Monday, June 30, 2008

Waiting Too Long to Make a Mistake

G8_Leaders_20070607A few bits of news show the nuclear renaissance colliding with the problems besetting the world these days – and demonstrating its value every time. And by value, we mean the jingle in the pocket as well as the zap in your sockets.

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Germany, as you may know, was an early supporter of nuclear energy that changed course, at least partly, because its governing coalitions usually include the Green Party, and doing away with nuclear energy is an article of faith for the Greens. But now, with energy plants having to shut down due to legislation, feet are growing colder:

RWE AG. said delaying a planned nuclear energy phase-out in Germany would help ease pressure on energy prices, adding that it welcomes renewed talks by lawmakers in the country over a possible delay.

Extending nuclear power plant operation in Germany by 25 years to between 50 years and 60 years could yield an additional economic value of 250 billion euros, the company said in a statement.

Well, an energy company, sure. But it’s not the only one talking:

Economy Minister Michael Glos has demanded that nuclear power plants be allowed to operate for more than the current 32 years to halt an increased dependence on power sources outside Germany.

We think it very likely Germany waited too long to make this mistake and will undo it before they make it. The words out of Berlin are increasingly conciliatory.

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Speaking of Germany, they are one of the Group of Eight (or Group of Seven and Russia, depending on what you think of Russia), that informal group of international leaders and policy wonks that gets together every year and then some and draws to their meetings every ragamuffin with a sign and a slogan. The G8 may or may not be responsible for the sins of globalization if sins they be, but it’s work is carefully weighed. Leaving aside the controversies, here’s a bit of news:

Group of Eight leaders were expected to agree to expand the use of civil nuclear power to fight climate change at the upcoming Tokyo summit July 7-9, according to Japanese media Monday.

And a little more:

The draft said: 'recognizing that ensuring safeguards (nuclear nonproliferation), nuclear safety and nuclear security (3S) forms a sound basis for international transparency and confidence in the sustainable development of nuclear power, we agree on a G8 initiative to assist countries in ensuring 3S.'

No word on Germany’s buy-in to this plan. But give them time.

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Okay, there’s the need for new energy, check. There’s the recognition that nuclear can help combat greenhouse gas emission, check check. What else? How about, oh, helping the American economy get back on track?

Shares of DTE Energy Co. rose Monday after the Michigan state Senate passed a bill that is expected to help with financing of the utility's planned nuclear capacity expansion.

Well, all right, that’s a stretch. One swallow doesn’t make a spring. But we’ve gotten lousy with swallows this year and will happily toss out the bread crumbs and popcorn and watch them flock back to the nuclear Capistrano.

Picture of your G8 leaders – last year’s version, anyway. Putin and Blair have ceded power in the interim.

The Wall Street Journal Energy Report

Wall Street JournalIn the unlikely event you've missed it today, The Wall Street Journal has published a special package on Energy and nuclear is the cover girl/boy. WSJ editor Michael Totty has written the lead article, The Case For and Against Nuclear Power. (Janus-like, Totty sees, and provides, both arguments.)

Sidebar materials include a podcast interview with Eileen Claussen, president of the nonpartisan Pew Center on Global Climate Change. Interesting exchange at the 8:44 mark,

Totty: What's your assessment? Will the [nuclear] industry succeed? Or will nuclear power, at least in the U.S., slip in importance over time as other energy sources come up?

Claussen: Well, if you look at the mix of sources that we now have—I think coal is about 50% of electricity generation, nuclear is about 20%—renewables, for all the growth we've seen, particularly in wind, is still in the single digits. So even if we worked really hard to increase the share of renewables, we're still going to need baseload power. And the demand for that power is growing in the United States, not shrinking or staying stable. To meet that, you're going to have to go to either nuclear, coal, with carbon capture and sequestration, or natural gas. And I think, with a carbon price, nuclear will do very well in that. This is going to last for a long time, so I think it [nuclear power] will do well over time. In fact, probably better and better.

Saturday, June 28, 2008

Dan Yergin on The Charlie Rose Show

Credible, dispassionate, informed: Dan Yergin on The Charlie Rose Show, Friday, June 27, 2008.

Dr. Daniel Yergin is the Chairman of Cambridge Energy Research Associates (CERA), a preeminent source of independent analysis and information on the global energy picture. In Friday's appearance on Charlie Rose, Dr. Yergin gave a nearly hour-long interview on the current energy situation.

Dr. Yergin explained the combination of factors that have given us $140/bbl oil. He described the urgency of expanding our use of energy efficiency to help in the short-term. He suggested the most important energy problem our leaders should focus on is natural gas. With so much natural gas used to produce electricity, we are growing dependent on imported natural gas, which suffers from the same pricing and political risks we see in our dependence on imported oil. Our prodigious consumption of natural gas for electricity generation links electricity prices to the vagaries of natural gas, spreading the impact of natural gas price increases well beyond the home heating market and chemical industry.

After laboring in the "Lovins vineyard" with my colleague, David Bradish, I was refreshed by the remarks of an energy professional who was obviously well informed and clearly dispassionate about the facts. Dan Yergin was not selling a point of view or asking the audience to accept certain assumptions he and his acolytes make about the nature of the problem or range of solutions. He simply shared what he knows from studying the problem very deeply and objectively.

If you would like to hear his profile of the global energy situation, look for a rebroadcast of Friday's show on your local PBS station. The show should also be available in the video archive at the Charlie Rose Show web site soon. Two of Dr. Yergin's previous appearances on the show (March 16, 2005 on alternate energy and May 6, 1996 on oil) are already available there.

FULL DISCLOSURE: In pursuit of well informed, objective sources of energy data and analysis, NEI subscribes to CERA's power and natural gas advisory services.

UPDATE at 9:30am, 6/29: Here's the link to the video. It should be showing in the next couple of days. Hat tip to Eric McErlain.

Thursday, June 26, 2008

Amory Lovins and His Nuclear Illusion – Part Five (Nuclear Plant Reliability)

We are now on part five in the continuing series that seriously looks at RMI’s latest nuclear bashing paper. RMI tries extremely hard on pages 21-26 in their paper to show that nuclear plants are unreliable. Sadly for RMI, a widely publicized set of data refutes their claim: capacity factors. A capacity factor is the amount of electricity a power plant actually produces in a period of time divided by the amount of electricity the plant is rated to produce during that same period of time. A high capacity factor implies high reliability.

From RMI, page 24 (pdf):

Though micropower’s unreliability is an unfounded myth, nuclear power’s unreliability is all too real.
In arguing that nuclear plants are unreliable, the RMI paper brings up a Union of Concerned Scientists’ report on long outages, refueling outages, heat waves, the shutdown of seven Japanese reactors due to an earthquake, and the 2003 Northeast Blackout. Other than the Japanese shutdowns, the four issues RMI brings up are all captured by the data in the graph below. Since 1971, U.S. nuclear plants have substantially improved their performance and reliability. RMI’s paper focuses on some unflattering situations that affected selected nuclear plants. As a fleet, though, U.S. nuclear plants have performed at a 90% capacity factor since 2000. RMI’s cherry-picking is showing again. They focus on a few negative events and ignore the outstanding performance of the rest of the fleet.
It is also interesting to note that nuclear plants have the highest capacity factors of any fuel type in the U.S. (source: Ventyx/Global Energy Decisions based on EIA data). Last year, nuclear plant capacity factors averaged almost 92 percent. If that is “unreliable,” as RMI claims, then what IS reliable?
From RMI’s paper, page 24:
Nuclear plants are capital-intensive and run best at constant power levels, so operators go to great pains to avoid technical failures. These nonetheless occur occasionally, due to physical causes that tend to increase with age due to corrosion, fatigue, and other wear and tear.
Actually, the data show the opposite is true. The average age of the operating U.S. nuclear plants is 28. The first graph above shows that the U.S. nuclear plants have improved their performance as they have become older. Not only that, Nine Mile Point 1 and Oyster Creek (nearly 40 years old and the oldest operating reactors in the U.S.) both averaged a capacity factor greater than 90 percent over the past three years.

