Bwahaha. They want you on the hook for even more.
Do you wonder why the nuclear power industry needs government insurance? Why they need government loan guarantees just to build the plants?
It’s simple. Without the Price-Anderson Act, without the taxpayer-funded construction loan guarantees Obama wants to triple, nobody who hires professional actuaries will touch the nuclear industry. Actuaries assess risk, as we all do every time we cross a street or get on a plane. We do it by gut feelings. Professional actuaries use statistics based on actual past risk.
And nobody who hires professional actuaries will touch the nuclear industry.
But we have no choice, people say. We need the energy.
We do have a choice. Look at some brief stats on what’s possible by 2050: Solar could provide 100% of our energy needs. Efficiency could reduce needs by 50% without affecting standard of living. (Links and calcs here, and here.) Nuclear could satisfy some 15% of our energy needs if we build a new gigawatt plant every six weeks (pdf). Even with guarantees tripled to $54 billion, that only provides some nine plants. That buys about a year’s worth of plants. Then we need to do it again. And again. And again. Every year for 39 years. And money spent on nuclear energy can’t be spent on real solutions.
(In case you’re wondering why nukes get built at all, remember that it funnels billions to huge corporations now. The fact that it doesn’t solve any of our problems ten years from now is not their concern. I think we’ve seen that movie a couple of times recently.)
But nuclear is safe, people say. It’s safer than driving a car.
Well, sure. The difference is that if a car crashes, in the worst case it costs hundreds of thousands of dollars in medical expenses and lost wages. If a nuclear plant has a disaster, it means total ruin. Yes, the chance of nuclear disaster is very low. But given the costs if it happens, even the hugest insurance or energy companies would go bankrupt. Nobody who knows the meaning of the numbers thinks the risk is worth it. Even the nuclear industry doesn’t think it’s worth it. They’ll take any profit, but they won’t build without someone else to take on the risk.
So you, Jane and Joe Taxpayer, get to do it. It gets worse. You’re not only on the hook for billions in insurance and construction loan guarantees. The industry are pretty much the ones who’ve decided how much money will be needed, so the estimates are, shall we say, rosy. Guess who’s on the hook for all the rest of the costs? That’s right. You.
You are the insurer and guarantor of last resort for the nuclear industry.
I guess that model worked so well in the banking industry, it’s a good idea to do it again.
nuclear, loan guarantees, Obama
Nuclear construction projects like all projects need financing to be built. A loan guarantee is not the same as a subsidy. The utility has to pay off the loan as soon as construction is completed. Nuclear power has really low operating costs and it actually pays off its loans quite quickly since nuclear power plants are extremely well run and efficient facilities.
Granted, constructing a nuclear powerplant is risky because the NRC is as much of a political and pointlessly bureaucratic institution as the people that run it are bureaucrats rather than scientists unlike the DOE but the NRC has all of the power. The process of obtaining an operating license is difficult because applicants have to pay expensive fees for the licensing process and it takes a very long time, often up to ten years. A lot of this is needless redtape and the application can be denied for any reason. Not to mention that there is often rampant NIMBYism that ties construction projects up in court for years just to be obstructive. If the licensing process was not so ridiculous and more streamlined there would be less risk of cost overruns and therefore it would be a more attractive investment choice. Nuclear construction projects in many other countries have shown that they can be completed on time and on budget because they have a political regulatory environment that is not openly hostile to nuclear energy. Not to mention the fact that a nuclear submarine can be completed in as little as two years.
Also, even the worse case scenario seen with Chernobyl resulted in fewer than 100 known casualties, including the ones that resulted from immediate radiation poisoning. Chernobyl was a series of one error after another including actually shutting down any safety features the reactor actually had to run an unapproved test. Finally, the reactor itself was an inherently dangerous design that no country uses or has ever used since. If the Chernobyl reactor had a containment dome like all reactors do now, the whole disaster could have largely been prevented in the first place. As it is, the evacuated area of Chernobyl is only a few levels above background radiation and it has largely become an unofficial haven for wildlife as it is flourishing there since people have left.
The disaster at Three Mile Island resulted in no injuries or deaths and it was the absolute worst thing that could have happened with a light water reactor. Yet in spite of this, the containment dome prevented a major disaster from happening an the operators were exposed to the radiation dose equivalent of getting an X-Ray (The same amount of radiation you receive from background radiation during a jet flight). Now compare the Chernobyl incident with the Banqiao dam collapse in China or the continually burning underground coal fires in Centralia, Pennsylvania. No energy source is completely risk free, yet the potential harm that could be caused has not stopped anybody from making use of hydropower or coal power. (Coal has got to go, though)
Granted, the light water reactor design is not the best design as far as reactors go, as there are even more efficient designs, such as the liquid fluoride thorium reactor that uses thorium for fission and can also act as a breeder in addition to using our current inventory of spent fuel as actual fissile material. In addition, the design of this particular reactor makes it impossible for it to experience a “meltdown” as the core of the reactor is already molten and it is unpressurized. Since it has a negative void coefficient. If the core heats up, the speed of the fission reaction is slowed down. In the event of the core becoming too hot, there is a plug of cooled sodium metal at the bottom of the reactor chamber that would melt and allow the contents to drain out and solidify.
There are numerous advantages to molten salt reactor designs and a working prototype was up and running at the ORNL national laboratory for two years before being defunded for political reasons. As this was the height of the red scare, much of our nuclear research was actually going into perfecting a new process for creating weapon grade material. In the molten salt reactor design, the plutonium 239 is too contaminated with plutonium 240 in addition to U232 and it made the reactor useless for obtaining weapon grade material. As a result, a brilliant design for cheap and clean energy was left to languish for political reasons. We need to get it up and running again. For more information, you can take a look here
http://www.youtube.com/watch?v=AHs2Ugxo7-8
http://www.youtube.com/watch?v=AZR0UKxNPh8
http://www.youtube.com/watch?v=VgKfS74hVvQ
Anyway, sorry for the bloviation and I do not mean to come off as a troll. I like your blog but this is one area that I disagree with you on. Let me know what you think of the videos.
Neurovore on February 9th, 2010 at 22:28