1. One thing I’ve often wondered. . . why aren’t the ‘Big Energy’ companies getting into Nuclear? I know that might sound like a ridiculous question – they make their money from fossil fuels. But the thing is, if anyone has the funds to build nuclear plants, it’s the big oil and coal companies who for the past decade have been earning billions every quarter. I think the Natural Gas industry is smaller, but I bet some of the big players it NatGas could probably afford to build some nukes.
    In any case, for the big energy companies like BP, Exxon, etc, dropping 100 Billion to build 10-20 nuclear plants would well within their means. If 3 or 4 large energy companies did this, you could see maybe 50-80 nuclear plants built, which I bet would be a large enough number of orders to get real economies of scale. For the Energy Companies, it would give them a real future – eventually, the oil, coal, and even natural gas, are going to get very expensive to extract – wouldn’t it be good to be ramping up (relatively) cheap nuclear power right about the time that additional reserves of hydrocarbons gets very expensive?
    I guess perhaps there’s not enough people who think long term at such companies? But really, they are the natural companies to be investing in big energy infrastructure projects, it would seem like.

  2. @Jeff – from an outside perspective, I agree – large, established “Big Energy” companies are the natural choice for investing in nuclear energy for long term success and survival. In Europe, there are several examples of this beginning to happen, with Total and Elf buying into new nuclear projects. The interest in nuclear energy in Russia and the Middle East (Iran, Saudi Arabia, UAE, Egypt) is another example of companies (or whole countries) that are purveyors of oil and gas deciding that they need to invest some of their current assets into an energy source that will be around for a while longer than oil and gas.
    In this country, the math works differently and the definition of a long term thinker at most companies is someone who worries about the annual report vice the quarterly report.
    You have made a key – and common – error by assuming that there is a difference between “oil companies” and “natural gas companies”. Both of those products generally come out of the same holes in the ground – though the ratios are different from each hole. They are produced, refined, transported and distributed by the same companies, though the ratios might be a little different in each company. For ExxonMobil, for example, gas makes up almost exactly 50% of its daily energy sales when measured in TOE (tonnes of oil equivalent). Most of the other Big Five that remain from the “Seven Sisters” have a similarly balanced portfolio.
    The problem for those companies is that a growing nuclear industry with less opposition would drive the price of all fuels down by tens of dollars per barrel and several dollars per million BTU. Suddenly, the fear of future scarcity would disappear. For a company like ExxonMobil that sells 4 million barrels of oil equivalent each day, the effect of such a drop in energy prices would be an enormous hit to the bottom line. I understand their quandary – they simply cannot release their hold on the market without catastrophic consequences.
    In this particular business case, the “creative destruction” that business thinkers like Schumpeter popularized simply WILL NOT come from the inside of the majors. It has to come from outside forces, perhaps from a guy with a slingshot blog.

    1. Rod,
      For the reasons you discuss above, the big fossil companies will only start investing in nuclear when it really is true that fossil sources are about to run out. There is just too much profit in sticking with fossil sources for as long as they’re around. As long as significant fossil reserves remain, developing nuclear (“too early”) will cause too much of a drop in fossil fuel price/profit.
      While probably true, I find this very depressing. These economic facts, along with the short-term thinking you also referred to, means that our current (private corporate) economic system is incapable of doing anything to conserve valuable resources for the long term. It’s just at odds with the business model. Any measures to conserve gas or oil while significant amounts are still around, will almost by definition depress the price, leading to reduced profits. Instead, companies incentives are to try to everything they can to increase demand, to shift the (sensitive) supply/demand balance to yield much higher prices and profits.
      What’s going on now with natural gas is a prime example of this. I, like you, think that a precious resource like natural gas should not be wasted on things like baseload power generation, and instead be conserved for future generations, given that we ONLY have ~100 years of it left. I think that huminity burning up the earth’s entire endowment of oil and gas in only ~two centuries is a crime, given their long term usefulness, and the presence of other, longer-lasting alternatives for large-scale power generation. But, instead, what we’re seeing is very heavy promotion of using more gas (on less valuable applications) now that gas prices are (temporarily) low, based on a lie that they will always remain so. Why, because it’s necessary to support the price/profit.
      It seems that our business model demands that we profligately burn through all our reserves of precious resources, since that it necessary to maintain profits. Real extraction costs won’t get high enough to force conservation/alternatives until the resource is almost gone. This is just not good enough. We simply can not rely on the pure market to make these responsible, long-term decisions.
      I don’t know what the answer is. For power generation, I favor a return of the Fuel Use Act, which limits how much gas an oil can be used (e.g., it can be used for peakers only). We should pass laws limiting gas to 20%, slowly decreasing down to 15% or 10%. I’d love to hear the wind industry’s reaction……

    2. Rod, a dash for nuclear electrical power would not change the big picture for rising oil and gases prices. It would only affect coal. The reason for that is that the Western Majors don’t have much “cheap” oil left. They only get now PSA in places where fossils are expensive to produce (like Sakhalin) or for a service fee only (like what is happening in Irak now).
      If one sets aside Greenhouse gases constraints (a big “if” I admit, but North American opinion and politics are what they are unfortunately), a lot of the “difficult” oil that is left to them will require significant amount of mechanical energy (to pump water and CO2) and heat (to pump steam) that could be provided by nuclear energy.
      Nuclear energy already has a lot of momentum in Asia because they are more vulnerable from an energy resource standpoint. Western countries will follow in the next ten years, and the oil majors will be a part of it once the “cheap shale gas” bubble will come to an end.
      Don’t lose hope, you may be selling these nice mPower steam plants to majors sooner than you expect !

