Frum on Nuclear Socialism
I was saying this morning that I thought conservative affection for nuclear power was a bit odd in light of the fact that only massive socialism seems capable of financing nuclear power plants. David Frum has a post in response that I don’t totally understand:
Nor is it true, as Matt contends, that only an active state can deliver nuclear power. The United States already draws 20% of its power from nuclear. Until recently, it’s true, the stock market has preferred utility companies that generate their power from coal. Coal is cheap and reliable. But if a carbon tax increased the price of coal, nuclear would come back into vogue – and the regulatory changes needed to facilitate that shift would not have to be very dramatic. Probably more important would be mergers in the utility industry. The rule of thumb in the industry is that a new nuclear plant would cost some $10 billion and start yielding revenue only after 5 to 7 years. That’s a big check to write when the largest utility in the United States, Exelon, has a market capitalization of only $35 billion. Electricite de France by contrast has a market cap of some $85 billion.
We seem to me to be in agreement here. Even though carbon pricing ought to make nuclear power profitable on an operating cost basis, it would be prohibitively expensive to raise the capital necessary to construct nuclear plants. I think you could resolve this by having the state step in and do the financing. He thinks, I guess, that some counterfactual private utility could do it if it were far larger than any existing utility. But how would you make these mergers happen? That sounds to me like you need an active state.
Note that many of these same considerations apply to windmills. They generate electricity quite cheaply on an operating cost basis, the problem is building the windmills. But the scale of the investment in a windmill is much smaller, so it’s easier for the private sector to mobilize the risk-bearing capacity necessary to build one. That said, obviously you need a certain amount electricity that can be relied upon irrespective of how windy it is or whether the sun is shining. So I’d happily see the nuclear share of the pie grow at the expense of coal and oil as the provider of that baseload electricity. But from where I sit, making it happen requires a pretty forceful state intervention. Or perhaps what I should say is that the cleanest way to make it happen would be to bite the bullet and engage in forceful state intervention. I’m afraid that what we’re going to do instead is try to subsidize the operating profits of nuclear power to such a sky-high level that the private sector can’t help but jump in with the financing even though the deadweight loss of doing it that way will wind up being a lot higher.
72 Responses to “Frum on Nuclear Socialism”
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November 6th, 2009 at 4:54 pm
You don’t need two utilities to merge. Exelon and, say, PG&E could do a 50-50 joint venture in Yglesias Nuclear LLC. I don’t know whether that would raise antitrust flags.
November 6th, 2009 at 4:55 pm
The real irony is that utility companies force rate payers (see Georgia, Washington State and Florida) to pay for the construction of nuke plants before a single watt of energy is produced by the nuke plants. Even though the rate payers pay for the plant, the utility still owns it at the end. And of course, the US Govt. subsidizes the whole process through taking the spent fuel and covering the catastrophic insurance costs.
November 6th, 2009 at 4:57 pm
We already have a socialist system in most states: utilities can only charge the price that the state governments let them. Ironically, the states with the strongest price controls are almost all red states in the South, whereas the freest markets are in the Northeast.
November 6th, 2009 at 4:58 pm
If you increase the profitability of nuclear plants, the financing will be found. Reducing the profitability of the banking sector will help this as well, since it will make putting capital into other areas relatively more attractive.
November 6th, 2009 at 5:02 pm
“Even though carbon pricing ought to make nuclear power profitable on an operating cost basis, it would be prohibitively expensive to raise the capital necessary to construct nuclear plants.”
Let’s not forget that nuclear power has costs associated with the perpetual storage of the spent fuel rods — unless that cost is socialized as well.
November 6th, 2009 at 5:03 pm
And was a public entity until about five years ago.
November 6th, 2009 at 5:04 pm
Matt said: “I’m afraid that what we’re going to do instead is try to subsidize the operating profits of nuclear power to such a sky-high level that the private sector can’t help but jump in with the financing even though the deadweight loss of doing it that way will wind up being a lot higher.”
And, this is because a significant number of Senators and Representatives have been, are, and will be on the receiving end of such subsidies in the private sector. Doing things the “efficient” way cuts them and their golf buddies/major contributors out of the action. As has been pointed out, most of the senior Bush II policy makers made their “private” fortunes from “public” subsidies.
November 6th, 2009 at 5:12 pm
The problem with nuclear isn’t just the capital cost, it is the uncertainty. Anti-nuclear groups became quite skilled at finding ways to delay plants and drive up the costs. And even if a plant was finished, it might not be allowed to operate as with the Shoreham plant. No utility in its right mind wants to deal with this.
Wind power doesn’t have any of this uncertainty. Wind turbines can be constructed and put into operation rapidly and predictably.
November 6th, 2009 at 5:19 pm
Nuclear Plants are being built right now. Plant Vogtle in Ga. has already begun construction. Progress energy, FPL, Duke, and SCANA, all have a COL submitted and have begun hiring and construction preparation.
November 6th, 2009 at 5:36 pm
But how would you make these mergers happen? That sounds to me like you need an active state.
Why would you need a state to make that happen? You just need a state to stay out fo the way. Up until 2006, the Public Utility Holding Company Act made utility mergers difficult, as they needed SEC approval. Luckily, the Republican Congress and President Bush deregulated utilities by repealing PUHCA, so maybe we will see some more utility mergers going forward.
