1. It’s a shame that the short term financial gain wins out over long term prosperity.

  2. @Rod, a nice addition to this post would be a graph inserted where the rest of us could join you in “looking at the trend in electricity prices from the 1920s to the early 1970s compared to the trend in economic output.”

    “Use all you want. We’ll make more.”

    If there was a singular, coherent nuclear “industry” in America (as is so often WRONGFULLY claimed by anti’s), this would make a great slogan.

    I recall reading things in the past that denigrated the fact that per capita electricity use in the U.S. south was too high, that we were being “too energy inefficient”. The reality is simply that electricity has historically been more affordable down here, so people can afford to use more of it without just scraping by. With the likely decision coming in about 28 hours by TVA to complete Bellefonte Unit 1, that affordability should continue for about 9 million customers that aren’t subject to paying the price of the most costly generator for their electricity.

    With atomic energy facilities, the energy won’t be running out anytime soon.

  3. Rod, I totally agree that rising energy prices contributed to the collapse of the economy, it was the trigger that pulled on the loans that had been extended past people’s ability to pay. When people were living in homes that were very close to the maximum of their ability to pay for any other major increase in their budget simply forced them into foreclosure. There were news reports in the summer of 2008 that for the first time in history people cut back on the total number of miles driven. This is evidence that they had no margin to work with. An extra thousand dollars a year could not be absorbed. My brother in law was building large expensive custom built homes for the past 35 years. He said that some of these homes did not even have furniture because the people who built them could only afford the mortgage.

    This economist points out that it is possible to have rising prices when the economy as a whole is in a deflation cycle due to the shrinking money supply. His definition of inflation is total money supply increasing including the money Banks can and will loan out. Deflation is the shrinking of the money supply including the money that Banks can and will loan. We are now in deflation according to him even though the prices of food and fuel are rising. This makes a huge squeeze.


    I believe that Banks would invest in power production if the regulatory risks were reduced. Power plants can pay their loans. Right now we need to replace hundreds of small coal plants that are about 40 to 50 years old. The fight now is what will replace them? Banks are flush with cash they are afraid to loan.

    1. @David

      I would make the addition that power plants with high enough capacity factors and non-imaginary markets into which they can sell the electricity they produce can pay their loans.

      These are the 2 places where wind and solar plants are (obviously to anyone with proper analytical thinking skills) not economically viable without being artificially propped up.

      1. @ Joel,

        Yes, and the willingness of Banks to finance Biomass to Electric plants indicates this as well. In an environment where you can get at least 9.5 cents wholesale Biomass plants can pay for themselves in 10 years (and I believe any power plant can) and after that the income is gravy to the owners. I know a company that just a few months ago was able to raise financing for a Biomass plant of close to 100 million. That would be for a 25MW to 30MW plant Payback is 10 years. While not as tightly regulated as a Nuke, they do have greater operating costs due to the lower energy density of their fuel. They are not burning down forests because they cannot pay for the cost of the trees on a cost per ton basis. Rather they are using waste wood that would either pile up or be burned off anyway as a source, basically for free. If they cannot get free fuel the cost of handling that large amount of fuel drives the cost up past viability.

        In contrast a SMR has large capital expenditures about double that of the biomass plant, but very very low fuel costs. Once built an SMR would be a cash cow. (Well cash calf perhaps…..).

  4. Economic benefits depend on the definition of what benefits the economy. Many of our politicians say they want jobs creation. To create jobs, wind and solar could be ideal, since it requires vast numbers of people working all over the country just to replace what was previously produced in a central power plant. But then again, we might aswell pay these people to do nothing, and keep the central power plant.

    I would define economic benefits as *wealth creation* in the economy, and that wealth then trickles down to us individuals. In terms of that, we need an extremely efficient and powerful way to get energy, that gets us the most amount of energy for the least amount of labour and resources. Nuclear fits that definition, solar/wind/gas do not!

