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13 Comments

  1. While I agree that oil/gas folks think of nuclear as the backburner alternative, it still sounds like they believe they can make more money on oil even though it will require more offshore rigs, deeper water, more processing for tar sands, etc. I know we all love nuclear and it is a safer way to make electricity, but I wonder if the greater versatility of oil/gas slows nuclear expansion (and nuclear is expanding in countries across the globe) as much as energy company resistance.

  2. Rod Adams wrote:
    I read the BusinessWeek article and the earlier one in the Wall Street Journal from the perspective of a lazy engineer. I hate working long hours, cannot stand wasting time and effort, and do not understand why anyone would want to go to the trouble of building large extraction systems to squeeze out the remaining crude since we long ago discovered nuclear fission, a far simpler alternative that is actually more capable than crude oil.
    I am also firmly in the “lazy engineer” school. And I believe that engineering is doing for $1 what any damned fool can do for $3.
    No doubt there is still a lot of oil to be had. And there are many who will be happy to provide it, so long as the rest of us are willing to pay the (high) price.
    The problem is, the wealth of society as a whole is “on the margins”. It is the money and resources left over, after we take care of the basics, that allow us to not only to enjoy life, but to also invest in technologies of the future. It only takes slight increases in the cost of the basics (like energy from oil) to destroy that marginal wealth.

  3. Just running through my memory, wasn’t there a proposal in the 1970s to use a few physics packages to open up pools of that crude?
    With an eye on carbon based fuel, IMHO, e. Coli trained to generate octanes has far more purpose, fed on grass clippings and the manure of umpteen revisions of senate and house legislation and NAVSEA manual revisions.

  4. My understanding is that the vast majority of crude is used for transportation fuels and chemical feedstocks and very little is used to generate electricity. If that is true, then nuclear power plants aren’t in direct competition with gas/oil companies as much as they are with coal-mining and coal-fired power plant interests.
    As to the cost of the commodity rising, isn’t that also true with all commodities as they respond to supply and demand influences? Uranium becomes “more abundant” when the price increases as it makes more economic sense for the miners to locate and extract it.
    To me, the logical path would be along the lines of Jim Holm at coal2nuclear.com. And as katana0182 (Dave) has ably expressed here on previous posts, maximizing the value and usefulness of the existing coal infrastructure while retraining and preserving the economic viability of affiliated industries as they transition from a coal-dominated to a nuclear-dominated power plant system. Basically, liquid fuels and feedstocks for where they are most beneficial and nuclear fuels/power where they are most efficient.

    1. Coal is a very, very useful feedstock for chemical processes, and we’ve got a tremendous amount buried underneath our feet. Some cleaner, far more effective use – as in coal to liquids – or coal to SNG – using a high-temperature nuclear heat source – combined with the phase-out of coal for power-plant use – and the phase-in of nuclear in its place – would have a minimally disruptive effect on the total economy of the US while getting rid of our biggest pollution nuisances, as well as dependence on oil from…shall we say, “unsound”…regions of the globe.
      If one is interested in the carbon aspects of this, it would also reduce carbon emissions, as well, especially if the high purity carbon dioxide produced in the coal to liquids process was either Sabatiered or otherwise sequestered in some form. Plus, the phaseout of fossil power in favor of nuclear would reduce total carbon emissions immensely. As time goes by, and the need becomes more and more pronounced, we could substitute biomass feedstocks for the fossil feedstocks as the science dictates to achieve more and more complete carbon cycle closure.
      Synthetic oils produced in this way would perhaps be a bit more expensive than the existing sources, but – here’s the key – prices would be far more stable – as supply chains would be less vulnerable to shocks of varying sorts.
      No US jobs would be lost, a vast number of new jobs would be created building the new nuclear power plants and carbon to liquids conversion plants, conventional air pollution would be reduced, industry stimulated, research stimulated, and total carbon emissions reduced. This would make sense – and make sense now, as everyone in the US would win. The only people who would lose would be the oil and gas exporting countries – and that I don’t think many Americans would particularly care about.
      (Still, mountaintop removal mining needs to stop, really, like sooner rather than later, and something more compatible with the environment needs to be substituted in its place, even if that means a return to less efficient underground methods – and a consequently higher price of coal and a lower rate of production. Blowing up inconvenient parts of the landscape is not acceptable anymore.)