November 6th, 2009 at 5:37 pm
Matt had a post earlier in the day about some kind of new WPA project. The problem with nuclear power plants (and 10 billion is cheap – try 20-30 bills) is the upfront cost is prohibitively expensive while the long term benefit is obvious. The free market never would have built the Tennessee Valley Authority or the US Freeway system but those projects have yielded incredible economic benefits. Tennessee would be the third world without the TVA and who can even calculate what the freeways have done for our economy.
Nuclear reactors, once they’re built, can provide lots of cheap, clean power for decades; properly maintained, maybe a century of use. Only the government can afford to build them. Here in Seattle, our old highways are falling into the sea and local politics, inter-state taxpayer rivalries and general leadership paralysis makes the kind of ambitious infrastructure projects needed impossible to even consider.
The Federal government could step in and get these things made and the long term benefit is obvious. Matt’s got a good point and David Frum is an idiot. Libertarian (frauds)/Republican ‘conservatives’ are the biggest obstacle to this country’s future.
November 6th, 2009 at 5:41 pm
Rate payers paying for construction of new nukes:
Senate Bill 31 would allow Georgia Power to recover financing costs during construction for two new nuclear units at Plant Vogtle.
That is recover from the ratepayers, in the form of higher utility bills. If nuclear is such a good deal, why can’t they pay for their own financing?
November 6th, 2009 at 5:46 pm
So Frum’s solution is to create a private utility company that will be too big to fail?
November 6th, 2009 at 5:47 pm
“lots of cheap, clean power for decades” as long as the government subsidizes the disposal of spent fuel, the cost of catastrophic failure insurance, and actually building the plant in the first place. Nuclear power is not cost effective without massive government subsidies, period.
November 6th, 2009 at 5:49 pm
Thanks, Matt, for writing about NE. It’s about time we have a reasoned debate.
Emrys: Storage is a technical problem that was solved by the Argonne team, and the project was killed in ‘94 due to objections cited by Mr. Shearer (reply #8).
Matt, please look into IFR and Gen 4 technologies. We need an informed progressive movement:
http://bravenewclimate.com/integral-fast-reactor-ifr-nuclear-power/
November 6th, 2009 at 5:54 pm
It’s good to to see the “something for nothing” dream is still alive and well in America. Electricity too cheap to monitor!
And we’ve made great progress in building the totalitarian police state you need to have to make nuclear power ’safe’- safe, that is, from terrorists and gangsters who might steal the ingredients and concoct a more deadly cake. Still not actually safe, so Price-Anderson would need to be updated to be absolutely sure the nuclear industry wouldn’t have to pay for any damage they might cause.
And there would be savings, because why would you worry about cleaning up the waste created already if you were just going to make more? These would be potentially huge savings, because the price tag of really cleaning up the mess so far keeps rising as the waste keeps spreading.
It would be interesting to see what happened if a few states were designated nuclear-free, so people who wanted to be safe could move there, and people who trusted nuclear could live in the states with the nuclear power. It would be interesting, but it ain’t gonna happen, if only because the waste migrates everywhere and there are no safe places.
Well, not to worry, it will be run with the military efficiency of the Army running Fort Hood, and systems will all have backups and fail-safes, just like the fly-by-wire systems of an Airbus. We’ve learned from our mistakes of the past, just like we did after Vietnam, and we’ll never do that again- we hope.
November 6th, 2009 at 5:57 pm
Richard @14,
Modern nuclear reactors are built so that a meltdown is impossible. They’re safer by far than a coal plant. Storage is a problem, yes, but only if the government in dumb enough to ship the waste to Yucca mountain. If they keep the waste on site and recycle it, it’s a long term problem, but so is global warming, so pick your poison. Threats of terrorism are vastly overblown. Can you imagine a bunch of assholes trying to storm a nuclear reactor? And yes, they’re extremely expensive, but after ten years, the cost starts averaging down nicely.
Nuclear energy ain’t perfect but considering the alternatives, they look pretty damn attractive. Liberals should get over their anti-nuke hostility.
November 6th, 2009 at 6:00 pm
Frum is whistling in the dark. Vigorous national regulation capped the liability for catastrophic failure of nuclear power plants years ago, and you can bet that only public money could even begin to pay for the clean up if there ever was another Chernobyl grade containment failure.
What is notable is that the technology was developed with great piles of federal government money, and that similar scale investments in photo-voltaics, wind power, biomass, and efficiency are much better ways forward.
November 6th, 2009 at 6:11 pm
The government can also give lump sum investment subsidies, or reduced rate financing. This can provide a useful way of incentivising investments in energy infrastructure and renewable energies – and also for home weatherization. Since it’s a handout to private companies and citizens, I’m sure Frum could get behind it.
It might also work for nuclear, though there the risk might be more prohibitive given the sums involved.
Another part of the equation is that the US doesn’t have the human capital to start doing nuclear on a large scale any time soon. You need more than dollars to buy plants, you need a nuclear-industrial complex. And if you look at the cost curves, that money and effort is better spent on renewables.
November 6th, 2009 at 6:11 pm
We don’t want to create energy companies that are too big to fail either, will the stories ever get straight?
My biggest beef all along with nuclear power is the authoritarian, top-down nature of it in terms of business model, as well as the massive risk that will never truly be capitalized (just bad-case scenarios wished away never to happen), along with the reality that we shouldn’t create thousand-year long management plans (i.e. nuclear waste), when we can’t even seemingly execute coordinated decade-long plans, especially private market operators, and we’re to believe we can manage radioactive waste for the time period needed?