    And since energy is a major component required for nearly any form of wealth (food, health, transportation, entertainment, shelter etc.), anybody trying to achieve prosperity will have to work either directly or indirectly to produce the energy required. The more difficult it becomes produce or buy electricity, the longer we have to work for the same outcomes, and eventually everybody becomes poorer. Energy is by far the most important common denominator of all economic activity, and has the potential to make us all prosperous or poor, depending on how it is managed/mismanaged.

    1. Bingo, Jerry. Finding better, more concentrated uses of energy was an enormous enabling factor for ending slavery in America. Electric appliances were an enormous enabling factor in allowing women to enter the workforce in greatly increasing numbers throughout the mid-1900’s.

      Far too few people realize the above 2 factors, and the fact that turning away from atomic energy would almost inevitably eventually reverse the situations above due to fossil fuels being as limited a resource as they are.

      1. Oops, I should have said “sources of energy and devices for using that energy”, rather than simply saying “uses of energy” in that first paragraph.

  5. I think Rowe was simply stating what most energy experts believe, right or wrong. Of course, the increase in supply will likely translate into increases in demand as utilities consider moving away from coal, renewables and nuclear for new capacity as long as the economics look good. A utility’s decision to build new natural gas plants or convert existing fossil units to burn more gas will not be arbitrary. It will be a business decision based on cloudy crystal ball projections of future fuel prices, regulatory risk such as the probability of a carbon tax or cap and trade requirement, etc. Businesses will strive for the lowest price option. For better or worse, it looks like gas will crowd out coal, renewables and nuclear at least for the near term.

    Europe is busy building LNG terminals and new pipelines which will reduce dependence on capricious Russian supplies.

    1. @ Blubba, Yes, which is why the major risk for Nuclear is the Shoreham effect. Reduce that risk and Nuclear is far more cost effective than even “clean cheap natural gas” So the political aim is to replace our current Chair of the NRC and to re-write the charter to include the explicit encouragement of the development of Nuclear resources.

      1. I disagree that we need to turn back the clock to an Atomic Energy Commission that both regulates and promotes nuclear power. It was specifically split up to allow DOE to be the cheerleader. Japan sees now that it is a bad idea and is rejiggering its regulatory structure to clearly separate the advocacy and regulatory functions. However, I would agree we need a stable predictable regulatory structure. It is the uncertainty over whether the NRC will move the goal posts on a whim that is one of the larger impediments to the further development of nuclear power.

        1. Bubbla

          The way the NRC generates its income by charging captive customers (ie the nuclear plants operators) on a cost plus basis with no accountability is at the heart of the problem. The NRC can passon its own inefficiencies and make a living off this.

          Any half decent budgeting process in any organization, public or private, must be a source of – motivation, control and accountability.

          As long as this is not fixed with some kind of objectives, ie public safety and carbon reduction, the NRC is caught in a vicious loop in which they can invoice their customers no matter what.

          This is a bigger problem than the Chairman in my opinion.

        2. @Blubba – no, the AEC was specifically split up to destroy it ability to enable nuclear energy to flourish. A major portion of the lobbying for the reorganization came from the coal industry.

          A supporting fact for my contention is the knowledge that the agency that was given the task of education and promotion was not the Department of Energy, but an organization called the Energy Research and Development Agency (ERDA) which received very little funding and attention for at least three years after the split. Many of the best people lost interest and moved on. Many of the AEC’s educational outreach programs – like the traveling museums that were operated from the Atomic Museum in Oak Ridge – lost their funding and were purposely destroyed. (I spoke to a sad curator about that loss during a visit to Oak Ridge several years ago.)

          The government does not have any responsibility to promote any particular company, but it surely has a responsibility to promote the common defense and prosperity of the entire nation by enabling useful technology to flourish – safely.

