Common Tragedies

Thoughts on Environmental Economics

Nuclear power

Posted by Daniel Hall on May 2, 2008

The CBO just issued a new study on nuclear power in America. Via the CBO Director’s blog here are a couple highlights:

Carbon dioxide charges of about $45 per metric ton would probably make nuclear generation competitive with conventional fossil fuel technologies as a source of new capacity and could lead utilities to build new nuclear plants that would eventually replace existing coal power plants. At charges below that threshold, conventional gas technology would probably be a more economic source of baseload capacity than coal technology. Below about $5 per metric ton, conventional coal technology would probably be the lowest cost source of new capacity.

A carbon price of $45 per ton of CO2 is very likely higher than the U.S. could (politically) implement in the near future. Current emissions prices in the EU are around $35/ton right now.  If the U.S. passed a bill with similar stringency to Lieberman-Warner — a big political ‘if’ — then the EIA says the 2020 price would be around $30/ton, while the EPA analysis suggests higher, $40-50/ton.  If I was guessing I would say it is much more likely that any politically acceptable bill will result in prices of $10-30/ton in the near term.

But I think this is actually the most interesting point about nuclear power right now:

Uncertainties about future construction costs or natural gas prices could deter investment in nuclear power. In particular, if construction costs for new nuclear power plants proved to be as high as the average cost of nuclear plants built in the 1970s and 1980s (adjusted for inflation), or if natural gas prices fell back to the levels seen in the 1990s, then new nuclear capacity would not be competitive…

And this is very possibly the state of the world we are in.  Check this recent post from the EU Energy Policy blog.  Power plant construction costs have more than doubled since 2000, with much of the rise in the last two years and much of it very related to nuclear construction costs.  China particularly is consuming so much cement and steel that global prices for construction commodities are going through the roof.

A couple years ago I was relatively sanguine about the prospects for nuclear power but I am much more skeptical now.  I think the big problems are:

1. In the short run the price of global commodities and NIMBYism mean that it is both very expensive and very difficult to build new plants.

2. In the long run bad news about climate change could make nuclear look much more attractive but here proliferation worries me.  The long run is all about China and India and other not-so-stable parts of the world.  Fine, you can nuke up the U.S. or Europe completely (a la France) but this doesn’t make a huge difference because those places aren’t the future of the emissions anyway.  To really make a dent in the emissions trajectory you are talking about a huge number of plants in parts of the world where there are major religious and ethnic tensions (Jammu and Kashmir, western China) or where governments are authoritarian or (perhaps worse) incompetent.

Essentially I think the U.S. and Europe should be thinking now about which energy technologies they’d like to export 20 years down the road.  In this regard I’d rather us do a bunch of carbon capture and storage research than try to reinvigorate the nuclear industry.

Here is the MIT study on nuclear power, recommended.

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9 Responses to “Nuclear power”

  1. Red Craig said

    You’ve reached the endpoint of this argument that many people have. The logic goes like this: every practical alternative can be portrayed as if it has some insurmountable obstacle, and so the only remaining solution is some magic nostrum that isn’t practical and has virtually no chance of ever becoming practical.

    In your case, you’ve decided that if advanced nations abandon nuclear energy, then other countries will forgo nuclear weapons. This is false logic: when countries decide whether or not to develop nuclear weapons, the presence or absence of nuclear power plants in other countries is not part of the consideration.

    Then, we can consider your proposed solution. Even if it were possible to capture most of the fossil-fuel exhaust gases by putting some sort of trap on every vehicle, home furnace, and power plant, there is no plausible reason to believe they could be securely stored in the ground. Moreover, it would take—what? 50 or 100 years?—to find out if the gases were going to stay there.

    This preference for imaginary solutions, silver bullets if you like, is what got us into this predicament in the first place. Anti-nukes assured us that it was okay to keep burning fossil fuels because spiffy new energy sources would soon take their place. But the spiffy new energy sources never materialized so fossil fuels polluted the air and oceans to the point where millions of people have died from it, the natural environment has been irreversibly damaged, and the climate has been changed.

    Consider what nuclear gets us:

    (1) An electricity source that doesn’t depend on wind or sunlight or the limited amount of energy storage available, and emits virtually no greenhouse gases. It could reduce CO2 emissions by 40%.