Nuclear power is the story of the sorceror’s apprentice all over again, it’s a bad idea on almost every level if you actually care about risk, management, and the history of civilization.
November 6th, 2009 at 6:15 pm
There are at least a couple of nominally independent questions here. The first is are are the republicans pushing nukes, if they likely would require more not less government? The other questions revolve around the cost/feasability/safety etc of the system. To answer the first, I think the republicans think firstly, secondly, and thirdly about gaining political advantage, and not at all about real policy, or implications of policy. So proposing Nukes makes them sound reasonable (at least to moderates), and there are bound to be a few lefties who will make a spectacle of their opposition. So they can play on the contrast ” Republicans reasonable, lefties -and by implication all Democrats, screaming nutjobs.
As for the techical issues, I think they deserve a different post. We could probably argue pros/cons until the cows come home and not change anyones opinion. So I’ll stay out of that one.
But the claim, that yes we are a bigtime nuke country, because we have more absolute capacity than France is disingenuous. We are a much larger country, with several times the per capita power consumption. Frances share of nuclear electric is somewhere in the high eighties, and ours is around twenty percent. Relatively speaking we are small potatoes. And almost all of our buildout eneded decades ago. The few plants under construction/permitting won’t be enough to change the fact that our percent of generation that is nuclear will remain pitiful for the forseable future.
November 6th, 2009 at 6:16 pm
If the net present value of the expected revenues from a nuclear power plant (using a cap rate to account for the various risks involved) exceeded the cost of building it, then I have no doubt that the private sector could pull together $10 billion in investment pretty rapidly. That is, in large part, the social good performed by Wall Street, as much as some like to pretend otherwise: it appraises various investments and allocates capital according to their expected return.
The problem is, I think, that the net present value of a nuclear power plant’s expected revenues do not exceed the cost of building one. We can generate the power we need more cheaply with coal and similar. The downside to coal and similar is in environmental cost, which, being an externality, does not factor into investors’ decisions.
The best way to change that calculus would be effective carbon pricing. If coal power had to internalize the environmental externalities it creates, it seems conceivable to me that the numbers would shift enough to make nuclear power attractive to investors. (Not knowing what the precise numbers are, it also seems conceivable to me that nuclear power would remain unattractive even after this reform.)
November 6th, 2009 at 6:17 pm
Other smaller-scale nuclear applications like in medicine deserve to be evaluated in their own right, and are on balance much likelier to make risk management sense, but nuclear weapons and nuclear energy need to be exiled to the waste dump of history, the former as soon as possible, if possible, and the latter if we ever wake the hell up and realize we don’t have to be such wasteful, junkie cretins when it comes to energy resources, and that through conservation, efficiency and massive investment in next-generation sustainable energy sources, we can look 7 generations ahead with confidence, while saying good grief to the practices of the last 7 (how many wars, how much over energy, c’mon people?).
November 6th, 2009 at 6:19 pm
Senate Bill 31 would allow Georgia Power to recover financing costs during construction for two new nuclear units at Plant Vogtle. That is recover from the ratepayers, in the form of higher utility bills. If nuclear is such a good deal, why can’t they pay for their own financing?
And how, precisely, do businesses pay for the cost of borrowing for major new capital projects without increasing prices for their customers?
November 6th, 2009 at 6:25 pm
@N #17
Why should the government have to clean up after a “private” profit making entity like a nuclear utility? Why isn’t waste disposal a part of the utility’s responsibility? Because then nuclear power is not cost effective anymore. Privatize the profits, socialize the costs.
Long term problem? Try 10,000 years of toxicity. Yeah I would call that long term.
If the costs come down after 10 years, why doesn’t private capital flow toward these projects? The fact is without massive subsidies, nuclear power is too expensive. Private capital won’t touch it. I would rather have massive subsidies go toward efficiency and renewables as they don’t create a toxic stream that lasts for centuries.
November 6th, 2009 at 6:27 pm
Hope is not a plan. You can’t say, ‘lets invest in next generation technologies’ when you can’t specify what those technologies are. Solar? We need several major breakthroughs in technology before solar power makes a dent in our power needs. Wind and hydro? The places suited to wind and hydro-power are not in high population areas so you lose most of the power in transmission. Unspecified next generation technologies are all science fiction at this point.
Nuclear power is real, we know how to make it and we know what we’d be getting. The alternative to Nukes at this point is coal.
November 6th, 2009 at 6:51 pm
Famous last words.
51% energy loss during transmission?
While there are people out there who don’t want any nuke plants built. Most of the comments here have been more concerned with the fact that nuclear power is being pushed with a privatize the gains, socialize the losses business plan. Unless the utilities want to pay for their own waste storage and their entire liability in case of an accident, we should subcontract our nuclear industry out to the French.
November 6th, 2009 at 6:53 pm
Eh, I understand we have some pretty unique geography here in Quebec, but 95% of our electricity is hydroelectric. Coal and nukes are not the only options. Though I would be in favour of replacing coal power with nuclear power.
November 6th, 2009 at 6:55 pm
Wind power doesn’t have any of this uncertainty.
Massachusetts Tribes Challenge Offshore Wind Farm
“The Associated Press reported Monday that the Wampanoag are attempting to block construction of the nation’s first offshore wind farm on religious grounds. ”
Wind NIMBYs in Walla Walla
“Whitman biology professor and rancher Delbert Hutchison, a landowner near a protected salmon stream below Lincton mountain, is one of the most surprising opponents to the proposed project. ”
MPP calls for moratorium on wind energy projects
“Bruce-Grey-Owen Sound MPP Bill Murdoch announced last week that he’ll call for a province-wide moratorium on wind turbine projects when he introduces a private member’s bill, at Queen’s Park.”
