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On No Longer Even Slightly Skeptical, No Longer Patient About Action to Effectively Reduce Greenhouse Gas Emissions

@Geoff - I had hoped that by including ExxonMobil and the leaders of the UAE on my list that people would recognize that I was not talking about "the domestic oil & gas" industry, but about the multi-national fossil fuel industry as a whole.

The industry that I bear animus towards is the one that invests tens of billions of dollars into building out liquified natural gas supply and transportation infrastructure and is now investing in huge marketing efforts to make sure that the investment - stupid as it was in light of the ability of nuclear energy to supply massive quantities of NO emission electricity and heat - pays off. 

The industry that I bear animus towards is the one that played an under appreciated role in making large new homes in distant suburbs so unaffordable by late 2007 that people stopped buying them and started defaulting on their loans. 

The industry that I bear animus towards is the one that instead of paying special dividends and letting shareholders benefit directly from the massive cash flows being generated by oil prices above $80 per barrel (peaking at $147) and gas prices in the teens decided to repurchase stock, which kept the stock price high enough for the managers to qualify for massive bonus payments most egregiously a $400 MILLION golden parachute for a guy who just happened to depart at a time of high profits driven by high prices.

Finally, the industry that I bear animus towards is the one that puts my friends and family's lives at risk in protecting their damn international investments so they can keep participating in an industry where a company with about a 4% market share can generate twice as much revenue in a year with just 80,000 employees as my employer spends to support 283 ships, 4,000 aircraft and 900,000 employees who have to go and fight for the profits of those 80,000 people.

I have NOTHING against oil and gas and nothing against some of the hard working people in the industry - I do have a beef with the industry manipulators who call themselves leaders, but who would actually have done quite well in the Columbian national industry.
February 20, 2010    View Comment    

On The trouble with wind power

@Marc - I have to differ with your optimism. Wind is a "good idea" in about the same way that "communism" is a good idea. Both have attractive elevator pitches, but as soon as you get into the details of execution, they fall WAY short of their rosy pictures due to some inherent and uncorrectable flaws.

One flaw in communism is the assumptions that talented people will continue to produce just as much as they did before, even when they are put into a system where everyone has a claim on their output. Another flaw is that the system prevents greedy people from taking charge and paying themselves an enormous share of the entire pie. After about 70 years of working hard at it, the second largest experiment in communism in history failed catastrophically. The largest has continued in place, largely by eliminating the first system flaw enough to allow the second to continue without fatal opposition.

The two basic flaws with wind from an engineering perspective are that it is diffuse and erratic. Wind is available everywhere, but reliable or predictable wind is only available in places where humans do not live in great density, mainly because living where the wind is always blowing strongly is not very comfortable. The diffuse part of wind means that you need really large collectors that are often idle. That adds costs that will never disappear no matter how much innovative thinking is applied.

Humans have worked really hard for many centuries to develop systems to harness the power of wind. Sailing ships required a lot of cloth, hemp, tall trees, and impressed labor. Engineers refined the designs and managed to build some pretty fast ships called Clippers that could get from point A to point B fast enough so that cargo did not lose too much value during transit, but they were not appropriate for bulk cargo due to extreme cost per unit weight. Once we figured out how to put steam engines on ships and how to locate enough coaling stations around the world to supply those ships, we dropped sails like a hot potato even though the coal did not come for free and even though it added a whole new dimension of hazard on the ships.

My dad used to engineer transmission lines for FP&L. He did that for 35 years. Before he passed away, he was the supervisor of transmission substation engineering. He was also the kind of guy who had a habit of "bringing his work home". His habit of discussing his trials and tribulations at the dinner table did not make him popular with mom, but it gave me a 14 year education about how hard it is to site and build transmission lines. His crowning achievement was a 500 kva line to bring coal by wire from GA, a project that he worked on for about 12 years.

Building transmission lines is most definitely not just a matter of "political will". There are millions of landowners in this country of ours that do not like the looks of a whole string of large towers in their backyard and a whole lot of environmentally minded people who REALLY do not like the looks of a 200-400 ft transmission corridor through their woods and over their mountain ridges kept denuded by regular applications of herbicide.