    (2) An energy-efficient way to produce hydrogen, which could be used directly in automobiles and trucks or added to biofuels to make their production higher by a factor of three. Presently, transportation accounts for about 33% of CO2 emissions; all of that could be eliminated through conservation, electrification, and alternate fuels.

    (3) A huge reduction in air pollution, lowered trade deficits, and freedom from Middle-East involvements.

    If nuclear energy isn’t developed in a major way, the world will keep burning fossil fuels. Within fifty years nearly all the world’s people will live in severe hardship and what little remains of the natural environment will be gone.

  2. Daniel Hall said

    In your case, you’ve decided that if advanced nations abandon nuclear energy, then other countries will forgo nuclear weapons.

    I don’t come close to making this argument. I claim that we should be very worried about having large number of nuclear facilities in places with dysfunctional and unstable political and social institutions.

    when countries decide whether or not to develop nuclear weapons, the presence or absence of nuclear power plants in other countries is not part of the consideration.

    Anyone who thinks that the only — or even primary — nuclear proliferation risk comes from government development of nuclear weapons is living in 1988, not 2008. Do we want to fill up China and India with fission material? Who is guarding the doors?

    In other words, the problem was not that the USSR had a lot of nuclear weapons in 1988, it was that Russia had a lot of nuclear weapons in 1991.

    I agree Iran is not trying to make weapons because the U.S. has nuclear power, but that does not imply that installing nuclear power plants all over the Middle East is a good idea.

    Even if it were possible to capture most of the fossil-fuel exhaust gases… there is no plausible reason to believe they could be securely stored in the ground.

    Actually there is, it’s called enhanced oil recovery and we’ve been doing it for quite a while. I agree there are uncertainties but this is exactly why research will actually get us some useful info.

    In conclusion I’m not saying, “Don’t build nuclear in the U.S.” Price carbon emissions and if that makes nuclear more attractive than coal then great, let’s build it. But also let’s realize that the two biggest things that matter long term for emissions are 1) what happens in the developing world, and 2) technology.

    What I’m saying is, “Let’s research technologies that actually make sense to export to the developing world, given the likely political and institutional constraints they will face.”

  3. Red Craig said

    Daniel, thanks for your thoughtful reply.

    One point I need education on: has anyone monitored enhanced oil recovery to determine if the CO2 is staying underground and not infiltrating to the surface? How would you monitor something like that?

  4. John Fleck said

    On NIMBYism: One of the messages the U.S. nuclear community has gotten is that local opposition can effectively kill a new nuclear facility, which is why the serious proposals we’re seeing so far for the construction of new nuclear power plants are all at the sites of existing power plants (where the data, as I understand it, seems to suggest that people have become comfortable with their presence and the local opposition is therefore muted).

  5. Daniel Hall said

    Red, the MIT study I linked in the post has a chapter on geologic sequestration that provides a nice overview of technologies for carbon capture and storage (CCS) and monitoring and verification procedures. The IPCC has also published a special report on CCS. It includes a description of the Weyburn Project, a CO2-EOR project in Canada with extensive monitoring that so far has been successful (i.e., no evidence of leakage).

  6. Shannon said

    This is interesting from a policy perspective because the Voinovitch Plan currently in the Senate would revert to $5 per ton for CO2 in a cap-and-trade scenario. The implication here is that the Right wants the public to subsidixe nuclear power to make it complete with coal on a kWh basis- that’s a lot of subsidy.

  7. Donna said

    Say NO to nuclear. Nowhere safe to store radioactive waste. No safe way to transport it. Too much energy and water to make it. Nuclear accidents happen and go unreported. I’m unfortunately a survivor of a nuclear accident no one wanted you to know about. It occurred just outside of Los Angeles.

  8. Donna said

    Here’s link for more info. on biggest nuclear meltdown in U.S. history. It was NOT Three Mile Island. It was much worse, and covered up but not without many people getting cancer. I unfortunately know this to be true. Just say no to nuclear. And yes to energy efficiency, and creating a government program to subsidize solar and wind power on grand scales and make Detroit create plug-in electric cars. To read more about how unsafe nuclear energy can be:

    http://www.acmela.org/rocketdyne.html

  9. [...] new study from the Congressional Budget Office. The bottom line, according to Daniel Hall, is that we’re unlikely to see the U.S. government levy a carbon cost sufficient to make [...]

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