November 6th, 2009 at 6:56 pm
“Modern nuclear reactors are built so that a meltdown is impossible.”
N, you must not be an engineer. Engineers never use the word ‘impossible’ because we know nothing ever is impossible. Obviously, our plants are much safer than Chernobyl, which had the possibility of positive feedback in the control rod system. But with enough failures happening at the same time, a meltdown is always possible. No safety system is ever perfect and the cost of a meltdown are huge. Imagine having to relocate the entire population of the Northeast after a meltdown in Connecticut. Remember, to this day nobody lives anywhere near Chernobyl. Fortunately, not many people lived there anyway. But the Northeast US is a much different story.
“If they keep the waste on site and recycle it”
Reprocessing fuel rods is not cost effective and won’t be until uranium becomes a lot more expensive. But uranium only becomes expensive when there is insufficient supply, at which point nuclear energy is a really bad idea. Yes, France reprocesses, but they lose money doing it.
That said, I support expansion of nuclear power and think the safety issues aren’t enough to kill the idea. But it has never been cheap, and probably never will be. It will always need subsidies, even with a streamlined licensing system. But it can supply the base power that would make wind and solar more plausible. So I’m for it, but there will be some accidents and it will be expensive. Ultimately, efficiency offers the best path.
November 6th, 2009 at 7:00 pm
“Bruce-Grey-Owen Sound MPP Bill Murdoch announced last week that he’ll call for a province-wide moratorium on wind turbine projects when he introduces a private member’s bill, at Queen’s Park.”
It should surprise no one that our friend MPP Bill Murdoch is a Conservative.
November 6th, 2009 at 7:07 pm
we should subcontract our nuclear industry out to the French.
In France, the maximum liability for an operator of a nuclear installation is 90 million euros. Anyone transporting nuclear substances must also carry at least 23 million euros in insurance coverage.
It should also be noted that the Vienna Convention on Civil Liability for Nuclear Damage sets the international limit of a nuclear operator’s liability at not less than ~$400 million.
By the way, India aims to add 60 GWe of nuclear capacity by 2030, and is planning on 10 GWe coming from US companies, projects worth $150 billion (source). These days, 1 reactor =~ 1-2 GWe.
November 6th, 2009 at 7:14 pm
By the way, there WAS a meltdown at Three Mile Island. The NRC Backgrounder says:
Although the TMI-2 plant suffered a severe core meltdown, the most dangerous kind of nuclear power accident, it did not produce the worst-case consequences that reactor experts had long feared. In a worst-case accident, the melting of nuclear fuel would lead to a breach of the walls of the containment building and release massive quantities of radiation to the environment. But this did not occur as a result of the three Mile Island accident.
I am not a nuclear engineer, but one can easily imagine an array of wedge-shaped, neutron absorbing materials at the bottom of the containment vessel to spread out, separate (and reduce the neutron flux – thus heat generation) of a melting core material to avoid its release into the environment. Pretty nasty mess at the bottom of the vessel, though, which is the situation at Three Mile Island.
November 6th, 2009 at 7:21 pm
But uranium only becomes expensive when there is insufficient supply, at which point nuclear energy is a really bad idea.
Not really, because as Uranium becomes more expensive, we begin to use the Thorium Cycle. While Uranium supplies are limited, Thorium is at least 4-5 times more abundant than all of uranium isotopes combined and is fairly evenly spread around Earth.
November 6th, 2009 at 7:25 pm
Foster @30,
Point taken about the word ‘impossible.’ ‘Much, much less likely than older reactors’ I think fairly describes safety measures at modern reactors. Evacuating the Northeast would really, really suck, to say the least. But hey, according to global warming pessimists, we’ll have to abandon Florida.
Nuclear power is far from ideal. But its been off the table for political and public relations reasons as opposed to cost/benefit and ‘what do we do when the oil runs out’ reasons.
I think it needs to be part of the discussion – maybe its simply the best option we have until all of these Jetsons-style future power sources the optimists claim are on their way actually arrive. I’m not seeing anything now that isn’t decades away from being realistic. Nuclear power, for all its faults, is realistic.
November 6th, 2009 at 7:35 pm
Can you imagine a bunch of assholes trying to storm a nuclear reactor?
More like crashing a Cessna full of C4 into it, I would think.
November 6th, 2009 at 7:46 pm
I’m pretty much in agreement with you N, I just get annoyed when people say nuclear energy will be super cheap and without risk. Neither are the case, but there really isn’t any silver bullet when it comes to energy. We’ll end up doing a combination of unpleasant things. But there are some good efficiency solutions now. Awnings can save on your air conditioning usage. I don’t use the air conditioner I have because I run a fan at night and shut the house up during the day. These are old solutions that help a lot. I use 30% less energy than the previous owners of my house, and all it took was some more insulation, and a morning and evening routine that takes two minutes each. If everyone cut their energy usage by 30%, our energy problems would be quite a bit easier to solve.
November 6th, 2009 at 7:47 pm
@30: “Engineers never use the word ‘impossible’ because we know nothing ever is impossible.”
Then engineers are engaged in low-value nonstandard English and nothing more, because some things are clearly impossible or close enough to impossible as not to deserve a distinction.
