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Atomic Insights

Atomic energy technology, politics, and perceptions from a nuclear energy insider who served as a US nuclear submarine engineer officer

Atomic Insights 2005

Building New School Energy Wells

June 26, 2005 By Rod Adams 1 Comment

Petroleum – that term includes oil, gas and derivatives – wells have been going dry for more than 150 years. Until now, the solution to that problem of resource depletion has been to find a new place to drill. Though there is still a lot of oil left inside the Earth, there is a significant body of research that indicates that we have already found and extracted about half of the accessible stored resources.

Few people would dispute the fact that the oil and gas that have been discovered and extracted so far is the easy half. It was pretty easy to find and it was located close enough to human populations or transportation routes that it was reasonably easy to deliver to the ultimate customers. The petroleum that is still left underground – which includes that which is stored under water – is the hard half. It is not so easy to find, or it is located in areas that make it difficult to move to markets.

There are some alternative energy sources, but most of them – coal, wind, solar, biomass – have been available for hundreds to thousands of years and represent old school technologies that have not been able to compete against petroleum without massive government subsidies or laws requiring their use. (A little clarification on coal – though it is still a major source of energy, its market position is far lower today than it was before petroleum became widely available. No one uses it for home heating, transportation, or town gas production anymore.)

The realization that the easy oil is gone has led to a significant increase in world energy prices during the past five years. Those increased prices have put hundreds of billions of dollars into the hands of petroleum producers, but it has not led to a large increase in production. The producers know quite well that there are not many opportunities to make major new discoveries so they are focused on maintaining their current production levels. In many cases, there is a growing supply of unused capital waiting for an appropriate place to invest.

Source: U. S. Energy Information Agency – http://www.eia.doe.gov

Oil executives would be wise to consider investing their human and financial resources in nuclear power plants, which can be considered to be new school energy wells.

Short historical digression

When nuclear power first entered the energy market during the mid 1950s, a number of oil companies invested heavily into the uranium and fuels processing portion of the business. This was the portion of the new energy system that seemed to fit with their core competencies of finding and producing the raw materials needed to produce useful energy. For the most part, these investments were not successful.

Part of the problem is that the cost components for nuclear power are different from those historically associated with fossil fuel. With nuclear, a most of the cost and risk is incurred at the beginning of the project. Once the plant is fully operational, the recurring cost of fuel is minimal. With fossil fuel power plants, capital and operating costs are often minimal compared to the always necessary expense of purchasing new fuel to burn.

Building nuclear plants is analogous to drilling oil wells

The path that fossil fuel producers take between finding a promising new field and selling finished product from that field into the market is a tortuous one full of regulatory hurdles, government agreements, massive capital investments, and significant risk.

Once that path has been successfully negotiated, the producer and his investors can look forward to an uncertain number of years worth of selling the product at an uncertain price that depends on a number of external factors. The incentive for making those up front investments and taking the risk is that sometimes those factors lead to market price increases. For an already producing asset, there is little risk that the actual cost of operating that asset will change very much, so price increases due to market conditions fall directly to the bottom line.

Fossil fuel companies have the necessary assets to make successful investments in nuclear energy wells. They can raise capital from organizations that are comfortable with risk, work their way through the regulatory wickets, buy the steel and concrete, develop the necessary agreements with local governments and ensure that their suppliers meet exacting specifications. They live and breathe safety based on long experience with massive quantities of volatile materials. After their new energy wells begin operation, they can look forward to many decades worth of reliable production and sales – energy is not a fad and people will always find new ways to use whatever quantity is available.

Of course, these nuclear energy wells could eventually reduce the value of fossil fuel by lowering energy prices, but by the time that occurs the fuel will be almost gone anyway. We have reached the time when fossil fuel companies can legitimately meet their fiduciary responsibility to maximize their investor returns by spending heavily to build a new generation of energy production capability based on heavy metal fission instead of fossil fuel combustion.

Filed Under: Atomic Insights 2005, Fossil fuel competition, New Nuclear

PBMR Update June 7, 2005

June 7, 2005 By Rod Adams

As frequent readers know, I am a huge fan of the Pebble Bed Modular Reactor (PBMR) project that has been under development in South Africa since 1993. Though there have been some hurdles over the years, and the project has had to overcome a significant amount of resistance, the PBMR team – originally from Eskom, now a separate company named PBMR (Pty) Ltd – is now close to producing their introductory module. During the past few months, PBMR (Pty) Ltd has signed a number of important component production contracts.

I like the project and the concept for a number of reasons. As a technical development, it is exciting to see that people are recognizing that not all reactors have to be 1000 MWe (or larger) central station power plants in order to be economical. The PBMR is a modular design with each reactor power unit producing approximately 170 MWe. These smaller units will increase the reach of nuclear fission power into new markets that cannot integrate the power output supplied by traditional nuclear plants.

The economics for the PBMR are also attractive. South Africa currently has some of the lowest cost electricity in the world, produced for the most part by coal burning power plants located very close to some extremely productive and low cost coal deposits. Those coal deposits – fortunately, in my opinion – are not universally distributed throughout the country; there are significant population and growth centers that are 1000 or more miles away from the current generation centers. When the economists and engineers at Eskom carefully evaluated the available power systems to supply those growing needs, they found that the PBMR was the low cost option, even compared to expanded coal fired production.

When it comes to safety, I have to choose my words carefully. The PBMR is not “safer” than traditional nuclear reactors – it is very difficult to prove that anything is safer than a power production system with the amazing track record produced by commercial nuclear power plants over the past 40 years. It is, however, possible to say that the safety provisions required for the PBMR are easier and cheaper than they are for conventional reactors. Even under the very creative – and generally quite unrealistic and amazingly conservative – worst case analysis methods generally employed by the nuclear industry, the PBMR requires fewer engineered systems, fewer back up systems, and a smaller exclusion area.

