Hydrocarbon marketers had a motive to oppose nuclear energy growth

Why have the efforts to restrict nuclear energy development been so well supported for so many years?

My theory is that hydrocarbon marketers have had a strong financial motive for supporting any group that seeks to reduce the supply of energy. Even when those groups seem to be fighting against the hydrocarbon industry, they are effectively helping to increase the profit margins for most producers by keeping supplies tight and prices high.

For the past fifty years, nuclear energy has been the new supply of energy that posed the biggest threat to hydrocarbon related profits, whether considering the profits going to producers or those going to speculators and financial backers. There are few natural limits to the rate at which nuclear energy can be supplied or to its sustainability; nearly all of the obstacles to its sustained growth have been imposed by humans in the form of excessive regulations, overly complex power systems developed in response to those regulations, legal opposition and organized protests.

Please understand that the term “fossil fuel interests” is not limited to US based oil companies. It includes market speculators, people who operate bulk transportation companies, and people from countries that make most of their income by exporting oil, natural gas or coal.

The most effective thing that any politician can do to lower energy prices is to support efforts that increase supplies, not by just drilling, but also by enabling new nuclear plant construction. The most cost effective way to do that is to reduce barriers that add huge costs and schedule delays, not to appropriate more money.

Nuclear plants are the energy equivalent of new natural gas reservoirs that can maintain a steady annual output for 60 years or more. There is little need for risky exploration; we know where the fuel is and we know how to build the plants. That prospect should be enormously attractive to anyone who enjoys the economic benefits that abundant energy can provide.

There was a time in the not too distant past – for the 20 years after WWII – when the world’s energy industry understood how to prosper in an environment where the price of their product dropped rather steadily as a result of increasingly available supplies. The path to prosperity for the industry during that period was to expand their markets and sell more volume every year.

That path is still available, but not if energy companies stubbornly insist on focusing on fossil fuels. There are too many limits on their supply, too many negative effects from their extraction and too many long term hazards from their waste products. In my analysis, the biggest current threat to hydrocarbon profits is a collapse of our industrial economy.

In our current economic situation, most energy suppliers would benefit if they added emission free, reliable, abundant nuclear energy to their portfolios. The recognition that the earth is endowed with fuel supplies that will last for thousands of years would enable a return to an optimistic prosperity where people do not spend so much time worrying about running out of fuel or worrying that their comfortable home or big car would become too expensive to operate.

Marginal fuel sources could be economically improved to become high grade liquids with the availability of low cost, no-emission, process heat.

If the world could move past the depressing, do less with less mentality of the people who believe that austerity and conservation are the words of the future, we could all live more productive, prosperous and enjoyable lives.

Will you join me in spreading this achievable vision for the future?

About Rod Adams

17 Responses to “Hydrocarbon marketers had a motive to oppose nuclear energy growth”

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  1. Joel Riddle says:

    I will share in your Cornucopianism.
    http://en.wikipedia.org/wiki/Cornucopian

    Did you happen to read and gain an inspirational spark from Colin McInnes’s Perpetual Motion blog from a day or 2 ago, Rod?

    And feel free to edit this part of my comment out after making any desired changes (I’m sure this post was probably written at 3 or 3:30 am), but here are a few wording enhancement suggestions.
    1st paragraph: remove one of the redundant “haves”
    3rd paragraph, 2nd sentence: remove “it” and replace with “nuclear energy”
    5th paragraph: add “do” between “can” and “to”

  2. Joel Riddle says:

    On Indian Point, I wonder when the final decision will be made on the License Extension?

    It looks like all the steps have been completed for over a year now, other than the final approval being granted from a Commission hearing.

    http://www.nrc.gov/reactors/operating/licensing/renewal/applications/indian-point.html#application

    I almost wonder if there is anything nefarious going on relating to the renewal and current Chairman? Does anyone know when the Commission is scheduled to make a ruling?