Do you agree that it’s impossible for an ordinary watermelon to melt down? Because the argument as I understand it is that modern nuclear power plant architectures, such as pebble bed reactors, are exactly as capable of melting down as an ordinary watermelon. Maybe that’s correct and maybe it’s not — it’s hard to tell with so many irrational/biased crusaders on both sides of the issue — but I do know that observations like “nothing is impossible!” entirely fail to engage the substantive issue.
November 6th, 2009 at 7:53 pm
If we had waited for private industry to create nuclear weapons, WWII would have had a different conclusion. In a time of crisis, of great need, a focused U.S. government can and has achieved what many would have thought was impossible (see the Space Program too).
Next-generation energy isn’t pie-in-the-sky, isn’t Jetsons, it’s a combination of massive conservation, ever innovating efficiency, and new technology, and we can choose to speed up this new technology if we so choose, just as we can steel ourselves to do more with less (as opposed to surrendering our fates to being gluttonous cowards with no political spine).
We should choose and steel ourselves such, make a damn sacrifice for once like the older generations, since nuclear power is incredibly unrealistic when you honestly consider it from a risk-management level, and with knowledge of the short history of modern human civilization, this fractious and conflict-based world we struggle to uphold, and so on.
To create such a thousand-plus year management plan for the by-products of nuclear energy production is the most pie-in-the-sky bullshit I’ve ever heard, and am continually amazed how so many buy into that nonsense, and I’m not even talking about possible meltdowns or disasters, just the predictable consequences.
Factor in the possible accidents, and unless you just dismiss actual liability out of hand, nuclear energy cannot and will not ever be property capitalized by private interests, and can’t be by governments or alliances of governments and industry either.
Further, it sets up an illiberal model for free commerce, public/private energy behemoths too big to fail forever, top-down organizations that must by necessity be controlled and regulated by the elite, and who will inevitably buy and sell tomorrow’s politicians like the oil companies over the past century, and then see how well the due diligence as far as safety and not taking shortcuts to emphasize profits holds up.
Unless of course you want more socialism and bigger government, then I send you back to the concerns before the last paragraph.
November 6th, 2009 at 7:56 pm
You know you’ve landed a punch when a conservative responds to your argument that state intervention is needed by pointing to France. When was the last timea onservative had anything good to say about France ? What does anything in France tell us about the market system ?
With Nuclear power, as with GM and AIG, you are not saying socialism forever. Even a publicly owned nuclear power company could be privatized once it is set up. You are talking about loan guarantees or something. Frum can clearly tell you are right. His view seems to be “it’s only socialism if conservatives don’t like it.” Consistency by tautology is the most they can manage.
November 6th, 2009 at 8:02 pm
“Not really, because as Uranium becomes more expensive, we begin to use the Thorium Cycle. While Uranium supplies are limited, Thorium is at least 4-5 times more abundant than all of uranium isotopes combined and is fairly evenly spread around Earth.”
That’s a fair point, although even that still uses some uranium. Far less, of course, but still some. I’m not really sure about uranium scarcity. We’re not close to it becoming scarce yet, or we’ be seeing fewer delays in the opening of uranium mines in Australia. But in 100 years, many say uranium will be scarce. But right now, we don’t actually know how much uranium is out there because nobody’s really looking for it. The easy to mine and already known uranium in Australia is enough for the entire world for more than fifty years. Anything anyone else finds is going to be more expensive to mine than what’s there, so why bother for now? When you consider the scarcity of something, consider titanium. During the Cold War, it was considered to be very rare and we went through some remarkable efforts to buy it from the Soviets. But now we know it’s pretty much everywhere. So how scarce is uranium? Not scarce enough to worry about now. Lithium would probably be a bigger concern.
November 6th, 2009 at 8:09 pm
One final note, I get even more worried about other countries steadily adopting nuclear energy, if it ever truly goes mainstream, because this obviously increases risk in a number of ways, without even a solid governing foundation of a few centuries under their belts for some of these folks, and then you have the whole worries and concerns about terrorism and/or the diversion of nuclear energy to less-than-peaceful purposes, and if we mainstream nuclear energy are we going to mainstream for everybody, or are we going to attempt to control who can and cannot produce and distribute energy, worldwide?
Any true discussion of the mainstreaming of nuclear energy needs to honestly accept this too, that it presumes that the world will be a friendly, liberal place, when in reality we know it isn’t and likely won’t be, not everywhere, which means we might practice freedom, liberalism and self-government at home, but we will work day and night to stifle that for others around the world, becoming an enemy to our own ideals and hypocrites destined to overreach and fail, and, with nuclear energy centers set up all over the world, such a failure would truly be historic on a biological level far beyond the small lens of human existence.
But I guess it’s pie-in-the-sky to be a realist about the world and analyze economic proposals from a global perspective rather than just economically (with a dash of political), and it’s not pie-in-the-sky to wish and expect for all the right scenarios to play out economically, politically, socially, militarily, etc. in order for the mainstreaming of nuclear energy not to pose a real risk of actual disaster.
November 6th, 2009 at 8:12 pm
It one whacky way to boil water that’s for sure. It will never be cheap either and will always need subsidy. The biggest problem with US nuclear power is that it was born of subsidy and everyone who ever made a dime on it pretends it was free enterprise.
Nuclear power makes no sense now when looking at it in the broadest theoretical way because the model of gigantic centralized systems is inferior to distributed localize systems. I don’t know how to get there from here without storage. Just saying, in theory.