Even though I have been following this project for more than a dozen years and writing about it for at least five years, I am occasionally surprised by new information. It has been common knowledge for PBMR news junkies like me that BNFL has been the only major foreign investor in the project since about 2002 when Exelon, the largest nuclear utility in the United States, ended its participation.

A couple of months ago, however, I came across some information indicating that Westinghouse was playing a significant role in the final development and commercialization of the PBMR. That fact confused me a bit until I realized that Westinghouse, the pioneer in the Pressurized Water Reactor (PWR) technology that underpins about 50% of the world’s nuclear power plants, was now owned by BNFL. I guess I had lost track of the ownership of the Westinghouse brand name after a previous iteration of the company morphed from one of the premier engineering companies in the world into a broadcast network.

I recently had the good fortune to interview Dr. Regis Matzie, Senior Vice President & Chief Technology Officer, Westinghouse Electric Company, LLC. Dr. Matzie represents the Westinghouse arm of BNFL on the PBMR (Pty) Ltd board of directors. Among his many other accomplishments, Dr. Matzie graduated from the US Naval Academy in 1965 and served as an active duty submarine officer for five years. Apparently, his sleep patterns were set early in his career; he invited me to call him “first thing in the morning” for this interview. That is how I found myself on the 2nd of June 2005, at 0730, still sweating after my morning workout and having a cup of coffee outside the Crystal City Starbucks.

Filed Under: Atomic Insights 2005, Gas Cooled Reactors

A Time For Opportunity and Caution

June 4, 2005 By Rod Adams

On May 16-18 2005, the Nuclear Energy Institute hosted its annual Nuclear Energy Assembly. The conference, held at the Fairmont Hotel in northwest Washington DC was titled Nuclear Energy 2005: A Time of Opportunity. There were both optimistic and cautionary speeches given during the conference. Some of the speeches are available for download from our […]

Filed Under: Atomic Insights 2005

BP versus Exelon

May 1, 2005 By Rod Adams

Two energy companies made the cut in the 2005 edition of Wired Magazine’s annual article about cutting edge companies. This year’s installment of the survey led with the following quote: “They’re masters of technology and innovation. They’re global thinkers driven by strategic vision. They’re nimbler than Martha Stewart’s PR team. They’re The Wired 40.” Both […]

Filed Under: Atomic Insights 2005

Are Nuclear Plants Really Terrorist Targets?

April 26, 2005 By Rod Adams

On September 11, 2001, three fully fueled transcontinental airplanes became terrorist weapons, causing a huge amount of direct damage and killing more than 3,000 people living and working in the United States. Though terrorist attacks are nothing new, the scale and impact of these three coordinated attacks from the air caused a complete revaluation of […]

Filed Under: Atomic Insights 2005

An Early Passion for Nuclear Energy

April 12, 2005 By Rod Adams

I have a passion for nuclear power. It began when I was a teenager and has continued to develop for more than thirty years. It fires me up early each morning, causes me to bore friends and family to tears, and often keeps me awake late into the evening. This passion has been the source […]

Filed Under: Atomic Insights 2005

Replacing Oil With Uranium

April 1, 2005 By Rod Adams

Truckers, farmers, parcel services, chemical manufacturers, airlines, bus companies, and railroads all need uranium to begin replacing oil. No, they do not yet need their own reactors, but they would all benefit substantially if more nuclear power plants were built to allow more uranium to be used instead of oil and gas wherever possible. The […]

Filed Under: Atomic Insights 2005

Time for Plan B – Yucca Mountain Project Should Close Shop

March 27, 2005 By Rod Adams

More than three years ago, I wrote about the Yucca Mountain project, telling you that I thought that the entire concept was stupid because it was based on flawed assumptions. (See Yucca Mountain: Right Answer; Wrong Question) I also promised that I would discuss a better solution in a future article. The future is now, […]

Filed Under: Atomic Insights 2005

Nuclear Power for Galena, Alaska

March 20, 2005 By Rod Adams

Galena, Alaska has a problem that may be solved with an innovative application of nuclear power. The remote village in Western Alaska is a long way from the grid that supplies electricity to more densely populated regions. It is a fly-in village with only local roads. The energy supply is limited to fossil fuels transported […]

Filed Under: Atomic Insights 2005

Too Cheap to Meter – It’s Now True

March 9, 2005 By Rod Adams

“It is not too much to expect that our children will enjoy in their homes electrical energy too cheap to meter, will know of great periodic regional famines in the world only as matters of history, will travel effortlessly over the seas and under them and through the air with a minimum of danger and […]

Filed Under: Atomic Insights 2005, Nuclear Cost Data

Fusion versus Fission – Difficult versus Easy

March 4, 2005 By Rod Adams

Yesterday morning (3 March 2005) I heard a story on National Public Radio (NPR) that reminded me why I chose an engineering focused career instead of one focused on science. (Aside: I carefully avoid calling myself an engineer, though I served as one in the Navy for a couple of decades. My undergraduate degree is […]

Filed Under: Atomic Insights 2005, Politics of Nuclear Energy

Saying the ‘N’ word Nuclear – in polite company

February 24, 2005 By Rod Adams

The ‘n’ word is definitely back in fashion. There are at least five large partnerships in the United States that are preparing to build new nuclear power plants, though all of them are keeping a rather low profile. The five identified efforts include a consortium led by Excelon that is investigating an early site permit […]

Filed Under: Atomic Insights 2005, Politics of Nuclear Energy

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