From RMI’s paper, page 24:
Yet size does matter. Even if all sizes of generators were equally reliable, a single one-million-kilowatt unit would not be as reliable as the sum of a thousand 1-MW units or a million 1-kW units. Rather, a portfolio of many smaller units is inherently more reliable than one large unit—both because it’s unlikely that many units will fail simultaneously...
Inherently? Actually no. Let's do the math. Say one power plant at 1,000 MW is 90 percent reliable. According to RMI's logic, two 500 MW plants at a 90 percent capacity factor are more reliable than the 1,000 MW plant. The probability that these two plants will provide 1,000 MW, however, is not 0.9 (90 percent). It's 0.81. All you do is multiply 0.9 times 0.9. This is called joint probability which means that in order to find the probability of an event with two or more random variables, you multiply each of their probabilities together. So if you have 10 units at 100 MW each, the probability that all ten will be able to provide the 1,000 MW is 0.35. The probability of success continues to diminish as you increase the number of plants. The same conclusion occurs if you change the capacity factor up or down. There is of course much, much more to managing the grid but based on this simplistic statement from RMI, I am curious how they make the math work!

RMI's statement from above comes from Mr. Lovins' book Small is Profitable. I don't know if there's more information that backs up their statement above, because the $60 book is temporarily out of stock on Amazon and the link to buy the book on its own website is broken. But based on my simple calculation, one plant is more reliable than 10, 100 or 1,000 plants that are “equally reliable” providing the same amount of capacity.

That’s it for this post. I only need to show capacity factor data that is objective and traceable to a widely accepted source and calculate some simple probabilities to show that RMI’s claims are spurious. For those new to this debate, here are links to my previous posts for this series: Amory Lovins and His Nuclear Illusion – Intro, Amory Lovins and His Nuclear Illusion – Part One (The Art of Deception), Amory Lovins and His Nuclear Illusion – Part Two (Big Plants vs. Small Plants), Amory Lovins and His Nuclear Illusion – Part Three (Energy Efficiency and “Negawatts”), and Amory Lovins and His Nuclear Illusion – Part Four (Costs of New Nuclear Plants). One more post from me left to go...

China's Nuclear Energy Program Accelerating

According to Caijing magazine, China is considering a revision to its nuclear energy development program: now targeting 5% of total capacity by 2020 instead of the 4% called for in a plan released just last year.

Zhao Xiaoping, deputy director of NDRC’s energy bureau, earlier said China may revise its development plan because “the country is capable and needs to accelerate development of the nuclear power industry.”

NDRC’s 2007 plan gave priority for developing nuclear stations to coastal provinces such as Guangdong, Zhejiang, Shandong and Jiangsu. These new facilities would complement the 11 nuclear power plants now operating in China, all in coastal areas.

But Caijing learned that three nuclear power projects – one each in central China’s Hubei, Hunan and Jiangxi provinces – are now awaiting NDRC approval. Indeed, several regions in central and southwest China – including Sichuan, Chongqing, Hubei, Henan and Jiangxi – had been lobbying the government for permission to launch projects.

Wednesday, June 25, 2008

John McCain: Running From or To Nuclear Energy?

Because most of Washington’s television needs are served by local outlets and Washington is not a battleground for the presidential candidates – all that action’s over in Virginia – we don’t see as many of the presidential ads that many of you have endured. So it struck us as odd to read the following  from the invaluable Factcheck.org about a new energy-focused ad from the McCain campaign:

Yet the imagery in the ad of solar technology and windmills might lead viewers to draw some false conclusions about McCain's energy policy. McCain has been less than enthusiastic about the development of wind and solar energy. The Politico points out that McCain's favored source of alternative energy, nuclear reactors, did not make the cut for visuals – there are no shots of a cooling tower in the ad.

Here’s the ad in question:

And here’s an earlier ad in which does include nuclear in its litany, though a bit separate from its renewable cousins:

We’re not sure McCain can really downplay his interest in nuclear energy – and granted, a 30-second spot is not the place to expect anything resembling even a complete thought – so we’re inclined to give the candidate a pass on this one.

We also know that cooling stacks, as used in the older ad, still carry, however unfairly, a somewhat sinister charge due to the iconography they picked up years ago. By contrast, the dragonfly windmill in both ads is probably the closest to an aesthetically pleasing object the energy industries has ever devised. So, okay.

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McCain’s message to the wind and solar folks has been fairly consistent, though it could be perceived as marking him as less than a  best friend:

I'm not one who believes that we need to subsidize things. The wind industry is doing fine, the solar industry is doing fine. In the '70s, we gave too many subsidies and too much help, and we had substandard products sold to the American people, which then made them disenchanted with solar for a long time.

McCain has not quite squared the circle on the pluses and minuses of subsidies. Moving industry in the direction you want it to go often involves subsidies simply because, with many public policy ideas, there is no immediately profitable way to go forward. If the government doesn’t splash out some cash, industry can become quite mulish about moving in a desired direction. Since the U.S. doesn’t have a controlled economy, subsidies become a useful tool.

We’re not sure we agree with the notion that McCain is unenthusiastic about wind and solar, as the writer above says, because the argument is that McCain is only interested in what he would have the government subsidize. That needn’t be true.

But McCain may be painting himself into two corners simultaneously. He wants to put forward the winning idea that government spending is mostly wasteful but still has to “waste” some money to buy America a measure of energy independence. Maintaining a consistent governing philosophy is tough under any circumstances, but McCain’s mix of ideas about energy are starting to suffer unwelcome press coverage – the whole piece linked here is very critical of McCain’s energy focused ads.

All things considered, we’re not sure that the wind and solar energy folks are delighted to see McCain embrace them for purposes of advertising – though they are likely fully delighted that windmills and solar panels are being shown in a completely positive way.

As for the cooling towers – well, we’ll keep ours eyes open. We expect Barack Obama to be completely into those dragonflies, though his embrace of nuclear is, in the best Democratic manner, more “nuanced'” than McCain’s if not quite so central to his policy.

Governor Corzine on Nuclear Power in NJ

Jon Corzine [D], current Governor of New Jersey and former U.S. Senator, appeared earlier today on CNN's American Morning. The interviewer was John Roberts (no, not that one) and the transcript/video can be seen here. The pull quote:

Roberts: On that subject of nuclear energy, would you be prepared to see more nuclear plants built in the garden state?

Corzine: Well, we actually have an energy master plan where we're working on the safety and security and the storage of waste. If we can come to positive conclusion on that, I absolutely would. We already get about 50% of our energy from nuclear power here in the state. We have four plants. They're aging and we're going to have to think about whether we want to renew that. I'm not arguing that's the only step. We need to be in wind, solar, biofuel, all of those other areas. And Senator Obama is talking about spending $150 billion in the next ten years in those kind of production activities coming from a cap and trade program. [It's a] very strong program. [It] will work and get us off this addiction on oil.

The History Channel's Mega Disasters "Glow Train Catastrophe"

The History Channel's "Mega Disasters" series ran an episode last night showing the "potential disaster" of trains transporting used nuclear fuel in dry casks. Dr. Buzz0 (aka Steve Packard) over at Depleted Cranium saw the episode and thought it was "just sickening." Here's what he had to say:

[The] theoretical “Mega Disaster” was not a nuclear weapon being used on a civilian population, but rather the idea of a train carrying nuclear waste somehow derailing or colliding with another train and thus causing a massive disaster, possibly wiping out Las Vegas or some other city, while en route to the Yucca Mountain Federal Waste Repository.

The show starts off with one of the worst examples of bad science I’ve seen in a long time. It notes that the trains carrying the nuclear material have been dubbed “glow trains” by anti-nuclear groups. Of course, we have dealt with the stupid “glow” issue before, but it gets worse. After this mention, the show then uses the term “glow train” on several occasions, in statements such as “but what if a glow train were to derail…” Yeah.. clearly we can see which side is getting the say here.

