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.

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.

I compiled together citygate prices for natural gas across the Northeast and compared them to U.S. average citygate prices, and the effect is quite clear - states in the Northeast pay on average an appreciable premium on wholesale prices over the U.S. average wholesale, precisely due to these types of bottlenecks, particularly during times of peak demand (i.e., cold winters). Obviously, pipeline capacity has been steadily increasing in response to demand for gas, however the real issue will inevitably be cyclical "spikes" due to competing uses of gas as a heating source.

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."

Spent nuclear fuel disposal is not a "subsidy"

One thing that tends to raise my hackles without fail is when the inevitable game of "Name the Energy Subsidy!" comes up, somehow the issue of spent nuclear fuel disposition gets lumped in. Namely because spent fuel management is pretty much the opposite of what is typically thought of as a "subsidy."

To give some background - prior to 1982, the management of spent nuclear fuel was the sole province of nuclear generators. In this regard, coupled with the dual expectation that uranium resources would be relatively scarce and that fast "breeder" reactors would be used to create a virtually inexhaustible source of plutonium-based fuels from non-fissile U-238, the nuclear industry began private-sector arrangements toward chemical reprocessing and recovery of uranium and plutonium from spent fuel. (This still leaves the issue of locating a high-level waste repository for the remaining radioactive materials not recycled, however the mass and volume of said materials would be substantially reduced).

This continued until 1976, when President Ford issued a temporary moratorium on civilian reprocessing of spent fuel, followed by President Carter's (infamous) 1977 executive order permanently banning it, based on international nonproliferation concerns. (Reagan would later reverse this order, but the damage by that time had been done). This came just as plans were underway to by Allied General Nuclear Services open a relatively advanced reprocessing facility in Barnwell, South Carolina. Ford's (and subsequently Carter's) executive orders came after $500-700 million had already been committed to the Barnwell facility. It is one of many sobering lessons in the history of the nuclear industry how mercurial shifts in politics can bring about financial ruin when dealing with capital-intensive investments.

Fast-forward to 1982 - faced with a crisis in managing spent fuel brought about by the sudden halt in the domestic reprocessing industry, Congress passed the Nuclear Waste Policy Act of 1982. One of the main provisions of this act is that the federal government assumes the role of locating and constructing a suitable geologic repository for the permanent disposal of spent nuclear fuel. (The subsequent 1987 amendments, termed the "Screw Nevada" bill, amended the 1982 Act, short-circuiting the site selection process to designate Yucca Mountain as the sole candidate site, in part due perceived cost savings by narrowing down the site selection process.)

[As an aside, there are two excellent articles I can recommend to those more interested in a full treatment of the history of how we came to where we are today - the first, "The U.S. Spent Nuclear Fuel Policy: Road to Nowhere" by James M. Hylko and Dr. Robert Peltier, PE, which focuses more on the chronology of U.S. high-level waste management, and the second, a recent article in The New Atlantis, "Yucca Mountain: A Post-Mortem" by Adam White, which delves more into the politics of Yucca Mountain.]

However, a key facet of this bill which is often overlooked is the fact that the industry is required to pay for the cost of disposal; specifically, they pay a fee of 1 mil/kWh ($1/MWh) of nuclear electricity generated. In other words, the Nuclear Waste Policy Act is by its very nature a "polluter pays" arrangement (which really, is as it should be). To date, the Nuclear Waste Fund has accumulated nearly $30 billion (accounting for accumulated interest), while spending about $8 billion on site characterization for the Yucca Mountain Project. Only in Bizarro-world is a net payment of $22 billion from the utilities (and, by proxy, electricity consumers) to the federal government considered a "subsidy." One can quibble over whether the sum is sufficient - right now the fee generates about $750 million per year - but the fact is, no one's getting a free ride on that front.

So I was somewhat distressed to see the waste "subsidy" canard come up this discussion of energy subsides over at Scholars and Rogues. Specifically, a couple of quotes jumped out at me:

The continuing cost of such temporary storage, and the nearly $100 billion needed for “research, construction and operation of the geologic repository over a 150 year period” at Yucca Mountain, is a subsidy for the nuclear industry.

Fifty-five thousand tons of spent fuel rods, with no permanent home in sight, suggest nuclear subsidies will continue. But before Congress, presumably with White House “cooperation,” ends any energy subsidy, perhaps they’ll take time out from their internecine bickering to actually produce a coherent national energy policy that reflects all available technologies and considers the viability of energy technologies in light of fossil fuel emissions decimating the global climate.

Huh? In what universe is an industry tasked with the responsibility of paying for its own waste disposal (particularly after the utter and repeated failure of the federal government to live up to its contractual obligations with utilities) a "subsidy?" Much of the rest of the article contains some risible arguments about subsidies to the nuclear industry (the value of the Price-Anderson Act is a contentious issue, namely because while it does act as a liability backstop for nuclear accidents, not a single dime has ever been paid out under the act; further is the cross-insurance requirement that literally guarantees "an accident anywhere is an accident everywhere"); however, given that I have a day job, I really didn't feel like debating every single claim. Needless to say though, the issue about calling waste management a "subsidy" struck me as profoundly incorrect.

So, in the spirit of Rod Adams, I left a comment, but I decided to share my comment here as well. (Forgive my long-windedness...)

I will leave the debate over some of the "subsidies" you bring up for others, but there is one major issue I must take issue with - you state the cost of spent nuclear fuel storage is a cost borne by taxpayers (i.e., a subsidy). This is most explicitly not true.

