Friday, May 01, 2015

How the House is Revving Up Nuclear Momentum

In talking about the budget for the Department of Energy and particularly its Office of Nuclear Energy, we often zero in, logically enough, on the Appropriations Committees in the House and Senate. These are the committees that will ultimately determine what the budget will be.

While appropriations committees determine what money is given to various programs, authorizing committees decide the general policies and programs that Appropriators can funds. In talking about the budget for the Department of Energy and particularly the Office of Nuclear Energy, the general policies and programs are decided in the House by the House Science, Space, and Technology Committee.

And what this committee decides show how things might go over the next year and beyond. The Science Committee members have consistently expressed a lot of interest in next-generation nuclear technology – and on a bipartisan basis.

That brings us to this amendment from Rep. Dan Lipinski (D-Ill.):

Developing an advanced reactor innovation testbed where national laboratories, universities, and industry can address advanced reactor design challenges to enable construction and operation of privately funded reactor prototypes to resolve technical uncertainty for United States-based designs for future domestic and international markets.

This bolsters the testbed approach and amends the Energy Policy Act of 2005 to incorporate it. The committee accepted this amendment; we’ll see what the full House does with it later.

I looked for more evidence that the committee sees this as a key direction – and found it, in spades. In December, the committee hosted NuScale and Transatomic to discuss nuclear energy topics and Chairman Lamar Smith (R-Texas) expressed his view of the nuclear landscape.

Nuclear power is a proven source of emission-free electricity that has been generated safely in the United States for over half a century. However, our ability to move from R&D to market deployment has been hampered by government red tape and partisan politics. We are just now seeing the first reactors under construction in more than 30 years. This hiatus has diminished our supply chain and ability to build new reactors. In fact, the United States no longer has the capability to manufacture large reactor pressure vessels.

In another hearing (on nuclear fusion), Smith is even more direct:

Depriving the U.S. ITER program [an experimental fusion reactor hosted in France] of the funds it needs to accomplish its goals is not good policy. To maintain our competitive advantage, we must continue to support fundamental basic research that encourages the creation and design of next generation technologies.

Which is answered in part by Lipinski’s amendment.

Energy Subcommittee Chairman Cynthia Lummis (R-Wyo.) echoed Smith’s comments:

Nuclear energy was born in the United States. We have the best scientists and engineers in the world. Yet, we are not seeing the pace of commercial technology advancement that we would expect. At the same time, other countries including China are surging ahead.

One doesn’t have to agree with all of this to see how the committee is interested in the forward momentum of nuclear energy, fission and fusion. Industry is ready – it seems the government is eager to follow suit.

Wednesday, April 29, 2015

What the Simpsons Gets Wrong About Nuclear Safety Culture

I love The Simpsons.  The Simpsons cleverly, mercilessly, and democratically gore everyone's sacred cows.  None are off-limits, including the professionals who comprise the commercial nuclear power industry.

What we are not.
From the avaricious Montgomery Burns, owner of the Springfield Nuclear Plant, to the bumbling Homer Simpson, control room operator and safety inspector, the people of the nuclear enterprise are portrayed as incompetent and unconcerned about their responsibilities to serve and protect their fellow workers, the public and the environment.  As you can imagine, the truth is quite different.

How different from that comedic portrayal are the real people of the nuclear power industry?  A recent briefing by our NEI colleagues, Sue Perkins-Grew and Rod McCullum, reminded us how different indeed.

Sue Perkins-Grew in action on the ropes course at SNPM.
Sue and Rod recently attended an elite leadership training course offered by the Institute of Nuclear Power Operations' (INPO), the industry-supported agency for promoting excellence in all aspects of nuclear plant operations. They attended the  Senior Nuclear Plant Manager (SNPM) course.  This five-week curriculum is designed to give up-and-coming leaders a broader view of the nuclear industry.  The course includes team building exercises that promote out-of-the-box thinking, briefings on the roles of key institutions and stakeholders in our industry, and visits to operating power plants to observe how other leaders and cultures achieve excellence in nuclear operations. Sue and Rod spoke  enthusiastically about the quality of the training and insights gained through the SNPM course. 

And what did they learn about their classmates from across the nuclear power industry?

In short, they were greatly impressed by the caliber of people in the course.  They described them as showing the highest levels of integrity and professionalism, and the utmost commitment to safety.  Sue and Rod expressed high confidence that our industry is in good hands, and will remain so when these prospective senior managers take the helm at their respective plants and companies.

Those of us in the nuclear power industry understand two things very well.  One is that we share a commitment to safety at all levels and in everything we do.  The other is that, by Hollywood's standards, this reality - a culture that puts nuclear safety ahead of everything else - doesn't make for a very entertaining cartoon.  That's ok with us.  We'll just keep on pursuing excellence and providing safe, reliable electricity to power the 21st century economy. And we'll leave the laughs to Homer and the gang.

Tuesday, April 28, 2015

Have China and Russia Stolen the Nuclear Thunder from the U.S.?

wall-street-journalThis is startling: Lenin and Mao referenced in a pro-nuclear energy op-ed written by Eric McFarland of the Dow Centre for Sustainable Engineering Innovation at the University of Queensland:

The ghosts of Lenin and Mao might well be smirking. Communist and authoritarian nations are moving to take global leadership in, and profit from, the commercial use of nuclear power, a technology made possible by the market-driven economies of the West. New research and development could enable abundant, affordable, low-carbon energy as well as further beneficial products for industry and medicine.

