With the public comment period on the EPA's Clean Power Plan closing on December 1 (have you submitted your comments yet?), I thought I'd share the public comment I submitted to the EPA on some of the shortcomings in the plan as they pertain to nuclear energy, particularly as it relates to potentially perverse unintended consequences introduced into the plan (as discovered by my students Remy DeVoe and Justin Knowles).
My comment follows below the break (warning: words ahoy).
Friday, November 28, 2014
Monday, April 1, 2013
Cold shutdown
Certain career constraints have (for now, at least) forced me to put this blog on an extended hiatus. I don't intend to disappear from blogging forever, but for the time being, I'm going to have to let this site go dark for awhile.
I hope those who have stuck with this blog have found it informative (and perhaps even entertaining). In the meanwhile, I look at this less like a decommissioning than I do a SAFSTOR. As circumstances change, I hope to bring things back online again.
Thanks for reading.
Thursday, February 28, 2013
The inherent shallowness of "market-based" arguments against nuclear
In the middle of a lengthy takedown of Taxpayers for Common Sense's recent publicity stunt press release proclaiming their "Golden Fleece" award over the DOE's recent award of $452 million for NRC licensing assistance to B&W to construct a first-of-a-kind SMR at the Clinch River site, +Rod Adams brings up an extremely insightful point almost universally neglected in "market-based" critiques of described subsidies for nuclear energy. Specifically, Rod points out a perverse, unintended regulatory consequence brought on by anti-trust laws addressed by the Price-Anderson Act, which governs financial liability in the event of a nuclear accident. (The whole thing is of course well-worth reading.)
Rod points out:
The dispute arises of course as to what happens above the $11.975 billion liability threshold - yet this has never actually been tested. (In fact, after Three Mile Island, the worst nuclear accident in U.S. history, $175 million in funds came solely from the "first tier" - i.e., private insurance). Critics are of course free to make their case that the cap is too low - but it first involves an honest reckoning of what the actual liability structure actually is.
More important however, arguments like this tend to underscore a common problem with many of some of these so-called "market" critiques of nuclear energy - even cursory inspection tends to reveal how thin a paint job has been applied to what is primarily a vehicle for advancing a dogmatic anti-nuclear agenda. (I say this too as someone who is almost always first disposed toward market-based solutions.)
Such a harsh critique comes primarily from the shallowness of the arguments presented - which, like TCS's "Golden Fleece," focus primarily on the seen (i.e., the DOE's licensing assistance) and less so on the unseen (i.e., the flawed NRC licensing process which makes it incredibly difficult for new market entrants to feasibly seek design certification). In other words, the "market-based" aspect is simply invoked as a shallow pretext for one-sided arguments applied solely to nuclear energy, rather than across the entirety of the energy sector.
Thus why I highlight Rod's point: A fair free-market critique of the energy industry - nuclear included - would also look at the barriers erected by government regulation (which in turn are what spur the calls for so-called "subsidies" which free-market groups generally oppose). The perverse consequences of anti-trust regulation from information-sharing are an insightful example of this; likewise there is the issue of the regulatory standard for long-term disposal of nuclear waste. For example, a geologic repository for permanent disposal of nuclear waste is required to meet a standard of no more than 10 mrem/year exposure to the public over 10,000 years, followed by 100 mrem/year up to 1 million years. (How one evaluates these begins to leave the realm of engineering and move more into the realm of divination...) To give some perspective - this involves a protection standard equivalent to less than 5% of the average background dose one receives from natural sources over the initial post-closure period, and less than 30% in the million-year period. To put it in more familiar terms, this corresponds maximum exposure equivalent to 1 chest x-ray per year in the first 10,000 years, followed by half the dose from a head CT scan (and 1/10th the dose of a whole-body CT scan) over the next 990,000 years. (Discharges from nuclear plants are regulated still more strictly, at 0.3 mrem per year maximum - less than a standard dental x-ray.)
Ask yourself this - when is the last time you've heard of a coal or natural gas facility being required to sequester their toxic wastes from the public in near-perpetuity? (Likewise even with toxic heavy metal wastes incident to the production of solar panels). How many other facilities are required to pay hourly costs for regulators evaluating license applications (much less put in the encyclopedic licensing applications to begin with)?
The point here is not simply to complain or to justify any special treatment on the part of the nuclear industry - but it does provoke a question of why more so-called "market advocates" in energy only look at one side of the coin. A deeper (and more insightful) analysis would consider the inherent barriers erected as well - including the perverse consequences of features like anti-trust regulations and unequal applications of standards for risk exposure across different energy-producing industries - rather than cherry-picking analysis we're typically treated to presently - thin gruel, indeed.
Rod points out:
The shared liability approach [inherent to Price-Anderson], if taken without permission, would violate the anti-trust laws that prevent competitors from cooperating. Price-Anderson’s system rewards the industry for sharing detailed technical information that would normally be carefully protected trade secrets. The nuclear industry’s habit of widely sharing important information and lessons learned from experience is one of the foundations on which its excellent safety record is built.
