Robert Bradley at Master Resource has responded to my criticism of his continued dismissal of nuclear energy in favor of burning more hydrocarbons. He kindly visited the Atomic Insights comment thread to let me know that he had responded. Here is his response from a comment that he posted on his blog titled Remembering ‘Green’ Enron (Part I: The Kyoto Moment).
Rod Adams at his blog Atomic Insights has this critical post on my work (and that of Cato’ Jerry Taylor): Challenging Master Resource’s implication that Enron was the only rent seeking manipulator (November 25, 2011).
I am not a big nuclear fan because it is wildly uneconomic versus $4/MMBTU natural gas, and banks will not support it in the free world. Note that nuclear has a very high up-front capital cost versus fossil-fuel-fired plants, and that debtors want certainty that those costs can be paid back, which means long-term fixed-priced contracts. Until voluntary purchasers sign such agreements (and they will not), then such projects are uneconomic.
Obama’s proposed $18 billion loan guarantee for new nuclear is another tell tale sign of nuclear’s plight in a competitive market.
I welcome nuclear power if and when it is economical in the market place. May it improve and improve and improve until the market (not me and Mr. Adams) decides to build reactors. Until then, it is a backstop technology in the U.S. and many other areas of the world.
(Minor spelling corrections made from the original.)
Here is the response that I posted on his blog. It is awaiting moderation – as of 2:45 on December 3, 2011.
The problem with your logic is that you ignore all of the things that “the market”, which is made up of numerous thinking human beings, has done to make nuclear power uneconomic. Nuclear energy’s competitors have helped to erect as many barriers as they can imagine to hinder nuclear energy development and raise its costs.
When you break it down into straightforward technical analysis, nuclear fission is simply a very reliable source of heat that can be substituted for the heat generated by hydrocarbon combustion in very similar thermodynamic “heat engines”. In fact, there have been several cases of power plants – like the Ft. St. Vrain reactor – that started their lives as nuclear heated plants that were later converted into power plants with a hydrocarbon heat source.
If that is the case, then a critical thinker might ask why nuclear energy systems would be all that much more expensive than hydrocarbon combustion systems. It is certainly not because they need a more extensive fuel transportation infrastructure, more emission control systems, or more extensive fire/explosion damage response teams.
No, the reason that nuclear energy systems are so darned expensive is that people have mistakenly been told that the very tiniest amount of radiation is dangerous enough to spend hundreds of millions in multiple layers of protection. It is because they have been mistakenly told that nuclear plants are somehow more vulnerable than all of the rest of our society’s infrastructure to potential attack by “terrorists” and need an average expenditure of $300 million or so in “security boundaries” and an annual expenditure of $30 million or so in security forces.
Even with all of those artificially raised barriers, nuclear fission is pretty darned competitive against hydrocarbon combustion when fuel prices are in the range of $7-10 per million BTU and wins it hands down at prices higher than that. The primary advantage is that fission fuel costs an average of 60 cents per million BTU, even when you add in ALL of the costs, including long term storage.
In markets where nuclear is an option, there is virtually no oil being burned to produce electricity because $100 per barrel is equivalent to about $17-20 per million BTU, depending on the grade of oil. It is not lack of “free markets” that encourages countries like the UAE, Saudi Arabia, Iran and Russia to be pushing hard to increase their supply of nuclear energy; it is simple market economics. They want to stop burning oil, a product that has a market value of $17-30 per million BTU, to produce electricity when there is an option that competes favorably with $7-10 per million BTU.
In countries where nuclear is an option and the people have not been hypnotized into believing that it is somehow more dangerous than highly combustible (and explosive) natural gas, logical businessmen will not avoid nuclear in favor of LNG that is currently selling for an average world price of $15-20 per million BTU. They will not avoid nuclear in markets where the price of pipeline gas is, by contract, linked to the price of oil. They might, however, reluctantly follow the edicts of governments full of politicians that have been purchased by Russian natural gas suppliers.
Your misunderstanding of history (or your political leanings) are also exposed by your characterization of the $18 billion loan guarantee program as “Obama’s”. That program and that original number was passed in the Energy Policy Act of 2005, more than three years before President Obama was elected.
“The market” does not make decisions. Individual human beings with assets, analysis, and vision do. I concur that, so far, the individual choices of the people who operate large utility companies in the US have been to shy away from nuclear in the years since June 2008 while natural gas prices here have been suppressed to a level that is about 1/3 of their level in most developed nations around the world.
However, there are individuals who have made a different choice and decided to invest in nuclear energy because of its natural advantages and its potential for future market success. If that was not true, I would not have the day job I have today as part of the team that is designing the B&W mPower(TM) reactor. (I speak only for myself and not for my employer.)
Publisher, Atomic Insights