Debating America and California's Energy Future

Last Sunday, Silicon Valley businessman Steve Kirsch, the founder of Web search engine Infoseek and currently owner of Propel Software, cobbled together some ancient anti-nuclear talking points for an op-ed that ran in the San Jose Mercury News.

It's the sort of cut and paste job we've seen before. But it's disappointing, as an entrepreneur like Kirsch ought to be embracing nuclear energy as a reasonable compromise that can provide the affordable electricity America needs, while preserving our environment.

I'll review the talking points one at a time. First, security and cost:

In general, the safer a reactor is, the more costly it is to build and operate. American-style reactors with redundant safety systems, containment shells and ever-more-elaborate security provisions are so expensive that no company will build them without subsidies.

This is a pretty standard half-truth that nuclear opponents typically use. Indeed, up front capital costs for new nuclear capacity are higher than for most other types of electrical generation.

In the 1990s, natural gas-fired electric capacity attracted the most investment. As our CEO, Skip Bowman told the Houston Forum earlier this year:

Since the early 1990s, the electric industry built more than 275,000 megawatts of new natural gas-fired generating capacity.

In the early ’90s, this was a reasonable short-term solution: Gas prices were low, and the electricity market needed quick startup, peaking capacity.

By the late ’90s, however, it was clear that gas-fired capacity also was being built to serve baseload demand, and with electricity demand growing, what used to be peaking became baseload.

That placed unsustainable demands on natural gas supply, and exposed consumers of natural gas, and of electricity generated from natural gas, to punishing price volatility.

In that same time period, since 1992, we’ve added only 14,000 megawatts of new nuclear and coal-fired capacity—all of which started construction back in the 1980s.

Today, coal and nuclear energy together represent approximately 70 percent of U.S. electricity supply, and they provide the highest degree of price stability. But investment in new nuclear and coal-fired power plants has virtually disappeared in the last 10 to 15 years.

There’s something wrong with this picture.

By overbuilding natural gas capacity, America has opened itself up to a host of problems, not the least of which is the prospect of developing an addiction to imported natural gas much like our current addiction to foreign oil. Need I remind everyone that the three nations with the largest proven reserves of natural gas are Russia, Algeria and Iran?

Expanded use of nuclear energy is going to be part of the solution. We believe that the limited incentives contained in the Energy Policy Act of 2005 will jumpstart American utilities to embark on new nuclear construction. In other words, with the incentives in place for the first half-dozen reactors, America will once again be able to integrate a long-term planning function into infrastructure investment, something that has been sorely lacking over the last decade or so.

And once new nuclear plants get built, the other half of the cost equation, production cost, comes into the picture. After more than 25 years of improving performance, production costs for nuclear power plants are the lowest in the industry. Here's the latest figures:

Economic efficiency is the most important measure of efficiency because it measures how a plant uses scarce resources and what the value of those resources is. Economic Efficiency is measured using production cost. Production cost is the cost of operating the plant -- —including fuel, labor, materials, and services -- to produce one kilowatt-hour (kWh) of electricity. Nuclear power has the lowest production cost of the major sources of electricity, with production cost of 1.68 cents/kWh. Coal has a cost of 1.9 cents/kWh, natural gas 5.87 cents/kWh, and petroleum 5.39 cents/kWh. Hydro has a production cost of 0.5 cents/kWh, wind .2 cents/kWh and solar 2.48 cents/kWh.

Nuclear production costs are the lowest in the electric industry. And this is even after it has spent an additional $1.2 billion enhancing security at 64 reactor sites nationwide in the aftermath of 9-11.

As for the subsidies argument, nuclear energy is now simply eligible for the same production tax credits that renewable sources of energy are currently. And this despite the fact that nuclear energy provides 73 percent of the nation's non-emitting generating capacity, while solar and wind together only account for 1.5 percent. Remember, wind energy has been getting that same production tax credit since 1992, while new nuclear build only became eligible after the passage of the Energy Policy Act of 2005.