        3. @ Blubba,

          As long as only safety is the concern of the agency they can constantly move the bar always claiming they have no responsibility to consider relative safety, or the cost / benefit of the safety regulations they put in place. They can claim that if they do these things and NO new reactors are built and the existing reactors are closed that they have fulfilled their charter. This is exactly the conversation that Sen. Alexander and the NRC Chair were having on the video Rod showed earlier.

          The promotion of Air Travel and the safety of Air Travel have been the FAA’s responsibility for a long time and very successfully. It does not take much promotion in this case, simply remove the constant fear of sudden changes which would happen if the agency has some responsibility to measure relative risk and to promote the use of Nuclear materials.

          1. I believe that an honest reading of the NRC’s current mission provides all of the necessary direction to include relative risk to the public and the environment:


            “To regulate the nation’s civilian use of byproduct, source, and special nuclear materials to ensure adequate protection of public health and safety, to promote the common defense and security, and to protect the environment.”

            We know that that is a very good probability that any electricity that is not produced by nuclear reactors will be produced by a technology with a poorer safety record. We also know there is a high probability that it will be produced by a technology with measurably more negative effects on the environment. There is even a reasonably high probability that less nuclear power will lead to an increased rate of fossil fuel imports, which reduces our common defense by making us more vulnerable to supply interruptions or excessive price volatility.

            Therefore, a risk informed approach to regulation should require the staff to consider the overall impact of forcing delays into construction approval processes, and the impact of excessively “conservative” responses to minor infractions.

        4. Rod, how I wish I had any confidence that the NRC would actually look at their task from a higher-level viewpoint like you suggest here. It is rather obvious that this hasn’t been the NRC’s collective thinking historically.

          1. Joel – it is our job to keep reading the NRC’s mission statement to them. They already get plenty of pressure from the Bernie Sanders of the world; it is time they received pressure from people who want them to perform their assigned task who actually like nuclear energy.

        5. Also with the ageing of the US nuclear fleet, introducing new reactors cannot possibly go against the NRC mission as recent technology has improved and is thus safer than the reactors that these will eventually replace.

          That’s one reason why I think the NRC will give a few green lights in the coming months. Waiting any longer will really be a clear denial on their mission statement.

  6. Rod – thanks for the post. I find this interesting:

    John Rowe is a lawyer by training who has a fiduciary responsibility to maximize short term profits for his company’s shareholders.

    Doesn’t he also have medium and long term fiduciary responsibilities – say 10 year and 50 year – to keep the company in business? Or do companies follow shareholders’ psychology and discount the future heavily? Or does he discount everything past his own retirement? (The Brits used to call this one “Blow you, Jack – I’m all right!”)

    On a side note – I was exploring the topic of uranium ore and uranium minerals, and found the following in the Wikipedia article under ‘black shale deposits’

    The Chattanooga Shale in the southeastern USA for example is estimated to contain 4 to 5 million tonnes [of uranium] at an average grade of 54 ppm.

    The Chattanoga Shale is part of the shale gas boom; its uranium concentration is 20x the average concentration in the earth’s crust (from Wikipedia). There’s vastly more energy to be had from the uranium in the shale than from the gas.

  7. Rod, I’m with you about not being a fan of ‘energy conservation’. However, I am a fan of ‘efficiency’. Allow me to define my terms, at least as I understand them to be defined (perhaps my definitions are wrong, but at least if I’m explicit about it, you can fallow along).

    To me, “energy conservation” is basically the idea of effecting an absolute drop in the amount of energy demand/generation.

    “Energy efficiency”, on the other hand is about how much benefit you achieve per unit energy consumed.

    So, while one can be and end to the other (you can achieve energy conservation, potentially, through efficiency), it’s equally true that through efficiency, you could consume the *same* amount of energy, and get *more benefit*. I’d rather see more benefit for the same power, than less power.