    • Atomikrabbit says:

      The Commission and Region 1 need to get Pilgrim taken care of first – their license expires this June 8. A recent action moves this forward, with the sole dissent of Jaczko of course: http://www.patriotledger.com/topstories/x1793848245/Nuclear-Regulatory-Commission-chief-sides-with-Pilgrim-watchdog-group

      They have been flying against headwinds from Rep. Markey, Massachusetts Attorney General Martha Coakley, and anties Pilgrim Watch and others: http://www.enterprisenews.com/answerbook/plymouth/x1353884752/PILGRIM-NUCLEAR-POWER-STATION-Too-little-too-late (these sites accept comments – feel free)

      It didn’t help that last year they had some high-visibility but inconsequential operator errors during a reactor startup, and their original design is similar to Fukushima Unit 1 (GE BWR-3, Mark 1 containment).

      It always occurs to me that if the anties did not move into the area prior to the late 1960s, then there was a nuclear power plant either already operating, under construction, or planned when they decided to move there. They knew, or should have known, about the plant yet decided to move there anyway. So the plant didn’t move into their neighborhood, they moved into the plant’s neighborhood! Maybe the plant should petition for THEM to move?

      Indian Point Unit 2 license doesn’t expire until Sept 28, 2013, and Unit 3 Dec 12, 2015, so the Commission has a little more time there.

  3. DV82XL says:

    Part of the problem is that demand for electrical power is dropping in North America, while at the same time, a glut of natural gas is keeping the price of that fuel at record lows. As well, overnight costs for NG power stations are low enough to make these the lowest cost replacement for the aging fleet of coal plants, particularly those smaller units which are often the worse polluters as a function of power generated.

    That is not to say that the long term costs of nuclear cannot be shown to be competitive, or that NG prices may not rise, but these are not going to be easy points to sell in the current state of the global economy, and with gas prices predicted to continue falling for the next several years.

    Like it or not as long as these conditions prevail, the argument for nuclear is going to be difficult to make on a purely financial bases. Thus the only arrows in our quiver are those based on environmental arguments. Thus I do believe that at this point in time, those are the arguments we must push the hardest

  4. seth says:

    With friends like these who needs enemies.

    “Just last week, the president of the Nuclear Energy Institute, Marv Fertel, suggested that low natural gas prices would push back construction of nearly all planned nuclear projects by a decade or more.”

    Who hires these fatheads. Hopefully he was fired the next day.

    Note to the NEI.

    Big Oil has paid off politicians like Markey /Big Media/Big Green to spew the nonsense that gas is dirt cheap and clean energy when in fact today’s $3/mcf is only a $2/mcf LNG ride to a $15 market spewing almost as many GHG;s as coal along the way.. Big Oil will keep bribing the politicians and subsidizing massive gas production losses until those coal plants become gas and the nuclear threat is bypassed. Then watch those LNG export plants get thrown up.

    We don’t need meatheads at the NEI to contribute to the disinformation campaign.

    • Joel Riddle says:

      seth,

      I think Marv is failing to give the LNG export possibility its due. From the EIA chart in the following article, it appears that the EIA’s projections fail to do that too.

      http://www.dailyfinance.com/2012/02/24/natural-gas-the-industry-that-could-save-america/

      For my curiosity, do you have a quick source on that $2/mcf figure for liquefying NG?

      Another relevant figure would probably be the transportation cost (for a typical shipment from Sabine Pass) to move LNG from Louisiana over to Japan, through the Panama Canal. If that cost is also only in the 2-4 dollar/mcf range, the spread between the Henry Hub price and the price of LNG delivered to Japan would CERTAINLY have to shrink over a decade-ish long time-scale.

      Also, I wonder whether anyone has any good estimates for the comparison of the time scales for completing an NPP compared to the time scales for building/expanding LNG export capacity.