On to total lifecycle emissions:

And the claim that nuclear power produces no greenhouse gases does not hold up. Nuclear power plants themselves don't emit carbon dioxide, but the rest of the fuel cycle depends heavily on fossil fuels.

This is incorrect, and we should know because we've checked the math (as have others) behind the studies making that claim and it doesn't add up. Click here for more on total lifecycle emissions.

And here's an old chestnut we've debunked before:

Two of America's most-polluting coal plants, in Ohio and Indiana, mainly supply electricity for the very energy-intensive uranium enrichment process.

Again, this is incorrect. This ancient talking point is based on claims made over and over again (and never fact checked by editors or journalists) by Helen Caldicott.

Here's the truth, as was pointed out in a letter to the editor of the Toledo Blade written by NEI Vice President, Scott Peterson:

Her claim that uranium enrichment plants use electricity generated from "two coal plants" is untrue. There is only one enrichment plant in the United States - in Paducah, Ky. By contract, it obtains electricity from the Tennessee Valley Authority's fleet of power plants, so about 40 percent of its electricity comes from non-emitting nuclear and hydroelectric power plants.

Now, reactor safety, and the typical exaggerations we've come to expect around the 20th anniversary of Chernobyl:

Nuclear power plants can also result in major accidents. In addition to plant workers who died immediately after Chernobyl (in what was then the Soviet Union), it is likely that up to 8,000 people will eventually die as a result of what happened. The largest nuclear plant accident in history exposed a thousand plant workers to radiation on the first day, and about 200,000 emergency and recovery operation workers over the 18-month initial clean-up.

Chernobyl was a horrible tragedy, and one that we never want to see repeated. But for the last 20 years we've seen Green groups distort data and make claims that don't stand up to scrutiny.

According to a study released by the International Atomic Energy Agency in September 2005, fewer than 50 deaths are directly attributable to radiation releases at Chernobyl, most of them selfless emergency workers who died in the first months after the accident. Furthermore, according to the Washington Post:

Officials said that the continued intense medical monitoring of tens of thousands of people in Ukraine, Russia and Belarus is no longer a smart use of limited resources and is, in fact, contributing to mental health problems among many residents nearly 20 years later. In Belarus and Ukraine, 5 percent to 7 percent of government spending is consumed by benefits and programs for Chernobyl victims. And in the three countries, as many as 7 million people are receiving Chernobyl-related social benefits.

"The monitoring of people with incredibly low doses uses huge amounts of resources and does more psychological harm than good," said Fred Mettler, a professor of radiology at the University of New Mexico who chaired one of three health groups in the study, titled "Chernobyl's Legacy: Health, Environmental and Socio-Economic Impacts."

In other words, folks who have no reason to fear are literally being scared to death.

Back to Kirsch's piece:

Even better technology and sophisticated and redoubled safety measures cannot guarantee against such disasters in the future.

While no one can ever guarantee that there will never be another accident at a nuclear power plant, the Chernobyl comparison is specious. Click here for our fact sheet, which explains the design differences between Russian and Western reactors that make a repeat of Chernobyl impossible.

And finally, nonproliferation:

But the most powerful argument against nuclear power is that, in this increasingly globalized world, America cannot build its economy around nuclear power that it doesn't want to share with other countries. Nuclear power and nuclear weapons require the same materials and employ the same technical skills. Nuclear power specialists in India, Pakistan, Israel, North Korea and Iran proved to be bomb builders as well. If America uses nuclear energy, others will want the same, and that opens the door to nuclear weapons proliferation.

Apparently, Kirsch has never heard of the Global Nuclear Energy Partnership, a program that was announced a few weeks ago by the Bush Administration:

It would achieve its goal by having nations with secure, advanced nuclear capabilities provide fuel services -- fresh fuel and recovery of used fuel --— to other nations who agree to employ nuclear energy for power generation purposes only. The closed fuel cycle model envisioned by this partnership requires development and deployment of technologies that enable recycling and consumption of long-lived radioactive waste.