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The show basically seems to consist of a lot of information about rail disasters, some of which have been quite bad in recent years. It then seems to equate these to nuclear waste as if there is some kind of connection to nuclear materials being equally likely to be in such an incident, but capable of increasing the magnitude to catastrophic levels! There are several interviews with emergency personnel (obviously the clueless ones) who state how they are not prepared to deal with a massive nuclear event and how difficult and destructive it would be.

The logic here is so flawed it is absurd. Yes, there are rail disasters and they do carry the potential for mass devastation. A train filled with LPG, toxic chemicals, explosives or other material carry the potential to devastate a large area in a mishap. Yet, these trains are allowed to travel the routes of the United States and other countries with little attention. Accidents can happen and they do. People have died. Communities have been severely damaged.

Yet nuclear materials like spent fuel poses no such risk. If a train were to derail or crash, the waste cask would simply need to be picked up and put back on a new train car or flatbed truck. Spent fuel is a high density ceramic. It cannot burn, explode or evaporate. It stays in one place and is chemically and physically inert. The casks which contain the material have been tested to extremes. In my opinion, it’s really overkill and unnecessary to go to the extreme measures taken, but they are definitely very very safe. And what if one were to be broken open? Well the fuel rods would fall out and the DOE would have to come and pick them up and put them in a new cask. At worst, they might fragment into small pebble-size pieces, which would not be too difficult to pick up.

The only real danger to the locals would be the physical damage from the train - the same as any other train. The cask of nuclear waste could indeed be deadly… if it falls on you. As far as the radiological danger, most of this stuff will be aged enough that the most radioactive fission byproducts will be long gone. The radiological dangers from this material would be limited to those who are in very close contact with the stuff. Therefore… don’t eat it, as that could be dangerous. Dust produced would be extremely minimal and dispersal would be minute.

Well done! Here's a video that shows how impenetrable these casks are.



Here's some more info on NEI's website on the safe transportation of used fuel. If you feel in the mood to be irritated and annoyed, the "glow train" episode is scheduled to air again on Tuesday, July 8.

Tuesday, June 24, 2008

Obama's Energy Address in Las Vegas

We expected that nuclear energy policy would be in the mix during this presidential campaign, we just didn't expect it to be so soon. From Senator Obama's just-concluded energy address to 100 invited guests at Springs Preserve in Las Vegas, NV:

Meanwhile, the oil companies already own drilling rights to 68 million acres of federal lands, onshore and offshore, that they haven’t touched. 68 million acres that have the potential to nearly double America’s total oil production, and John McCain wants to give them more. Well that might make sense in Washington, but it doesn’t make sense for America. In fact, it makes about as much sense as his proposal to build 45 new nuclear reactors without a plan to store the waste some place other than right here at Yucca Mountain. Folks, these are not serious energy policies. They are not new energy policies. And they are certainly not the kind of energy policies that will give families the relief they need or our country the oil independence we must have.
Update: The full text of the speech is now available here.

CNBC Clip on Nuclear Energy

David Kreutzer from the Heritage Foundation and Michael Mariotte from NIRS duked it out earlier today on CNBC. Check it out.
Hat tip to McErlain for the link.

What I Did Missed on Summer Vacation

Go away for a few days to a wireless-less island and nuclear goes boffo in the general interest press. (Clearly this is a sign that I should go on vacation more often.)

Stephen Dubner, author of Freakonomics, looks at the possibility of nuclear power providing the electricity for plug-in hybrids. (Not the first time this week we've heard that idea.)...In its cover story package, The Future of Energy, The Economist identifies nuclear's place at the table....Investor's Business Daily puts the DOE's loan guarantees in context...The New York Times Magazine profiles Duke Power CEO Jim Rogers...The New York Post publishes an Op-Ed by NEI president and CEO Skip Bowman.

Anything else I missed?

Monday, June 23, 2008

Friday, June 20, 2008

Dishwasher or No Dishwasher? That Is the Question.

Dishwasher Honestly, we like the folks in the environmental movement a lot, even if their more zealous activities can make some of them easy targets for fun and snark. Maybe it's that environmentalism has a high appeal to younger folk who get their first taste of activism and run wild with it. Maybe it's that the green sands are so shifty it can be hard to maintain ideological purity without tipping into a sandals-and-earnestness trap. Nothing like being hip and a bore at the same time - you can find yourself alienating all your friends at once.

But fair is fair, and we think The New York Times is being signally unfair when it weighs in on green overload:

Two years after “An Inconvenient Truth” helped unleash a new tide of environmental activism, green noise pulses through the collective consciousness from all directions. The news media issues dire reports about disappearing polar bears; Web sites feature Brad Pitt arriving at a movie premiere in his hydrogen-powered BMW; bookstore shelves are piled high with titles like “50 Simple Things You Can Do to Save the Earth”; shops carry hemp-enriched shampoo and 100-percent organic cotton tampons.

Probably could have done without some of those details, but the idea is that while green may seem the new black, it has rapidly lost cache in a media- and marketing-driven orgy of opportunism.

“What we’ve been seeing in focus groups is a real green backlash,” Ms. [Suzanne C.] Shelton said. Over the last six months, she added, when the agency screened environmentally themed advertisements, “we see over half the room roll their eyes: ‘Not another green message.’ ”

Shelton runs an ad agency, though the article seems loath to point out that it is the marketers and advertisers of the world that are most to blame for this state of affairs.

Now, we should note that the NYT, and especially writer Alex Williams, who put quill to paper for this one, delight in manufacturing trendless trend pieces. Take this, for example:

“I would be a much more productive member of society if I didn’t have to worry about, ‘Should I wash dishes by hand or run the dishwasher?’ ” said Erik Michaels-Ober, a 24-year-old software engineer in San Francisco. “There are all sorts of conflicting stories about that.”

When you get to something like that, you know you're in the thickets with a reporter straining hard enough to develop mental hemorrhoids. (No offense to Mr. Michaels-Ober, who got roped into this, but really - the photo indicates he's a single guy, so what's he doing dishes-wise, feeding the Norwegian army?)

It may sound as though we're rapping the folks here who are trying to wrap their minds around environment issues, but really, the rap is against the Times. This articles takes as its template the argument often used against environmental advocacy - that earnestness shades into silliness when it's taken beyond practical limits. (You could call it the PETA effect.) The net result is to downgrade environmental arguments as crackpot. The timing of this article, with much discussion over offshore drilling now occurring, feels highly suspect, a way to clear out rhetorical deadwood en route to a highly contentious public policy change.

That may well be oversensitivity, but we found our antennae twitching uncomfortably on this one. Not that we'll be taking our most devoted green friend out for a dinner of rocks and twigs, but fair is fair.

Drawing is of a dishwasher. If Mr. Michaels-Ober has a blog, maybe we can help him figure out his dish washing dilemma.

The Heritage Foundation on The Costs of Energy

heritagelogo

Our friends over at the Heritage Foundation have been developing quite an interesting portfolio of papers about nuclear energy over the last few months. Their latest is called Critics of Nuclear Power's Costs Miss the Point and addresses the relative costs of nuclear power and its pals in the renewable Club of Heroes, solar and wind.

Writers Jack Spencer and Nick Loris make points we've made here several times over but do a good job of summarizing why it might be that nuclear energy, despite up-front costs that give pause, remains the energy source to favor for emission-free electricity generation (almost sounds like a sale pitch). Here's what they say about some of those up-front costs:

Today, it is very expensive to produce nuclear-qualified components and materials because steep overhead costs are carried by only a few products. Additional production will allow these costs to be spread, thus lowering costs overall. Further savings should be achieved by applying lessons learned from initial construction projects. Because nuclear plants could have an operating life of 80 years, the benefit could be well worth the cost.

John McCain mentioned this the other day in his energy speech and here Spencer and Loris make exactly the point we did: that the potential for industry development around nuclear componentry is enormous.

But what about wind?

Despite efforts to portray these sources as viable alternatives to nuclear power, they have their own problems. They are expensive, intermittent, and inappropriate for broad swaths of the United States. For example, wind turbines are virtually useless in the Southeast, where there is little wind. Even environmental activists are beginning to oppose wind projects because they kill birds, despoil landscapes, and ruin scenic views.