      • seth says:

        http://www.theglobeandmail.com/globe-investor/investment-ideas/breaking-views/us-eyes-supply-side-economics-of-natural-gas/article2290280/comments/

        “On Dec. 30, it fell below $3 (U.S.) per million British thermal units (1000 cu ft) for the first time in two years. Gas typically sells for almost five times that in Asia and nearly three times as much in Europe. Infrastructure firms, such as Cheniere Energy Inc., want to convert idle U.S. plants, once intended to import LNG, into export hubs. So far, six projects are awaiting U.S. Department of Energy approval. ……

        f they all go ahead, the United States could export about 12 billion cubic feet of gas a day. That’s equivalent to almo
        , for Asian gas users, which import 20 billion cubic feet a day, another source of supply would enable them to drive a harder bargain.

        But that dynamic poses a threat to Cheniere and other infrastructure firms. They may have to spend up to $40-billion building the new export plants, according to IHS Cera. ”

        $40B is 45 cents a mcf at 5 % finance payback 16 months.

        http://shareholdersunite.com/the-ioc-files-useful-background-material/the-economics-of-lng/

        1) Liquification plant $1.1 per Mcf +/- $0.20
        2) Shipping costs (LNG tankers and operating costs) $0.70 per Mcf +/- $0.30 depending on distance.
        3) Cost for regasification $0.35 per Mcf.

        The costs come out to $2.15 per Mcf.

        • Joel Riddle says:

          Oh, so $2.15 all-inclusive for liquifaction, shipping, and regasification.

          In that case, I am that much more confident that projecting low NG prices for anything beyond the next 4-5 month period is rather fool-hardy.

          If this upcoming summer were to happen to be anywhere close to among the top-5 hottest of the past 20 years, I could see the domestic demand for NG for electricity generation being adequate to get the price bumped back up.

          The perfect storm of this recent, much-lauded increase in domestic supply from shale gas coinciding with one of (if not THE) the warmest winters in the past 50 years may have really clouded any chance for a solid, rational analysis of the supply and demand balance for NG.

      • DV82XL says:

        The funny think is both suffer from a lot of NIMBY-type resistance, in the case of NG, not just the terminals, but the pipelines that deliver the gas to these facilities too, it seems.

        • Rod Adams says:

          @DV82XL – This is an opportunity for nuclear marketers. Since natural gas is NOT an energy dense fuel, it requires a vast array of hundreds of thousands of wells (with thousands more drilled each year), tens of thousands of miles of pipelines, and huge terminals and storage tanks often located near highly populated port cities.

          In other words, the industry affects the backyards of millions of people and that number grows every year. Those pieces of the infrastructure are known to be smelly, noisy and occasionally dangerous.

          In contrast, nuclear energy is extremely energy dense and needs comparatively little supporting infrastructure. I like pointing to the example of the 1960s vintage submarines on which I served. My last boat operated for 14 years – off the grid – on a load of fuel that weighed only a little more than I do. I also point to commercial nuclear plants that can serve all of the power needs of a million people for 18 months using just a few truckloads of commercial fuel.

          The challenge that the pronuclear marketers – and I include myself in that category – need to address is the way that the opposition has so far successfully convince some people that the backyard of a nuclear plant extends out to 10, 20 or even 50 miles. Drawing those large circles convinces a large number of people to be NIMBYs when it comes to nuclear energy.

          The SORCA studies and the work done by the people seriously researching the health effects of low level radiation provide the technical basis on which to develop a series of factual, but persuasive commercials to teach people that they have nothing to fear from even a very rare nuclear plant accident that actually releases some core material as long as they live outside of the gates.

          The NIMBY argument, like the waste discussion, is a huge nuclear advantage as long as it is properly marketed.

    • Brian Mays says:

      The Nuclear Energy Institute is a trade group that represents not only the reactor vendors, but also the utilities who own and operate nuclear power plants. If some of its members, the utilities, are telling it that they are going to put off building nuclear power plants because the current price of gas is low, do you really think that it would be wise for the NEI to lie and say otherwise?

      Even if such mindless cheerleading temporarily makes a few nuclear proponents happy, eventually it would become obvious to everyone that the NEI had become disconnected with reality as the new nuclear builds are postponed, just as its members had warned.

      Let’s leave the lies and half-truths to the environmental groups.