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| Image: NRC |
To those unfamiliar with how the Price-Anderson liability law works, the NRC has a helpful fact sheet which explains the basics. Contrary to common portrayal, Price-Anderson does not simply act as an "escape hatch" for financial liability for nuclear reactor operators. Each reactor operator is required to hold private insurance for $375 million per individual unit; after this limit is exceeded, a second tier of insurance from cross-pooling across each operating reactor kicks in - up to $11.6 billion. In other words, the liability structure of Price-Anderson explicitly makes it such that "an accident anywhere is an accident everywhere" - there is a shared financial liability across every operator.
The dispute arises of course as to what happens above the $11.975 billion liability threshold - yet this has never actually been tested. (In fact, after Three Mile Island, the worst nuclear accident in U.S. history, $175 million in funds came solely from the "first tier" - i.e., private insurance). Critics are of course free to make their case that the cap is too low - but it first involves an honest reckoning of what the actual liability structure actually is.
More important however, arguments like this tend to underscore a common problem with many of some of these so-called "market" critiques of nuclear energy - even cursory inspection tends to reveal how thin a paint job has been applied to what is primarily a vehicle for advancing a dogmatic anti-nuclear agenda. (I say this too as someone who is almost always first disposed toward market-based solutions.)
Such a harsh critique comes primarily from the shallowness of the arguments presented - which, like TCS's "Golden Fleece," focus primarily on the seen (i.e., the DOE's licensing assistance) and less so on the unseen (i.e., the flawed NRC licensing process which makes it incredibly difficult for new market entrants to feasibly seek design certification). In other words, the "market-based" aspect is simply invoked as a shallow pretext for one-sided arguments applied solely to nuclear energy, rather than across the entirety of the energy sector.
Thus why I highlight Rod's point: A fair free-market critique of the energy industry - nuclear included - would also look at the barriers erected by government regulation (which in turn are what spur the calls for so-called "subsidies" which free-market groups generally oppose). The perverse consequences of anti-trust regulation from information-sharing are an insightful example of this; likewise there is the issue of the regulatory standard for long-term disposal of nuclear waste. For example, a geologic repository for permanent disposal of nuclear waste is required to meet a standard of no more than 10 mrem/year exposure to the public over 10,000 years, followed by 100 mrem/year up to 1 million years. (How one evaluates these begins to leave the realm of engineering and move more into the realm of divination...) To give some perspective - this involves a protection standard equivalent to less than 5% of the average background dose one receives from natural sources over the initial post-closure period, and less than 30% in the million-year period. To put it in more familiar terms, this corresponds maximum exposure equivalent to 1 chest x-ray per year in the first 10,000 years, followed by half the dose from a head CT scan (and 1/10th the dose of a whole-body CT scan) over the next 990,000 years. (Discharges from nuclear plants are regulated still more strictly, at 0.3 mrem per year maximum - less than a standard dental x-ray.)
Ask yourself this - when is the last time you've heard of a coal or natural gas facility being required to sequester their toxic wastes from the public in near-perpetuity? (Likewise even with toxic heavy metal wastes incident to the production of solar panels). How many other facilities are required to pay hourly costs for regulators evaluating license applications (much less put in the encyclopedic licensing applications to begin with)?
The point here is not simply to complain or to justify any special treatment on the part of the nuclear industry - but it does provoke a question of why more so-called "market advocates" in energy only look at one side of the coin. A deeper (and more insightful) analysis would consider the inherent barriers erected as well - including the perverse consequences of features like anti-trust regulations and unequal applications of standards for risk exposure across different energy-producing industries - rather than cherry-picking analysis we're typically treated to presently - thin gruel, indeed.
Wednesday, February 27, 2013
Serious climate advocates don't turn upon their vanguard
The easiest test of whether one is dealing with a serious environmentalist is quite simple: anyone claiming to be a friend to the environment who simultaneously makes it their priority to shut down the most abundant carbon-free energy source in present day is at best no serious friend to the environment, showing a ludicrous disregard for the most basic concept of triage.
In this case, the calculus of triage is quite simple, and quite brutal - taking Fukushima as an example of some of the very worst consequences of a potential nuclear accident in terms of modern nuclear reactors (insomuch as a 40-year old reactor design can be called "modern"), such consequences amount to a catastrophic loss of property and perhaps even livelihoods to a localized region - but it pales in comparison to the global and devastating consequences of unchecked climate change, and pales even in comparison to the premature deaths brought about from ordinary pollution from more polluting sources like coal.