Er, how about solar, guys?

Solar, Inc., the world's largest solar company, recently told investors that its largest market, the European Union, may ban its solar panels because they contain toxic cadmium telluride. To replace the cadmium model with a silicon-based model would quadruple the production costs.

We expect Solar, Inc., will find a way around this, but you get the picture. We're not sure we fully agree with the "all the alternative energy sources have problems, so a pox on all houses" approach here; it's probably fairer to say that all sources of electricity generation present challenges, from construction right up to operation, and it's up to industry, with a nudge from regulators, government and activists, to find ways to solve those challenges.

Nuclear gets the nod in a lot of corners because, in broad terms, it's well understood and has proved its worth in the long term. It's also mature enough to produce electricity less expensively than its cousins.

We cannot nod to our friends over at Heritage without dinging them for a bit of partisan zeal:

Government has no business making any decisions about nuclear power based on costs. Its role should be to provide adequate oversight and fulfill its legal obligations on nuclear waste. It is primarily private companies that produce America's power, and consumers pay for it. Their interactions in the marketplace should determine the best way to meet America's energy needs.

We'd love to believe that government has such a small role to play here; however, when the public good intersects with industrial prerogative, the insertion of government into the mix can be a net positive, welcomed as a counterbalance to the impulse to do what is most immediately profitable - which is where corporations incline, after all. Heritage always seems to assume that if you step one pace away from an unfettered marketplace, Hugo Chavez will be having a ticker tape parade on Fifth Avenue.

Very slight ding, though, on a very good piece. Take a read.

Thursday, June 19, 2008

A Response from Amory Lovins on My First Post

It looks like we now have a debate over at Gristmill. Check it out. I'll be responding there shortly.

Amory Lovins and His Nuclear Illusion – Part Four (Costs of New Nuclear Plants)

We’re now on our third week of posts seriously looking at Amory Lovins’ and the Rocky Mountain Institute’s latest paper that bashes nuclear energy. Today’s post deals with the paper’s claim that nuclear energy’s “true competitors” (according to RMI) are cheaper and therefore “produce” more “climate solution” than nuclear. I will show that RMI relies on weak sources, no sources, and cherry-picked data for their cost assumptions to exaggerate their claims.

From page 19 in RMI’s paper (pdf):

Every dollar spent on new nuclear power produces 1.4-11+ times less climate solution than spending the same dollar on its cheaper competitors. For a power source merely to emit no carbon isn’t good enough; it must also produce the least carbon per dollar…
To come up with the above statement, RMI’s paper takes the cost assumptions for each technology from their graph below, inverts them to get kWh per dollar, finds each technology’s “CO2 emissions displaced relative to coal,” multiplies the kWh per dollar with the “CO2 emissions displaced relative to coal,” and then compares each technology’s results to nuclear to come up with the above statement. If you understood the first time what I just wrote in the previous sentence, then you’re a genius. It took quite awhile for me to make sense of this, but whatever. My post deals with the cost assumptions in the graph below.Initial Thoughts

I’ve gone through RMI’s Excel spreadsheet, methodology and 52-page paper and what they have basically done is picked and chosen many different data points from many different sources to compile the above graph. The primary cost assumptions are found in rows 20-38 in the worksheet titled “Climate Data” from RMI’s Excel spreadsheet. When digging into the numbers, I found the worksheet was extremely hard to follow, it doesn’t explain certain calculations, and calculates practically everything differently. It’s one big mess in my opinion.

One of the problems with the way RMI put the worksheet together is that the data comes from numerous sources published in different years. RMI compares data from a 2003 MIT study, a 2007 MIT study, a 2006 one-page WADE source, and a 2005 “personal communications” data exchange (will explain below) just to name a few. Picking and choosing certain data points from many different sources just screams the word “cherry-picking.” As I’ll show below, that’s exactly what they did.

Cogeneration Cost Data

The RMI worksheet assumes that the delivered costs (aka levelized costs) of “combined-cycle industrial” and “building-scale” cogeneration plants (aka combined heat and power plants - CHP) are 5.47-5.91 cents per kWh. One component (O&M) of RMI’s levelized costs comes from WADE’s one-pager on gas turbines. What’s interesting is that the WADE one-pager provides a link to the International Energy Agency’s 2008 Combined Heat and Power paper (pdf). According to page 24 in the IEA report, the delivered electricity costs for an “Accelerated CHP” plant are above 10 cents/kWh, nearly twice as high as RMI’s costs. Why didn’t RMI use this data from the IEA paper considering IEA is a more reliable, objective source than themselves or WADE? RMI uses IEA data for one of the cost components of nuclear (O&M). But apparently IEA data on co-gen plants are not good enough for RMI’s comparisons. Looks like cherry-picking to me.

Moving on. The RMI worksheet found that “Recovered-heat industrial cogen” plants are the cheapest power plants in their dataset. I went through a maze trying to find the capital cost assumptions for this type of power plant. In RMI’s “Climate Data” worksheet, the source of the capital costs for this plant was a paper titled “Mighty Mice” (pdf) that Amory Lovins submitted to the Nuclear Engineering International magazine. I found no such mention of the capital costs on “Recovered heat industrial cogen” plants in this paper. Instead, a link “for documentation” in the section titled Comparative Cost sent me to RMI’s page on energy efficiency. This page had nothing to do with the capital costs of “Recovered heat industrial cogen” plants. I went to RMI’s methodology next.

According to the third page of RMI’s methodology (pdf), I can supposedly find the “cost breakdown” of “Recovered heat industrial cogen” plants in a previous RMI document (pdf). It looks like the breakdown is on page 22 in the paragraph on Cogeneration. All the data in this paragraph is based on “personal communications” with Tom Casten, Chairman and CEO of Primary Energy. No capital costs were mentioned in the paragraph, instead, only an “all-in electricity price” was given. To me, relying on “personal communications” from 2005 for cost data is just plain weak. Especially since it is proprietary and there’s no way for me to verify it.

So basically the spreadsheet and methodology pointed me to two different documents which provided no information on the capital costs for a “Recovered heat industrial cogen” plant. Not only that, the source of some of the data is a CEO. Apparently, RMI thinks it’s appropriate to use the info from the CEO of Primary Energy, but when NEI’s CEO says nuclear plants are competitive in a climate-constrained world, Amory Lovins complains that it’s false (as discussed on page 5 in RMI’s paper (pdf)). One word again comes to mind: cherry-picking.

Energy Efficiency Cost Data

RMI assumes, without references to any sources, that efficiency costs 1-4 cents/kWh. How can RMI claim these numbers without any sources?

Here’s what I’ve found when researching efficiency costs. According to the EIA’s 2006 Annual Energy Review, the costs of electric efficiency from utilities have remained between 3-4 cents/kWh since 1996 (adjusting to 2007 dollars, see graph below). The energy savings have also remained flat since 1996 as well. If utilities were to save more with efficiency, I could easily argue that it will cost much more than 3-4 cents/kWh.RMI’s claim that nuclear’s “cheaper competitors” produce “1.4-11+ more climate solution” is grossly exaggerated. Their “11+” number is based on the assumed cost of efficiency of one cent/kWh. Yet, according to EIA data, one cent/kWh is too low. I find it stunning that RMI advocates so much for efficiency, yet they provide no sources on the actual costs! I am not going to get into the RMI’s cost assumptions for coal, combined cycle gas, nuclear and wind because, as I’ll show below, RMI’s assumptions are irrelevant.

So do nuclear plants provide “more climate solution” per dollar than what RMI claims?

Yes they do, at least according to several electric utilities that are planning to build them.

Over the past several years, the capital costs of building different types of power plants have increased substantially. This trend is documented by Cambridge Energy Research Associate’s Power Capital Costs Index. Here’s their press release:
The IHS CERA PCCI – which tracks the costs of building coal, gas, wind and nuclear power plants indexed to the year 2000 – is a proprietary measure of project cost inflation similar in concept to the Consumer Price Index (CPI). The IHS CERA PCCI now registers 231 index points, indicating a power plant that cost $1 billion in 2000 would, on average, cost $2.31 billion today.



