I was visiting Watts Bar Nuclear Power Plant earlier this week, and asked the Engineer guiding us how he viewed the apparent death throes of the Yucca Mountain repository project and how it might affect the Tennessee Valley Authority’s (TVAs) operations there. I was told that they have not yet needed to employ interim dry storage (all their spent fuel is still in wet storage), and that it was by no means an urgent problem for them. He went on to say that they now had a source of funds to develop a dry storage facility on site from their share of what will likely be a multi-billion dollar settlement from the Department of Energy to utilities for failure to take possession of spent fuel as required by law.  

While, as an economist, it seems reasonable not to give in to sunk costs, it is disappointing to see money continue to be hemoraged (or even trickled) on a project that is not going anywhere. I think it is essential to get an act together on nuclear waste management soon. If  Yucca Mountain is, in fact, dead; then we need to stop feeding money into it and move on to the next option. If Yucca is the best option, it needs to move forward. This is not because there is urgency (i.e. power plants are not overflowing with dry storage casks), but because it doesn’t make sense to keep paying good money both for the continued development (money has been cut but not eliminated) and in law suites, if there is no intention to use the facility.

Unfortunately, the fact that there is time to consider the problem thoroughly and to build a sound waste management strategy means that it is more likely than not that no decision will be made. Politicians seem only capable of making hard decisions under high pressure. If the outrage at inaction is not high, and any course will be controversial in some quarters, the politically astute thing to do is stall until the people become distracted.

The Obama Administration says it wants its ducks in a row on waste management before moving forward on nuclear energy, but it is hard to say whether this is a measured and laudable approach or a means to stonewall on nuclear energy. Hopefully, the former is the case. Stonewalling outright would not be a popular decision because there is a sufficiently widespread belief that nuclear needs to be part of the solution to the country’s energy and environmental challenges. In fact, it would be hard to take the President’s ambitions to cut carbon seriously without nuclear making up some part of the overall strategy.   

To be fair, the questions are by no means simple. For example, should we reprocess / recycle nuclear fuel? There has not been a great deal of economic impetus to do so, and there is a lot of reluctance that stems from nuclear nonproliferation concerns. On the other hand, reprocessing reduces the volume of high level radioactive material and its lifespan considerably, and it radically expands the amount of fuel that can be obtained out of our given reserves.

The Global Nuclear Energy Partnership (GNEP) was supposed to facilitate reprocessing, but in a way that did not separate out Plutonium into weapons-usable fissile material. That program was another put upon the chopping block. The justification presented for killing it was its nonproliferation ramifications with respect to fuel reprocessing. Either those responsible for the GNEP reprocessing scheme were not astute in explaining how they could make good on such a claim, or they were not believed. (It seems apparent to me that even technically knowledgeable people don’t fully understand how the GNEP process could achieve this objective.)

Technology Review’s  “Top Ten Emerging Technologies for 2009″ issue is now out. (see: http://www.technologyreview.com/specialreports/specialreport.aspx?id=37)  Among the ten technologies anticipated to “change the way we live” is the Traveling Wave Reactor design developed by Intellectual Ventures. Intellectual Ventures is a Bellevue, Washington company founded by a couple former Microsoft executives that combines venture capitalism with research and development. The reactor in question would internally convert some of the non-fissile isotopes in natural uranium into fissionable components, and, therefore, breed its own fuel.

If its promise can be realized, such a reactor would offer a number of proliferation risk mitigating effects as well as some environmentally friendly benefits. First, it apparently reduces the amount of uranium enrichment that would be required. Apparently, the process uses only a small amount of uranium enriched in the Uranium-235 isotope, and, because it makes its own fuel, no fuel changes would be needed over the life of the plant. This means that the desire to build more enrichment plants globally to either meet expanding demand or to assuage supply disruption fears would be reduced. 

Second, it would presumably reduce the need to recycle / reprocess (proponents using the former term and opponents the later) spent nuclear fuel via external facilities, because this would be done internally within the reactor. Presently, good arguments have been offered for moving toward a closed fuel cycle ala France rather than the open one ala the US. An open cycle uses fuel once and then puts it into storage, a closed one (reprocessing/ recycling) extracts fissile material from the spent fuel and runs it through another reactor to get more electricity for the dollar. The arguments in favor of recycling fuel are based on both economics and environmental factors. For one thing, the closed cycle radically expands the amount of nuclear fuel that is available in the world. Another factor is that recycling the fuel reduces the amount of high-level radioactive waste that must be stored. 