Few environmentalists are willing to take such a self-marginalizing position (although clearly that number is far from zero, if the ongoing campaigns against Vermont Yankee and Indian Point are any indication). Those that do inevitably fall into two categories - those that (disingenuously) assert that the gap can be filled nearly immediately with renewable sources (despite the mathematical difficulties of such a claim), falling back onto the idea of natural gas as a "bridge fuel" (again failing the basic arithmetic rule that half the carbon dioxide emission of coal, easily the dirtiest source available, is still far greater than zero, or close enough when all emissions are factored in over the entire lifecycle), or when pressed, falling back upon the idea of "energy austerity" - asserting (again, under highly questionable premises) that the energy deficit can simply be closed by using less - either by efficiency or simply by imposed austerity.
A natural experiment for this position is to look to Germany's Energiewende, which purports to do just that - trading carbon-free baseload from nuclear today for a promise of carbon-free intermittent electricity from renewables tomorrow. As to its efficacy, the evidence speaks for itself - Germany's carbon emissions increased last year by 1.2% - namely because the chief replacement for nuclear energy has come not from renewables but perversely from burning more brown coal and natural gas. Claiming that substituting definite and indisputable risks (if only from the environmental costs of coal burning alone) for an uncertain, possible (and by all accounts, remote) risk represents a positive environmental trade-off is laughably absurd. Worse, it represents the very opposite of intelligent triage - again, taking for granted the idea that the risk of a nuclear catastrophe is non-negligible (debatable, but assumed for the sake of argument), basic logic dictates eliminating the worst and most certain environmental harms first - the very opposite of what is being done.
Inevitably then we come to the default position it seems of most "mainstream" environmentalists today, perhaps realizing the absurd parody of triage implied by prioritizing the closure of existing, operational plants which emit no carbon in their operations over the most significant environmental offenders, instead re-focus their message on opposing the development of new nuclear units (essentially hoping to simply run out the clock on the matter). The most curious arguments invoked inevitably come down to very selective applications of both arithmetic and economics - those being that nuclear takes too long to build compared to renewables (which causes one to question whether they've done the math at the time it would take to build out an equivalent capacity) or that it simply costs too much while in the same breath insisting that the federal government must provide financial support to their energy sources of choice. (As for the latter, there is yet another quick test of the seriousness of the convenient economic principle invoked - ask the proponent whether their argument applies equally when it is their own ox being gored. If the answer is "no," the argument about economics can be clearly dismissed as specious special pleading.)
Give the boosters of natural gas as an eponymous "bridge fuel" credit for one thing - at least their position doesn't rely upon logical gymnastics (although it does depend on where you call home in the wintertime).
The argument is simply puzzling, to say the least. As of right now, nuclear energy forms the vanguard in the fight against climate change, making up about 60% of the U.S. carbon-free electricity portfolio. In what constitutes an existential fight for the simultaneous survival of the human race combined with an unparalleled drive to lift out billions from crushing poverty, what sane leader then treats the vanguard as disposable? Contrary to popular belief, we do not currently suffer from an embarrassment of riches when it comes to options for stabilizing carbon output, especially if economic considerations are factored in (as they should be).
The fact is, prioritizing carbon-emitting sources like natural gas over nuclear - be it for the present (if temporary) economic realities (again, where warm weather and plenty of pipeline capacity persists) or for more ideological reasons (i.e., avoiding nuclear energy at all costs) - poses a real and significant handicap in our ability to combat climate change.
Sane triage allows for the idea of swapping out the worst sources (like coal) for "better" sources (like natural gas) - but what serious advocate for action on climate change should advocate turning upon their own vanguard - especially when arguably the nuclear solution has the potential to cut across ideological boundaries, particularly to those who might otherwise be otherwise ill-disposed to work as allies (i.e., ideological conservatives)? One needn't even believe in the reality of climate change for solutions which mitigate carbon to have real consequences - something which itself ultimately demonstrates nuclear's cross-cutting value proposition as a key tool in climate change mitigation.
In this case, the calculus of triage is quite simple, and quite brutal - taking Fukushima as an example of some of the very worst consequences of a potential nuclear accident in terms of modern nuclear reactors (insomuch as a 40-year old reactor design can be called "modern"), such consequences amount to a catastrophic loss of property and perhaps even livelihoods to a localized region - but it pales in comparison to the global and devastating consequences of unchecked climate change, and pales even in comparison to the premature deaths brought about from ordinary pollution from more polluting sources like coal.
Few environmentalists are willing to take such a self-marginalizing position (although clearly that number is far from zero, if the ongoing campaigns against Vermont Yankee and Indian Point are any indication). Those that do inevitably fall into two categories - those that (disingenuously) assert that the gap can be filled nearly immediately with renewable sources (despite the mathematical difficulties of such a claim), falling back onto the idea of natural gas as a "bridge fuel" (again failing the basic arithmetic rule that half the carbon dioxide emission of coal, easily the dirtiest source available, is still far greater than zero, or close enough when all emissions are factored in over the entire lifecycle), or when pressed, falling back upon the idea of "energy austerity" - asserting (again, under highly questionable premises) that the energy deficit can simply be closed by using less - either by efficiency or simply by imposed austerity.A natural experiment for this position is to look to Germany's Energiewende, which purports to do just that - trading carbon-free baseload from nuclear today for a promise of carbon-free intermittent electricity from renewables tomorrow. As to its efficacy, the evidence speaks for itself - Germany's carbon emissions increased last year by 1.2% - namely because the chief replacement for nuclear energy has come not from renewables but perversely from burning more brown coal and natural gas. Claiming that substituting definite and indisputable risks (if only from the environmental costs of coal burning alone) for an uncertain, possible (and by all accounts, remote) risk represents a positive environmental trade-off is laughably absurd. Worse, it represents the very opposite of intelligent triage - again, taking for granted the idea that the risk of a nuclear catastrophe is non-negligible (debatable, but assumed for the sake of argument), basic logic dictates eliminating the worst and most certain environmental harms first - the very opposite of what is being done.