First, the cost of on-site storage is explicitly paid for by the generating utilities (i.e., under the law, this is their obligation) - not the federal government. Second, per the Nuclear Waste Policy Act, nuclear operators have been required to pay a fee of 1 mil/kWh of nuclear electricity generated (i.e., $1/MWh) to cover the costs of geologic disposal. (Per the NWPA, the federal government assumed the responsibility for permanent geologic disposal - in 1987, this was amended to select the Yucca Mountain site.)

In this time, the federal government has collected nearly $30 billion (including accumulated interest) from the utilities to cover the costs of Yucca, with about $8 billion being spent in site characterization. This most certainly does not look like a subsidy in the conventional sense.

One can argue whether the nuclear waste fee is sufficient to cover future costs - at present, the waste fund accumulates about $750 million per year, and will continue to do so as long as the reactor fleet operates. One could likewise argue with your characterization of "no permanent solution" - geologic disposal, by its very nature, is designed to be a "permanent" solution, namely by placing spent fuel in long-term isolation from humans and the environment. And this is not the only waste disposition strategy available - other strategies, like reprocessing to separate out shorter-lived fission products from still-useful actinides can both substantially reduce waste volume and the overall long-term radioactivity (i.e., the actinides, like Pu and other fissionable heavy metals, are the majority of the "long tail" of radioactivity in spent fuel - nearly all of the rest is gone after around 300 years). However, I would also point out that it was political decisions by the federal government in the 1970s that ended U.S. reprocessing efforts being undertaken by private industry - and thus left the federal government in the role of assuming responsibility for spent fuel disposal.

Overall though, the fact that the nuclear industry is responsible for paying its own way with regards to spent fuel disposal significantly undercuts the argument that this constitutes a "subsidy" in any form.

Meanwhile, what other energy sector requires that hazardous wastes be so methodically isolated from humankind until the end of time? Certainly coal ash has toxic heavy metals (lead and mercury) which never become less toxic, as do older generations of photovoltaic cells. I don't say this to diminish the challenge in responsibly managing nuclear waste, but rather to point out that this is a more universal problem - the only difference is that nuclear is the only sector actually held to account for this negative externality, including paying for the actual costs of permanent disposal.

Does declining gas exploration indicate a price "explosion" or just a new equilibrium?

A few interesting points came out of the follow-up discussion on my prior post, in which I argued that, contra Rod Adams, natural gas prices are not set to "explode" anytime soon.

Meredith Angwin of Yes Vermont Yankee made a keen observation that over the last year, the number of new natural gas exploratory wells is collapsing. Why is this happening? Namely because of the cratering current price of natural gas.

In fact, a very interesting thing appears to be happening right now with shale / unconventional natural gas recovery boom - the industry appears to be a victim of its own success. Or rather, drillers have been sinking new wells without regard to price (again, see the sharp boom in new wells up until about October 2008, where new wells peaked). As a result, proven reserves have fairly substantially increased - and in particular, known reserves of "dry gas" (i.e., nearly pure methane, the most commercially valuable component of natural gas) have in fact "exploded" - nearly doubling over the last decade.

Meanwhile, neglected in these considerations is that shale fracturing wells in particular aren't cheap to drill; as a result, anomalously low natural gas prices means that some drillers have been losing their shirts over the same much-publicized "boom" in natural gas production. 

This is where we get back to the discussion of natural gas prices overall. What appears to be occurring is a basic disequilibrium; a disruptive event in supply (i.e., introduction of large new resources) prompted a rush to invest/explore this resource, which in turn created a significant rise in supply over the short term, rapidly dropping the price to a point where the market price is below the profitable price of recovery.

Thus, as far as exploration goes, we seem to be observing is basic mineral economics: exploration follows price. When price drops (i.e., we had an over-abundance of exploration), exploration drops. As prices rise to the point where new wells achieve a net profit, it's a relatively safe prediction that exploration will again begin to rise. What is essence is developing are two constraints on natural gas price - a "floor" on prices (i.e., below which it is not economically viable to recover gas from new wells) and a "ceiling" (driven by the large increases in known supply). My colleague Alan observed this some time ago when he speculated as to whether we are seeing the end of natural gas price volatility (at least for now).

So, will natural gas prices rise? Probably - but given the very large amounts of known reserves, price acts as a strong signal to start drilling again. Given the large known new reserves, this will inherently push back against any significant rises in price - as it gets more profitable to drill new wells, new producers will inevitably get into the game, particularly because we know the gas is out there. The real question is, "At what price does this happen?" I'm not an expert in gas recovery, so I don't know - but like Meredith, I suspect it will be around $5-6/MMBtu. A columnist at Forbes suggests it may be $8/MMBtu. Either way, I remain deeply suspicious at this point of the idea of prices "exploding" (and hence my bet with Rod) - what instead appears to be happening is the search for a new price equilibrium.

A final addendum - as commenter Robert pointed out, all of this really applies to the U.S. - something worth emphasizing. Other places, where either fossil resources like coal and natural gas are less abundant (i.e., South Korea and Japan) or where there these resources are more valuable as exports (i.e., UAE) have a completely different picture for the relative economics of nuclear versus natural gas. In particular, it is likely far easier to make the economic case for nuclear in these places - meaning even if new builds for nuclear may be slowed or delayed in the U.S. for the time being, the same is not true abroad.

