestacks as of 1982 emitted 801 tons of uranium as fly ash in the US, has something to do with it. Supposedly well meaning activists such as Gore, Lovins and Romm, who mindlessly dump on any consideration of nuclear power, as they cherry pick from reports that clearly support nuclear expansion, or just plain lie about what is known, also have something to do with it.

    That Forbes article is a sobering thing to read. Americans could and did build plants all over the world with success, but when operating in the US regulatory and political environment, they just blew it, time after time, in so many ways it is almost unbelieveable:

    Cook: “The bungling the industry was capable of boggles the mind. In the Zimmer [reactor] control room, according to a study for the Ohio PUC, the control panel would catch fire when the alarm nodule lights went on close together, so that in an emergency the panel would have knocked itself out and the staff would have been unable to control the plant. But nobody worried about that. Many of the lights had burned out, and the staff had unplugged others to decrease the risk of fire. ”

    Cook: “The ineptitude had no pattern, and virtually anything could go wrong, and did…. How could Bechtel have installed the reactor backwards at San Onofre? How could Brown and Root have got the reactor supports 45 degrees out of what at Comanche Peak? … How could the NRC itself approve designs for the Mark II reactor when what Grand Gulf was building was a Mark III?”

    The article in question is by James Cook, it is entitled “Nuclear Follies,” and was published by Forbes, February 11, 1985

  27. Joe Bftsplk says:

    Here’s analysis from David Frum’s blog. Frum, readers of Climate Progress may remember, is the former Bush speechwriter who wrote “Conservatives Heart Nuclear Power” who Romm pronounced something like brain dead for thinking nuclear might prove to be an option to deal with carbon emissions. What Frum writes about Obama’s energy policy:

    “Likewise, there’s a case for incentivizing green energy production. Just about everybody wants to move away from oil, and despite this year’s Climategate scandals, the preponderance of the evidence suggests that coal presents serious environmental concerns.

    Again there’s a right way and a wrong way to do it. The right way is to raise a cost umbrella over all forms of green energy via, for example, a carbon tax – and then let the technologies battle it out in the marketplace. Let private investors direct capital to its best use. (As I write, I am at a conference in Montana to introduce a very promising new solar technology to venture capital funds.)

    Government has a role as a funder of basic research. Beyond that, though, government historically makes a very bad energy investor. Yet the Obama plan will expand government’s investment in energy development. Worse still, the Obama plan continues to sprinkle tax credits and other benefits on favored industries: wind, solar, and now nuclear. The playing field, already uneven, is being tilted even more.

    Here’s the crazy thing about energy policy: If you want off oil, the only way to preserve free markets is by raising energy taxes. If you seek to quit oil without raising taxes, you plunge into a welter of subsidies and special favors. And that, sorry to say, is the course the Obama administration has chosen.”

    Of course, sorry to say, Republicans just don’t appear to be the “just about everybody” who wants to get off oil. At least very large segments of that party base appear to be Tea Baggers who say climate is a non-existent issue, or “drill baby drill” types.

    Frum is advocating to a Republican Party he admits is not ready to listen to him that they should embrace climate as an issue and start advocating the policies he advocates as a way to appear credible enough to win the Presidency and the Congress again.

  28. Richard Brenne says:

    While I might not agree with everything in the last posts by Leif, Chris, Bob, David Lewis and Joe Bftsplk, I think they bring up many outstanding points that need to be part of the growing conversation at all levels to decide all this.

    There were disagreements stated with civility and intelligence, all made with sincerity and good faith that often appears missing among the anti-science, pro-pollution crowd.

    And thanks to Joe for hosting this and posting those who intelligently disagree with him. These are exactly the kinds of conversations we need to have and Climate Progress is the best place to have them.

    And Joe, we’d all be interested in any final comment (and/or future posting) you’d have about what has been said here.

  29. Jim Hopf says:

    All that needs to be said on all these economic questions is that we should just cap or tax CO2 (as well as other pollutants and imported gas/oil) and let the market decide how to respond. If one insists on subsidizing, then all non-emitting sources should recieve the same subsidy treatment.