    I have heard “conservatonists” claim that we can reduce national energy consumption by 80%; a number I find *remarkably naive*. Why? They might be right, based upon pure science and technology, but they seem to not take into account finances. Energy efficiency improvements cost money. In general, they also save money – but I find myself, currently, in a situation that I bet millions of people in America, and probably even a lot of businesses, are also in:

    I recently moved to a two bedroom apartment in a very old (at least by American standards) building – it’s like 100 years old, maybe older, I think).

    July was extremely hot across pretty much the entire country this year. The electric bill for just the last 2 weeks of July and the first week of August (not even a complete month) came to $171. For a two bedroom apartment. Most of this was due to the air conditioner. I don’t know for sure, but I suspect that there are a number of measures that could be taken to make the old building where I live more energy efficient vis-a-vis heating a cooling.

    There’s one problem: I don’t own the building, so I cannot legally modify it, and even if I could, it would be much more expensive than I would recover during my temporary (a few years at most, I would think) residency at that apartment.

    The building owner has very little incentive to spend hundreds of thousands, maybe millions, of dollars to make the building more energy efficient (I know my apartment could definitely benefit from new modern windows, at the least, and probably better insulation, maybe repaint the outside of the building in a lighter, more reflective, color instead of the sun-absorbant dark red it’s currently painted, etc).

    My point is, since my landlords don’t pay my electric bill, they will never save money by making the building more energy efficient – it will only cost them money. They might be able to pass that on to tennants, in the form of higher rent, but the low rent is part of why tennants rent there. The tennants cannot pay for better energy efficiency, even though it would directly benefit them in the form of lower monthly energy bills.

    There’s also one last potential fly-in-the-ointment – the costs of making the building more energy efficient *might* be a bit larger than the tennants would *ever* recover, anyhow. (After all, I would only expect one or two months of very high electric bills in the summer, and maybe one or two high gas bills in the winter when it’s coldest). If the efficiency improvements are more expensive than just paying for a bit more energy, then it makes financial sense to just buy energy instead.

    If nuclear power can (someday, hypothetically speaking) make energy cheap (say 3 or 4 cents per kWh) as well as virtually unlimited, why bother with expensive efficiency improvements when you can generate cheap electricity?

    I like building standards/codes that encourage all new buildings to be more energy efficient (on the assumption that you’d pay nearly the same for an energy efficient building as for a wasteful building), because there’s no reason to be wantonly wasteful when there’s no need, but the “old building problem” is a very hard issue to work around for energy efficiency/conservation, it seems to me.

    1. I have heard “conservatonists” claim that we can reduce national energy consumption by 80%; a number I find *remarkably naive*.

      Jeff – That’s just because you lack sufficient imagination.

      I’m sure that something around that number could be achieved by killing off 80% of the population.

      Almost always, these “conservatonists” also advocate some sort of agrarian socialism — you know, where people live in villages and spend happy days growing organic food for the collective. Well, we can see how that worked out in Cambodia over three decades ago; it was rather successful at reducing energy consumption.

      The problem with Pol-Pot is that he was not ambitious enough. He managed to kill off only about 20% of the population of his country. A truly inspired plan must achieve four times that much to realize the “conservatonists'” dream of an ideal society based on efficiency and conservation. 😉

      1. Off-topic, but I find it kind of funny that you duplicated my typo so many times.

        “conservatonists” should have been “conservationists”.

      2. Another way to “conserve” energy is to force energy intensive businesses to shut down and move offshore. Politicians can then pride themselves in statistics that show a downward trend in overall energy consumption. This is already happening, and will be accelerated by higher energy costs.