So, given these upsides of recycling, why isn’t the US doing it? There are at least two reasons. One is that the process is expensive. Proponents of recycling will argue that not all the benefits are captured by those considering the expense of recycling. Such benefits include: a.)  a decreased amount that needs to be stored, and, thus, a need for fewer / smaller repositories; b.) a reduced longevity of the radioactivity of waste products; and c.) a vastly expanded stock of available fuel that will push out into the future the date at which short supplies lead to skyrocketing  prices. These may all be true, but the fact of the matter is that private companies don’t see it this way. This is because individual firms don’t calculate benefits accruing to society as a whole into their bottom lines, and the future is heavily discounted such that the difference between running out of nuclear fuel in hundreds of years versus tens of thousands of years is inconsequential (these timescales are  not based on calculations or even an educated guess, but are just a, possibly hyperbolic, literary device). This leaves government to take the task of capturing societal cost and benefits, but governments tend to be near-sighted themselves. 

The other downside of recycling or reprocessing is that the extracted fissile material from the spent fuel  translates into a potentially greater risk that such material will be diverted to military or criminal uses. Recycling involves transporting material, plutonium getting caught up in pipes, and whole new facilities to monitor. However, the traveling wave reactor would seem to achieves at least some of this within the reactor.  Since one can’t steal the fuel from inside a reactor (they tend to be both really hot and highly radioactive), some degree of recycling is achieved without the proliferation risk.

Before one gets too excited, it is important to realize that the reactor is at the moment a design, and idea. There are several hurdles that must be leapt before this technology can contribute to a change in the way we live. First, it has to be taken from a theoretically appealing concept to a physically preforming technology. The second, and no doubt harder chore, is that it must be made economically competitive with existing technologies. Finally, along the way there will be a number of powerful firms, in some cases closely tied to governments, that will stand to lose as such a technology takes over.

I tend to be inherently pessimistic; even when, as in this case, I am fundamentally ignorant of the technical issues involved. Things that are easily achieved are readily done, and most of what isn’t fails. That being said, I am hopeful that this and other technologies that can offer us the environmental benefits and energy security of nuclear power while simultaneously reducing the proliferation threats will succeed sooner rather than later.

I saw “The Day the Earth Stood Still” this weekend. Those who haven’t seen it may have gathered from the trailer or the original that,… SPOILER WARNING… the essential premise is that an alien, Klaatu (played by Keanu Reeves), is tasked with making a determination about whether humanity can turn around its behavior before it destroys a rare planet capable of sustaining life. Among the major complaints of reviewers seemed to be that the film was high on preachiness and Computer Generated Imagery (CGI) and low on story and acting. This aside, I think an interesting question is raised about what it takes to change fundamental human behavior. (A more interesting critique might be why the producers / writers thought a  benevolent species that used energy so wastefully [giant orbs creating light that served no purpose] without apparently causing pollution would opt for destruction of humanity rather than sharing this high intensity – low waste energy source.)

While there is still a debate about whether climate disruption is real and the degree to which it is created by humanity (versus natural processes), the scales seems to have tipped in favor of those who think human activities must be changed in order to reduce a very high risk of catastrophic results. The question is whether anything can and will be done about it on a revolutionary time scale (we are of course already making changes on a more gradually paced time scale.)  President-elect Obama has stated his desire to create a green energy revolution that would create a jobs building energy capacity based on more environmentally friendly energy sources. However, there are difficulties that have historically prevented not only the US, but the world more generally, from moving full-speed ahead in this direction.

At its heart, the issue is that green energy technologies are, for the most part, not cost-effective at the current time. This means that the commercial world will not switch to them of there own volition. A firm cannot take on higher energy costs than its competitors without reducing its profit or, possibly, driving itself out of the market altogether, and, therefore, there is an incentive to let others change without doing so oneself. Using a more expensive energy technology translates to fewer dollars for spending on other goods and services. Our economy is based on the ability of people to perpetually buy more and better stuff and if people have to spend more of their incomes for a given amount of a staple like energy the less they have available for what passes for enhanced standard of living (more and better stuff.)

Nuclear is cost competitive (though it is hard-pressed to compete with coal in the absence of a carbon tax) and reduces carbon emissions for a given energy output, but it can’t meet all our green energy needs. First of all, nuclear plants are expensive to build and take about six years to build (and this length will grow much longer as the number of plants under construction increases because of limited suppliers of certain components and shortages of qualified /certified labor.) Second, in an era of tight credit, financing such huge capital costs may prove challenging. Third, there are just not enough qualified people to build and run these plants. Finally, no good policy has yet developed for dealing with spent fuel.

Coal is an incredibly inexpensive fuel if one doesn’t count the marginal social cost of carbon emissions. There are technologies such as carbon sequestration that may make coal more environmentally palatable, but it is not yet cost-effective in the absence of a carbon tax.

