I'd be more likely to listen to NEI's PR if its shills didn't seem to be so blithely making stuff up. For instance, Peterson says, "there is growing public awareness of the clean-air benefits of nuclear energy," and more than three-fourths of the country supports more nuclear generation. That shift must have happened not in year but in months: Last June, according to an ABC News/Washington Post poll, 64 percent of the country opposed new nuclear plants.NEI does not make this stuff up. What we do is conduct our own polling with Bisconti Research on public attitudes about nuclear energy. This isn't anything new, we've been doing it for many years.
So when we say that there's growing public awareness of the clean-air benefits of nuclear energy, and that more than three-fourths of the country supports more nuclear generation, it's all based on long-standing research. If you would like to dispute our findings with other data that's one thing. But to suggest that NEI is "blithely making stuff up," is just plain wrong.
To view the latest public opinion research from NEI, click here (PDF).
Returning to the post:
E&E's Brian Stempbeck presses Peterson hard on the waste issue, on government subsidies and on the finances of nuclear plants, which leads Peterson to underestimate costs (Yucca Mountain hasn't cost just $6 billion so far -- last I heard it was $8 billion), claim that he's "very confident in the scientific pedigree" of Yucca Mountain and boast of a new "wave of enthusiasm" on Wall Street.The cost of Yucca Mountain and the financing of new nuclear build are two separate and distinct issues. It is important to remember that Congress established the Nuclear Waste Fund to provide for costs associated with building a national repository for used fuel. This is a dedicated fund which is paid for directly by ratepayers who use electricity generated by nuclear power, not out of general tax revenues. Electricity consumers have paid more than $24 billion in fees to the Nuclear Waste Fund. The fund is growing by about $1 billion per year.
As for the scientific pedigree of Yucca Mountain, we're referring to the work done by some 3,000 engineers and scientists from 12 universities and 2 national laboratories. And they all support this conclusion from the National Academy of Sciences:
"After four decades of study, the geological repository option remains the only scientifically credible, long-term solution for safely isolating waste without having to rely on active management. Although there are still some significant technical challenges, the broad consensus within the scientific and technical communities is that enough is known for countries to move forward with geological disposal."As for a new wave of enthusiasm on Wall Street, here's an excerpt from "Cleaning the Environment," a research note published earlier this week by Merrill Lynch (no online reference available):
Shares of nuclear utilities and E&C (Engineering and Construction) Companies have generally been strong performers over the past year. However, the consensus support for the stocks appears to hinge on factors other than environmental benefits. For nuclear, the stocks have been viewed as a play on rising natural gas and coal prices. For the E&C names, the main growth focus has been in areas such as oil and gas, petrochemicals and federal programs. We believe that investors are underestimating the scale of the environmental opportunities for both sectors in the near term as well as the level of certainty that these environmental investments will be made.What's driving this? America's coal fleet faces a growing capital expenditure burden as they prepare to meet the tighter requirements in the Clean Air Interstate Rule (CAIR). This capital spending drives up the market clearing price of power, something that nuclear units capture in the form of increased profitability. For more on CAIR, click here for an explanation from my colleague Mary Quillian. And click here and here for more from our archives. And if you'd like to investigate further the financial issues involved, click here for our archive of Wall Street briefings.
Another factor: The rising cost of emission allowances for SO2 and NOx, which also drives up operating costs for fossil generating capacity. Until 2003, SO2 allowance prices had ranged from $150-200 per ton since the mid 1990s.
Last week, those same allowances hit $1,600 a ton. That has real economic consequences. Again, we're not making this stuff up.
Back to Lewis:
In other words, Peterson claims that nuclear energy is all benefit and no cost. It's clean, reliable and safe; we already know what to do with the waste; the public loves it and investors can't wait to fund it. New plants, therefore, will start going up in 2007.Actually, we've been very conservative when it comes to the time frame for construction of new plants. Here's what our CEO, Skip Bowman said this past October in a speech to the World Association of Nuclear Operators:
We expect companies to break ground on new nuclear plants in the United States around 2010, with commercial operation beginning as early as 2014. Once those first plants are built and operating, as companies and investors gain confidence in the licensing process, we expect construction of significant numbers of new reactors after 2015.There are significant economic and environmental challenges that are driving renewed interest in nuclear energy: The need for new baseload power generation in the post 2010 time frame; the rising price of fossil fuels and volatility in natural gas markets; and the need to comply with clean air regulations and the prospect of regulation of carbon emissions.
Every type of electrical generation carries with it a degree of risk. With coal, the risk is technological, with questions remaining over the viability of integrated coal gasification technology (IGCC), sequestration and the future costs for carbon control. With natural gas, the risks surround price volatility and availability. Renewables, though they will play a larger role in our energy mix in the future, aren't poised provide the heavy lift we need for new baseload generation.
With nuclear energy, the technological risks are minimal as the technology is mature, but there is concern over regulatory risks that could cause delays that increase costs during construction. And while a reformed plant licensing process has been implemented, it has yet to be tested. However, with the investment incentives and standby support provided for in the Energy Policy Act of 2005, we believe these risks can be mitigated.
There is no perfect energy option going forward. All fuels carry with them a balance of risks and rewards. And when we look at the growth curve for future demand, it is clear that all types of electrical generation will have to produce more power, more efficiently than today.
The mantra for America's energy mix going forward has to be energy diversity. But under current market conditions, nuclear energy is poised to play a larger role in America's energy mix than it does today. And that's no lie.
POSTSCRIPT: I'm sure many of you remember that Lewis was the author of a two-part piece in LA Weekly that discussed the debate over new nuclear build in very good detail.
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