Below are a few letters received at EnergyBiz Insider on topics that appeared in the past few weeks. They capture the essence of how many readers say they feel.

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Energizing Defense Contractors - February 17, 2010

Better check that rearview mirror. This certainly isn't the first time that defense contractors have ventured into the energy sector. Anybody remember back in the early 1970s; back when the entire East Coast was awash in garbage and lots of newly minted Washington environmentalist-elites came to our rescue with a whole pile of "resource recovery" hair-brained schemes?

Some of the big-time defense companies back then didn't have a clue about garbage, power production, or what happens when you combine them. About all they had were great government connections; the ability to write a good looking business plan; and the philosophy that cheaper was better (and that "thar's gold in them-thar garbage piles"). No consideration for why things were the way they were; no understanding of why the state of the art in power production was where it was. Heck, anybody could burn garbage to make steam and electricity that can be forced into the local grids without hardly any effort; and at full retail prices.

Like wow, man; it had it all going for it; couldn't miss, man. Except that a lot of those cities and local municipalities that bought into that dream sort of went broke. We had best take a hard look at some of those lessons learned before fully embracing defense contractors as the salvation of "green energy" -- an idea that probably doesn't deserve salvation in light of some of the recent revelations of duplicity and lack of objectivity in the root "science"; but I digress. Anyway, thanks for another thought-provoking article.

W. Michael Earle, P.E.
Turbine-Generator Systems Engineer
Beaver Valley Power Station

The Promise of Shale Gas - February 19, 2010

Good article.

This issue of contamination and how much of it is "real" or not needs to be resolved quickly. I have seen the argument by some that there has "never" been any contamination and that is patently absurd. But what contamination there is needs to be addressed honestly and quickly.

Jack Greene

The environmental movement will fight natural gas from shale just like everything else that doesn't fit their utopian view of life. We can't supply our energy needs by only tipping at wind mills. We need affordable energy and every form that we can muster. We're talking about our economic survival while their living a fantasy.

Ron Corso

Nuclear Energy's Chances - February 22, 2010

There seem to be two levels to the nuclear energy discussion: politics and reality.

At the politics level, the discussion focuses on the potential for increased subsidies (loan guarantees) to the nuclear industry, the growing bipartisan willingness to support nuclear projects, the debate over whether loan guarantees are essentially tax payer handouts if a 50 percent default rate is to be expected, etc.

At the reality level, South Texas Project, Units 2 and 3 went from an estimated $5.2 billion to an estimated $17 billion in two years, a bond rating house lowered the municipal utility from neutral to negative based on the potential level of debt, the level of rate increases needed to support the high level of investment led the City of San Antonio to conclude the project was too expensive, information on cost escalations was hidden from the public and the elected officials while an increased commitment was being sought, a scandal erupted when the information became public -- these are the on-the-ground realities of a nuclear project. These are also the same factors that emerged the last time nuclear came around -- escalating costs, declining bond ratings, suppressed information and scandals.

History does repeat itself when the lessons are not learned.

Lanny Sinkin

This is one of the few times I have to disagree with President Obama, while it may be true that it may be a tool to prevent climate change there are many downsides to commercializing nuclear energy for this nation at this time. In addition to the downsides of cost and what to do with waste fuel, how does one protect containment structures? And don't forget the fuel, where can we obtain sufficient quantities? As I've stated before this nation has many viable fuel options, coal gasification, natural gas from shale deposits and as the UCS points out renewable sources. Certainly this nation should continue to study nuclear energy but hold up on commercializing.

Joseph Langenberg

I read with dismay in Nuclear Energy's Chances that we need "... a scientific breakthrough to allow the spent fuel to be recycled." Nuclear fuels have been reprocessed since the 1940s.

The standard method used is the PUREX process. The PUREX process was invented in the United States during the Manhattan Project. The patent was filed in 1947.

Currently, this "ancient" and well-developed American technology is used by France, the UK, Russia and Japan to reprocess commercial nuclear fuels. The total capacity of these plants is about 3,800 tons per year.

Like so many things developed in the U.S., government policy pushes the technology overseas and it is now controlled by foreign nations, along with the high-paying jobs.

Let's not forget the decision of the Obama administration to dump $6 billion and shut down Yucca Mountain. That makes the idiot list as well.

Ed Dykes, P.E.

A good article but I would like to add a few points that may give a clearer picture of nuclear power:

• Electricity output from the existing fleet of reactors has doubled since the 1970s without building a single new reactor.
• Government grants for wind are cash payments equal to about 33 percent of the capital while support for the nuclear industry are non-cash guarantees.
• Although government support appears to have increased the quantification of the cost of the credit subsidy has not been finalized and the current anticipated levels will kill most of the proposed construction.
• Termination of Yucca Mountain support without a viable replacement just feeds the anti-nuclear movement.
• No scientific breakthrough is necessary for spent fuel reprocessing as it is routinely done in France, Russia, Japan among others.
• The U.S. will eventually need baseload capacity. Wind and solar are not baseload. Baseload is primarily coal and nuclear.
• Since wind and solar are not reliable generators of electricity for each megawatt of wind and solar the cost of backup (most likely gas) will have to be factored into the cost equation for those periods when power is in demand and the wind isn't blowing and the sun isn't shining.
• Coal capacity will increase in cost if carbon abatement is factored in. Likewise carbon abatement costs will have to be factored in for gas-fired capacity although cleaner than coal it still has 50 percent of the carbon output of coal while nuclear has zero carbon emissions.
• Coal and uranium prices are almost flat-line stable while gas prices look like an electrocardiogram.
• Fuel expense is about 10 percent for nuclear, 55 percent for coal and 95 percent for gas units.
• Nuclear plant prices for a 1,000 Mw installation can vary from $4 billion to $9 billion. Factors such as: rate basing of front-end costs, cost of credit subsidies, demand for reactors, specialty steel, cement, rebar, etc will all impact final cost.
• The one certainty is that with over 40 reactors under construction now around the world, and many more planned in the near term, unless the U.S. gets its act together other countries will experience a renaissance that we will be excluded from participating in.