Inevitably then we come to the default position it seems of most "mainstream" environmentalists today, perhaps realizing the absurd parody of triage implied by prioritizing the closure of existing, operational plants which emit no carbon in their operations over the most significant environmental offenders, instead re-focus their message on opposing the development of new nuclear units (essentially hoping to simply run out the clock on the matter). The most curious arguments invoked inevitably come down to very selective applications of both arithmetic and economics - those being that nuclear takes too long to build compared to renewables (which causes one to question whether they've done the math at the time it would take to build out an equivalent capacity) or that it simply costs too much while in the same breath insisting that the federal government must provide financial support to their energy sources of choice. (As for the latter, there is yet another quick test of the seriousness of the convenient economic principle invoked - ask the proponent whether their argument applies equally when it is their own ox being gored. If the answer is "no," the argument about economics can be clearly dismissed as specious special pleading.)
Give the boosters of natural gas as an eponymous "bridge fuel" credit for one thing - at least their position doesn't rely upon logical gymnastics (although it does depend on where you call home in the wintertime).
The fact is, prioritizing carbon-emitting sources like natural gas over nuclear - be it for the present (if temporary) economic realities (again, where warm weather and plenty of pipeline capacity persists) or for more ideological reasons (i.e., avoiding nuclear energy at all costs) - poses a real and significant handicap in our ability to combat climate change.
Sane triage allows for the idea of swapping out the worst sources (like coal) for "better" sources (like natural gas) - but what serious advocate for action on climate change should advocate turning upon their own vanguard - especially when arguably the nuclear solution has the potential to cut across ideological boundaries, particularly to those who might otherwise be otherwise ill-disposed to work as allies (i.e., ideological conservatives)? One needn't even believe in the reality of climate change for solutions which mitigate carbon to have real consequences - something which itself ultimately demonstrates nuclear's cross-cutting value proposition as a key tool in climate change mitigation.
Monday, February 11, 2013
Chemophobia and radiophobia's shared cultural roots
Chemist Michelle Francl has a quite interesting critique of the all-too-common "bobo" conceit of chemophobia - in its distilled form, a variant of the "appeal to nature" fallacy (sometimes mistakenly referred to as the "naturalistic fallacy"). Faced with the unfamiliar (and sometimes unpronounceable) chemical names for even mundane medicines like naproxen (more commonly known under its trade name "Aleve"), they sound menacing and unfamiliar - despite the fact that naproxen is fundamentally similar to salicylic acid on a chemical level - an extract of willow bark (and a metabolite of the more common compound known by the humble name of "aspirin"). As a result, a booming cottage industry exists for peddlers of "natural" remedies - with the implication that "natural" means "safer." (In the end, chemistry doesn't really care whether it comes from a lab or nature - the laws of physics remain the same regardless).
An important consequence of chemophobia is that it trades established science for an unknown - "traditional" alternative remedies which may or may not be effective and which fall outside the rigorous quality, safety, and perhaps most important dose controls applied to pharmaceuticals. But the one thing that it doesn't escape from is chemistry itself - for these "natural" remedies to be effective, they rely upon the same chemical principles in modern medicines. Hence, the chemophobia fallacy.
Francl's discussion of chemophobia (of which the whole thing is very much worth reading) touches upon an important parallel common to discussions of nuclear technology - radiophobia:
The same is true for things like radon gas - despite frequent concerns about radiation exposure from nuclear power plants, individuals are far less likely to be concerned about far more common (and far larger) exposures from naturally-occurring radon gas in their own basements resulting from the decay of uranium byproducts found in uranium-rich soils. More importantly, the largest source of increasing radiation exposure in modern times has been due to medical imaging - the increasing proliferation of regular CT scans is far higher contributor to the average American's radiation exposure compared to nuclear energy facilities. (ANS has a very useful tool for estimating your average exposure based on these kinds of lifestyle factors.)