    2. It is even hard to “save” when you own the house. Being retired and looking to save where ever I can I checked the height of the insulation in my ceiling. The government charts show I need 3 more inches to meet the minimum recommendations for my area. That will “save” me ten percent of my heating/cooling bill. Even though I heat with a heat pump (the house was heat-pump certified when it was built 30 years ago) my total electric bill is less than $100 a month on the level payment plan. After reviewing several other government websites I found that that extra 3 inches saves me less than 10%. The kicker is that even if my son and I put in the insulation ourselves it is almost $1000. If I pull $1000 out of my IRA to pay for this means I will have lost that $1000 and the interest on that $1000 – a net loss of cash. Worse yet, someone that can’t install it themselves and has to pay to install the insulation would be looking at double the price.
      I did replace three windows with “certified” Low-E windows (because they were rotting away) and took advantage of the “efficiency rebate.” Again my son and I replaced these, they cost over $2000 total (double that also if you had them installed) and after checking the energy savings it would take my grand children living in this house to break even on any energy savings. As my son does this for a living, he informed me that even then you do not really save any money as the Argon leaks out and the insulating qualities become useless after ten to 15 years (you know, right after the warranty expires.)

      As an ex utility worker, all of this “cheap gas” sounds like the same story about 10 years ago when all of the utilities built all of the gas turbine plants as they were the cheapest way forward only to see the cost of gas double (and then again).

      1. @Rich – I am happy that I am not the only one with a reasonably long memory who recognizes the same old story that we were told 10-15 years ago – cheap gas will be with us forever (until it is not cheap any more because demand picked up a bit.)

        It is easy for petroleum companies to dump gas into the market for a while. They have enormous bank accounts and understand the strategic value of building market share through price wars. They have known that technique since the days when Rockefeller built the Standard Oil empire.

        Natural gas is also a dangerous byproduct of all drilling activity anyway. If drilling companies cannot pipe it to a market immediately after it is released, they have to flare it to prevent deadly explosions. Natural gas is also a waste product of making additional coal areas ready for production. Coal bed methane is the source of about 8% of the current supply of natural gas; total production from that source is more than half as large as the production from shale gas. However, coal bed methane only lasts until the formations are well drained of that dangerous mine component and actual coal mining can begin.

        There are many temporary reasons for low gas prices. If we do not build new nuclear plants soon, I predict that natural gas prices will follow a trajectory similar to the one that existed from 1999-2008. Just as a reminder, here is a link to that graph:


        Here is an even more pertinent graph – the price of natural gas for commercial customers:


        1. Remember too that methane is a terrible greenhouse gas. For those concerned with such things, they should really, really be against natural gas use for electricity generation. Just the amount of methane released in the NG extraction step dwarfs the life cycle carbon footprint of nuclear. I’m not completely sold on the theory of anthropogenic climate change, but there are those who claim to be, and to them I say, from that viewpoint, nuclear is a much better way to go than natural gas.

        2. Several analysts on The Oil Drum have run numbers and found that the the current shale-gas operations cannot be making money on even the best dry gas wells until the price goes upwards of $7/mmBTU. They’re drilling now not because of cash flow from gas (though maybe liquids are profitable), but because their company assets are composed largely of “drill it or lose it” leases.

          This is a bubble waiting to pop. The real issue is if new leases are being signed at anything like the current pace of drilling. If not, there is a time in the next year or so when the last wells in the bubble will be drilled and production will start to fall. Then prices will leap.

    3. Jeff S wrote:
      “Energy efficiency”, on the other hand is about how much benefit you achieve per unit energy consumed.

      Agreed! This goes right to the heart of the Jevons Paradox. When a device is made more energy efficient, more benefit is derived from each unit of energy input. And since device is more efficient, one can afford to use it even more than the previous version, multiplying the amount of benefit one receives from it. In the end, this causes the energy savings to be no where near as great as thought at the beginning.

  8. German households and industry stress efficiency and will not fund new pipelines for NG from Russia. Gasprom miscalculated demand for natural gas and with excess supply shot themselves in the foot. I believe NG here will meet the same fate with a shortfall in new gas fired installations. With a down economy people will conserve energy because there will be no money for new gas that is available in oversupply.