I have gone on too long to get into the engineering and cost challenges of building and maintaining 200 meter tall towers with locomotive sized turbines driven by 110 meter long blades in offshore salty waters that are frequented by storms. If you think onshore wind is expensive, you should see the costs of off shore wind.

Rod Adams
Publisher, Atomic Insights
Host and producer, The Atomic Show Podcast
February 20, 2010    View Comment    

On No Longer Even Slightly Skeptical, No Longer Patient About Action to Effectively Reduce Greenhouse Gas Emissions

@Michael - so, you think we should place our future and the future of our children into the hands of ExxonMobil, the leaders of the UAE, Shell, Anadarko, Chesapeake Energy, T. Boone Pickens, and the rest of the natural gas industry hoping that they will not allow the market to respond to supply and demand, causing huge price spikes?

You think we should also keep dumping our waste products into the atmosphere to be washed off into the water and land masses and filtered out by human and animal lungs - in the case of some fossil pollutants - or to accumulate in the atmosphere for centuries only to cause changes in the earth's climate that might make many of our current cities dangerous places to live?

Sorry, I think that investing in new nuclear plants that have a very good potential for supplying clean, affordable, abundant, electricity heat and motive power for 60, 80 or even 100 years into the future is a better way to plan. Those loan guarantees will not end up costing the government any money - with the possible exception of reducing its income from taxing fossil fuels. Since they give so many breaks to the oil and gas companies already, governments should figure out a way to recover that lost income via taxes on the income generated by selling fission based electricity and heat.

@Gerry - please. You are comparing ancient, already paid off coal fired stations to new nuclear and you ignore all of the capital costs required to install fuel delivery infrastructure to new gas plants and the price volatility that has always existed in the gas market. I am a reasonably experienced technologist and financial analyst. I know what it takes to build a new, safe nuclear plant and what it takes to build a new "clean" coal plant. The amount of equipment required substantially favors the nuclear plant because its heat source NATURALLY does not require crushers, conveyors, baghouses, scrubbers, slurry ponds, amine CO2 absorption, compressors, pipelines, drilled deep wells, and massive underground rock formations. 

Nuclear plants can run for 18, 24, 120, or 396 months without new fuel. (The last number is from our current VA class submarines.) They store all of their generated waste inside the plant and do not release it to the environment. 

I will also challenge your assertion that $5000/kw leads to 13 cents per kilowatt hour in capital recovery costs. Please provide your assumptions.

Here are mine - 
Debt - 80%
Equity - 20%
loan period - 15 years
interest - 6%
return on equity - 15%
Capacity factor - 85%

My capital payment model using those assumptions returns a price per kilowatt-hour of 6.3 cents. (Note: after 15 years, the plant is fully paid off, leading to some pretty amazing returns on investment for the owner for the remainder of the plant life - 40, 60, 80 or 100 years.)
February 19, 2010    View Comment    

On Wall Street Journal - Small Reactors Power Nuclear Industry

@Jesse - interesting question. Though the specifics would be difficult to answer in a short comment, there are several items to consider in addition to the sheer numbers of reactors.

You have to take into account the specific accident probabilities, the actual consequences of the accident, and the source term of the reactors that might be involved.

My analysis is that though large reactors can be made safe, it is easier to cool a small reactor, the size of the source term is proportionally smaller, and it is easier to take some actions like burying the entire facility that reduce the possibility that any accident at the plant will ever affect any member of the general public.

Safety in small reactors is simpler and less expensive per unit energy generated - at least that is what I have found in about 19 years worth of research and quantification.
February 18, 2010    View Comment    

On No Longer Even Slightly Skeptical, No Longer Patient About Action to Effectively Reduce Greenhouse Gas Emissions

@Gerry - unless you put numbers next to your list of items to consider, I cannot take your comments seriously. Engineers, accountants and financial specialists only deal in quantitative judgements - mere lists of factors are simply not useful for decision making.