The consequences of irrational fear go beyond the consequences for the pharmaceutical and energy industries - the choice to eschew science-based medicine carries real risks for health and safety. Fear of radiation results in energy choices like coal (particularly in Germany, which has swapped coal for the nuclear plants which it has sought to shut down) which produce far more deaths per kilowatt-hour both by fine particulates and which incidentally release more radiation than the nuclear plants they seek to avoid. The desire for "natural," intermittent energy sources (like wind and solar) in turn lead to far higher consumption of natural gas to fill the gaps in their intermittency, again amplifying the far greater risks of global warming. (And, as +Rod Adams recently notes, overly conservative emergency evacuation protocols can in fact increase latent cancers in the event of a nuclear emergency - namely by contributing to increased traffic congestion, preventing the needed triage to evacuate those facing the greatest exposure).
Francl concludes with an astute observation of a common goal, which should not itself be to dictate choices concerning how risks of various alternatives (both in medicine and energy) are weighed, but to ensure that those risks are discussed and decided based upon sound information about those risks, rather than falling prey to cultural biases. Chemistry, like energy, is an indispensable component of the modern world, and both face the same communication challenge of fostering a science-based public discussion based on a rational evaluation of comparative risks and benefits. This in turn means understanding how cultural biases are formed - and ultimately developing science communication strategies to break through these biases. (In this regard, I once again point to folks like +Dan Kahan of the Yale Cultural Cognition project, who is doing the yeoman's work with this topic as well as David Ropeik, who writes about risk perception issues extensively in an approachable fashion.)
I will say as a postscript that I think all too often that there is a particular intellectual laziness which resists these kinds of strategies - which (at least in the case of nuclear energy) solely blames public (mis-)perception of risks on petroleum-fueled conspiracies. Aside from being devoid of evidence whenever challenged, such excuses (and they are excuses) unproductively halt any discussion of what to do about the issue (and further, fail to recognize the deeper cognitive science behind how risk perceptions are formed. For example, cultural polarization occurs even for novel technologies like nanotechnology after exposure to limited information about the technology.)
Obviously, there exists no doubt that there's money to be made preying on fear (both in the realm of alternative "energy" and "medicine"), but the fact is that these is more than sufficient evidence that how risk perceptions are formed has far more to do with our inherent values and cultural affiliations than the stock price of Exxon-Mobil. Thus, for these kinds of science-informed discussions to occur, it also requires nuclear professionals to stop hiding behind convenient, ephemeral excuses of conspiracies and actually begin understanding the science of how risks are perceived (and likewise, the science of risk communication).
An important consequence of chemophobia is that it trades established science for an unknown - "traditional" alternative remedies which may or may not be effective and which fall outside the rigorous quality, safety, and perhaps most important dose controls applied to pharmaceuticals. But the one thing that it doesn't escape from is chemistry itself - for these "natural" remedies to be effective, they rely upon the same chemical principles in modern medicines. Hence, the chemophobia fallacy.
Francl's discussion of chemophobia (of which the whole thing is very much worth reading) touches upon an important parallel common to discussions of nuclear technology - radiophobia:
We are a chemophobic culture. Chemical has become a synonym for something artificial, adulterated, hazardous, or toxic. Chemicals are bad—for you, for your children, for the environment. But whatever chemophobics would like to think, there is no avoiding chemicals, no way to create chemical-free zones. Absolutely everything is made of atoms and molecules; it’s all chemistry.The problems of chemophobia and radiophobia share common cultural cognition roots - particularly a mistrust arising from the origin of perceived risks. Sources of risk from large, faceless corporations, from synthetic origins are unfamiliar or ill-understood conspire to increase perceived risk, particularly for more those who identify with more egalitarian / communitarian values. (By contrast, as Francl notes, more natural, friendly-sounding names - think extract of willow - by virtue of their familiarity sound less threatening - again, despite the fact that the chemistry is unchanged.)
Francl concludes with an astute observation of a common goal, which should not itself be to dictate choices concerning how risks of various alternatives (both in medicine and energy) are weighed, but to ensure that those risks are discussed and decided based upon sound information about those risks, rather than falling prey to cultural biases. Chemistry, like energy, is an indispensable component of the modern world, and both face the same communication challenge of fostering a science-based public discussion based on a rational evaluation of comparative risks and benefits. This in turn means understanding how cultural biases are formed - and ultimately developing science communication strategies to break through these biases. (In this regard, I once again point to folks like +Dan Kahan of the Yale Cultural Cognition project, who is doing the yeoman's work with this topic as well as David Ropeik, who writes about risk perception issues extensively in an approachable fashion.)
I will say as a postscript that I think all too often that there is a particular intellectual laziness which resists these kinds of strategies - which (at least in the case of nuclear energy) solely blames public (mis-)perception of risks on petroleum-fueled conspiracies. Aside from being devoid of evidence whenever challenged, such excuses (and they are excuses) unproductively halt any discussion of what to do about the issue (and further, fail to recognize the deeper cognitive science behind how risk perceptions are formed. For example, cultural polarization occurs even for novel technologies like nanotechnology after exposure to limited information about the technology.)