Wishful thinking on natural gas prices

Rod Adams of Atomic Insights has posted a string of arguments in the general thread that natural gas prices are set to explode - or at least, precipitously increase - and that further, the current historic lows in natural gas prices are a mirage, one carefully put into place by gas producers to squeeze out competition, particularly in the electricity sector. In his latest post, "Where is the huge increase in US natural gas supply?" Rod points to EIA data indicating that the "flood" of new natural gas is anything but.

There's just a small problem in this assertion - the data doesn't support Rod's claims. And I say this as someone who obviously would like this to be true. Low natural gas prices have largely put the brakes on new nuclear construction - the latest casualty being Exelon's planned Victoria unit in Texas. Obviously, Exelon has made its position known on whether it will be investing in new nuclear units in an environment where natural gas is currently cheap (it won't), so this comes as a surprise to no one. In fact, the overwhelming majority of new electric generation capacity in the U.S. over the last decade has been natural gas.

Rod makes the claim that the cause of currently low natural gas prices is less due to new supply and more due to slumping demand for energy given the recession. As evidence of this, he points to this chart from the EIA, indicating gross withdrawals of natural gas at U.S. wells.

Rod's argument is that the new supply hitting the market isn't exactly overwhelming - and therefore, when demand picks up, so will prices. The data Rod is using to justify this reasoning is withdrawals at the wellhead - which indicates how much supply is hitting the market. The trend is easier to see on the annual withdrawals basis.

While we don't see an "explosion" in terms of orders of magnitude difference, looking at the data, it's clear that natural gas withdrawals have increased by over 20% since 2005 - hardly insignificant.

But frankly, this is the wrong metric to look at the begin with. If we want to know the real story with natural gas supply, we need to look at proven reserves (i.e., the amount of natural gas we have reasonable certainty of economical recovery from the ground). Again, going to the EIA data, we see the same trend; since 2003, proven U.S. reserves have increased from about 7.5 billion barrels to 9.3 billion in 2011 - a 24% increase. Again, while not mind-blowing, this is not insignificant.

However, we're still missing one last piece of the puzzle - natural gas consumption. This of course is the key to Rod's argument - we've demonstrated that supply has increased, although perhaps not "exploded." But Rod claims that much of what has contributed to temporarily low gas prices has been slumping demand due to a down economy. We can easily evaluate this claim by looking at total consumption data.

On a month-by-month basis, peak consumption (in January) did decline from 2011 to 2012 - by about 5%. This may be partly due to a sluggish economy, but probably more so due to an anomalously warm winter. To get a better feel for total consumption trends however, one should look at the annualized data, "smoothing out" some of these peaks.

On an annual basis, natural gas consumption has been rising - since 2003, net consumption has increased by about 10%. Looking at just the last six years (from a minimum in 2006), gas consumption has grown at a maximum of about 14%.

So now to recap - natural gas supply, in terms of proven reserves, has increased by about 24%, while natural gas consumption has only grown by 14%. Basic economics allows one to predict what happens to price under this circumstance - supply has, in the short-term, outstripped demand. However, while demand has dropped off a little in 2012, supply has been outstripping demand for the last 10 years - this is not a temporary phenomenon.

Now, one can make the argument that eventually demand will catch up with supply - in which case, prices certainly will begin to creep back up. But there is no evidence that proven reserves themselves are declining, which means predictions of the imminent explosion of natural gas prices have, unfortunately for nuclear, little basis in reality.

This gets me back to a recurring point I make many, many times - for nuclear to be viable, reducing capital costs and eliminating the risk premium must be the absolute first priority. (A second, equally important priority would be in establishing a clear price signal on carbon dioxide - very much contrary to the giveaway to natural gas producers which the EPA's current target amounts to.) 

Expecting a deus ex machina spike in natural gas prices to save new nuclear construction simply isn't going to happen in the short-run. It may be true in the long-run - a decade or more away. And certainly any utility looking to hedge against future price volatility in fuels would be smart to invest in nuclear. But there isn't any evidence that a sudden increase in gas prices will come to nuclear's rescue in the near-term, and this is important - not because I don't want to see new nuclear get built, but because nuclear advocates need to be clear-eyed about the reality confronting them. Self-deluding arguments might feel good in the short-run, but they do little to see to it that new nuclear plants actually get built.

Update: In the spirit of Bryan Caplan of Econlog, Rod has made a wager ($50) with me; that there will be at least one month by end of 2014 in which natural gas prices at Henry Hub will exceed $10/MMBtu (Rod is betting that they will exceed this). I have to say, I respect anyone willing to put their money where their mouth is. I hope I'm wrong, but I doubt I will be.


For reference, here's the historical EIA data on natural gas prices. (For clarification: 1 MMBtu = 1000 Btu; 1000 cubic feet of natural gas contains about 1020 Btu, or 1.02 MMBtu)

Deconstructing anti-nuclear economic myths - a response to Veronique de Rugy

Let me start things off with a disclaimer - I am not an economist. I don't even pretend to be an economist; I'm a nuclear engineer by training (I hold Ph.D. in Nuclear Engineering). That notwithstanding, economics (and specifically, the economics of energy) are a side interest of mine. So it was with mixed interest and trepidation when I read a recent piece by libertarian economist Veronique de Rugy from the upcoming July issue of Reason, entitled "No to Nukes."