    1. Well, it was supposed to be a Babcock and Wilcox 205 design (the number “205” indicating the number of fuel assemblies in the core).

      This design is unusual in that it used the B&W Mark-C fuel assembly, which was similar to the fuel assemblies designed by Westinghouse.

      (More information here)

      Note that, when I say Babcock and Wilcox, don’t assume that the company that Rod is working for will be doing the work. If the uncompleted reactor at Bellefonte is finished, the work will be done by AREVA, which owns the commercial reactor technology of the old Babcock and Wilcox company.

      (I know … it’s confusing.)

      1. To add, I think Bellefonte will ultimately use Areva-fabricated fuel (not 100% sure on that though).

  9. Brian,

    Who else has such a reactor operating?

    If it has not been installed anywhere, the NRC is going to drag them forever to certify the design. I am skeptical.

    Are we talking slam dunk or not in this lifetime?

    1. Daniel,

      Nah … you shouldn’t be so worried. Notice how I mentioned that B&W had been moving toward a fuel assembly design that was similar to Westinghouse’s? Westinghouse has designed and built most of the Pressurized Water Reactors in the world. Thus, the fuel design will be very familiar to the NRC. The core design should not be that different from what they are used to.

      This should be well within the NRC’s “comfort zone.”

      This is all “old school.”

    2. @Daniel

      No one else has such a reactor operating.

      On the surface, that would seem to raise a red flag. Looking deeper though, it seems to be mostly due to unfortunate timing for the 205 design since it was an evolutionary design that was ready to be completed at just the time that so many projects in the US were being cancelled. There was an implementation of this design that briefly operated in Germany but was then shut down. This might seem like a bad sign, but then you have to recognize Germany’s overall highly negative attitude toward nuclear power.

      Bellefonte Unit 1 is going to have the benefit of having many further evolutionary improvements that weren’t available at the time that the B&W-205 plants were originally scheduled for completion. TVA has stated that it will be the most advanced nuclear plant in the U.S. when it is completed. This should prove true unless an AP-1000 is completed prior to Bellefonte’s completion in the 2018-2020 timeframe.

  10. The nuclear industry does not need CEO John Rowe outdated analysis. Gas prices are up as supply is low this is extremely bearish. Hydrocarbon industry is going period of contraction worldwide [see prices] Sour Canada BC gas & tar sands gas to KEYSTONE XL pipeline to asia met with enviro opposition.
    New small nukes is the future as developing world expands into smart SMR’s. Should the U.S. nuke industry continue to adopt outdated mega wet bulb LWR, rest of world will leave America’s outmoded big nuke reactor tech offers.

  11. John Rowe is a lawyer by training who has a fiduciary responsibility to maximize short term profits for his company’s shareholders. He is not a nuke. He is willing to destroy a 2200 MWe formerly licensed and fully completed nuclear plant in order to constrain the supply of electricity.

    He is also willing to allow the state of New Jersey to force another 620 MWe from the Oyster Creek nuclear plant off of the grid in the relatively near future.

    This is Enron-style market manipulation. I hope some state attorneys general tell Mr. Rowe that if any scenario like this plays out, they’re ready to depose him and the rest of his corporate officers whether they’re still working for the company or not.

  12. This CEO’s prediction of cheap Natural Gas availability in the future indicates he hasn’t looked at a ten year Natural Gas price chart lately.
    To me, this is a sad commentary on executive prowess – and likely excludes the necessity of terms such as “visionary”.


    Please note that as far back as 2001, Natural gas spiked to $10 per MMBtu, in 2011 dollars that’s $12.76. A similar spike occurred in 2003.

    In late 2005, Natural Gas again spiked up to $15 per MMBtu and in 2008 again to $14.

    So yes, in 2011 in the most severe economic pullback since The Great Depression, we have $4 Natural Gas.

    For the time being, yes, it’s cheap.
    Long term, I wouldn’t bet my utility on it.
    This man has.

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