Obviously, there exists no doubt that there's money to be made preying on fear (both in the realm of alternative "energy" and "medicine"), but the fact is that these is more than sufficient evidence that how risk perceptions are formed has far more to do with our inherent values and cultural affiliations than the stock price of Exxon-Mobil. Thus, for these kinds of science-informed discussions to occur, it also requires nuclear professionals to stop hiding behind convenient, ephemeral excuses of conspiracies and actually begin understanding the science of how risks are perceived (and likewise, the science of risk communication).
Friday, January 25, 2013
Where's the real bottleneck for natural gas? Distribution.
As a scientist and an unabashed nerd, I love data. Particularly, I love it when ready access to data reveals things that are surprising in the face of conventional wisdom.
An interesting case comes up with this year's colder winter in New England. (Thankfully, I'm located in damp, icy East Tennessee, where even the threat of ice and snow manages to bring civilization to a grinding halt.) In particular, Meredith Angwin noted an interesting press release by ISO-NE (the grid operator for the northeastern United States), ostensibly pointing to record-low wholesale electricity prices, but containing something more interesting buried beneath - a slow but quite noticeable creep of wholesale natural gas prices upward to the range of $6/MMBtu (1 MMBtu = 1 million British Thermal Units).
At first glance, this seemed a bit surprising to me, given that while spot prices for natural gas have nudged a bit upward, they're still hovering well under the $4/MMBtu mark; in other words, they don't seem to be going anywhere fast. What really began to catch my eye however was the cyclic behavior of gas prices in the chart from ISO-NE, something which doesn't show up in spot prices from Henry Hub (which generally sets the market spot price for natural gas in the U.S.)
Looking to verify the trend, I dug a little further around EIA's website. While unfortunately their data on "citygate" prices are a few months behind, the regular periodicity in the citygate price was likewise not there - instead, taken as an average across the U.S., spot, wholesale, and electricity costs derived from natural gas tend to have a strong correlation. Yet here we see above in the data from ISO-NE that prices clearly are deviating substantially from spot prices - what gives?
It turns out in fact that the culprit is in distribution. A look around EIA's website brought me to this interesting report, which notes that supply bottlenecks in U.S. northeast for natural gas are expected to produce significant variances in energy prices from the rest of the U.S., and in particular from Henry Hub prices.In essence, despite a relatively abundant supply of natural gas at the wellhead due to the proliferation of wells seeking to exploit unconventional resources, one thing the laws of physics haven't changed for is the capacity of distribution infrastructure - in other words, pipeline capacity. Natural gas doesn't really care where its end destination is - be it for electricity or home heating. Which means a cold winter can easily drive up demand and stress pipeline capacities - precisely what is occurring, according to the EIA report: utilization rates at the Algonquin compressor station have averaged around 86% for the months of November through December 2012.
Basic economics can predict what happens next. Because natural gas is generally shipped across pipelines as a compressed gas, due to frictional losses across the pipeline, it must be repressurized at terminals across the pipeline network. The higher demand for gas goes, the closer to maximum capacity these terminals reach. And, as EIA data helpfully shows, the closer utilization reaches to 100%, the larger prices begin to "spread" from spot prices at Henry Hub.In other words, while the commodity price of gas may indeed be cheap, the wholesale cost to utilities can be an entirely regional phenomenon. This is especially true in the blustery cold of New England winter, where demand is especially cyclic.
Why go to all of this trouble to look at trends in gas consumption (especially when I'm not an energy economist by trade)? Namely because it upends some recent "conventional wisdom" about energy; namely, gas prices are still a regional phenomenon. While there are some places where supply is not as constrained by distribution capacity (or driven by cyclic consumption) and it thus makes perfect sense to look at natural gas a short-term replacement electricity source (particularly for coal), the Northeast is a shining example where this is definitely not the case. Which in turn makes efforts to shut down stable and relatively low-cost (not to mention carbon-free) baseload sources like Vermont Yankee (and Indian Point) all the more insane - despite the claims of proponents to this end, the balance of electricity from these plants would not be made up from renewables but rather almost certainly come from natural gas. To which again, low spot prices for natural gas are in fact a remarkably poor indicator - especially if one considers what adding an additional consumption driver would look like in terms of utilization "bottlenecks" during times of peak demand (i.e., winter).
I still remain unconvinced of the argument that wholesale natural gas prices are set to explode (and so stand by my bet with Rod Adams) - namely because of the fact that an abundance of known, recoverable supplies makes economics of the raw commodity relatively self-correcting. (In other words, as gas prices go up, so too will the number of wells, pushing prices back down to an equilibrium). However, revolutions in the recovery of gas from novel geology hasn't changed the fundamental physics of pipelines - which in turn may be the real constraint to natural gas growth as an electricity source, at least on a regional scale.
Update: Via Twitter, Rod Adams points to an EIA alert from yesterday about natural gas prices and capacity in the Northeast, given the recent cold snap. Current local spot prices at Algonquin and Transco Z 6 NY (a New York-based distribution hub) are around ~$30/MMBtu - almost 10 times the Henry Hub spot price, with utilization factors reported to be at over 85% capacity. As Rod puts it, "Winter happens."