Plausibly, de Rugy's animating complaint (given Reason's market-oriented focus) is in the subsidies for new nuclear (specifically, when I followed up with de Rugy on Twitter, she pointed out the issue of loan guarantees, although nowhere does this specifically appear in her piece). The piece itself is nothing new, however - the bulk of it is in fact a retread of a suspiciously-timed nuclear hit piece which appeared literally two weeks after the Fukushima disaster. (One gets the distinct impression that, despite her protestations to the contrary, de Rugy is more than happy to dance on what she perceives to be nuclear's grave, particularly given her timing and choice of targets.) In reality, the piece seems to follow on to a frustrating trend of pro-fossil contrarianism as of late, particularly in libertarian circles (contrarian in the sense of singling out the most economical, carbon-free competitor to fossil fuels for special scorn on economic grounds); although perhaps this contrarian turn owes to the fact that conservative heavyweight think tank Heritage has cornered the market in advocating nuclear energy as a free-market energy source. (Who said hipsterism is limited to fashion and terrible beer?)

de Rugy's piece begins with an overly long introduction detailing to the reader why nuclear power was destined to fail to live up to its promises, including citing public opinion which she describes as having " remained steadfast against the technology ever since [Three Mile Island]" (although someone may want to refer de Rugy to the latest polling data on the subject), along with other issues, such as "[d]isputes over waste disposal [which] have never been resolved" (once again however, these are political rather than technical matters).

Finally we get to the meat of the matter - it would appear that a restart of the nuclear industry is, "[...]not just bad politics. It’s awful economics." Well.

To this end, de Rugy characterizes the recent decision by the NRC to grant Southern Nuclear company a license to build two new AP1000 units at the Vogtle site - the first new units in 30 years, as "[...]an act of desperation by a president who has realized he is running out of other options." Fortunately, contrary to the opinions of a economists with a particular axe to grind, the decision to award Southern Company is not in fact in the hands of the president, nor are operating licenses granted upon individual opinions about economic viability of the project - they are voted on by the commissioners of the NRC on the basis of safety alone. This fundamental misunderstanding of the process is pervasive throughout the rest of the piece.


Much of the piece is particularly scarce on actual sources and utterly devoid of hyperlinks (however, given the fact that the piece is a re-tread of her prior post-Fukushima piece, most of her sources appear to be taken from there). de Rugy cites a 2009 MIT study by Ernest J. Moniz and Mujid S. Kazim as evidence of nuclear's uncompetitive costs; one assumes she is referring to MIT's "Future of Nuclear Power" project which includes cost projects of nuclear compared to other conventional fossil sources under a variety of circumstances. In the 2009 update, it reports the following cost comparison: assuming current cost of capital, coal clocks in at 8.4 ¢/kWh, natural gas at 6.5 ¢/kWh, and nuclear at 8.4 $/kWh. The authors specifically note however that this includes a current "risk premium" to capital costs for nuclear - recalculating capital costs at comparative market rates (absent the "risk premium"), they come up with a number far closer to gas and coal: 6.6 ¢/kWh. Even assuming the risk premium stays, with a carbon capture and storage the cost for coal and gas quickly reaches near-parity with nuclear once more. Such an analysis is also borne out in applying levelized cost of electricity estimates to EIA data, resulting in similar conclusions.

Taking up the example of the French (with their nuclear-heavy energy portfolio), de Rugy asserts that because of the France's (state-subsidized) industry, French consumers pay more for electricity. Specifically, she writes:

But producing nuclear energy in France is not magically cheaper than elsewhere. French citizens are forced to pay inflated costs to support grand government schemes, such as the decision made 30 years ago to go nuclear at any cost after the first oil shock in 1974. 

Really? Going to the data, the opposite is in fact true: France has one of the lowest retail electricity prices (the 7th lowest in the E.U.); compare this to Germany, which has recently phased out nuclear entirely, which pays the second-highest rate. (Again, these are not hard things to find, but something de Rugy asserts with no evidence and in clear contradiction of the data.) She might try to argue that consumers pay indirectly, but nowhere has evidence been presented to support this, nor is it supported by retail electricity price data.

de Rugy's main thrust here of course is that capital costs for nuclear in the U.S. are little different than those than in nuclear-friendly France, relying on the analysis of the Vermont Law School's Mark Cooper, an individual who isn't exactly private about his own agenda when it comes to nuclear. (Hint: he's not a fan.) Again, one gets the impression the data is being cherry-picked to fit the desired conclusion. de Rugy makes an incomplete comparison here, citing the high "overnight cost" estimates for nuclear capital costs compared to coal and natural gas, while neglecting to inform her readers that this alone is a highly misleading comparison. (To see how this process is properly unpacked, even with natural gas still coming out favorably compared to nuclear, I invite you to see how Dr. James Conca unfolds the data).

To wit: "overnight" cost is a rough estimate of total capital cost (i.e., total money which must be invested to build the plant), assuming the plant "overnight" - i.e., without the borrowing costs (in other words, interest on loans which continues to pile up while plants are being built and not generating revenue), something which particularly dominates nuclear costs. However, a more accurate comparison is the levelized cost of electricity  (LCOE)- something which calculates both the capital cost and operations & maintenance costs (which include fuel - a cost which dominates natural gas economics). The LCOE calculates the "break-even" cost of electricity from a plant given the projected costs over the plant's lifetime, with a reasonable discount rate (for example, the expected return of ~3% on treasury bonds) over the life of the facility. Given that the expected lifetimes of different facilities can vary widely by type (i.e., the current fleet of nuclear plants will almost all be relicensed to operate for a total of 60 years, with some potentially operating up to 80 with facility improvements and upgrades), this makes for a more useful comparison of the actual cost of electricity. Once again, something absent from de Rugy's analysis.