“The fundamentals that have driven costs upward for the past eight years—supply constraints, increasing wages and rising materials costs—remain in place and will continue during 2008“ [said Candida Scott].
The RMI paper only discusses CERA’s cost increases for new nuclear plants (from pages 7-10) and fails to note that the “supply constraints, increasing wages and rising materials costs” are affecting all types of power plants, including RMI’s co-generation plants. This trend is important to note because cost estimates older than a year ago are outdated. This further invalidates RMI’s cost estimates that are based on data from older studies.

What are the latest new nuclear plant cost estimates then?

I can't give you exact new plant cost estimates because they vary among different sources. I can, however, provide the overall findings from several utilities who have made their own cost estimates.

In October 2007, Florida Power and Light submitted a Petition to Determine Need for Turkey Point Nuclear Units 6 and 7 (pdf) to Florida's Public Service Commission. Here's what page 11 states:
FPL’s analysis shows that for all of the scenarios evaluated (eight of nine), the addition of new nuclear capacity is economically superior versus the corresponding addition of new [combined cycle] units required to provide the same power output, yielding large direct economic benefits to customers as well as effectively addressing the criteria of section 403.519(4)(b). In fact, in the only scenario in which nuclear is not clearly superior, the natural gas prices are significantly lower than they are today and there are zero future economic compliance costs for CO2 emissions. Of all the scenarios evaluated, FPL believes these two to be the most unlikely. Moreover, even in these two unlikely scenarios, the results of the analysis show nuclear to be competitive or only slightly disadvantaged economically, while retaining the non-quantified advantages of fuel diversity, fuel supply reliability, and energy independence. Based on all the information available today, it is clearly desirable to take the steps and make the expenditures necessary to retain the option of new nuclear capacity coming on line in 2018.
This is a pretty significant statement for FPL to find that a new nuclear plant is “economically superior” considering they are the largest owner of wind capacity in the U.S. and 42% of their generation comes from “state-of-the-art” combined-cycle gas plants.

What’s hilarious is that the RMI paper (on pages 6 and 7) used FPL’s high cost estimates to imply that nuclear plants are becoming even more uneconomical. Yet they neglected to mention FPL’s key findings on page 11 as well as the whole point of the filing. Here’s FPL’s page 2:
While FPL continues to advance reduced electricity usage and load management techniques through industry-leading conservation efforts and demand side management (“DSM”) programs, and actively cultivates and pursues the development of additional renewable generating capacity within the state, by themselves these efforts are not enough. FPL must also at times construct large, baseload capacity additions if the Company is to continue “keeping the lights on.” The proposed Project is intended to help meet FPL’s growing need for additional baseload capacity, which is the essential foundation of any utility’s supply portfolio, because these plants run year-round to provide the continuous supply of electricity that customers require. The Project also will enhance the reliability of FPL’s system by reducing reliance on fossil fuels and diversifying the resource mix.
Failure to note these statements is another clear example of RMI’s cherry-picking. Here’s what Progress Energy Florida had to say in their Petition to Florida’s PSC (pdf) back in March 2008 for two new nuclear units (page 4):
PEF made its determination that Levy Units 1 and 2 were needed and the most cost-effective source of power to customers after fully accounting for the express considerations for nuclear power plant need determinations that the Florida Legislature set forth. Levy Units 1 and 2 will meet a reliability need in 2016 and beyond, while capturing cost-saving efficiencies and economies of scale from the successive construction of two nuclear power plants. Levy Units 1 and 2 will help the Company achieve greater fuel diversity and will enhance fuel supply reliability and security. The Levy units will avoid 864 million tons of carbon dioxide (“COz”), 1.4 million tons of NOx, 5.8 million tons of SO*, and 28,800 pounds of mercury over a sixty-year time frame and will, accordingly, position the Company to better respond to existing fossil fuel environmental regulations and future greenhouse gas (“GHG) regulations.
And here is SCE&G’s application to the South Carolina PSC (pdf, docketed in May 2008) to build two new nuclear units at its Summer nuclear plant station (page 6):
SCE&G’s total net reliable generation capacity, including its two-thirds share of the output of the VCSNS Unit No. 1, is 5,687 MW, compared to a 2007 peak demand of 4,998 MW. The Company’s peak demand continues to increase and is presently forecasted to be 5,791 MW by 2016 and 6,133 MW by 2019. SCE&G can efficiently meet as much as 209 MW of this increased demand through conservation, load-shifting, off-system purchases, renewable energy resources or through the installation of gas-fired peaking units. However, without the additional base load capacity represented by the proposed Facilities, SCE&G will not be able to meet the increasing need for efficient base load power in its electric service territory and assure reliable, reasonably priced electric supply to its customers and the State of South Carolina.
At least three utilities tasked with providing reliable power to their customers contradict RMI’s findings on nuclear plant costs. I’m sure the companies planning to build new nuclear plants in this list would also agree with the statements made by FPL, Progress and SCE&G.

Conclusion

The Energy Tribune sums it up best:
Lovins has a number of critics, and among the most prominent is Paul Joskow, a professor at the Massachusetts Institute of Technology. “My rule of thumb,” Joskow wrote me in an e-mail, “is to double his [non-nuclear] cost estimate and divide his energy saving estimate in half to get something closer to reality.”
Pretty much.

Here are links to my previous posts for this series: Amory Lovins and His Nuclear Illusion – Intro, Amory Lovins and His Nuclear Illusion – Part One (The Art of Deception), Amory Lovins and His Nuclear Illusion – Part Two (Big Plants vs. Small Plants), and Amory Lovins and His Nuclear Illusion – Part Three (Energy Efficiency and “Negawatts”). I have two more posts left to publish – one on nuclear and grid reliability (also incorporating thoughts on decentralization) and then my overall conclusion of RMI’s paper. Stay tuned.

Wednesday, June 18, 2008

GM's Plug-in Plugging Into the Grid

VoltObligatory hat tip to NEI Notes reader Scott for pointing us to this Seattle Times story about GM's plans for its plug-in hybrid vehicle, the Chevy Volt.

Scheduled to launch in 2010, the Volt will run up to 40 miles on a single charge. That 40 mile threshold is key, as, according to GM, 78% of U.S. commuters drive 40 miles or less daily.

How would a fleet of electric cars impact the pump and the grid? (Here's where it gets really interesting.)

Cambridge Energy Research Associates (CERA), a prominent Boston consultancy, estimates that if the entire U.S. vehicle fleet suddenly became electric, gas consumption would drop 70 percent, and electric-power consumption would jump about 17 percent.

"It's not that big a hit for the electric-power industry," said CERA consultant Patricia DiOrio.

What electricity source could respond to that demand? General Motors vice chairman and head of product development, Robert Lutz, has an answer,
The only real option is nuclear energy.

John McCain’s Energy Speech

mccain2 Here’s the whole transcript. You don’t have to filter it through our observations. As you might expect, McCain addressed the issue du jour, high gas prices.

People are hurting, small farmers, truckers, and taxi drivers unable to cover their costs, small business owners struggling to meet payroll, the cost of living rising and the value of paychecks falling. All of this, in large part, because the price of oil is too high, and the supply of oil too uncertain. These citizens believe their government has a duty to finally assure the energy security of this country, and they are right.

As you might expect from a very political speech, McCain has to both answer to and challenge industries and the electorate in order to gain support for a change in public policy. Sometimes, that can lead to too many circles getting squared, but we'll put aside the partisan aspects - since the hot air of political discussion could displace all other energy sources with enough left over to power a new sun - and focus on a few issues.

Here’s the paragraph on nuclear energy:

As for nuclear energy -- a proven energy source that requires zero emissions -- we haven't built a new reactor in 31 years. In Europe and elsewhere, they have been expanding their use of nuclear energy. But we've waited so long that we've lost our domestic capability to even build these power plants. Nuclear power is among the surest ways to gain a clean, abundant, and stable energy supply, as other nations understand. One nation today has plans to build almost 50 new reactors by 2020. Another country plans to build 26 major nuclear stations. A third nation plans to build enough nuclear plants to meet one quarter of all the electricity needs of its people -- a population of more than a billion people. Those three countries are China, Russia, and India. And if they have the vision to set and carry out great goals in energy policy, then why don't we?