November 6th, 2009 at 8:13 pm
29
Of course there is sometimes opposition to wind projects (as there is to practically anything these days) but it is not nearly as widespread and effective as the oppostion to nuclear power. Large amounts of wind power have been installed quickly in places like Texas and Iowa in recent years.
November 6th, 2009 at 8:18 pm
43
… the model of gigantic centralized systems is inferior to distributed localize systems. …
Really? Let me know how smelting steel in your back yard works out.
November 6th, 2009 at 8:24 pm
“such as pebble bed reactors, are exactly as capable of melting down as an ordinary watermelon.”
Well, this technology is even less developed than solar, so we won’t see it on a commercial scale in a long time. And there was an accident in Germany in 1986 that released radioactivity. So safety is still a concern, although it’s obviously much safer than our current designs, which as Three Mile Island showed, aren’t as safe as we’d like. And given that this pebble bed reactor had an accident that released radioactivity, it’s obviously not as safe as a watermelon. But pebble beds are also more expensive. And look, I like this kind of technology, and I do think we should use it. And we should experiment with as many variations of nuclear technology that we can. I just think we need to realize that as it is now, it’s not as cheap and safe as proponents say, and making it safer only makes it more expensive. And making it cheaper only makes it more dangerous. It’s a risk we should take, but let’s not pretend the risk isn’t there. And even if we could make nuclear energy cheap and risk free (doubtful), uranium mining and processing still kills people. If you breathe uranium dust for decade, don’t be surprised when you get leukemia.
November 6th, 2009 at 8:34 pm
“Really? Let me know how smelting steel in your back yard works out.”
Actually, it worked out fairly well in Colonial times. The quality of steel was low, but that’s mostly because we hadn’t learned how to make Damascus steel yet. Seems that was still an Indian secret. The Arabs didn’t know it either, they bought ingots from India. And yes, I could have a colonial-era coke oven, furnace, and forgery in my back yard. Well, except for the obvious zoning problems.
November 6th, 2009 at 9:54 pm
The size of utilities isn’t given by god, it’s determined by the market. It’s likely given that the largest utility is $35 billion because a company that tried to be bigger than that would be less profitable. If nuclear became viable, and required bigger companies, either the proper mergers would happen, or entities with tons of capital would buy utilities, or the utilities would borrow shit tons of money. Exxon Mobile is worth $345 billion, which the market manages to capitalize.
November 6th, 2009 at 9:56 pm
The Republican State of Nebraska has a socialist electric system that owns nuclear power plants. Maybe that’s a decent model?
November 6th, 2009 at 10:20 pm
“The Republican State of Nebraska has a socialist electric system that owns nuclear power plants.”
What’s up with that? Boulder privatized years before I moved to Austin, which still had a municipal electricity grid. And Austin is much more conservative. And there hardly are any municipal grids anymore, and they are almost all in die-hard Republican places. Why did the liberal areas privatize first? I guess bigger markets drove the politics, but I really haven’t thought about it.
November 7th, 2009 at 1:32 am
Funny, both sides in that ping pong still didnt mention the major issue which is dealing with nuclear waste, catastrophe risk and all those other little externalities.
I would prefer every nuclear plant to be government run if there are any in the first place, but short of ignoring externalities, both market and central planned decissions are usually against nuclear power plants in the first place. For example if you demand that power plants insure without limit against catastrophic risk, that makes nuclear plants very uneconomical. That would be the US market based soluation to avoid nuclear power plants. What Bush did to make them more popular is to lower the necessary insurance sum.
November 7th, 2009 at 7:01 am
Well, setting up a “US Government nuclear construction company inc”, that issues US treasury bonds, builds a nuke plant with the money, and then either operates it, or hell, promptly sells the plant on to private operators, should be insanely profitable, because the revenue from electricity produced would be many times higher than the interest payments and service on capital.
The market currently charges private sector new nuclear build in the US a severe “We fear lawsuits by greenpeace” surcharge on construction bonds, because even utterly groundless suits can delay and hinder construction.
And a nuclear project that has to pay 10-13 % interest rate on its bonds is not very economic, because that level of interest eats all the profits.
This is also why the US utilities that are doing nuclear build are mostly raising the money from their ratepayers – In effect, they are saying “fuck the vampire bankers, we are going to loan the money directly from our customers.” And if it is a regulated utility doing this, it is in fact a good deal for said customers – They will get their money back, and then some, in lower electric bills once the plants are in operation.
November 7th, 2009 at 7:38 am
I think people that argue that nuclear isn’t cost-effective without government subsidies aren’t considering that the costs of fossil fuel production and consumption are almost all externalized – so it’s no surprise that nuclear can’t compete bearing all its own costs.
By the way, I don’t think anyone would argue that the spent fuel storage/disposal aren’t subsidized by the government, but the utilities have been paying into the Nuclear Waste Fund to share the cost for a long time – that’s why they keep winning their lawsuits against the government for failing to open Yucca Mountain, lawsuits that are going to cost us a lot of money over the long run.
I haven’t seen anything to suggest that reprocessing solves the waste problem – it just doesn’t reduce the waste by enough, plus it creates plutonium, which creates non-proliferation concerns (though the plutonium can be used as fuel, not all plants are set up for that). That said, some of the new designs create much less waste.
November 7th, 2009 at 9:20 am
Threads like this are always amusing to the sufficiently cynical. Part of that is because they ignore what is jokingly referred to as “the real world”.