Indeed, taking this out to the logical extension - if nuclear plants were wholly unprofitable to build and operate, why in the world then would operators of the existing fleet of 104 reactors not simply turn each one off tomorrow, much less put a dime into maintenance outages which run up into the millions of dollars? The answer of course is because this is not true; nuclear plants are indeed expensive to build (due to capital costs, including the borrowing costs associated with construction times), but the marginal cost of power from a nuclear unit is tiny - namely because most of the cost is in the cost of capital itself. Nuclear in this sense represents the opposite economics of natural gas, which has a low front-end cost but whose costs are generally dominated by fuel price. (Thus, the levelized cost - something de Rugy does not look at - is extremely dependent upon assumptions of future fuel prices - hence why nuclear is often seen as a hedge against future fossil fuel price increases.)

However, de Rugy comes back with the follow-up that such estimates of nuclear cost come "after taking into account a baked-in taxpayer subsidy that artificially lowers nuclear plants’ operating costs." Looking at the broader picture of historical energy subsidies however, this point doesn't seem to carry the impact de Rugy seems to think it does - from the period of 1950-2010, nuclear has been the recipient of about 9% of total federal energy subsidies, compared to a shocking 44% for oil. (For those following at home, the rest include: Natural gas - 14%, Coal - 12%, Hydro - 11%, Renewables - 9%, Geothermal - 1%). Most of nuclear's subsidy has, contra de Rugy, not been focused on the regulatory side (although the study does point to an approximate regulatory subsidy of $16 billion over the total time period) but R&D, which should surprise few who are conversant with the history of nuclear. (Oil, by contrast, receives the whopping share of its calculated subsidies from tax policy and regulation, while natural gas has almost exclusively benefited from tax policy).

Image: Wikipedia

Notably absent from de Rugy's analysis is how the most important subsidy fossil fuels (especially coal) have come to rely upon, which is treating the atmosphere like an open cesspool. Indeed, looking to the above costs from the MIT study, were we truly dealing with a "level playing field" in the sense that carbon-intensive industries were required to give their waste products the same degree of scrutiny that nuclear already does, the much-ballyhooed "cost difference" largely vanishes. (Again however, discussions of energy subsidies invariably seem to only go one way: like a claymore.)


No doubt though de Rugy is invoking the issue of nuclear liability insurance of course (known under the moniker of the "Price-Anderson Act", passed in 1957). What is not noted is the exact taxpayer liability to date under Price-Anderson - which is exactly $0. Again, contrary to the claims of nuclear opponents like de Rugy who dress up their objections in economist's language, nuclear is not "uninsurable" on the private market - in fact, each nuclear unit is required to carry an individual liability of $375 million; following the exhaustion of the individual commercial policy, each operator-licensee is required to kick in up to another $111.9 million (pro-rated), producing what amounts to a collective cross-insurance arrangement of $11.975 billion. One can dispute whether such a sum is "sufficient," but the idea that the industry is utterly absolved of tort liability is clearly at odds with the the current reality.

When I pressed de Rugy over what particular subsidies she was complaining about and why her complaint so specifically singled out nuclear (looking at her publication history, there is nary an article devoted to the issue of energy subsidies for other sectors), she responded by pointing me to an analysis she did on the market-distorting effects of loan guarantees. (This after I pointed out that I was in favor of removing all subsidies - but it would seem, like many in the punditry business, the conclusion comes first).

Frankly, I won't get into all of the analysis - because once again, I am not out to defend loan guarantees or any other form of energy subsidy. However, one thing that did jump out at me once more was the use of extremely cherry-picked data in her report - the few items that do mention nuclear (most of the piece pertained to loan guarantees for solar - which incidentally, was not required to pay the credit subsidy fee which nuclear was) are, shall we say, "factually challenged." de Rugy rolls out the several-times-over debunked trope of the 50 percent default rate with nuclear loan guarantees - based on poorly-documented projections over a program which was never passed. While de Rugy immediately pointing out that the CBO revised this number (without specifying how much), the supporting evidence she gives to this revision doesn't even pertain to civilian nuclear power - rather, the study she points to is a comparative economic analysis of nuclear power for naval propulsion.

The only other nuclear-specific studies de Rugy cites in this study come from Peter Bradford - a well-known anti-nuclear activist with the Nonproliferation Policy Education Center (simply google "Bradford" and "nuclear" if you don't believe me) - along with Henry Sokolski (also affiliated with the same). The extremely selective use of sources known to have a hostile agenda to nuclear (that is, when the sources even accurately refer to de Rugy's claims) again strongly implies a rushed, cherry-picking approach that implies a "conclusion-first, evidence later" approach that is all too familiar with established punditry. Indeed, it might make for impressive-looking studies (and good sound bites), but it hardly suffices for serious scholarly work. Indeed, if the evidence is as strong as she claims it to be, it would behoove her case greatly to find such evidence from more objective and less clearly agenda-driven sources.

