Backlash Against Nuclear Power Adds to the Top Line of Oil and Gas Companies
An article titled Backlash Against Nuclear Power Hits the Bottom Line provides some interesting food for thought about the intricate connections associated with the world’s $6 trillion per year energy market. Here is the first quote I want you to ponder.
The combination of earthquake, tsunami and human ineptitude produced a fiasco at Japan’s Fukushima Daiichi nuclear complex. Fukushima spewed radiation across Japan, and Weltschmertz across much of the rest of the world. Anxious citizens targeted nuclear plants in Asia, Europe and North America for a rethink or shutdown.
No matter what your view is of nuclear power, it’s a big part of the global grid. For example Germany, a major industrial powerhouse and the world’s fourth-largest economy, has 17 nuclear reactors that supplied nearly 23% of the country’s electricity last year. Nuclear (when it isn’t spilling from containment vessels) is cleaner than many alternatives and—critical for business—cheaper too.
The word choices are a little slanted, but notice the bottom line – the Wall Street Journal admits that nuclear energy is cheaper than many alternative energy sources. It also blames “anxious citizens” without helping put any context of what might have caused and reinforced that anxiety – like non-stop media coverage quoting hand wringers like Michio Kaku, Chris Busby, Ed Lyman and Arnie Gundersen.
Another section worth quoting is the following:
That’s left business asking: What now? What combination of gas, coal, oil and renewable energy can replace this big chunk of power? How will the country meet international carbon-emission obligations? Will this make Germany more dependent on mercurial Russia for energy supplies?
And what will it do to a company’s energy costs?
“It’s nearly impossible to make a reasonable assessment of future energy costs—the only thing you know is that costs will go up because nuclear is so cheap,” says Mr. Bischoff of Daimler. “What is so shocking to me is that political decisions were made based on the sentiments of the population in a very limited time frame without really informing people what the alternatives would be.”
I read a lot of business press and market analysis. There are people who are almost salivating at the prospects of a “bullish” period for natural gas enabled by supplying the power demands that nuclear will not be supplying if current decision patterns are maintained. See, for example this story from Sweet Crude Reports titled LNG price surges to three year high which includes the following quote:
“LNG demand will go up, there’s no other alternative,”said P.K. Jain, the New Delhi-based director of finance at GAIL India Limited, the nation’s biggest gas distributor and a co-owner of Petronet LNG Ltd., the largest buyer. “Demand will rise in Asia as Japan increases LNG use after Fukushima and even in Europe, with countries moving away from nuclear, long-term demand for LNG may rise.”
(That quote almost qualifies as a smoking gun, don’t you think?)
I decided to make a comment on the Wall Street Journal story to see if I could attract the ire of any hydrocarbon or advertiser supported media defenders. I’ll let you know how the conversation turns out. Here is my comment:
It may be time for an Atomic Insights post with a parallel but alternative headline:
“Backlash Against Nuclear Power Adds to the Top Line”
The fact that many journalists fail to point out is that rising energy costs do not hurt everyone. The increased “cost” that most of us see is balanced in the world economy by increased “revenues” for the non-nuclear power suppliers. In the six months since the great northeast Japan earthquake and tsunami, the world market price of Liquified Natural Gas (LNG) has increased by 33% and the volume of shipments into Japan have increased by 15-20%.
Publications focused on energy market trading are celebrating the “bullish” impact of the market shift caused by irrationally shutting down German reactors that could never ever experience a tsunami and by keeping safe, intact Japanese reactors shut down longer than required to evaluate their condition after the earthquake.
Do you really believe that these consequences are purely unintended? Can you remember just how many “clean natural gas” advertisements you saw during the Fukushima hyperbole on the network news channels?
The public actually supports nuclear energy, according to numerous polls. It is the established energy industry and their friends in the advertiser supported media, along with some purchased politicians in the oil and gas focused governments that think there is something wrong with a power source that is clean, abundant and proven to be extremely safe over during a five decade long operational history.
Rod Adams
Publisher, Atomic Insights
I guess I really should be a little more fair and not put all of the blame on fossil fuel suppliers. After all, Siemens, which just announced that it is pulling out of the nuclear energy industry reported that its unreliables (renewables) unit produced the fastest growth of any of its various business lines. The unreliables industry will supply whatever portion of the former nuclear demand it can, but the fossil fuel industry will clearly be the largest winner.
One wonders just how long this house of cards will stand. The twin facts that demand pressure on methane will outstrip supply growth and that wind and solar are not able to pick up the slack as promised, will put this whole scheme against the wall in a very short time is obvious.
DVA2XL,
You know, I want to agree with you, but based on my experience with markets and various ‘house of cards’ schemes makes me hesitant.
The irrational market will almost always outlive your expectations – for example the bubble economies in the 90s and the 00s went on for a decade before finally pricking; Madoff started his scheme in the 70s, before finally crashing down in 2008, the US has been on its debt trajectory for 40 years (and counting), etc.
As for denmark, it started *it’s* bubble in ‘renewables’ in 1970, and has continued with it, plateauing in 2003 at 19%.
So, IMO this ‘house of cards’ could go on for a very long time, perhaps longer than this climate and the ecological services upon which we rely can withstand, before the mother of all unsustainable systems – the environment – collapses around us, taking our civilization with it.
My only hope is that the emerging industries (china, india) don’t fall for the popular hype and continue their trajectory in nuclear, but that is by no means a done deal. And it’s no means a done deal that their efforts will suffice.