All of the items that you mention have been studied in great detail and are included as part of the external costs assigned to nuclear in the ExternE study.

http://atomicinsights.blogspot.com/2009/08/assessment-of-external-costs-and.html

They are also part of the study conducted by MIT called The Future of Nuclear Power.

I am "impressed" that there are 750 MW of solar thermal under construction. Do you care to share how much storage they have? What will they do when there are a couple of days of clouds? How close are they to existing large transmission lines?

We have 104 nuclear plants operating in the United States supplying approximately 800 Billion kilowatt hours per year with an AVERAGE capacity factor of greater than 90%. Essentially all of those plants are paid off and still have at least 20 years of life remaining. The average production cost in 2008 - including all of the costs that you mention with the exception of the capital cost of the plant - was just 1.86 cents per kilowatt hour. That is pretty favorable when compared to the average cost of "cheap", abundant coal at 2.75 cents per kilowatt hour and "cheap, clean" natural gas at 8.05 cents per kilowatt hour.
February 18, 2010    View Comment    

On GE and Washington: Too cozy?

Just in case Peter does not get around to my request for posting GE's US employee count, I did some quick searching on the company web site. I found annual report data back to 1998 which provided numbers for US employees back to 1994. Here is the graph. 

I would love it if someone could help me find the number for the end of FY 2009 so I can complete the graph. I sure hope that it backs up the claim of 16,000 jobs "created or saved".


February 6, 2010    View Comment    

On GE and Washington: Too cozy?

Claudia - I tend to agree with you. GE's lobbying/marketing push to mandate purchases of CFL's made in China was perhaps the last straw for me.

There was a time when GE was a manufacturing leader that created the kinds of products that Peter described. I remember a company that designed and build a machine called an S8G that was pretty darned impressive.

Then, sometime under the regime of a guy named Welch, the company departed from its US manufacturing roots and decided that it was a lot more profitable to use its name as currency for obtaining cheap money and lending it out to others. That business takes so much less effort and requires so many pesky employees (sarcasm).

Of course, there is some substantial risk involved in that model when the money being borrowed is short term and the money being lent out - at higher rates - is long term, but that risk can be mitigated through a strong political effort that ensures that the risk is actually born by the taxpayers.

Bottom line for me - GE is a "has been" that is run by a bunch of money focused people. It is no longer run by leaders who recognize value from building excellent products that serve human and national needs. I wonder if Peter O'Toole would mind posting the US employee count for the company over the past 25 years before touting jobs that have been "saved or created".
February 6, 2010    View Comment    

On Nuclear Energy Is Cheap and Disruptive; Controlling the Initial Cost of Nuclear Power Plants is a Solvable Problem

@Wilmot - just a point of clarification. My statement is that nuclear costs are "controllable" not that they are "controlled". There is a subtle but important difference. A controllable variable still requires effort and attention to keep it under control.

Your brainstorming idea is certainly one path that may work. It is the path being undertaken by NuScale, Hyperion, and mPower, among others (like <a href="http://www.atomicengines.com">Adams Atomic Engines, Inc.</a>)

The idea of building a lot of $50-$300 million plants with plenty of opportunities for learning curve improvements on the way to producing the same power output as a single $10 billion investment is quite alluring. 
February 6, 2010    View Comment    

On Nuclear Energy Is Cheap and Disruptive; Controlling the Initial Cost of Nuclear Power Plants is a Solvable Problem

@Wilmot - I guess I would have to start my response by asking the question - "respected by whom?" I am referring to your adjective describing Climate Progress.

Actually, I suppose you are not incorrect in using that adjective; Joe Romm and his team are respected by some. However, the reality is that many of his backers - like John Podesta are unabashed natural gas promoters who stand to gain financial rewards if nuclear growth is effectively discouraged and pushed out into the future.

The only real costs that I can point to with regard to nuclear energy are the production costs that I quoted in my post. All other costs and schedules that you read about are predictions for the future or are negotiating positions by organizations with a strong incentive for predicting costs that turn out to be just enough less than the costs of power from competitive sources to win sufficient sales at a high price to get the industry established again.