  5. I saw John Hofemeister give a lecture in Oakland, CA about 8 weeks ago. He was an excellent speaker and made many very compelling points that I think almost any nuke supporter could agree with. Although he didn’t speak about nuclear or any other energy source in much depth, he was definitely very supportive of nuclear and referred to William Tucker’s “Terrestrial Energy” book when asked a question about nuclear from the audience saying something to the effect of “William Tucker has this very well figured out, read his book”. Although oil doesn’t generate a significant amount of electricity in the United States, it does have a strong market share for e-generation in other countries, though I don’t think the oil industry is worried that nuclear will be eating that market share anytime soon and even if it did, oil demand is pretty steady regardless.
    Yet in spite of John Hofemeister’s sensible observations and suggestions, I think the oil industry depends on a lack of innovation. The 4-stroke Otto cycle engine has lasted over 100 years more or less because it’s familiar, not because someone hasn’t bothered to invent a better engine. The story of the QWERTY keyboard design’s staying power over the vastly improved Dvorak layout is very telling of how difficult it can be to change an established technology. No company has a vested interest or ownership of either layout so there is no good reason for accepting a layout designed poorly on purpose. Incumbent technology is harder to overthrow than a government. We have all the technology now to design plug-in serial hybrid vehicles that burn dimethyl ether through high efficiency free piston or toroidal engines. But will we ever if our leadership has no such vision? I think John Hofemeister’s vision is grounded by his experience and that’s a good thing because he has been privileged enough give valuable input to many of our energy officials who’s grasp of energy matters is barely grounded in reality.

    1. Jason – I suggest that you take a little time to go look at a reasonably detailed graph of oil prices over the past 40 years. Heck, you could perform this exercise with just the last 5 years. Note just how many peaks and valleys there are in the graph. In just the last 10 years, the price of oil has ranged from about $15 per barrel to $147 per barrel.
      Throughout that time, the daily sales volume of the product has been within 6% of 75 million barrels of oil PER DAY. That means the shared revenue of the world’s oil industry has varied from about $1.0 BILLION to $12 BILLION per day with almost all of that variation due to PRICE, not production.
      If you read or listen to energy market news for very long, you should begin to realize why there is such an amazingly resilient market demand despite changes in price – oil is very definitely a commodity that demonstrates price inelasticity. Almost no amount of price increase stops people from buying – though they might complain LOUDLY. Almost no fire sale price convinces people to step up their rate of purchase very much – where would most people store a commodity that is as dangerous as gasoline that they use in quantities of dozens of gallons per week?
      There is a reason why OPEC often spends a lot of time in meetings trying to raise or lower quotas by a few hundred thousand barrels of oil per day.
      The final part of the assigned homework is to think about how this all looks from the point of view of the oil market. Their profits, dividends, and bonuses ride on their company profitability. The company profits depend almost entirely on the market price of the commodity. A percent or two change in the balance between supply and demand can cause dramatic changes (both up and down) in the price.
      Though oil is used as the basic raw material in a lot of chemical processes, the VAST majority of the world’s oil is used to produce HEAT in one way or another. Thermodynamics makes the industrial world go around.
      All of that is great and puts you in the driver’s seat if you can simply keep steady pressure on the balance between supply and demand, arranging it for a profitable point. Unfortunately for the oil, coal and gas guys – who are often all the same people depending on the time of day or the point in their career – their tidy little HEAT market got invaded by scientists, engineers and technicians who figured out how to reliably and safely extract heat from a substance that has about 2-10 million times as much of it for every unit of mass.
      The world’s nuclear power plants currently churn out as much HEAT into the market every day as Saudi Arabia PLUS Iran PLUS Nigeria! (Roughly 12 million barrels of oil per day equivalent.)
      Just think about what they could be doing and then tell me again why you think that the oil industry is not worried about losing even a little of its very important market share to new nuclear power plants, nuclear powered ships, and nuclear process heat systems.