Wednesday, January 16, 2013
DOE's spent fuel strategy: Not a bang but a whimper
There is a hallowed tradition in Washington known as the "Friday Document Dump," in which news and announcements the government wishes to bury are strategically timed for Friday afternoons, when such announcements tend to fall through the cracks of the typical news cycle (i.e., assuming reporters are even present to cover the event, the strategic timing tends to ensure it will miss the weekend papers, thus effectively "burying" the story by the time the new week rolls around).
In this storied tradition, the Department of Energy released the Obama administration's response to the Blue Ribbon Commission report last Friday to relatively scarce media coverage. In fact, one would be hard-pressed to find any coverage in many of the major papers; what little coverage there was can be found in the Washington Times, Platts (an energy publication), and the Las Vegas Review-Journal. (Needless to say, the timing appears to have had its intended effect).
AREVA's NextEnergy blog and Nuclear Diner have already posted some of their thoughts on the release, but after reading the DOE's report I have to say I've felt a bit underwhelmed. As a friend remarked, it's a document "laying out the next set of milestones for the nation's spent fuel management program to miss." I wish I could say he was joking.
Some of the major highlights:
Much of the above points are relatively familiar, essentially retreading what has already been detailed in the original BRC report findings (thus begging the question of why a 14-page response would take so very long). And, for the most part, the BRC findings, translated to the DOE report, are not bad findings - however it's hard to find where the DOE's report has added much at all to the discussion aside from a blanket endorsement.
Perhaps to the disappointment of the AREVA (who emphasized reprocessing as a viable fuel cycle strategy in their blog response), the report seems to go out of its way to minimize the potential role of reprocessing in a future U.S. fuel cycle strategy - in fact, one point which stuck out to me was in that the DOE report recommended that the scope of the waste management organization (referred to as a "management and disposal organization, or "MDO" - because if there's one thing Washington loves, it's acronyms...) should be explicitly constrained to explicitly exclude reprocessing. Here's the relevant quote:
With respect to the emphasis on interim storage, I have to admit to having a somewhat adverse reaction while reading the report - namely because of the jarring disparity between words and deeds. In particular, such a ready-made pilot facility for interm storage based upon local consent has already been proposed - Private Fuel Storage. PFS existed as a consortium of nuclear utilities; it negotiated a contract with the Skull Valley Band of the Goshute Indian Tribe located in Utah (located about 70 miles SSW from Salt Lake City).
PFS had been attempting to open a privately owned and operated interim storage site for over ten years (it first filed a license application with the NRC in 1997); in the process, it has been a political football of multiple administrations in the ongoing battle over Yucca Mountain. Ultimately, PFS received an operating license from the NRC in 2006, yet various shenanigans from both the state and federal level prevented it from ever opening. (The Bureau of Land Management refused to allow for the expansion of a rail line to ship fuel to the reservation, and the state of Utah continued to block any shipments of spent fuel canisters to the site along Utah highways. Despite the fact that as a Native American tribe the Skull Valley Band is legally autonomous from the state of Utah, the state government found plenty of other ways to frustrate the intentions of the Goshute Tribe and PFS.)
Roughly two weeks before the DOE report was released, PFS finally announced its intention to withdraw its license from the NRC - namely because it was clear that the process was going nowhere (and licenses aren't free). Thus, a jarring chasm between word and deed - clearly, a pilot interim storage site already existed - one which had the consent of the local government (in this case, the Goshute Tribe); however, the Obama administration has shown little inclination to intervene. One is left to wonder then how any other future site could hope to get off the ground when a ready-made solution such as this one is abandoned to state-level sabotage; one can easily see such a scenario playing itself out with states blocking shipments to interim sites located outside their borders based on the Utah example.
Particularly depressing about the overall strategy is in its relative lack of ambition; a planned operating date for an interim storage site which would happen a mere 27 years after the original timeline obligated by the Nuclear Waste Policy Act (and 43 years after the act was first passed), with no repository in sight until I (a relatively young and spry individual at the present) am poised to retire - a full 50 years past the original deadline. (Only in the federal government is one allowed to miss a deadline by a full half-century with a straight face.)
I will be the first to say that the 1987 amendments to the Nuclear Waste Policy Act which ultimately decreed Yucca Mountain as the nation's sole geologic repository by virtue of legislative fiat was a mess. But the warmed-over copy-'n'-paste job combined with completely lackluster goals for siting a repository look like rather unseemly indicators that Obama administration's approach to the BRC process was essentially that of a stalling tactic, following their contentious decision (both politically and legally) to cancel the Yucca Mountain project. If one is to unilaterally dismantle nearly three decades of standing policy of nuclear waste disposal policy, a little more should be expected in terms of an alternative. The DOE report would not be it.