Of course, all of this is the problem: even rather sloppy studies like this, particularly when attached to someone with a Ph.D. in economics, sound plausible and require the time and energy to deconstructing their myriad of errors and misplaced assumptions - something which amounts to a non-trivial task for one when most of their day is typically occupied by honest employment, alas.

Checking out the competition

In a bit of a change of pace from the normal fare, I thought I'd post some pictures from a visit today to TVA's Norris Dam. At 130 MW peak generating capacity, it is perhaps the one source out there that can truly compete with nuclear in terms of marginal unit cost as well as dispatchability: hydro.

Norris Dam from the western overlook

Norris Dam serves a dual purpose, being designed both to provide large amounts of reliable electricity as well as providing flood control along the Clinch River (which winds through east Tennessee, eventually joining with the Tennessee river).

Norris Dam and power station

Hydro represents one of the most interesting sources of electric power, in terms of its flexibility - its economics are similar to nuclear in certain respects (in that it is capital-intensive yet very low marginal unit cost, meaning it is the first energy source to be dispatched for demand), yet by its nature it is easily suited to baseload generation (low marginal cost), as well as load following and peak generation (i.e., given the ease at which floodgates can be opened or closed). Nuclear is also capable of load-following, which is commonly done in France, although much less so in the United States (due to economics) save for where nuclear exists is high concentrations; typically load-following is accomplished through fast-response natural gas turbines.

In other respects, hydro shares some similarities with other renewables - the energy output of a hydroelectric plant is fundamentally tied to nature - namely by the reservoir level (which in turn is influenced by rainfall levels). Unlike wind and solar however, hydro represents relatively "smooth" and predictable power output - while meteorology is far from a perfect science, rainfall patterns are generally quite predictable, meaning output levels from hydroelectric dams can also be readily planned for in advance.

The view from the top of Norris Dam

Clinch River valley, past the impoundment

More photos here.

Unfortunately, at least as far as the U.S. goes, most of the "prime" hydroelectric capacity has already been tapped - meaning we've got about as much as we're going to get from this source.

Happy Memorial Day to our U.S. readers - we'll be back to our regular scheduled programming later this week.

The EPA's coal mandate: An opportunity for nuclear, a giveaway for natural gas

Today the EPA issued its first-ever regulation on carbon dioxide emissions from new power plants, limiting emissions to 1000 pounds of CO2 per megawatt-hour of electricity produced. Given the fact that the average coal plant vastly exceeds this limit (weighing in around 1,768 lbs CO2 per megawatt-hour), the implications of the move seem rather obvious - essentially banning new coal plants without carbon capture and sequestration (CCS) technology (and thus greatly increasing the cost of new coal plants), thereby making good on President (then-candidate) Obama's promise to "bankrupt" anyone who still desired to build new power plants fueled by coal.

Naturally, the move is producing howls of protest from the predictable corners - despite the fact that the move only applies to new construction (with an exception for those already permitted and begin construction within one year of the rule change taking effect. And of course, despite the fact that there exists a reliable, baseload alternative for producing energy, one which incidentally has the lowest marginal generating costs and has proven more than capable of delivering electricity safely and reliably. More to the point, given that the chief opposition to the rule is from Republicans, who ostensibly support nuclear energy, why the doom and gloom about an economic catastrophe? If anything, the move should be an opportunity to hammering the case for why nuclear is needed now more than ever. Again though - one wonders if nuclear's support is wide but shallow compared to support for conventional fossil sources among these groups.

Overall however, the EPA mandate has a marginal but positive impact on new nuclear, namely by formalizing the winnowing down of new baseload capacity to a race between nuclear and natural gas, the latter of which has of course been buoyed by low prices from the recent boom in shale gas production.

Meanwhile, if the EPA's mandate is a glimmer of opportunity for the nuclear industry, it's an outright giveaway for natural gas. The average natural gas plant emits roughly half the CO2 of a standard coal plant (about 850 pounds per MWh), and meanwhile the EPA estimates that 95% of current natural gas power capacity would pass muster under the new rules. Thus, the choice of a convenient round number of 1000 pounds per MWh seems all the less arbitrary - in fact it seems almost entirely designed to benefit natural gas at the expense of coal. (I was pleased to see that I am not the only one who noticed this distinction - the fine folks at NEI Nuclear Notes have also taken notice .)

There are perhaps any number of reasons to complain about the EPA rule, even if one does believe (as do I) that tackling carbon emissions is of the utmost importance. For one, a more economically efficient proposal would of course be a carbon tax. Logically, if the rule is designed to minimize the social ill caused by carbon emissions, then natural gas plants (as a function of capacity) all produce half the harm of coal plants, while nuclear produces none. More economically efficient policies - like a carbon tax - would more readily reflect this than the current approach, which almost seems designed to simply promote natural gas.

Indeed, MIT's "Future of Nuclear Power" report found that even a modest carbon tax of $25/tCO2 would raise the price of new coal to 8.3 cents per kWh, comparable to that of new nuclear (8.4 cents/kWh), while that of natural gas would rise to 7.4 cents per kWh - still cheaper, although hardly the clear favorite, especially given scenarios under which the capital costs of nuclear were controlled to the level of other fossil sources (at which point, new nuclear drops to 6.6 cents per kWh - well below coal and slightly cheaper than natural gas.)

One can only guess then as to why EPA choose to ignore the advice of both numerous environmentalists and scores of economists, all of whom have advocated either a carbon tax (or its lesser cousin, a cap-and-trade carbon credit market) as an economically efficient solution in favor of a suspiciously non-arbitrary cap.