      1. Rod, your points are well taken. I did look at the oil price charts for the past 30 years, and yes I can understand why that is of a great concern to the oil companies. However, I wanted to go a step further and check out global market segmentation for oil from year to year. I’m still looking for that information but I did find some good info on the EIA’s International Energy Outlook 2009 report. Page 21 of that report says world demand for oil is expected to go from 85 million barrels in 2006 to 107 barrels in 2030. On page 64 of the report is a table of global electricity production by source with projects from 2006 to 2030. According to their projections, oil will lose in this market segment in the OECD countries very slightly, gain in non-OECD slightly, and lose slightly overall. According to the table oil supplies about 5% of electricity and Stewart Brand says it’s 6% in his latest book. I still haven’t found how many barrels per day that market represents to the oil business, if you know of any (free) detailed sources of oil market statistics please let me know. So my logic is they may not be worried about losing some of this business in electricity production because they are growing in other markets and thus won’t lose overall, and then again they may not be worried but more accurately just greedy.
        According to a relative of mine who used to work for a large oil company, the insiders had an expression for a penny rise in the price of gasoline, “the 100 million dollar penny.” I don’t know the scope of time or territory to which the expression applies, but you get the idea.
        I know there are many people who support nuclear energy but do not have an expansive visionary concept of nuclear being at the heart of our future energy systems. They see it in a more practical, perhaps cynical even, way in which the LWR design is all there is and are vaguely aware of advanced designs. John Hofemeister may be a little like that but nonetheless I value his experience, perspective and his input to some of our high level officials. I will have to send you some of the anecdotes he shared at his lecture later after I look over my notes.
        By the way, is this email notification on the comments ever going to work? It’s been broken ever since the system changed.

        1. Jason: I have an email into Echo regarding the email notification. However, I notice that the comment form does not provide you with a place to enter an email address, so I am not sure how the system is supposed to work.
          It has been my experience that the EIA forecasts for any time in the future beyond a year or two are not accurate. There are some key assumptions that they make in their forecasts that inherently lead to inaccuracies, but I cannot put my fingers on the page that provides those assumptions. It has been a while since I read it or talked with an EIA analyst – who happened to agree that the forecasts are not their strongest suit. That agency is really skilled at collecting data and producing useful tables and charts.
          Electricity may be only 5-6% of the world oil market, but that is larger than Iran’s contribution. Add in ship propulsion at about 6%. Then add in heating oil for homes, process heat for buildings and diesel fuel for locomotives. Add in the oil that the oil industry itself consumes on its off shore rigs (Amanda Little’s book indicates a large rig uses about 27 MW of continuous power and burns about 40,000 gallons of refined diesel fuel per day) and in process heat in its refineries.
          My point is that heat is fungible and that fission does not have to come in extra large units that prevent it from meeting what are large and significant markets with smaller unit size demands. Uses that could potentially shift 10% – 20% of the oil market would have a huge impact on prices – like adding a new Saudi Arabia plus a new Iran plus a new Nigeria to the market over just a period of 2-3 decades.

          1. Rod, I see the email field with a checkbox appears below, it just doesn’t work.
            I like your outlook on the potential future of fission, I’ll send you a graphic I came across that expresses the idea very well.

  6. It’s tough to make predictions, especially about the future.
    Anyone who expects a model of something as complex as worldwide energy markets to be accurate or dependable doesn’t understand how modeling works. There are too many assumptions that could be wrong, too many quantities that could change unexpectedly, and small errors can greatly influence the results down the road.
    In my opinion, the various alternative scenarios that the EIA models — i.e., the sensitivity studies — are far more valuable than their forecasts. The results of these studies depend on far fewer assumptions and can be used to get a good feel for how the system will respond to various circumstances or policy decisions.

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