This popped out:

But we've waited so long that we've lost our domestic capability to even build these power plants.

I think he means some of the components rather than the full plant, which is true enough. But depending on the ambitiousness of the program, nothing stops a revival of the components industry in this country – it could have the salient effects of revitalizing the steel industry, at least to some extent, and creating new industries around new nuclear technologies. As we’ve said here often, the nuclear renaissance implies a strong economic ripple around it, both in associated industries and in communities housing those industries and the plants. But, hey, it’s a sentence, not carved in stone and not in the least problematic.

We expect details on this will emerge in the next week - McCain's making a lot of energy speeches right now - so more on this later.

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Naturally, the speech is a mix of the appealing and appalling. Where you stand on various energy issues, on the partisan arguments advanced and on the sliding scale of environmental stewardship vs. industrial prerogative will determine how you react to it. So far, the fiercest arguments revolve around these few lines of the speech:

We have proven oil reserves of at least 21 billion barrels in the United States. But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restrictions and to put our own reserves to use. 

To us, this seems a non-starter due to having to get a Democratic Congress to agree to it. As President Bush’s term winds down, the Dems are far less likely to entertain his wishes. Bush introduced  legislation today that mirrors McCain’s proposal - see below. The only hope is that Republicans can raise enough of a ruckus – Fox News has been supporting it on every show of theirs I’ve seen – to get it to a vote.

The proposal itself, however, falls seriously foul of environmentalists' concerns, though the areas of the country that would embrace it – we’d guess the gulf coast – would find those concerns easy to override. (Florida and the east and west coasts, though, not so much.)

However you slice it, the proposal is worth discussion and you may be sure there will be a lot of it. But if the Democrats move on it, we’ll be genuinely surprised.

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Here’s the Sierra Club on the drilling idea – guess where it falls?

And here’s Fox’s Neil Cavuto – er, guess where he falls?

I have to give Cavuto credit, though; he really pulls out the big guns:

The product of the greatest generation...all too quickly, all too sadly leaving us now. I hope we don't forget them now. Or their resolve then. When they fought a Depression and a World War at the same time.

And how does this relate to offshore drilling? Read the whole thing to find out, then come back here and memorize these lines for future use. You can use them to cow almost anyone about anything.

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Fox also has the story of Bush’s proposal.

Here’s Bush:

For many Americans, there is no more pressing concern than the price of gasoline. Truckers and farmers, small-business owners have been hit especially hard. Every American who drives to work, purchases food or ships a product has felt the effect, and families across the country are looking to Washington for a response.

Sound familiar? It sounds like McCain's lines above.

Here’s House Speaker Nancy Pelosi:

The president's proposal sounds like another page from the administration's energy policy that was literally written by the oil industry: give away more public resources to the very same oil companies that are sitting on 68 million acres of federal lands they've already leased.

There’s the poles of the debate right there.

Photo of John McCain. We've noted the pointing predilections of politicians before, but here's a rare sighting of a thumb point. And don't worry, Obama supporters - we'll scrounge up a photo of Barack Obama with a flag background, too. It's going to be, as always, a long campaign.

Tuesday, June 17, 2008

U.S. Senate Candidates on Energy

Mark UdallBob SchafferThe Denver Post today has an Energy Q&A with Senate candidates, Bob Schaffer (R) and Mark Udall (D). Good news for the nuclear industry: both support its expansion.

Do you support the expansion of nuclear energy?

Schaffer: Yes. Bob Schaffer supports safe and environmentally responsible expansion of nuclear energy. Nuclear energy is cost-effective, efficient and just one plant can produce a great deal of energy. France, for example, depends on nuclear for 75% of its energy. Nuclear can and should be part of America's strategy to achieve energy independence.

Udall: Yes. Given our nation's energy crisis, its effects on our national security, and the threat of global climate change, I think nuclear power has to be "on the table" in the mix of power sources we look to for the 21st Century.
Schaffer and Udall are running for the seat vacated by Wayne Allard (R). The RealClearPolitics average currently has Udall up by 8.3%.

McCain on Cap-and-Trade

mccain Senator John McCain, in response to a question, made a curious comment about cap-and-trade yesterday:

Sure. I believe in the cap-and-trade system, as you know. I would not at this time make those - impose a mandatory cap at this time. But I do believe that we have to establish targets for reductions of greenhouse gas emissions over time, and I think those can be met.

We guess his idea is to get the EPA up to speed on administration and an infrastructure in place for auctions (if there are auctions – and assuming cap-and-trade eventually makes it through Congress – both McCain and Obama favor it), but it seems peculiar not to have the initial caps and a schedule for them in place when the program is ready to go. Otherwise, no market for carbon credits is created.

We’ve noticed McCain’s penchant for comments so terse there may be nothing at all or a universe of detail behind them. It’s not a bad politician trick, and McCain may be trying to signal industry not to worry so much about cap-and-trade while still supporting it in concept – and it makes sense that he should support it, since he drafted an early version of what later became Lieberman-Warner.

Presidential politics, of course, is very different than representing Arizona (or Illinois, in Obama’s case), so positions that make sense in a micro way can make less sense in a macro way. Industry tends to be a Republican go-to for funding, so it seems natural McCain might feint that way, but the power generation industry seems reconciled to a cap-and-trade regime. It’s a bit of a mystery. Is McCain stepping back a little or did he just get too terse for comfort?

McCain’s giving a major speech on energy issues today that should be quite friendly to nuclear energy. More on that later…

How Much Is that Pony in the Window?

The purchase of a major asset, whether a car or a new power plant, frequently involves a trade off between the purchase price and operating costs. A column by Joseph B. White published in The Wall Street Journal's Eyes on the Road column on June 16, 2008 titled, "Still Waiting for Hybrids to be the Smartest Buy", updates us on the trade-off between the higher purchase price and lower fuel costs of hybrid cars like the Toyota Prius.

White shows that, even with gasoline at $4 per gallon, a typical consumer would have to drive the hybrid vehicle for more than seven years to begin to realize net savings compared to the non-hybrid alternative. Said differently, if the consumer expects to keep the vehicle for more than seven years, purchasing the hybrid could make sense economically. Interestingly, the article also mentions some of the non-economic reasons buyers offer to explain their willingness to pay a premium for a hybrid. Among them are a desire to be "greener" and gain access to commuter lanes reserved for high occupancy vehicles and hybrid cars.

Similarly, electricity suppliers are looking at the trade off between initial construction costs and fuel costs for the next generation of power plants now under consideration. While recent press reports (typical is an article in the June 11 Chattanooga Times Free Press) often highlight the cost of constructing new nuclear power plants (i.e., the initial purchase price), they seldom mention the lower, and by comparison more stable, cost of nuclear fuel (part of the operating costs).

These articles offer opportunities for eye-catching headlines, but there is much more to the story. For the consumer, the real issue is not what the initial purchase price will be, but what will be the "cost of ownership", i.e., the cost of the electricity produced by the new power plant. Our analyses and our review of outside studies indicate that the price of electricity produced by new nuclear power plants will be very competitive when they enter the market in 2016 and beyond.

Finally, as was mentioned by hybrid owners quoted in the Wall Street Journal article, there are important non-economic reasons to consider. Chief among them is the importance of maintaining diversity in our energy supply, helping to keep our electric system among the most reliable in the world. NEI has long maintained that the nation will need to tap all of the available options to meet its electricity needs, including efficiency and conservation, renewables, clean coal, and gas.

Later this week, the NEI Blog will present additional information on the cost of new nuclear power plants. Stay tuned.

UPDATE at 2:45pm, 6/17/08
A tip of the hat to our friend and former co-worker Eric McErlain who forwarded a link to an interesting mention of plug-in hybrid electric vehicles (PHEVs) in Nashville, Tennessee this week. Thanks, Eric.