In the real world, there are three choices:
1) emit CO2;
2) nuclear power;
3) freeze in the dark.
Those who are bound and determined to achieve a “natural” society, in which they get to be aristos charmingly condescending to the happy peasants singing paeans to the Dear Leader and retiring to their mud huts when the day’s work is done, naturally prefer the third option. They hide it in different ways, of course — “biofuels” are a scam designed to reduce the US’s income from farm exports, solar power is too diffuse to ever support an industrial economy, and “wind power” is a pure scam, as should be evident from the fact that T. Boone Pickens, the world’s most effective scam artist (B. Obama not excepted), is strongly pushing it.
Our ancestors sat around campfires and told stories about ghosties and ghoulies and things tha’ gae bump in th’ night. The modern equivalent is to sit around in Starbucks and exchange horror stories about “nuclear waste” — “thousand year containment plans” and the like. Nuclear waste, properly understood, is nasty stuff and needs to be handled with care. Exaggerating the dangers serves no one but Bourbon wannabees. Try this: Go to a coal plant and fill a two-gallon bucket with ash. Take it to a nuclear power plant, just in the gate without coming near the buildings let alone the reactors, then out again. Congratulations! You have just violated Federal Law and Regulation, and can go to jail for mishandling “nuclear waste”.
Operating problems and “meltdowns”? The “disaster” at Three Mile Island exposed the typical person in the neighborhood to approximately the radiation St. Al will get driving his GV from Tennessee to Copenhagen, and both the designers and the operators of Chernobyl were good conscientious Government employees identical in every important detail to the folks who’ll be managing your health care in the near future.
That’s without even addressing Matthew’s post, which takes advantage of the convenient circularity. The real cost of a nuclear power plant — fuel, reactors, buildings, etc. etc. et. al., the machinery that makes it work — is about twice that of a coal plant. All the rest of the cost is beating off the Luddites with lawyers, complying with regulations that drive up costs without yielding any benefit (safety or otherwise), or supporting the licensing process by generating reams of nonsensical paperwork to feed the bureaucracy. Given that all that crap is in place, a nuclear power plant isn’t cost effective (or is only marginally so) if constructed by private industry — therefore the “solution” is either Choice Three or have the Government build them, so the right thing to do is more and tighter regulation and “oversight”.
I know for sure that I’m not one of the Elect, so I’m going to get to live in a mud hut with the rest of the peasants. Matt is likely to be disappointed. He’d better be sucking up real good to the Reids and Pelosis, and of course the Dear Leader, or he’s likely to find himself beatin’ his feet on the Mississippi mud like the rest of us.
Regards,
Ric
November 7th, 2009 at 9:24 am
Hm, that was confused what i wrote up there. There was a limit but a rather high one (still to low, but high compared to many other countries) for the insurance sum and Bush lowered it, but that still didnt help much to make nuclear power plants more popular. Many other countries have no incurance requirement whatsoever.
November 7th, 2009 at 10:21 am
Uh… How many windmills are required to generate the output equivalent to a nuke plant? Uh… How many square miles required to be used to plant said windmills? Uh… How much wire required to connect all those windmills to the grid? And when the wind is not blowing, it is merely a synthetic forrest of monuments to stupidity. Nuclear is inexpensive and doable in the private sector if we were to have the political will to keep the hippies and their lawyers out of the way.
November 7th, 2009 at 10:45 am
Come on, Deserve Liberty. In no universe is nuclear energy cheap. On a pure cost basis it can’t compete with gas, wind, or even solar. If you look only at private costs, yes it’s cheap, but that’s because government covers most of the cost! An yes, the land requirement for wind is high. It would take close to 150 square miles to get the generating capacity of one nuclear plant. There is, however, a lot of cheap land in some very windy places. There’s a reason that private sector investment has been increasing rapidly in wind.
And before you act like nuclear power is 100% reliable, consider that France had to shut down 1/3 of its nuclear reactors this summer due to high temperatures and low water levels.
Ric, the evidence from other countries is that litigation isn’t what makes nukes prohibitively expensive. Also it’s rather foolish not to consider the possibility that the extremely tight regulation is a big reason that there hasn’t been a serious disaster at a nuclear facility.
November 7th, 2009 at 11:07 am
Sorry, but this just isn’t true. In fact, Nuclear is actually cheaper than conventional coal-fired plants. The problem, you see, isn’t that nuclear plants are all that expensive; it’s that just about every evaluation of coal neglects the same externalities that are calculated into the cost of nuclear. So most of what you see is an apples and oranges comparison. For example, far, far more people die of radiation-induced symptoms every year than all the people who have ever died from being poisoned by nuclear power plants. But that’s rarely – if ever – figured into the cost of the coal plant, is it? There was a lot of this type of analysis on the old RISKS-L forum back in the 80’s. I don’t know if the group made the transition successfully into the modern formats or if you can only find this through painfully tracking down old archives, but I’m sure this information isn’t all that hard to track down.
November 7th, 2009 at 12:15 pm
Delaware beats Switzerland as most secretive financial center
http://joshfulton.blogspot.com/2009/11/delaware-beats-switzerland-as-most.html
November 7th, 2009 at 12:20 pm
I’d like to point out that, from a purely technical perspective, the waste problem is way, way overblown. This is a real shame, since I think this mis-perception, not based on fact, is a big driver in negative public opinion.
