Taxpayers for Common Sense (TCS) trace their heritage to William Proxmire, a senator famous for his “Golden Fleece” awards for wasteful government spending. Yesterday, the organization held a press conference to announce that they had decided to award a Golden Fleece to the US Department of Energy SMR (small modular reactor) program.
The press release for the event can be found on the Taxpayer.net web site. There is a recorded audio version of the event. It is worth listening to the 19 minute recording so you can hear the chirping silence and the repeated series of instructions for getting into the question “queue” in between the four or five questions that the organizers managed to pull out of the gathered teleconference audience.
In other words, the press virtually ignored TCS’s announcement; in the context of an agency whose budget runs into the tens of billions every year, a cost sharing program that may approach $452 million over a 5 year period does not seem worth much attention. Even if you do not like government spending of any kind, a “fix the big noise first” approach would put the SMR program near the bottom of the list of targets.
There were several interesting questions raised during the short Q&A period that exposed the extremely light research effort backing the TCS decision to select the SMR program for criticism. One reporter pointed out that TCS had come out strongly against the loan guarantee program that might eventually help Southern Company and its partners build the units 3 and 4 at Plant Vogtle and asked if TCS simply disliked any help for nuclear energy. Ms. Alexander took several minutes to explain that TCS dislikes all energy subsidies and to point out that the nuclear industry is a “mature” industry that should be able to fund its own research and development efforts.
She accused the industry of having a long history of “socializing risk and privatizing profit” despite the fact that no one has ever been hurt by radiation from a US nuclear plant and the fact that few individuals or companies have extracted much wealth from the technology. There are a few hundred thousand good jobs with some relationship to nuclear technology, but it would be difficult to name a single nuclear energy tycoon.
The benefits of the government’s early investments in developing atomic power technology have been widely distributed in the form of about $40-$80 billion dollars worth of emission free electricity produced every year. Most of that power is sold to rate payers at a price that provides a modest, regulated rate of return to the investors that provided the initial capital investment.
Another questioner pointed out that the DOE had subsidized natural gas and oil hydraulic fracturing research since the 1970s; it seemed to me that he was gently reminding the TCS spokespeople that some DOE funding programs have provided a good return on investment for taxpayers in the form of abundant, cleaner and less expensive energy. The TCS spokesperson did not get the nuance of the question and said that sure, they would oppose research funding for hydraulic fracturing.
I don’t think that Ryan Alexander, the TCS President and primary speaker on the call, recognized that the reporter was asking if TCS would have worked to halt fracking funding in the 1970s, when the technology was at a stage similar to that of SMRs today. It was being done by relatively small players in a “mature” industry (oil and gas). Like SMRs today, enhanced gas and oil recovery technology in the form of hydraulic fracturing of tight shale offered great hope for unlocking huge resources with a payoff that was known to be several decades into the future.
Though I am hugely biased, the B&W mPowerTM reactor program has many analogous features. (I have been working for B&W mPower for more than two years. My views are my own and do not necessarily represent those of my employer.) The technology is built on a sound technical foundation, but needs time and nurturing in order to succeed. Uranium is a proven energy source that contains at least 10,000 times as much energy per unit mass as oil; that energy is released in a process that does not release any polluting gases to the atmosphere or particulate pollution to surrounding land or water.
Aside: The “10,000″ number for comparison is based on today’s inefficient, once-through, light water reactor technology that only extracts energy from U-235 fission. That isotope is just 0.7% of the total amount of uranium; extracting the other 99.3% requires the use of fast spectrum reactors. Of course, there is also the thorium option where the total resource is about 4 times as abundant as uranium and where most of the energy can be extracted using thermal spectrum molten salt reactors – as long as you have enough fissile material to start and maintain the reaction. End Aside.
Autumn Hanna, a senior program director at TCS and the other “expert” on the call, pointed out that the US has been manufacturing small, modular, factory produced reactors for more than 50 years for US Navy submarines and surface ships. What she does not understand is that the specific technologies and methods used in that program are not available to the commercial sector because they are classified and considered to be extremely important strategic assets that require a high level of information security protection.
As Chris Mowry told the Weather Channel during a recent visit to the Lynchburg and New London, Virginia facilities where the B&W mPower is taking shape, the reactor system is quite different from those used on board ships. It will serve many customers that each operate in different markets under a different set of government regulations. A large portion of the money associated with the DOE SMR program will not go to B&W or its partners to develop technology, instead it will instead go towards the government’s effort to learn how to license and inspect the technology. Modern SMRs will take advantage of technologies that are significantly different from the technologies commonly used in the large, 25-40 year-old behemoths the existing NRC staff is used to regulating.
There was another question that illustrated TCS’s lack of energy market understanding. Ms. Alexander talked about how SMRs could not hope to compete against the current price of natural gas, but that statement makes at least two incorrect assumptions. She assumes that natural is available in the locations that are already expressing strong interest in building small modular reactors and she assumes that the price of natural gas in those locations – if it is available at all – is similar to the price of natural gas at the trading hubs that is frequently advertised as the benchmark. Neither assumption is even close to reality.
As is often the case, the TCS press conference included several mentions of the insurance subsidies that the government supposedly provides to the industry. Price-Anderson is not a subsidy; it is a regulation-enabled risk pool that has never cost taxpayers a dime. Several decades ago, visionary thinkers recognized that the government needed to establish special rules for insuring nuclear facilities because the most cost effective way to protect the public from any risk of loss is for the industry was (and remains) the approach of “a nuclear accident anywhere is an accident everywhere”.
The shared liability approach, if taken without permission, would violate the anti-trust laws that prevent competitors from cooperating. Price-Anderson’s system rewards the industry for sharing detailed technical information that would normally be carefully protected trade secrets. The nuclear industry’s habit of widely sharing important information and lessons learned from experience is one of the foundations on which its excellent safety record is built.
Price-Anderson, however, is one example of rules that must be restructured in order to allow smaller reactors to have a hope of competing. Like annual license fees, the current liability computation for Price-Anderson is rooted in the notion that reactors come in one size. Every reactor unit, no matter how large or small, is currently assessed the same fee in the case of an accident that results in legal claims that exceed individual insurance coverage for any of the pool participants.
That results in a much higher risk per unit of electricity for smaller unit sizes and puts dramatically smaller units like the B&W mPower reactor design at a significant financial disadvantage. The restructuring effort will require government expense because making the change involves a lot of varied interests that must be addressed.
Michele Kearney’s Nuclear Wire has published B&W’s response to the TCS award along with a response from Will Davis who recently wrote about the B&W mPower reactor project on Atomic Power Review. Will is a frequent guest on the Atomic Show podcast. Will, unlike the ladies at TCS, has operated small modular reactors enough to know that they are real, that they have useful technical advantages over competitive sources of power and that they are something worth investing in because of their potential to make the world a cleaner, safer and more prosperous place.