Monday, June 16, 2008

Where the Hot Wind Blows: Some Odder Ends

Archie The Guardian has an interesting article about the harder look being taken at microgeneration:

British buildings equipped with solar, wind and other micro power equipment could generate as much electricity in a year as five nuclear power stations, a government-backed industry report showed today.

Commissioned by the Department for Business, Energy and Regulatory Reform (DBERR), the report says that if government chose to be as ambitious as some other countries, a combination of loans, grants and incentives could lead to nearly 10m microgeneration systems being installed by 2020.

Apparently, Germany is investing the euros necessary to jump start the industry, but Germany is also roaring along economically and most European countries are not. The upfront costs of microgeneration are gasp-inducing and fall on builders and owners retrofitting their houses.

Other possible incentives include 50% grants to help people meet the high initial cost of equipment and installation. If the government subsidised 50% of the cost of the some of the technologies, Britain would save 14m tonnes of CO2 a year, or 3% of all emissions for a cost rising to £2.2bn a year by 2030.

Frankly, we think making individuals do this without shutting off their electricity will take a massive education effort or government dictum (which would mean shutting off the electricity ultimately.) That can be tough, as can be seen in the effort here to get people to switch off analog TV before the government does it for them – and that’s just TV and pretty cheap to do. If done on a large scale, a transition like this could also send unpleasant economic shocks through various energy-generating industries that the government has to somehow accommodate. Oh, and one more thing:

Conservative leader David Cameron, Gordon Brown and Malcolm Wicks have all had applications to erect wind turbines on their roofs turned down by planning officers.

Not on my roof’s backyard, thank you very much.

Which doesn’t mean it shouldn’t be pursued. Not much mentioned in the U.S. so far, it’ll be interesting to see how Great Britain pursues this in their upcoming energy plan.

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As always, Archie Comics – yes, this would be a change of subject – has been looking for ways to keep their characters interesting to the mobs of young girls (mostly) who have lots of other things to gobble up their time. Archie’s gang has been around since 1941 and has always been in high school, so relevance here means keeping Riverdale High more or less in sync with the times and with the cultural touchstones that interest kids. (Which should mean Manga Archie, but so far, no.)

So it’s no surprise that Archie is going green and promoting it:

Just as "Freshman Year" writer Batton Lash [wonder if he was named after Bat Lash, a western hero of 60s comics] is turning back the timeline for a fresh look at Archie and his friends' beginnings, the publishers of Archie Comics are giving previously used paper a fresh look by printing this storyline on recycled paper! Beginning with ARCHIE #587, all five issues featuring this special storyline, through issue ARCHIE #591 will have their interiors printed on recycled paper.

We’re not sure why this story merits the paper rather than a story about the kids’ eco-efforts, but maybe the coverage missed it. And do high school kids have “beginnings”? Since all these kids grew up together, it isn’t even a question of meeting each other for the first time.

Archie Comics may be letting itself in for it, though, as recycled paper is fairly expensive and these issues are probably loss leaders. If Archie’s readership begins to militate for all the titles to be printed this way all the time, trouble for someone’s pocketbook.

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Well, Planet Green, the Discover channel outlet we mentioned last week, debuted. Slate has a first review, but we’re loath to quote from it. If Troy Patterson is right, it’s everything we made fun of and more. But as we said then, early days – Discover has generally found the right balance in their programming before and likely will here, too.

Picture of the first of the green Archies. Note the backpacks and outfits – they do keep up. If you grew up on the Dan DeCarlo version of Archie – and who didn’t? it lasted 50 years – Bill Galvan’s variation is a nice spit polish. Not much diversity, though – where are these kids, anyway? Utah?

Friday, June 13, 2008

In the Tank for Nuclear Energy? John McCain and Subsidizing New Plants

matthew_yglesias_140x140.jpg Over at The Atlantic, Matthew Yglesias takes a look at John McCain’s energy plans. He notes McCain’s refusal to consider subsidizing any form of alternative energy source except for nuclear energy. McCain, we noted during our week of Lieberman-Warner, was unhappy with the bill only in that it did not include subsidies for nuclear energy.

Yglesias concludes:

That's the kind of position you would expect a lobbyist for the nuclear energy industry to take -- not someone who's serious about reducing carbon emissions. Anything that puts a price on carbon, whether or not in includes explicit subsidies, will be good for the nuclear energy industry. And if additional subsidies on top of that are the price it takes to convince unprincipled Senators -- like, apparently, John McCain -- to vote for an overall good bill then that's a price worth paying.

It’s an interesting post, even with the drive-by swipe at McCain, so be sure to get the full flavor there.

We don’t really want to get into political bloviation here at NNN – you can get that at lots of different places, at incredible length – but we do have a notion how McCain might have been toting this one up.

Nuclear energy plants, unlike those of some other alternative energy sources, sees a mountainous share of their expense during construction rather than after they start producing those sweet jolts of low-cost electricity we prize them for. If you look at a plant’s costs only during its construction, it would rightly give you pause – but over the long term, the value of a nuclear energy plant increases considerably as its running costs decrease. Mitigating the jitters over those up-front costs is what government-backed loan guarantees are all about and may be what McCain had in mind, too, wanting to see more of them. So, we have a grasp of how McCain is squaring this particular circle, even where it seems to run counter to conservative economic argument (loan guarantees are only nominally a subsidy) and even McCain’s own stance on energy plant subsidization in other instances (wind and solar plants, for example, cost less to construct even if they do not produce electricity as economically as nuclear, but it makes them less vulnerable to skittish loan officers).

Yglesias says that any tax, called such or not, on carbon benefits nuclear energy, but nuclear energy and all its renewable cousins have been benefiting without it so far and are likely to continue doing so with or without cap-and-trade, which, depending on how it’s implemented, could be seen as a tax on carbon emissions (if the credits are auctioned) or a new marketplace for carbon credits(whether or not credits are auctioned – we can see where trades in carbon credits could be taxed, too).

In the realm of energy generation (well, really, any industry in which government inserts itself), government is often looking to find the right carrot and the right stick to get industry to where it wants it to go. This gives government a role without completely warping the normal stresses and strains of capitalism and, at the least, gives industry a sense of where public policy is likely to take it. We may conclude that the energy industry is now fully up-to-speed on what the federal government has in mind for it, however long it takes to get a policy together. You can compare it to those ads about the generosity of pharmaceutical companies giving away expensive medicine to deserving someones – big pharma sees the toast getting buttered and wants to be sure it’s on the right side of it.

We’re not sure McCain has fully cooked his energy plan and think Yglesias might be jumping a bit fast for a spoonful of a developing public policy. Certainly it’s fair to note that the details are not yet matching the big ideas and to really sound the alarm if the details never come together. But we’ll sit a ways back on this one for a spell and see where McCain and Obama take their arguments as the campaign picks up speed.

Political bloviation filter fully back in place. Whew! The hot air could boil a cat.

Photo of Matthew Yglesias. Now, there’s how a writer should be photographed – thoughtful, stroking chin, listening intently – 3/4 view of the face is pretty flattering, too. All that’s lacking is a pipe and a corduroy jacket.

Gordon Brown's Energy Policy and the Fourth Estate

Is there anything more tedious than hearing someone rant about media bias? (Of course there is, but for the sake of this blog post, the answer to the rhetorical question is, "no.") And while I'm sure those who call in to C-SPAN's Washington Journal to expose the agenda of the moderator* are certain they are saving the Republic, I'm not one of 'em. That said, this lede from The Scotsman, caught my eye:

A THOUSAND new nuclear power stations are needed across the world to tackle the oil crisis, Gordon Brown warned yesterday.
Warned?

Here's how London's Independent wrote the story,
Gordon Brown has signalled he wants Britain to play a major role in the race to build an extra 1,000 nuclear power stations across the world as part of his vision for ending the global "addiction to oil".
And The Guardian,
Brown also suggested it would be necessary to build 1,000 nuclear power stations worldwide to combat climate change and end what he described as the world's oil addiction.
And the BBC,
Speaking at his monthly media conference, Prime Minister Gordon Brown said the world may need another 1,000 nuclear power stations to bolster energy security and fight climate change.
So what am I saying? The Scotsman reporter, Ross Lydall, is clearly not a fan of nuclear and his editorializing is showing. Meanwhile, The Independent, The Guardian (both left-leaning papers), and the BBC all stick to straight reporting.

