01 June 2011

Special Series: The Nuclear Power Play – Part 2: The True Economic Cost

Published Saturday, May 14, 2011 3:00 am
Special Series: The Nuclear Power Play – Part 2: The True Economic Cost

Though one might think that the recent nuclear disaster in Japan would have tamed our appetite for nuclear power, advocates for the industry are instead attempting to mount a powerful reassurance campaign in order to quell public concern. In part one of this series, we looked at the true environmental cost of a nuclear power plant. In this piece, we'll explore the real economical impact.

In part one of this series, where we looked at the true economic cost of NP, we asked, Where's the green? Though we failed to find it in real environmental value, there appears to be plenty in terms of the dollars that the industry ultimately requires.

To start with, the expenses prior to cranking-up an NP plant are startling. Building the infrastructure of new power-lines, buying the enormous amount of land, poles and right-of-way is pricey. There’s fuel enrichment, storage, oversight committees, regulators, inspectors and costly emergency back-up everything. There has to be a guarantee of a clean and endless water supply plus emergency sources.

Currently NP plants are providing less than 20 percent of all electricity produced in the US, and only 8 percent of all end uses. Expectations are, that over the next 14 years, production would increase 10 percent with the construction of 20 new plants. China has 25 plants currently under construction and experts predict 25 more new countries will commission their first NP plant by 2030. Most experts say uranium reserves are dwindling and within a decade we’ll be forced to import. I wonder what a peak uranium analysis would reveal? Perhaps lots of “yellow cake” and a world of “dirty bombs.”

On average, 30 tons of high level radioactive waste is created and disposed of from each plant annually. Efforts to open up new disposal facilities and reopen old ones to accommodate the increasing amount are becoming more difficult. Transporting this waste increases the possibility of accidents and contributes to an increasing probability these highly radioactive gases will find their way to the public. More often than not, plants are increasing the amount of waste they store on plant properties. Any method chosen still leaves the chance of disaster.

With a half-life (the time until it reaches half its original radioactivity level) of thousands of years, the problem of storing the “spent fuel rods” does not go away either. They will remain a threat for hundreds of generations to come. This expense, what ever it may be, is not factored into the proposed cost of the plant.

The health hazards associated with working around or living near a NP plant have forever been disputed. What are accepted levels of radiation, the radiation’s origin and whether the person was predisposed to a related disease, has also been disputed by the industry, forcing the burden of proof on to the effected person. Trouble is, the effects of radiation, like smoking cigarettes, can take years to manifest. Many don’t make it through the years of litigation once they have discovered their illness.

The proposed “assisted financing” amounting to $36 billion of interest free loans President Obama has repeatedly announced, is more of a money trap than an incentive. NP plants always require subsidies. The amount includes profits for the partners, while tying those profits to the amount lent. The more the assisted finance, the higher the level of profits are allowed. This public/private romance guarantees a second dance to the bank and a third, until everything is “too big to quit.” This is the anatomy of NP’s money-side.

What happens under various circumstances concerning safety, legal matters, finance and communications are in Washington’s hands, should anything warrant interference. This is clearly laid out in the Federal Response Plan for Peacetime Nuclear Emergencies for Interim Guidance (1977) and amended by Ronald Reagan in a 1981 “Presidential Signing Statement.” This October 8th White House document removes many of the burdening regulations once in NP’s path.

The truth is, NP’s future has been in the hands of those who have been turning our dials for over a half century: the Oil companies. They have had a large stake in NP since the 70’s own the mineral rights to many of the uranium mines. Their government/private partnerships were cast in cement, a power which the BP disaster demonstrated.

The division of Mining and Minerals was forced to divide into two separate entities (revenues and regulations) after the BP disaster, for fear of exposing their codependent relationship, ripe with conflicts of interest.  On Wall Street, they certainly enjoy the “capital gains” generated by these partnerships, but stay away from feeding off this “sacred cow.” Standard and Poor’s predicts the cost of building NP plants will continue to grow at a current pace of 15 to 20 percent annually, and most of Wall Street agrees. This creates an unquenchable thirst for public funds among approved plants, and both Wall Street and S&P agree there is less than a 50 percent chance that any government financing will ever return to the treasury.

In capitalism, a basic tenet is that the producer bears all costs of bringing the product to market before profiting, but we can see that in many industries, especially energy, such is seldom the case. Therefore, any conversation about nuclear power's role in our future energy plan must begin with an honest assessment of cost. The fact that any such assessment presents a big problem for the advocation of a major role for NP, seems like the very reason such facts aren't being discussed by those at the top. Can America, especially our future generations, really afford to move forward in such a financially reckless manner?

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