My post is aimed at the talented and stubborn engineers, financial managers, investors and project managers who can learn to understand the inherent physical advantages of concentrated, emission free energy and recognize the opportunities that it presents to them to really make a difference in the world. 

This is not about predictions or arguing with people like Romm - a guy who earned a degree in physics but has spent his career as a policy maven aiming at encouraging the development of energy sources that are anything but nuclear, with the especial aim of making his employers lots of money from selling natural gas. 

A statement of opinion like "nuclear power is simply more expensive than other "low carbon" alternatives" should expose the motives and belief system of the author. Fission is not a "low carbon" power source - it is a NO carbon power source whose only "carbon footprint" is due to assumptions about the power sources used in the supply chain of the initial raw material. Even with some very conservative assumptions, reliable studies have shown that the amount of carbon per unit energy produced during a nuclear plant life cycle is about the same as is produced by a wind turbine - 10-30 grams of CO2 per kilowatt-hour. For natural gas, even with the most efficient power conversion systems, the value is more like 350 grams of CO2 per kilowatt-hr, more than an order of magnitude greater.

My aim here is to encourage the practical minded doers that have made our world a much better place to live than it would have been without their technological contributions. We actually do know how to build things, operate them, maintain them and keep costs reasonably well controlled.

February 6, 2010    View Comment    

On Is a Federal Grant Really Income?

Charles - I almost agree with you. However, since every rate payer is also a tax payer who has to pay their share of the subsidies, I am certain that it is not "impossible to judge" if onshore wind is less expensive than nuclear.

The facts are in; nuclear generation is not only more reliable, it is cheaper. The average all in production cost for nuclear is only 1.8 cents per kilowatt hour. Wind gets that much just from the PTC. The fuel may be "free" but the cost of maintaining and operating 30-40 story tall towers with enormous generators and blades exposed to the weather costs more than 1.8 cents per kilowatt-hour of actually produced electricity.

Rod Adams
Publisher, Atomic Insights
February 5, 2010    View Comment    

On Nuclear power support

@Lou who wrote:

"Why expand nuclear loan guarantees–which weren’t even capitalized on last year–when the budget is already, as everyone and their mother knows, strapped for cash?"

Perhaps if you take a hard look at the budget you will answer your own question. Take a look at page 179 of the President's Budget Submission data tables. In the line marked "Guaranteed loan accounts" you will see the following numbers - in billions:

2010  (-42)
2011 (-34)
2012 (-22)
2013 (-10)
2014 (-4)

Let me translate. For fiscal years 2010 (now) through 2014, the government expects to collect $112 Billion in fees from various loan guarantee programs - that is what the negative signs mean. 

I have no idea how much of those are from the nuclear loan guarantees and how much is from other programs where the government guarantees the loans and collects fees, but this program is a cash generator, not a cash expense at least in the near term when lots of other parts of the budget are bleeding cash today. This certainly will not make a huge difference, but those are some reasonably large numbers even on a federal budget level comparison.

February 3, 2010    View Comment    

On President Obama Answers Question From a Young Person By Explaining at Least One Reason to Invest in Nuclear Energy

@T Haynes - I guess you just beat me to it. Sometimes having to work for a living can get in the way of responses on blogs. (grin)

You do bring up an excellent point - one of the systems that many people who are opposed to nuclear energy bring up as a potential replacement in the "baseload" market is a solar thermal system with storage.

Besides their rather inaccurate description of the thermal storage system as being like a thermos bottle (it is more like a wide open thermos bottle if you are actually producing power when the sun is low on the horizon or not visible at all) the proponents of solar thermal forget about two site selection criteria of their proposed technology that tend to move in opposite directions.

To capture the largest quantity of energy during daylight hours, you want to find a dry, sunny place. To have the highest efficiency for your thermal energy conversion system (heat engine) you need a heat sink, preferably a large body of water - the cooler the better - or an evaporative cooling tower. 

Hmmm. How many hot, dry land areas are conveniently located near large bodies of cool water?
February 3, 2010    View Comment