* Full Discloure: I have a bit of a media crush on Greta Wodele.

Thursday, June 12, 2008

Barbara Boxer Embraces Nuclear Power

Not all was lost in the Lieberman Warner bill debacle; Sen. Barbara Boxer (D-CA) has publicly stated her support for nuclear energy. From MSNBC's Morning Joe on Wednesday,

Scarborough:...Let me ask you, this is one that you may disagree with me on, but France, a [sic] 75% of its energy coming from nuclear power. Europe is moving in that direction and they are doing it because they believe that's the best way to cut carbon emissions. Why can't we figure out a way to safely regulate nuclear power so we could cut all those greenhouse gases overnight?

Boxer: There's no question that nuclear is going to be part of the solution. The thing is, we have got to get an answer to disposing of the waste. That is a big question mark. But I went to France to see what they do and Joe, it's amazing. Because they have no other way to get energy, you are right. They rely on this. They have put the whole power of the government behind the safety question. Here, we don't do that. So i think if you had, if you make sure that it was safe and that we really worked harder to make it safe, it would have more acceptance. But let me say under any scenario we are going to see more nuclear power because it's going to be more cost effective once there is a price on carbon and that's why we need a global warming bill.
The video is available here. (Nuclear-related comments appear at the 4:20 mark.)

Wednesday, June 11, 2008

Amory Lovins and His Nuclear Illusion – Part Three (Energy Efficiency and “Negawatts”)

So far I have written two detailed posts on Amory Lovins’ and the Rocky Mountain Institute’s latest nuclear critique. My third post discusses energy efficiency and Amory Lovins’ coined term “negawatts.” There is this widely held belief that becoming more energy efficient means that we will consume less energy. At first glance, that notion seems correct but digging further, I found there’s much more to it. In the case of energy efficiency, RMI overlooks a fundamental effect of efficiency on the energy marketplace.

From RMI’s condensed version:

An even cheaper competitor [to new nuclear plants] is enduse efficiency (“negawatts”)—saving electricity by using it more efficiently or at smarter times.
There are several misperceptions about what energy efficiency really contributes. Here’s what Robert Bryce has to say in the Energy Tribune:
The final – and most important – area in which Lovins has been consistently wrong is his claim that efficiency lowers energy consumption. And when it comes to arguing the merits of energy efficiency, Lovins’s prime nemesis is a dead guy – William Stanley Jevons – a British economist who in 1865 determined that increased efficiency won’t cut energy use, it will raise it. “It is wholly a confusion of ideas to suppose that the economical use of fuels is equivalent to a diminished consumption. The very contrary is the truth.” And in the 142 years since Jevons put forth that thesis, now commonly known as the Jevons Paradox, he’s yet to be proven wrong.
The Jevons Paradox is explained further in The Bottomless Well:
First, efficiency seems to come, regardless - often far more efficiency than the most well-meaning regulators and policy pundits can foresee.

Second, when radically more efficient technologies do emerge, they are quickly embraced by paying customers without any need for government mandates - embraces not just to displace old ways of doing things, but to do all sorts of new things that previously hadn’t been done at all (pp. 106-107).

Two centuries ago, no engine could surpass 10 percent efficiency. By raising boiler temperatures and pressures, engineers pushed performance to about 20 percent efficiency by the turn of the twentieth century. By mid-century, they were up to about 40 percent. Today, the best thermal plants routinely hit 50 percent efficiency. Efficiency gains this large ought to have had a dramatic impact on supply and demand - and they did. The price of transportation and electricity fell steadily. And the total amount of fuel consumed in those sectors rose apace. Efficiency may curtail demand in the short term, for the specific task at hand. But its long-term impact is just the opposite. When steam-powered plants, jet turbines, car engines, light bulbs, electric motors, air conditioners, and computers were much less efficient than today, they also consumed much less energy. The more efficient they grew, the more of them we built, and the more we used them - and more the energy they consumed overall. Per unit of energy used, the US produces more than twice as much GDP today as it did in 1950 - and total energy consumption in the US has also risen three-fold (p. 111).

…efficiency fails to curb demand because it lets more people do more, and do it faster - and more/more/faster invariably swamps all the efficiency gains (p. 112).

It is only when we begin to focus on efficiency in the extraction of energy that the paradox of efficiency comes to seem less paradoxical…The better our energy-extracting technology, the cheaper the energy, and when goods get cheaper, we consume more of them. There’s nothing paradoxical at all about that proposition … Small wonder, then, that efficiency increases consumption. It makes what we ultimately consume cheaper, and lower price almost always increases consumption. To curb energy consumption, you have to lower efficiency, not raise it. But nobody, it seems, is in favor of that (p. 123)
Where’s the data to back up the Paradox?

Below is a chart that shows the electric intensity vs. electricity consumption per person for the U.S. The chart shows that the U.S. became more efficient with its electricity (electric intensity) starting in the 1970s but continued to consume more electricity per person. If efficiency supposedly curbs demand, then the chart should show the red line following the blue line after the 1970s (or at least some change in that direction). It does not.
RMI’s Rebuttal

RMI and Amory Lovins are well aware of the Jevons Paradox and the Energy Tribune article. They attempt to rebut the two by citing the improvements in refrigerators, the implementation of hybrids, and the reduced energy consumption per-capita in California and Vermont. The Paradox describes macro-level behavior. Micro-level data on refrigerators and hybrids do not refute it. For example, the energy savings from refrigerators could simply have gone to plasma-screen TVs, XBoxes, computers or other electrical equipment. The energy savings from hybrids could simply have gone to a new lawn-mower, boat or car.

The most significant point in RMI’s rebuttal may be the following:
According to RMI co-founder and Chief Scientist Amory Lovins, Vermont has reduced energy use per household in recent years. And California, he adds, "has held per-capita electricity use flat for 30 years -- saving 65 peak GW and more than $100 billion of power-system investment -- while per-capita real income rose 79 percent."
Proponents of energy efficiency often cite California as an example of what the rest of the nation could do to save energy (as evidenced above). A careful look at the data tells us otherwise. Here’s Max Schulz:
California’s proud claim to have kept per-capita energy consumption flat while growing its economy is less impressive than it seems. The state has some of the highest energy prices in the country—nearly twice the national average, a 2002 Milken Institute study found—largely because of regulations and government mandates to use expensive renewable sources of power. As a result, heavy manufacturing and other energy-intensive industries have been fleeing the Golden State in droves for lower-cost locales. Twenty years ago or so, you could count eight automobile factories in California; today, there’s just one, and it’s the same story with other industries, from chemicals to aerospace. Yet Californians still enjoy the fruits of those manufacturing industries—driving cars built in the Midwest and the South, importing chemicals and resins and paints and plastics produced elsewhere, and flying on jumbo jets manufactured in places like Everett, Washington. California can pretend to have controlled energy consumption, but it has just displaced it.
Conclusion

I agree with RMI that promoting energy efficiency is important and valuable. However, I disagree with RMI on where increased efficiency leads. It does not necessarily lead to decreased consumption. The Energy Tribune sums up this perspective very well when it says:
Efficiency is a wonderful by-product of human ingenuity. It is an essential part of America’s ever-evolving economy. It is part and parcel of the free-market economy working independently of government-mandated efficiency programs. It makes sense to wring more work out of each unit of energy. Energy efficiency conserves capital. It is good for the environment. It is good for rich and poor alike. Efficiency helps reduce the impact of energy price volatility and possible oil price hikes.

But when it comes down to brass tacks, energy efficiency doesn’t necessarily mean less energy use, it usually means more energy use. And that usually means more carbon dioxide emissions. Thus, the idea of “saving the climate for fun and profit” may be just a bit more complicated than Lovins claims.