Replacing Oil With Uranium

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 have been a number of recent headlines in newspapers like the Louisville Kentucky Courier-Journal and the Jacksonville Texas Daily Progress that describe the effects of recent increases in gasoline and diesel prices on companies that provide a number of important services in today’s economy. While news outlets in urban markets like New York and Washington minimize the importance of rising prices by telling people to leave their SUVs at home while their ride public transportation, the people in smaller towns recognize each week that fuel prices are affecting their lives and livelihoods. In suburban and rural America, pickup trucks, minivans and SUVs are more a necessity than a lifestyle option.

I have lost count of the number of times I have read or heard an urbanite journalist say something to the effect of “Gas prices may be high, but in real dollars they are still a lot lower than they were in 1981″ or “Americans are complaining about high gas prices, but they should see the prices I saw in Europe on my last visit there! Americans are spoiled; Europeans pay 4 or 5 dollars per gallon.”

These comments do not resonate with people that know that they are spending real dollars every time they visit the pump. They do not resonate with people that can tell you within fifty cents how much they spend on gas every week because it is one of the larger items on their budget and one that they feel the least control over. They also do not resonate with hard working people like farmers, truck drivers, and airline comptrollers who know that increasing fuel prices make everything they do more expensive. Many of these people cannot afford to visit international destinations to make them feel lucky to be paying less for gas at retail outlets than do people in other countries.

Here are some numbers that illustrate the problem. UPS spent $50,000 per jet for a fill-up last year – now they spend $70,000. Larry Harmon of Dallas, Texas spent $45.00 per fill up last year – now he is spending $60.00. Pisciotta Farms (a small family farm) of Pueblo County, Colorado burns 400 gallons of diesel fuel every day, so their daily cost has increased by $150 per day. Overall, the US trucking business estimates that it will spend $15 BILLION dollars more on diesel fuel this year than it did last year.

Nuclear power can help. The world’s oil market is like a giant bucket with a large number of various size drains at different levels in the bucket. The connection levels represent different price levels where that demand is either reduced or eliminated. Coming into the bucket are a number of sources of supply, also in various sizes and at various price levels. If some of the consumption flows are closed off, the supply for all the rest of the demands increases. In the past, it has been relatively easy to increase the inflows in order to cause the same effect, but the world has been waiting for several years for oil suppliers to work that magic. It is time to stop waiting.

Here some examples of markets where nuclear power can almost immediately begin to replace oil, reducing overall demand.

• Italian electric power – Italy currently has several reactors that were shut down in reaction to the Chernobyl accident. Apparently, at least one or two of them can be restarted within a year or two. Right now, 70% of Italy’s electrical power is produced by burning oil or gas and their rates are 30-40% higher than their neighbors.
• Commercial ships – The American shipbuilding industry is desperately trying to figure out how to survive on a US Navy ship ordering rate of 4-6 ships per year. The US Navy is trying to figure out how to help improve the efficiency of American shipbuilding so that each ship costs less money. American shipbuilders know how to build nuclear power plants and there are probably some long lead time items for those plants in storage since the Navy’s ordering rate has dropped more quickly than planned several years ago. Seems like there might be a win-win situation available there.
• Distributed electrical power – In many areas of the world, diesel generators are the main source of power. Small nuclear power plants can be built relatively rapidly – in the early 1960s with hand drafted drawings and slide rules for computations – a 1.8 MWe nuclear power plant was designed, tested and installed in Antarctica in less than 2 years.

There is an historical precedent that demonstrates the effect that using uranium instead of oil and gas can have on oil prices. In the period from 1970-1985, the world’s production of oil remained relatively constant even as energy demand was steadily growing. By 1986, the price of oil had dropped to near $10 per barrel from its highs in the early 1980s of more than $40 per barrel. Without massive increases in uranium use in the United States, Europe, Japan, and on naval vessels at sea, this oil price behavior would have violated all known laws of economics.

History must almost repeat itself. Now, however, we have lessons to be learned from the first nuclear age. We can avoid the boom and bust cycle this time around.