Lester Brown's Flawed Economic Logic At Grist

I just read Lester Brown’s guest post at Grist titled Waste of Energy: The Flawed Economics of Nuclear Power. Considering the fact that one of Lester’s primary sources is Amory Lovins’s “The Nuclear Illusion” (4.2 MB PDF), I was not at all surprised to recognize some substantial holes in Lester’s logic and data. David Bradish from NEI Nuclear Notes has already beaten me to the punch by providing some excellent reference material and commentary. Here is my first contribution to the discussion:
(I have made two already, so I need to wait for a bit to see how the Grist community responds.)

Like his mentor and primary source, Lester does a fine job of ignoring reality and cherry picking his data to provide the story he wants to tell.

Rather than checking to see how many nuclear power plants are scheduled to be shut down between now and 2015, he resorts to using a model based on at least two invalid assumptions (prior decisions to shut down plants at certain ages predicts the future decisions, and there will be no changes in technology, markets or law that will alter nuclear plant life expectancy) to COMPUTE that there will be 93 plants shut down in that very near term future. That model is grossly wrong based on announced plans. In fact, there is a possibility that several previously shut down plants will be restored to operation in that time period.

He also makes a big deal about the cost of uranium and uses skewed data to indicate that it is going up because of physical scarcity and production costs rather than complex market behavior and trading reasons. There is an enormous store of uranium in the world, but the markets for it are opaque and intermittent. At $60 per pound, it represents a fuel cost of only about 0.6 cents per kilowatt hour after all enrichment, fabrication, waste storage and producer profit margin. That cost is almost exactly the same as it was in 1960 without any adjustment for inflation. For comparison, in 1960, a barrel of oil cost less than $3.

Lester also does not mention the very obvious fact that wind and solar investors are not investing without a lot of help from the federal, state and local governments to provide somewhere around half to three quarters of the dollars that make the investment work. They have loan guarantees, production tax credits, accelerated depreciation allowances, and perhaps most importantly, Renewable Portfolio Standards. They also have an enormous army of lobbyists led by major industrial companies with a national capitalism mentality of privatizing the wealth while socializing the risk. When you press your representatives for subsidies for wind and solar, you are working – unpaid – for GE, Siemens, Kyocera, Sharp, BP, Shell, FPL, Boone Pickens, and many other companies that love to collect your tax dollars and tinkle down the benefits.

There are many private investors who are putting major dollars into doing the foundational work that will enable a new generation of new nuclear plants, both traditional large plants and smaller plants that have all of the characteristics that Lovins likes to tout for distributed power sources like CHP. Check that, they actually do his favorite sources – natural gas and coal – one better since they will not produce any emissions at all.

Investors in new nuclear power projects include major companies like Exelon, NRG, Southern Company, Progress Energy, Areva, Northrop Grumman, FPL, Entergy, Shaw Group, Westinghouse, McDermott, Hyperion and NuScale. They also include Bill Gates, Warren Buffett, Rod Adams (forgive my vanity in putting my name there, but heck, as a percentage of net worth, I am up there on the list), John Deal, Paul Lorenzini, Jose Reyes and George Chapman. While no ground has been broken – yet – there are a number of signed Engineering, Procurement, and Construction (EPC) contracts and there are components being formed. (Note: I am not providing links, but you can find out more about the projects using the above names as search terms.)

It takes time to build big projects, but we did not get into our energy crisis overnight and will not get out with quick fixes. Lester is absolutely correct that nuclear power has not attracted many Wall Street investors in the past few decades. I tend to think that is a ringing endorsement; we have all seen the fallout from the favored investments that are characterized by short term payoffs and ready cash out capability.

Nuclear power works; it competes very well against coal, oil and gas for reliable electrical and large vessel propulsion power. Wind and solar do not really produce the same product – they can only provide useful energy when the weather cooperates. Comparing them as energy sources to nuclear is like comparing a garden to a grocery store. Sure, it is possible to get cheap food out of the garden on occasion, and it is even possible to store enough food to survive. It is comparatively difficult work and not really economically viable for an entire society, especially as we are currently populated and structured. Gardens do not work for people who live in apartment buildings, for those who are physically disabled, or for those that live in non temperate climates. Neither do solar and wind.

I predict that at least one response to this post is going to include a comment about the need to control and reduce our human population, but I am not about to start making the kinds of choices that would be required to have a world population that is substantially lower than we have today any time in the next several decades. Though I kind of hope that growth slows, the overall number is not going to decline and the need for energy is not going to fit within the constraints of wind, solar and available fossil fuels.