AREVA's NextEnergy blog and Nuclear Diner have already posted some of their thoughts on the release, but after reading the DOE's report I have to say I've felt a bit underwhelmed. As a friend remarked, it's a document "laying out the next set of milestones for the nation's spent fuel management program to miss." I wish I could say he was joking.
Some of the major highlights:
- An emphasis upon a flexible, staged, consent-based process for locating a permanent geologic repository for used nuclear fuel designed to be adaptive to potentially changing circumstances.
- A new, independent waste disposal organization charged with overseeing used fuel management and disposal, along with legislative action to reform allocation of the Nuclear Waste Fee paid by operators to allow for greater operational flexibility and independence.
- Short-term emphasis upon siting a pilot interim storage facility for used nuclear fuel, with a triage priority of relocating fuel from decommissioned reactor sites first. Operations would begin in 2021.
- Transitioning toward an operational interim storage site with sufficient capacity to meet the existing federal government's liabilities under the Nuclear Waste Policy Act of 1982; operations to begin in 2025.
- Making "demonstrable progress" toward locating and characterizing a potential geologic repository with a target operations date of 2048.
Perhaps to the disappointment of the AREVA (who emphasized reprocessing as a viable fuel cycle strategy in their blog response), the report seems to go out of its way to minimize the potential role of reprocessing in a future U.S. fuel cycle strategy - in fact, one point which stuck out to me was in that the DOE report recommended that the scope of the waste management organization (referred to as a "management and disposal organization, or "MDO" - because if there's one thing Washington loves, it's acronyms...) should be explicitly constrained to explicitly exclude reprocessing. Here's the relevant quote:
In addition, the mission of the MDO will need to be carefully defined. For example, funding made available to the MDO should be used only for the management and disposal of radioactive waste. While this could include the management and disposal of waste resulting from the processing of defense materials, the MDO itself should not be authorized to perform research on, fund or conduct activities to reprocess or recycle used nuclear fuel. These limitations on the MDO mission are consistent with the recommendations of the BRC.Thus, it would strongly indicate a commitment to a once-through fuel cycle for the time being. Among other factors cited to support this decision was ORNL research I'd highlighted in my previous post, which indicated that most of the current used nuclear fuel inventory (98%, in fact) could be consigned to direct disposal even assuming a future closed nuclear fuel cycle.
With respect to the emphasis on interim storage, I have to admit to having a somewhat adverse reaction while reading the report - namely because of the jarring disparity between words and deeds. In particular, such a ready-made pilot facility for interm storage based upon local consent has already been proposed - Private Fuel Storage. PFS existed as a consortium of nuclear utilities; it negotiated a contract with the Skull Valley Band of the Goshute Indian Tribe located in Utah (located about 70 miles SSW from Salt Lake City).
PFS had been attempting to open a privately owned and operated interim storage site for over ten years (it first filed a license application with the NRC in 1997); in the process, it has been a political football of multiple administrations in the ongoing battle over Yucca Mountain. Ultimately, PFS received an operating license from the NRC in 2006, yet various shenanigans from both the state and federal level prevented it from ever opening. (The Bureau of Land Management refused to allow for the expansion of a rail line to ship fuel to the reservation, and the state of Utah continued to block any shipments of spent fuel canisters to the site along Utah highways. Despite the fact that as a Native American tribe the Skull Valley Band is legally autonomous from the state of Utah, the state government found plenty of other ways to frustrate the intentions of the Goshute Tribe and PFS.)
Roughly two weeks before the DOE report was released, PFS finally announced its intention to withdraw its license from the NRC - namely because it was clear that the process was going nowhere (and licenses aren't free). Thus, a jarring chasm between word and deed - clearly, a pilot interim storage site already existed - one which had the consent of the local government (in this case, the Goshute Tribe); however, the Obama administration has shown little inclination to intervene. One is left to wonder then how any other future site could hope to get off the ground when a ready-made solution such as this one is abandoned to state-level sabotage; one can easily see such a scenario playing itself out with states blocking shipments to interim sites located outside their borders based on the Utah example.
Particularly depressing about the overall strategy is in its relative lack of ambition; a planned operating date for an interim storage site which would happen a mere 27 years after the original timeline obligated by the Nuclear Waste Policy Act (and 43 years after the act was first passed), with no repository in sight until I (a relatively young and spry individual at the present) am poised to retire - a full 50 years past the original deadline. (Only in the federal government is one allowed to miss a deadline by a full half-century with a straight face.)
I will be the first to say that the 1987 amendments to the Nuclear Waste Policy Act which ultimately decreed Yucca Mountain as the nation's sole geologic repository by virtue of legislative fiat was a mess. But the warmed-over copy-'n'-paste job combined with completely lackluster goals for siting a repository look like rather unseemly indicators that Obama administration's approach to the BRC process was essentially that of a stalling tactic, following their contentious decision (both politically and legally) to cancel the Yucca Mountain project. If one is to unilaterally dismantle nearly three decades of standing policy of nuclear waste disposal policy, a little more should be expected in terms of an alternative. The DOE report would not be it.
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