      1. @Charles – if we are doomed to paying very high prices for oil and gas, selling a lot of mPower steam plants would not improve my hopes for the future. I am just not that selfish.
        The US burns up about 1/3 of its natural gas production in the electrical power market. Western Europe gets an even higher percentage of its electricity from methane – what would gas prices do if we replaced gas burning with fission?
        The world burns up about 6% of its oil production in the international shipping market. What would oil prices do if that market shifted to nuclear?
        Oil is also a big source of electrical power in oil producing nations. What is going to happen as they shift more of their power production to fission, freeing up more oil for export?
        The Western majors are certainly losing access to oil because others are figuring out just how valuable that oil and gas is for long term prosperity and they are tired of someone else exploiting it as rapidly as possible. However, that does not mean that oil and gas are destined to be hugely expensive and immensely profitable forever.

        1. Rod, all the effects that you describe are true, but you forget the elephant in the room : There is a MASSIVE increase of car ownership and power production going on right now in developing countries (GM sells more cars in China than in the US). As people gets wealthier, they are going to travel more and use more fossil fuels for transportation (batteries operated EVs are still very much a luxury for these countries). Same thing for air travel. The demand creation occurs much faster that its destruction via replacement of inefficient vehicles and reduction of miles travelled in Western countries.
          So, sorry, very high prices for oil and gas (I.e. around 100 USD for oil and 8-10 USD for Gas) are our future, we better get used to them.
          With high oil price driven by global transportation demand, NG powered vehicles have a good chance to take off. At 8-10$ natural gas becomes expensive for electric power (compared to Nuclear), but is still at a reasonable level for transportation (we are ready to pay much more for “transportable” Joules than for “stationary” Joules). US is blessed with lower NG prices than most of the world, because the consumer is relatively close to the producer, so it makes sense to use it for transportation instead of spoiling it in base-load power plant (pretty much the same story as oil actually).

          1. @Charles – you may be correct, but my analysis tells me that gas at $6 per million BTU is expensive enough to make it difficult to compete with well built nuclear plants. The prices that you predict for oil are high enough to do some demand destruction here in the US. The number of cars is not a particularly good predictor of the amount of fuel consumed – the number of miles driven per year and the consumption per mile are also important.
            For air travel, demand destruction is already happening based on fuel cost impacts and the impact of the additional hassles at the airport. It is possible to replace a lot of what now happens via air with rail and ocean shipping. Both of those can be powered with nuclear energy either directly or through wires. In many developing countries, rails are widely accepted as being a fast enough mode of moving from one place to another. I actually expect that the US will begin returning to rail travel as well.
            Petroleum will always have an advantage in the transport market, but the prices that would be in place in an oil market that mainly used for light vehicles, trucks and airplanes would be quite a bit lower than those in effect today. Those markets represent about 50% of global oil use – you can look at recent price history to see the short term effects on the oil market of even a 5% drop in demand.

            1. Rod, I think we both agree that it is not a good idea to use gas to produce electricity.
              As per our difference of views between the relative strength of fossil fuel demand destruction in the western world and demand creation in the developing world, it probably stems from the fact we live 12 time-zones apart and are influenced by our immediate environment. Time will tell…

  3. Fusion Power for example will happen as a quiet revolution and intentionally blended in with some more common energy source. The average guy on the street will never know the difference or for that matter care very much as long as no large changes are made in every day life. Even in marine power applications fusion power will be just another steam plant with some mysterious heat generating source creating wet steam and fractions of dissociated oil that is common to catalytic crackers in oil refinerys. Enter the fusion power revolution as one option amongst many.
    You know that response you get from your wife now and then……”That’s nice dear”. Following that comment it is time to wet a line in your favorite stream or go golfing with the guys. Indeed it is a nice day dear.

  4. If I may ask another question. . .
    You compare fuel prices between an EPR-style reactor and NatGas, and you mention that the fuel costs are about $190,000/day for nuclear fuel. Now, I realize this is kind of out in the future still, but has anyone done any analysis/estimates of what the fuel costs become in an IFR/PRISM reactor where on-site reprocessing of the fuel is performed with electric pyrorefining (such as the ARC which GE is trying to sell as part of the PRISM ‘package’)? How expensive is that reprocessing? I’ve heard that reprocessing spent fuel from ‘traditional’ LWR, using traditional reprocessing methods, is more expensive than just mining and enriching ‘new’ uranium – do those economics change with the IFR refining process?
    Wouldn’t it blow peoples’ mind if the average ‘per-day’ cost if you refined the fuel dropped down to something like $50,000/day vs. $1.2-5 Million/day for the same amount of energy from gas. I don’t know it would ever get that low (or perhaps it would get even lower, effectively, since you are supposed to be able to reprocess the fuel a large number of times – not sure what it is, I think something like 40 or 50 times before you’ve ‘exhausted’ all of the U-238)? So it becomes very much a question of just how expensive the reprocessing is, since that will probably dominate the fuel costs (e.g. if reprocessing is very cheap, it’s almost like dividing the fuel cost by like 40 or 50, or whatever the number of times is that it can be recycled; if each recycling is very expensive though, it would be like ‘re-buying’ the fuel every time you recycle)?

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