    However, “environmentalists” (anti-nukes) have been fighting against any such even-handed policies where nuclear would have a chance to compete. Instead they insist on massive subsidies for renewables only, along with portfolio standards that require a large fraction of renewables use, regardless of cost or practicality. If anything nuclear opponenets were saying about renewables being cheaper than nuclear were even close to true, none of these policies would be necessary.

    Renewables are much more subsidized than nuclear, especially on a per/kW-hr basis. Despite the fact that renewables like solar and wind generate ~1/10 the emissions-free energy that nuclear does, they’re getting a larger loan guarantee volume (see link below), much larger degrees of direct financial support, and more DOE R&D money. The terms of their loan guarantess are also more favorable (i.e., more of a subsidy, as shown in the link):

    Until nuclear critics agree to having no subsidies or equal subsidies, and agree to eliminate all renewable portfolio standards (or replace them with non-emitting energy standards that include nuclear), I will never take any of their economic arguments seriously. Let the market decide!!

  30. Jim Hopf says:

    With respect to Joe’s comments at the end of the article, it’s actually mostly true, albeit rather obvious (except perhaps the part about renewables being “cost effective”).

    To summarize, he’s saying if we have no price on CO2 (or other pollutants), weak growth in power demand, govt. mandates that (by fiat) require that most of the (weak) growth be met be renewables (regardless of their cost), and gas costs remain low, there is little room or need for new nuclear. Well duh!!

    I thought it was understood, by everyone, that fossil fuels (notably coal) would remain cheaper than nuclear, or renewables, if no price were put on carbon. Joe is right that nuclear would have to be subsidized (by loan guarantees mainly) forever if no price is put on CO2. Yeah, what’s your point? So would renewables. As with renewables, nuclear subsidies are necessary unless (and until) we enact CO2 limits or taxes. Even if CO2 limits are coming, it’s probably a good idea to have some up front, temporary subsidies to kick start the nuclear and renewable industries, so they’re ready when the CO2 limits really start to dig in.

    We can’t do anything about weak demand growth, nor would we want to. As far as gas is concerned, and its competitiveness with nuclear, who knows? Gas is cheap now, but with peaking oil production and CO2 limits, it’s price may soar in the future. Competition between nuclear and gas is best left to the market. We all agree that we need a price on CO2. As for subsidies, there is simply no argument for treating nuclear and renewables differently. If nuclear is less economic than renewables, than it won’t be built, under a (no subsidy) CO2 limited system, or under an equal-subsidy system.

    The one policy that simply must go, however, is the Renewable Portfolio Standard (the states as well as Federal). It is grossly unfair. How would you (Joe, et al) feel if we had a nuclear portfolio standard that required a huge amount of new nuclear, regardless of cost (given your feelings about nuclear economics)? What nuclear critics want is to set up a situation (like the one described in Joe’s paragraph) where nuclear never had any chance to compete, and then write the history books to say that nuclear didn’t go anywhere because it was not competitive. Given that the portfolio standard amount is close to expected growth, it basically fixes the game so that almost all new generation is renewable. There is no clean energy market, especially if you have RPS but no CO2 limit/tax.

    In fact, the above is true even if Waxman-Markey were to pass. The national RPS is 15%, and the required emissions reduction is 17%. Unless there is significant grown in demand, once utilities comply with the RPS, they will have almost met the CO2 emissions reduction requirements. Throw in a few cheap (and phony) carbon offsets and you’re there. There will be no free, non-emitting energy market, where there is a significant price on CO2, and non-emitting sources get to compete fairly. Instead, we will have govt. picking winners (renewables and coal).

  31. Jim Hopf says:

    Finally, although it’s off the topic of nuclear economics, some of the things said (by Dudley and others) demand a response.

    It’s been well established that nuclear’s external costs are tiny compared to fossil fuels and similar to renewables. The net CO2 emissions from the entire nuclear power process are ~2% of coal’s, ~5% of natural gas, and similar to renewables (actually lower than most renewables):

    The risk of a severe meltdown is negligible, and even if one were to occur, the total eventual deaths (a thousand or two, if any) would be less than one tenth of that which coal inflicts every single year in the US alone. No event (accident/attack) at a Western reactor is capable of raising radiation levels above the range of natural background over any significant land area.