Here’s a fact to keep things in perspective, which anyone can verify with a calculator and a piece of paper. A large nuclear plant, producing a gigawatt of electricity and running 100% of the time, will “burn” (ie fission) about a ton of heavy metal in a year. (Compare with a similar capacity coal plant, just for fun, which burns more like a million tons of fuel a year, or a full trainload every other day.) The products of this fission — aka fission products — include short-lived isotopes that are (necessarily) highly radioactive. This is the nasty stuff, high-level waste. But the fact is,there just isn’t that much of it. A ton of fission products would fit in the trunk of a sub-compact. It’s not that hard to blend it into a glass or ceramic and let that sit in a shed on-site for the full lifetime of the plant, even 20-50 years. This is what people have been doing for quite a while now, and it basically works fine. Handled correctly — government regulation required! — it’s not that dangerous or that expensive. It’s public perception, not reality, that makes this into a problem.
High-level waste mostly decays away on a time-scale of hundreds of years, which is well outside any imaginable policy horizon. But people who insist on thinking about the far, far future worry more about mid-level waste, which is less intensely radioactive but has lifetimes on the order of tens of thousands of years. These are typically not fission products, but in a standard low-enriched-uranium (LEU) fuel system they are the results of neutron captures on U-238, leading to various isotopes of plutonium, americium and neptunium. The exact quantities depend on many details, but in general the total amount of mid-level waste is on the same order as the high-level waste, ie tons per year. So this, too, can be interred safely on-site. You have to insist that people do their chemistry correctly! and here I’m all in favor of heavy-handed government oversight. But any industrial society has already agreed to this arrangement for its chemical industries, which are potentially far more deadly (Bhopal); there’s no reason to treat nuke waste differently other than superstition.
Oh, and BTW: if you’re one of those people who worry about the far, far future ten thousand years from now, then you should be a friend of the thorium cycle, which was mentioned above. Not only is thorium more abundant and more environmentally benign to extract, the thorium cycle also produces about a factor of x100 less long-lived waste than the conventional LEU cycle. T(he thorium brotherhood is alive and well and can be sampled here http://thoriumenergy.blogspot.com/ for those who are interested.)
November 7th, 2009 at 1:47 pm
As for “freezing in the dark” here is an interesting article about “passive houses” that don’t need any heating at all.
November 7th, 2009 at 3:54 pm
Just as a data point: Actual recoverable energy from solar is approximately 200 +/- 50 watts per square meter, so long as the plant is south of 40 degrees north latitude (in the northern hemisphere).
The comparable value for wind is about half that.
Both sources require energy storage and/or alternative energy sources for when the sun isn’t shining or the wind doesn’t blow. I invite you to calculate the mass of batteries necessary. Don’t bother looking at lithium batteries, either — there isn’t that much lithium. Lead-acid all the way.
And it has always astonished me that the Luddites don’t grab onto the “nuclear waste” notion. If you subjected the ash from a coal plant to the same regulation as the waste from a nuke, you could shut down all the coal plants tomorrow.
Regards,
Ric
Regards,
Ric
November 7th, 2009 at 5:46 pm
[...] h/t Yglesias. [...]
November 7th, 2009 at 6:34 pm
In which world exactly are the negative externalities of nuclear power calculated into the price? Maybe 5% of them at best )-:.
November 8th, 2009 at 8:14 am
# Just Dropping By Says:
November 6th, 2009 at 6:19 pm
“And how, precisely, do businesses pay for the cost of borrowing for major new capital projects without increasing prices for their customers?”
Usually by selling goods and services to customers; not lobbying for the legal right to charge customers for services not yet provided.
November 8th, 2009 at 9:17 am
The entities hoping to build new nuclear are not limited by the size of U.S. utilities. The major designs are being pushed by vendor consortia (Unistar and NuStart) with combined revenues roughly equivalent to the Russian Federation, and joint ownership among utilities is common. This industry claim is brilliantly satirized in a presentation on “policy enhanced investing” at http://www.earthtrack.net/content/nusubsidies-nuclear-consortium.
November 9th, 2009 at 9:20 am
[...] socialism a prerequisite for a national nuclear industry? (Matthew [...]
November 10th, 2009 at 7:58 am
[...] [...]
November 10th, 2009 at 2:21 pm
A democracy must suffer the idiotic superstitions of lay people, including their intense distrust for the findings of nuclear science.
A rational dictatorship can just tell the superstitious idiots to shut up and accept progress, the democracy has to get on its knees to the Gaia worshipers and pretend that the last 30 years of nuclear research don’t exist.
November 10th, 2009 at 7:02 pm
[...] Nor is it true, as Matt contends, that only an active state can deliver nuclear power. The United States already draws 20% of its power from nuclear. Until recently, it’s true, the stock market has preferred utility companies that generate their power from coal. … Even though carbon pricing ought to make nuclear power profitable on an operating cost basis, it would be prohibitively expensive to raise the capital necessary to construct nuclear plants. …Page 2 [...]
November 10th, 2009 at 10:12 pm
[...] Nor is it true, as Matt contends, that only an active state can deliver nuclear power. The United States already draws 20% of its power from nuclear. Until recently, it’s true, the stock market has preferred utility companies that generate their power from coal. … Even though carbon pricing ought to make nuclear power profitable on an operating cost basis, it would be prohibitively expensive to raise the capital necessary to construct nuclear plants. …Continue [...]
November 12th, 2009 at 5:46 pm
[...] h/t Yglesias. [...]