Unless it turns out that the time is ripe for various green technologies to become cost competitive, I have trouble imaging that there can be much success in developing such a revolution. In essence, it seems that the policies designed to create substantial numbers of jobs may have to follow the technology development rather than leading it. Of course, there are any number of  good policies to be enacted to motivate research and development, but developing jobs around these technologies before they are adequately mature may not be feasible. 

Senator McCain made a speech yesterday advocating the need for an increased nuclear power generation capability in the US. Let me first say that I agree with a number of the positions proposed by the Republican nominee. Nuclear power will have to be part of the solution to the energy and environmental challenges confronting the world today. Wind, solar, and tidal power should be developed to their utmost, but, considering their limited capacity into the foreseeable future, they are incapable of meeting anywhere near our demand. If we are serious about cutting carbon emissions in a manner that is not crippling to our economy, nuclear expansion has to be on the agenda. 

Recycling spent fuel may make good sense too. It reduces the amount of the waste product and, as I understand it, it decreases the half-life of those radioactive waste products that must be stored. Furthermore, it gives you more power out of the same material. It is true that plutonium reprocessing/recycling has not been cost-effective historically, and I would not advocate government subsidization of it. This process must be cost-effective, but possibly with a greater accounting of costs it would be considered so. The French certainly believe spent fuel recycling is worth the investment. Despite scares involving “plutonium hang-up” – the tendency for plutonium material to get stuck in pipes and fixtures at reprocessing facilities so as to create the impression that material has gone missing- the experience of France gives reason to believe that spent fuel recycling can be done safely and securely.

Where the train went off the rails was with the statement about 45 new nuclear power plants by 2030. Now I am not saying that McCain is self-medicating with medicinal marijuana, but he may want to get urine samples from his staff - starting with whomever gave him this suggestion. It is true that a number of advances have been made that could increase the speed of reactor deployment. The most notable of these is the shift to using a few standardized reactor designs instead of making each plant a unique entity unto itself. This cuts time in the early phases because the Nuclear Regulatory Commission (NRC) does not have to evaluate every aspect of the design every time, but rather whether the site is suitable and whether any design modifications are acceptable.

The above being said, there are a number of realities that make 45 reactors in less than a quarter of a century a difficult prospect to swallow.  First, there is a huge human capital deficit. The skilled craftsman and engineers needed for an undertaking of this scope are not available. The US certainly hasn’t been producing them at the rate needed for such a boom, because we haven’t been building new nuclear power plants in recent decades. It is true that we should not need to think solely within our own borders. However, besides the French, much of the rest of the world has seen a lull in new reactor production as well - at least since Chernobyl. Furthermore, one can expect all manner of delays resulting from attempting to use international firms. Consider what happened to the Air Force when they made the dread mistake of giving a contract to the lowest bidder who offered to make a plane meeting their specs (which happened to be a consortium including European Aeronautic Defence and Space company [EADS]). That is, one can expect political fall-out, perhaps even considering the security ramifications of having foreign firms build something as sensitive as nuclear reactors. Not that there should be any problem, but nor should there have been with a Dubai company contracting to manage US ports, but one should expect hang-ups due to alarmism and nationalist sentiment.

Second, there will be political resistance every step of the way. It may be true that resistance of the American citizenry to nuclear power seems to be waning, and that the greatest supporters of nuclear power are those who have a nuclear plant in their communities already. (People often point out that this effect is because the nuclear plant is the bread and butter of such locales. True enough, but if they were having 8-toed 3-eyed babies it would hard to imagine that the support wouldn’t falter.) All this being said, there is still a vocal faction of the populace that will drag their feet every step of the way, and who have the political acumen to succeed in holding things up.

My final point is that the utilities who would be the ones actually building these plants would have to be ready, willing, and able to plonk down a lot of money over a relatively short time-frame in an investment with an uncertain future. Not that there is a particularly great deal of uncertainty, but the future is always uncertain. Carbon sequestration technology improvements might make nuclear an uncompetitive producer of base-load power compared with coal – even with the costs of carbon included, or any number of other events could occur (a freak accident causing panic) that could make the investment flop. McCain may intend to offer public financial support. Such a plan suffers a couple problems. One is a political resistance problem not only from the aforementioned anti-nuclear power establishment, but also from the coal suppliers, mining labor, etc. Nuclear competes with coal as a base-load power supply, and the coal establishment has a right to resist subsidization of its competitor. The other thing is that we are running persistent national debt, and, in my opinion, we should avoid shoveling more money into government subsidization of for-profit firms.

I could be wrong about this, but these words will long be forgotted by 2030. Of course, I suspect Senator McCain was thinking the same thing. Barring breakthroughs in genetics or cyrogenics, I don’t think anyone will be holding the good Senator accountable.