Ed
I think the real question is going to hinge on how fast NG production wells can be brought on line’ and pipes laid, as longer range price trends respond to limitations in resources and their rates of development. I simply don’t think that supply can keep up with demand if nuclear and coal are taken offline. Japan alone is going to drive up prices over the coming Winter in the LNG sector and Germany will do the same in Europe as delivery capacity on the pipeline network will be strained driving up prices particularly if its a very cold season.
Rod, I noticed a comment from you in the unreliables comment thread as I was reading yesterday about occasionally intentionally misspelling Gundersen. In that vein, I doubt you intentionally misspelled Kaku’s name. It is Michio rather than Michu (4th paragraph).
Had you misspelled his last name as Cuckoo, I might have guessed it was for search engine optimization purposes.
http://en.wikipedia.org/wiki/Michio_Kaku
If the claims that “the public doesn’t want” nuclear power were true, they would vote against it with their wallets and voluntarily sign up for green electricity plans that many utilities offer.
But few people do that – to any market observer it’s obvious that most consumers choose the cheapest power, and accept coal or nuclear. Yet we are told to believe this is “democracy” and the majority rather votes for the subsidies and higher power prices in elections, than subsidize and pay higher rates directly.
In Europe the subsidies and taxes have so much distorted the market, that green electricity rates are sometimes cheaper than non-green ones. It then creates the false impression that consumers voluntarily buy green power.
Sentiment on nuclear energy by the majority of people, one way or another, is always “passive”.
This is why even when the Italians sponsored their ill timed (on purpose) referendum on nuclear energy it had to be included with 3 OTHER questions that were highly unpopular (like privatizing water resources). But there is no doubt, that at this time, nuclear power is overwhelmingly opposed by most Italians and Germans. There simply is no question about it and it was still expressed in those recent referendum and state elections.
In other countries actual opposition, like in the U.S. which is by no means necessarily a majority opinion, is totally passive, is *support* for nuclear energy.
I think it would be cool…Rod suggested this a few years ago…that not only should we be able to choose “Green” energy (solar and or wind) but should be able to choose nuclear as well…so long as they were at the cost of production.
David
The pity here is that were there more _educated_ opposition as opposed gut opposition, it’d automatically mean far less anti-nuclear opposition.
James Greenidge
Queens NY
The electrical grid just can’t discriminate based on energy source.
That was one of Germany’s stupidest requirements to France and the Czech Republic : that they only provide non nuclear based electricity.
Just can’t be done. France is supplying them mostly with nuclear of course and the Czech Republic has only one way with nuclear. Way up.
I think your comment on WSJ is great Rod. How high do you rate the chance that Germany will overturn it’s decision to phase out nuclear in the next few years?
A lot of people are angry with nuc right now because of the dishonesty of the Japanese politicians who have lied to their people about the accident.
A lot more informed people are against BW and light water reactors too. I like the turbos and your Adams, and think we should go with the thorium angle too.
I don’t want to have anymore scaled up sub engines anywhere in the US. Phoenix has come out and said Palo Verde has no danger of the same type accident that happend in Japan, but it is in danger of EXACTLY the same kind of earthquake damage.
Built on valley fill, no local supply of water, it has to be throttled down in the summer already because of water temperatures on-site. If the cooling poles even “slosh”, they are going to lose at least a third of their water. If there are piping cracks, it could go the same way.
There are a lot more quakes happening lately, and most of them are not on any known faults. Am expecting the big one in the next year, and maybe kicking off volcanism again. Keeping an eye on the Cali-Nev border. It’s getting hot in Nevada again!
If it really kicks in, will prob lose most of the Salt Lake/Wasatch front too- they have been building up on the hills above town, and anything over 6 will prob bring it all down in a firestorm.
I want shipping container sized power plants. granularity, robustness, locality.
Until the public can trust the performance of _current_ plants, forget them taking anyone’s word of the merits of spectulative modular or Thorium or whatever other nuclear plants. Gov. Cuomo implied as much as his overall windvane view of _anything_ nuclear. Ironically this should not be a hard thing to do even after Fukushima. For Pete’s sake, they had the Greens’ and their media chums’ worst nightmare — a Meltdown — and THREE in a ROW, yet no deaths or public property damage! This was UNTHINKABLE in “China Syndrome” days! Like — such was supposed to spell D-O-O-M-S-D-A-Y!! My God, do you know how many industries Wish their worst accidents were so relatively benign in lives and damage (yea, even throw in Chernobyl!)?? We’re headed for sixty years of having nukes which ought be long time enough for Jane Fonda’s mega-death wet dream to’ve occured SOMEWHERE but it hasn’t — and with older plants yet! Have we forgotten how many lives and public property were “routinely” wiped out in oil and gas production last year alone ( (including oily birds!)?? Is there a reality parity disconnect here, folks? A sharp Ad ageny could even truthfully spin rare accidents like Fukushima as a _Plus_ for having nukes! If Gas Industry Ads aren’t ducking the issue of Flacking(sp?) then the Nuclear Industry (or if union atomic workers gut-up in taking up the Ad mantle if their companies won’t) can also frankly face and smash the bogeyman of meltdowns in the public face too! But again, future advanced reactors aren’t going to see light of day if the public that has to eat them isn’t educated that TODAY’s are safe. Thorium or Uranium, we’re all in the same boat! Let’s oar the same way!
James Greenidge
Queens NY
That meltdown isn’t done yet – meters are still going up. And plenty of new isotopes being created last i heard. Estimates that the pile is still on concrete are hopefull, but not final.
If it gets to the water table there could easily be another explosion. And there are lots of folks onsite.
Just quit building water reactors. Go to these turbos and other fluid beds.