    It is obvious that a Western LWR is not capable of releasing anywhere near as much radioactivity as Chernobyl (and thus, having anywhere near the impact). This is fundamental (from the basic design), and does not rely on proper maintenence, management, or even construction. Saying Chernobyl-like events are possible is a lie. The worst possible event? More like TMI.

    Whereas much of DOE is devoted to the nuclear WEAPONS complex, the amount of DOE resources (R&D) budget that goes towards nuclear power is less than that devoted to fossil fuels or renewables.

    Dudley’s comparison between coal and nuclear is literally comical, the most spectacular case of cherry picking data I have ever seen. He compares Western (US) practice for coal mining to shabby Soviet practice for nuclear (as opposed to using, say, Chinese coal mining deaths). He ignores deaths from coal plant pollution completely, but uses inflated death estimates (from a non-credible source) for nuclear pollution (Chernobyl).

    Here is what a fair, objective analysis would look like, for his chosen 60-year period:

    Worldwide deaths:

    100-10,000 for nuclear (Chernobyl – credible UN sources)

    ~10 million for coal (200,000 deaths per year worldwide, times ~50 years, coal mining not even included).

    Summary, 1,000 to 100,000 times as many deaths from coal.

    US (only) deaths:

    Coal – 1.5 million (25,000 per year (EPA) times 60 years).

    Nuclear – ~1000 (high estimate for deaths related to power-specific uranium mining – no deaths from power plants).

    There’s no comparison. It’s not even close. There has been universal scientific concensus for some time that the health risks and environmental impacts of nuclear are negligible compared to those of coal. Even the anti-nuclear Union of Concerned Scientists acknowledges that the ANNUAL health costs of coal in the US alone are several times that which would occur from a worst-case meltdown event at any Western reactor. Then, finally, there’s global warming, with coal plants causing 33% of US emissions, and no significant emissions from nuclear.

  32. Kirk Sorensen says:

    Natural gas just killed two people (at least) and injured scores of others in an explosion in Connecticut. Are you still going to advocate abandoning nuclear for natural gas in the aftermath of this catastrophe?

    [JR: Seriously? I’m surprised you didn’t mention all the people who die every year from faulty gas heaters. And then there is all those people who die in car crashes every year. Will it ever end???]

  33. Kirk Sorensen says:

    Seriously. There are people advocating that a nuclear power plant in Vermont get shutdown over a few billionths of a curie of leaking tritium, yet the natural gas you consistently advocate for has killed at least two and possibly more in Connecticut.

  34. What many on the anti-nuclear side don’t realize about component manufacturing is that this is where the real development is. JSW currently is the only manufacturer that can cast a reactor pressure vessel for an EPR. But that is a small minority of the reactors be built. 50 are under construction and there are no less that 6 forging companies that are out to compete for that business that is currently only available by Japan Steel Works. The VVER 1000 and 1200 and FBR fast reactors have ALL their components made in Russia. The recent Korean deal with the UAE for 4 APR-1400 are made entirely in S. Korea. JSW itself is *tripling capacity*. The Chinese are building no less than 3 complete melt shops to cast the huge ingots needed and pounded into shape with hydraulic presses. The French and British are doubling their capacity.

    The expansion of the component side of the issue is being solved, and being solve almost exponentially. If you look at today’s Charles Barton reviews the current state of the nuclear renassaisne. It’s happening and it’s not slowing down.

    Lastly, nuclear energy NOW is mitigating CO2. If the 104 US plants now on line were not built, want to take a gander at what WOULD be generating that power? Yes, coal, and natural gas. So it’s basically a *lie* that nuclear energy will not mitigate CO2. Of course it will be cause it does it now. S. Korea, France and Japan all see lower GHG emissions when their nuclear plants are running and *when they don’t run* you see GHG go up. Every nuke built means a coal or gas plant *not* built. Those of you who are anti-nuclear can’t get around this fact. The Chinese and Indian’s understand this completely which is why the each want to eventually build 400 GWs of nuclear ! It is NOT a quesiton of “lobbying”, it’s based on keen national plans that see nuclear as *economical* and *carbon free*.