      • seth says:

        Exactly my point. If the NEI is supposed to to a friend of nuclear then it has no friends at all. Big Oil/ Big Media does 100% coverage of the cheap gas nonsense we don’t need NEI doing it too.

        . You would think Fertel would have adopted the position better to be silent and be thought a fool than open ones mouth and remove all doubt. How about a terse no comment. How about pointing out that Westinghouse is building AP-1000′s in less than 4 years from first pour to lights on in China at half the cost they are building for in the US. Plenty of time in this decade for US politicians to change gears in the US.

        The nitwit might ask himself why in no nukes Australia is Big Oil spending close to $100B on LNG export terminals. Could it be with the renewable nutballs running that country where nuclear is dead and renewables are the future that Big Oil’well knows gas provides 100% of the energy in the renewable/gas backup scam. Huge profits running up the gas price there with nuclear safely out of the way.`

        The first thing Big Oil’s man and antinuker in chief Markey did in his virulent anti Vogtle rant was to quote Fertel.

        • Joel Riddle says:

          seth, you said “at half the cost they are building for in the US”.

          There hasn’t been a nuclear plant built from scratch completed in the U.S. since 1996, and that one was started in 1972 or 1973. Thus, there is definitely some uncertainty embedded within the estimates for the AP-1000′s being built in America.

          I wonder how much of that uncertainty lies in the possibility of the projects coming in UNDER their oft-repeated estimates (about $14B total for both Vogtle units has been mentioned a lot). If Vogtle could end up being completed on-time, and for only $10B for both units, that would be a massive, massive win for the nuclear industry as a whole and for Southern Company’s stakeholders.

          If you think about it, the inherent cost of the materials and fabrication of components should be virtually the same between China and the U.S. The total number of man-hours to SAFELY complete a plant of the exact same design with the same level of QUALITY should be approximately equal, maybe +/- 15% difference, as long as the workers’ incentives are aligned properly with completing the plant in the most timely manner.

          The major place for differences then is in the cost per unit of labor (whether manual, engineering, or whatever), which would be reasonably expected considering relative levels of per capita income between the 2 countries.

        • Rod Adams says:

          @Seth:

          Brian is pointing out that the NEI is not charged with being a friend to nuclear. It is charged with representing the interests of its dues paying members, nearly all of which have many energy interests outside of nuclear energy.

          Marv is doing a great job representing companies like Exelon and Constellation that will benefit mightily from higher gas prices along with the interests of companies like GE that are selling a whole lot of both gas turbines and windmills.

        • seth says:

          Actually Joe Vogtle includes $4B for transmission builds that would be needed in any case. The nuke cost is $10B or about $4B/Gw same as the the VC Summer builds.

          The same nukes are 76% complete on time on budget in China built by America engineers with NRC observers for half the cost. The major difference is efficient Chinese public power rather than extremely inefficient America private power and the Chinese using craftsmen for their build and Southern company a team of $500 and hour attorneys,

  5. Jeff S says:

    Rod, I have a suggestion:

    “Nuclear plants are the energy equivalent of new natural gas reservoirs that can maintain a steady annual output for 60 years or more.”

    I would change that to:

    “Nuclear plants are the energy equivalent of new natural gas reservoirs that can maintain a steady annual output for 10,000 years or more.”

    Ok, each individual plant cannot, but you are comparing individual plants to, basically, the entire known reserves of methane. I think a better comparison is between gas fuel reserves, and nuclear fuel reserves.

  6. Andy Monger says:

    For the past 45 years I have watched, with dismay, our economic world leadership decline, and I attribute this mostly to our failure to differentiate the horror and the beauty of nuclear fission. I’m well aware of the history of nuclear power in America, having witnessed a myriad of setbacks which gained momentum due to fear and ignorance of the general populace. My frustration is greater than ever now that we may be past the point of no return on energy policy in this country. As an outspoken advocate of nuclear energy, I would like to know what I can do to help dispel the misinformation that seems to garner media attention.
    My vision for the future is a nuclear/electric age where the internal combustion engine is a relic.