The Partnership would demonstrate the critical technologies needed to change the way used nuclear fuel is managed -- to build recycling technologies that enhance energy security in a safe and environmentally responsible manner, while simultaneously promoting non-proliferation.

Kirsch also trots out the old saws about industry liability and Price Anderson. Click here for our explanation on the topic. One last thing about Price Anderson: The one time it had to be used, it worked, and it didn't cost taxpayers a dime. For more, go visit NEIL, the folks who actually provide the insurance coverage for the industry.

It's hard not to find all of this a bit bewildering. After all, Kirsch's home, Silicon Valley, engine of so much of America's economic growth, relies entirely on the sort of reliable baseload power generation that nuclear energy provides:

Today, computer and high-tech peripherals are estimated to account for 13 percent of all electricity usage. By 2020, they are expected to account for 25 percent. Silicon Valley's power usage has grown about 5 percent a year -- —fully by one-third since 1994 -- triple California's statewide rate. If a typical home requires one, and a commercial office building five, watts per square foot, a chip manufacturing plant requires 30 to 50, and a server farm 75 to 100. The U.S. Department of Energy, in its energy outlook for 2006, forecasts growth in demand for electricity of 1.5 percent annually through 2030. To satisfy that demand, DOE predicts the United States must increase electricity production by 45 percent -- —the equivalent of adding more than 300 new 1,000-megawatt power plants.

And omitting new nuclear from America's future energy portfolio will mean having to rely even more on coal and natural gas for electrical generation -- a choice that would have desperate consequences for the nation's environment and energy security.

Last September, our CEO gave a speech before Town Hall LA (click here for video), and looked at the hard numbers when it came to nuclear energy's contribution to environmental protection in Kirsch's home, the state of California:

Here in California, replacing the San Onofre and Diablo Canyon nuclear power plants with alternate fossil electricity sources would mean an additional 16.5 million tons of carbon dioxide, by our analysis. That's the equivalent of emissions from one-sixth of all the cars in the state.

These four reactors also helped prevent the emission of more than 9,500 tons of nitrogen oxides. To get the same impact, you would have to pull more than 500,000 cars off the road.

(snip)

[R]eplacing more than 2,000 megawatts of capacity at San Onofre with combined-cycle gas-fired capacity would require construction of four to five new gas-fired plants, the Commission said in its analysis of alternatives. In addition, the new gas-fired plants would require new gas pipeline capacity to bring in the fuel, as well as new transmission lines and new or upgraded substations to carry the electricity to market.

The California PUC'’s environmental report also evaluated renewable energy alternatives to San Onofre. The PUC said that although these technologies "“do not rely on a finite supply of fossil fuel, consume little water and generate either zero or reduced levels of air pollutants and hazardous wastes ... these technologies do cause environmental impacts."”

The PUC concluded that all the renewable alternatives "“have unique technical feasibility limitations. High costs and, in some cases, limited dispatchability, inhibit their market penetration."”

I bring the PUC environmental report to your attention. It evaluates solar thermal, solar photovoltaics, wind, geothermal, hydro, biomass, fuel cells and demand-side management as alternatives to the San Onofre and Diablo Canyon nuclear plants. It notes the attractive features of each technology. But the Commission's environmental report concludes that none of these technologies can realistically replace the 24/7 baseload power currently being met by San Onofre and Diablo Canyon.

Fortunately, not everyone in California has come to the same conclusion Kirsch has about nuclear energy. Silicon Valley notables as dissimilar as Scott McNealy and Stuart Brand have come out publicly in support of new nuclear build, and new supporters like Jared Diamond seem to come on board everyday. Here's hoping Kirsch gives nuclear energy a second look. He might actually like what he finds.

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