Energy finance in free markets: an open conundrum

A question which has occurred to me lately revolves around the oft-heard objection that, "Nuclear has always been a state enterprise." In other words, the high up-front capital cost (and attendant front-loaded risk from construction delays and potential intervenors) makes nuclear a tough pill to swallow for liberalized energy markets, despite the extremely low operating costs (and hence, low back-end risk).

This problem seems to extend well beyond nuclear energy itself; rather, it would seem to indict any capital-intensive energy projects where a given rate of return on investment is not guaranteed. It provokes the question - in a completely free market for electricity (as opposed to the admixture we have now), what would energy investment look like?

Some of the imbalance which currently exists now owes to the imbalance of externalities captured by the current regulatory environment. Sources like coal - especially older, "grandfathered" plants, are allowed to treat the atmosphere effectively as an open cesspool; at the other extreme, nuclear is expected to account (and pay for!) each last curie of waste produced, going as far as to return the site to greenfield status once the plant has closed.  Meanwhile, indictment of nuclear as uniquely a "state industry" by its detractors rings somewhat hollow, given that yet more expensive, diffuse, and less reliable sources such as wind and solar would almost certainly be pushed to the margin under the same standard.

Obviously, a balance to the regulatory playing field is called for (although don't hold your breath waiting for that one…). Yet going a step further, assuming this, what would energy investment look like in a completely liberalized energy market?

U.S. natural gas prices, per EIA

Essentially, what such a market would appear to produce, if the current trend is any example, is likely sources in which costs are easily externalized to others (e.g. coal and to a lesser degree natural gas) or the costs are relatively distributed throughout the lifecycle (e.g., natural gas, where costs are largely on the fuel cost). Yet one predictable consequence of this - beyond the environmental impact - would be the impact on retail electricity price volatility. Again - natural gas is far from being historically "stable" in price.

Where does this leave nuclear? Ultimately, nuclear would seem to have the ability to moderate these types of price shocks, namely by providing stable, low-cost baseload power. This ultimately is where I believe technologies such as small modular reactors (SMRs) are so vital to the future of nuclear; they provide at least some means of blunting the capital risk of nuclear in liberalized energy markets. Further, incentives clearly matter - Pigouvian measures such as a carbon tax would go a long way toward leveling the playing field (again, don't hold your breath on this one.)

Yet even beyond this however, the need for innovative mechanisms for financing large, capital-intensive energy projects remains clear. Ultimately, my expertise is in nuclear technology and not finance, and thus I am at a loss for ideas. Given my own personal predilections toward free markets, it is often disappointing to see many market-oriented advocates simply put down nuclear as "socialist" rather than seeking out new vehicles and mechanisms to finance such projects through private investment.  (Unlike many nuclear advocates such as Rod Adams, I do not share their antagonism to Wall Street, recognizing that ultimately private capital will be essential for future energy projects, especially as America's own government contemplates austerity measures in light of a growing entitlement crisis brought about by massive demographic shifts). One notable example of innovative ideas for finance comes from this excellent guest post at Idaho Samizdat, taking a lesson from the Dutch nutmeg trade. But further such ideas for innovative financing models are badly needed.

An alternative proposal is for legislative mandates such as portfolio standards - e.g., a "clean energy standard" similar to renewable energy portfolio standards which currently exist, mandating that utilities generate a certain fraction of their energy from designated sources. Beyond the obvious potential for peril of political manipulations on defining just what qualifies as "clean" (or attempts to game the standard by powerful, entrenched interests), this does nothing to solve the existing problems of financing which have ultimately precipitated the perceived need for such mandates.

Ultimately, this question goes well beyond nuclear; given the fact that liberalization in energy markets is unlikely to reverse course in the forseeable term, how can we develop new mechanisms to provide financing to capital-intensive (but lower long-term financial risk) projects, sans government intervention? This is the true long-term challenge, incumbent advocates of clean energy of all types as well as market advocates themselves. These kinds of questions are the kind whicn should form the basis of free market environmentalism (a term which need not be an oxymoron).

Unfortunately, these are questions I am ill-equipped to answer, yet they are (in my mind) vital to the future of energy markets.

Rent-seeking and Greenwashing: The Case of Sierra Club and Natural Gas

Recently, the Sierra Club was outed for accepting massive amounts of bribes donations from Chesapeake Energy (a major natural gas producer heavily involved in hydraulic fracturing, or "fracking") along with others to the tune of over $25 million, money used to fund Sierra Club's "Beyond Coal" campaign. As a part of the same campaign, Sierra flogged natural gas as a "bridge fuel" to an renewable energy-powered future (however implausible). In response, current Sierra Club head Micheal Brune posted a hand-wringing essay about just how hard it was to accept piles and piles of cash from the natural gas industry, why it really was all in the service of a higher good, and finally why they have decided to refuse future, yet larger donations from the same industry. To use his words:

It's time to stop thinking of natural gas as a "kinder, gentler" energy source. What's more, we do not have an effective regulatory system in this country to address the risks that gas drilling poses on our health and communities.

In other words, "We got caught with our hands in the cookie jar, so now we need to make good."

To wit: is it wrong for environmental groups to accept funds from competitor energy sources? In itself, no - where Sierra crossed a serious ethical boundary was in their refusal to make their clear conflict-of-interest known. In accepting money from natural gas and then using that money directly in service of the interests of that industry (i.e., campaigning against coal), Sierra had exposed itself to a tremendous conflict of interest in its advocacy - one which they deliberately chose not to disclose. They, along with their patron, had a direct economic interest in their lobbying campaign.