Bob Percopo
Executive Vice President
Project Finance Advisory Services
Global Marine & Energy
Chartis

Probable cancellation of Yucca Mountain, as long-term repository for highly radioactive nuclear waste (i.e. spend fuel rods, etc), forces U.S. nuclear plant operators to continue to store this material onsite. Example: FPL has requested expansion of their onsite storage at their Turkey Point facility.

Lacking this long term storage represents a major obstacle for future nuclear power plants. The other major obstacle is cost. Cost for proposed plants, ranging size from 1100 to 1700 MW, could cost between five to ten billion dollars, Small package reactors [as developed by B&W, Toshiba/Westinghouse, and NuScale Power Inc] are expected to cost about $5000/KW for a unit generating 125 - 140 MW. These smaller units include self-contained storage of spend fuel rods for about 60 years capacity.

Such units could replace older coal fired units; which already are connected to high voltage transmission lines. First Energy's proposed acquisition of Allegheny Energy could reflect implementation of this scenario, since both entities operate older coal-fired power plants.

Dr. Richard W. Goodwin, P.E.
Environmental Engineering
Consultant

Nuclear energy faces two overwhelming barriers -- cost and environmental impact. This is a balancing act in which environmental impacts are overcome by increasing costs which result in lowered investment returns. The problem with this model is that environmental impacts are "perceived" and not actual impacts because all mitigation is before the fact. Thus, it is as important that mitigation be treated as public image issues as much as scientific issues.

While it is understandable that the nuclear industry does not want to suffer public image damage from an aggressive campaign, the public may be much more receptive if the industry were to put effort into shaping public perceptions as much as engineering plants. As pointed out in the article, the industry could now start playing its hand using carbon mitigation as the trump card.

The industry had an opportunity thirty years ago to mold its public image but chose to invest too little and too late. In France the industry has an image of clean, reliable power that is environmentally friendly. In the U.S. the image is one of necessary evil. The industry allowed its opponents to set the stage and choose the arguments and thereby build this image. The nuclear industry chose a more defensive posture which allowed Three Mile Island to deal a death knell. The industry failed to recognize that it had to both mitigate and educate.

We have an opening now, but we are seeing feeble efforts in that respect. Its $200 billion investment should not only be protected but leveraged through a campaign that demonstrates that the ultimate impacts of nuclear industry expansion would benefit us all in terms of quality of life, improvement of the environment, and reduction in the cost of power. Spending a couple of million dollars a year is not sufficient. A concerted and continuous effort should be part of the restart of the nuclear industry. One would think that a tenth of one percent would not be a reasonable PR campaign for any industry that wants to expand its footprint. Let's hope that the guys running the show recognize the opportunity.

Alan Gartner
Managing Director
EnerTechnologies

Green Era - February 24, 2010

Apart from their predisposition to move slowly (perhaps you know the joke about the utility exec who tries to commit suicide by throwing himself in front of a glacier), I think the utilities who already face significant regulation have good reason to think twice about asking for government funding given the strings attached from an administration whose desires for even greater control (cap-and-trade) are well known.

In general, this is why the economy isn't responding: the administration has simply sent too many conflicting messages to the market place. Given the huge disconnect between the government and private sector, more spending is simply going to drive us deeper into debt and act as a further drag on our economy.

David O. Zenker Jr.

I've been reading your columns at EnergyBiz Insider for several years and have generally found them objective and informative. Recently, however, that objectivity has begun to slip when it comes to the energy policies of the current administration, which always seems to get the last word even when you present dissenting views. Wednesday's "Green Era" piece is a good example of this tendency. It is one thing to defend policies, but quite another to defend the politics behind them. You were more effective when more scrupulously neutral in such debates, since effective change in energy will require genuinely bipartisan policies that can successfully span administrations and Congresses of both parties.

Geoffrey Styles

Thanks Geoff for the candid remarks here. Generally speaking, I start the columns with a premise and then work to support that in the body. The stories then naturally come to a conclusion. I try to go into each story with a clear mind and without preconceived ideas as to what the premise will be. The thesis and the resulting conclusion are based on the research I've done. They are not my opinion, although readers oftentimes confuse them as such. Having said all that, readers will oftentimes disagree with the premise and as such, they dispute the conclusion. They then write in and explain their reasoning, which benefits our readers. I have often said -- and I repeat here -- the columns I write are never meant to be the "last word." They are merely a springboard -- a trigger for more debate. - Ken

 

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