[An aside: Notably, when market-oriented groups like Cato accept money from the petrochemical industry, they are assailed as shills for "secretive oil billionaires" - despite the fact that their pre-existing libertarian agenda does not directly favor - or disfavor - any one specific industry. It will likely be a cold day in Hell before the same standard is ever applied to groups like Sierra.]

But perhaps the bigger issue is how the whole case exposes simply how pervasive the notion of rent-seeking is within the energy market as a whole. In this context, "rent" is not used in the meaning of say, a landlord, but rather in the economist's jargon, where these types of "rents" are wealth created through exploitation of the political system - think locking out competitors and the creation of cartels which drive up prices from their normal equilibrium. (Conservative Washington Post columnist Charles Lane also recently devoted a column exclusively to this topic.)

Captain Renault is shocked, shocked to find that
rent-seeking is going on in energy markets.

What the Sierra Club case shows is just how rife the intersection of environmental politics and energy is with rent-seeking behavior. The only mystifying feature is how shocked anyone seems to be - almost like Captain Renault in Casablanca, who was, "shocked, shocked to find that gambling is going on here." Anyone who has paid attention to these issues (and in particular, I will give the nod to Rod Adams) knows this kind of behavior has been going on for some time.

For Chesapeake, funding Sierra's "Beyond Coal" campaign was a no-brainer in terms of economic self-interest: not only did they have a chance to kneecap a direct energy competitor (coal); equally as important they purchased vital environmental credibility - in essence, "greenwashing" their behavior. As a special bonus, they were able to accomplish all of this via proxy - it wasn't the natural gas industry attacking their logical competitors, it was a disconnected third party with ostensibly pure economic motives.

In a certain sense, such activities can be viewed as the direct parallel of conventional lobbying, along with its corresponding perspectives. Taking Sierra strictly at their word, Chesapeake's activities are simply like those of psychological conditioning through positive reinforcement - rewarding and promoting behaviors which so happen to benefit their interests, the same way individuals and industries might support candidates whose actions and beliefs correspond with their own interests. The other perspective of course is that Sierra and others become beholden to their donors, altering their message and focus to keep the money coming - something which Sierra's Brune takes great pains to attempt to dispel, particularly by refusing future funds from Chesapeake in rather pharisaic fashion.

Yet at the heart of this is what has fundamentally begun to go awry with American capitalism - it has become, in essence, "political capitalism" (aka, "Crony Capitalism") particularly when it comes to energy. Resources otherwise devoted to research and development of more abundant resources are instead poured into games of political influence-peddling, a game in which the winners reap privilege and favor from regulators, all to the detriment of consumers.

Meanwhile, funneling money into environmental lobbying organizations has been fundamentally dual-purpose - for one, "buying off" groups in a mafioso-like protection racket as well as hiring them on as mercenary lobbyists to rig the regulatory regime in their favor. This raises obvious problems across the political spectrum - unlike the way Rod Adams characterizes the issue as market advocates as blithely dismissing the matter as, "This is what you get when you play with fire," political capitalism - particularly in energy markets - should be worrying to anyone with a vested stake in environmental and energy security issues.

And unfortunately, no one's hands are really clean when it comes to this one. The fossil fuel industry continues to profit handsomely from uncaptured externalities in their products - everything from the carbon dioxide they are allowed to freely spew into the air to the pollutants which come out the flue of every coal plant - especially egregious when one examines how existing coal plants have been grandfathered in to more stringent environmental regulations. And indeed, the natural gas industry has proven expert at playing ahead of the curve on this one, when it comes to both paying off environmental organizations to promote natural gas as a "bridge fuel" as well as positioning themselves as the "clean(er)" source of energy. Those with slightly longer attention spans might remember fossil fuel magnate T. Boone Pickens' implausible wind corridor plan - in reality, a plan to reap tremendous benefits by hawking natural gas - something he just so happened to have a large vested interest in.

Nor coal has been a shirking violet, both with their "America's Power" campaign as well as their steadfast opposition to any carbon pricing scheme.

And indeed, it goes without saying that renewable sources have their heads deepest in the trough, both in advocating for political mandates for producers to buy their products (renewable portfolio standards) as well as demanding outrageous subsidies (electricity feed-in tariffs and above-market energy price contracts) in order to keep an otherwise unsustainable business plan afloat.

Finally, an area where I at times am forced to part ways with my nuclear advocacy colleagues - yes, nuclear too is at times guilty of the same behavior (if to a lesser extent), particularly in the face of high-stakes "energy policy" legislation. The counter-argument many nuclear advocates make is that nuclear is uniquely hamstrung as an energy source by federal regulations - which is indeed true. Nuclear plants requires years of licensing approval before construction can even take place and must maintain a record of safety and waste stewardship unheard of in any other energy sector. But in my mind, the answer is not more special pleading with the government to offset these requirements, but to simply level the playing field - let the same standards apply across the board and then we'll see how "cost-competitive" other conventional energy sources are. (Don't hold your breath for Congress to move on that one.)

Much like the Game of Thrones, in the game of political capitalism, you win or you die. (And either way, consumers lose.) But the only surprise in this debacle is in how long it has taken anyone to notice that game has already long been in motion.