This is published in the Wall Street Journal, so the goal may well be to wake up the capitalists from the dolorous slumber.

Governments are right, of course, to monitor and tightly control the application of nuclear energy, as they do chemical and biological weapons. But the well-intentioned systems, agencies, regulations, legislation, safeguards and bureaucratic mass that have been applied to every aspect of nuclear technology since its inception have tended to prevent us from realizing its full potential.

Um, well, that should wake them right up – free marketeers view regulation with considerable suspicion, and it’s true that domestic nuclear energy has many, many regulations from many, many agencies to contend with. Finding the balance between safety and regulatory priority is a prime interest of the industry – and of the regulators, too – but I’m not sure regulation can be debited for not allowing nuclear energy to realize its full potential. That’s the argument, which the editorial carries a little further.

Globalization is real. Preventing the innovators in Western democracies from creating new cost-effective technologies using nuclear reactions won’t prevent it from being done. It’s ironic, but given America’s ever-burdensome nuclear regulations, it will likely be engineers from nondemocratic, authoritarian regimes like those in China and Russia who will be free to design the safe and cost-effective commercial nuclear technologies of the future.

I’d probably also focus more on markets, a WSJ thing, because reforming them to recognize nuclear energy’s value as a reliable and emission-free energy source would bolster the argument considerably.

Again, this is meant to wake up quiescent capitalists. The case seems overstated to me, but, as the editorial says about regulators, the intention is good. It’s worth a full read to see what you think.

Monday, April 27, 2015

What Americans for Prosperity Gets Wrong About the Ex Im Bank

Ted Jones
The following is a guest post by Ted Jones, Director of International Supplier Relations for NEI.

A spokesperson for Americans for Prosperity told The Hill last week that Congress should allow the U.S. Export-Import Bank to expire when its authorization ends in June.
If a particular sector like the nuclear sector needs Ex-Im to survive, “the fact that your industry has grown dependent on taxpayer-backed loans doesn’t mean that it needs to continue forever,” Russell said.
While that sounds like a principled free-market argument, a closer look at the realities of international trade demonstrates that it is a mistaken premise for ending the Ex-Im Bank. To the contrary, the conservative principles of fiscal responsibility and American leadership in global affairs should lead Tea Party groups to support Ex-Im.

Ex-Im Bank serves a crucial role for nuclear exporters that the private sector cannot. U.S. nuclear exporters turn to Ex-Im precisely because financing alternatives in the private sector don’t exist, not because they can’t compete as AFP claims. This happens for a variety of reasons, including the following:
  • Export credit agency support is almost always a bidding requirement for nuclear power plant tenders. Ex-Im Bank is therefore vital to the success of U.S. exports even in cases where the customer ultimately elects not to use Ex-Im financing. Without Ex-Im Bank, U.S. commercial nuclear suppliers would suffer a major competitive disadvantage or be excluded for failure to meet tender requirements.
  • Emerging markets – where commercial nuclear energy opportunities are concentrated – do not have well-developed capital markets. This makes competitive financing from a foreign export credit agency vital.
  • Ex-Im Bank participation enables commercial lenders to assume a role in financing nuclear power plants that they would not otherwise accept. Risk in nuclear power plant finance is typically low. But commercial lenders are averse to financing nuclear power projects for regulatory reasons – specifically, the higher capital requirements mandated under the Basel III accord.
George Landrith, President of Frontiers of Freedom, put it this way in a piece in 2014 at Breitbart.com:
By law, the Ex-Im Bank does not compete with private sector lenders. It is a “lender of last resort” and simply provides economically sustainable loan guarantees where they are not otherwise available. Some nations have underdeveloped economies or banking systems. The Ex-Im Bank fills-in banking gaps so that U.S. goods can be exported to nations where commercial financing is insufficient or underdeveloped.
Here’s one last note on this important point: Without Ex-Im Bank support, U.S. companies would specifically be at a severe disadvantage against international rivals, especially the Russians which offer competitive financing and strong state support for their nuclear bids. Without a doubt, Vladimir Putin is applauding AFP’s efforts to kill the Ex-Im Bank.

Ex-Im Bank is not a significant taxpayer risk. Ex-Im has highly diversified portfolio that spans the industry sectors and regions of the world, and it authorizes insurance, guarantees, and loans in a judicious manner. As a result, Ex-Im’s current default rate is just 0.194 percent – far lower than the typical rates in the commercial banking sector. In the nuclear energy market, sovereign guarantees usually apply because the customer is typically owned or backed by the foreign government.
Ex-Im Bank subsidizes the American taxpayer, not the other way around. Ex-Im uses the interest and fees it receives to cover all of its own operating expenses, meaning U.S. taxpayers don’t actually fund any of Ex-Im’s operations. When the Bank’s revenue exceeds the cost of doing business, taxpayers make money. In 2014, taxpayers made $675 million from Ex-Im. The year before that it was $1 billion. Over the last two decades, taxpayers have profited more than $7 billion. That’s $7 billion that went to reducing the U.S. deficit.

Current accounting methods are appropriate for Ex-Im Bank. Some critics of Ex-Im point to an analysis by the Congressional Budget Office (CBO) that considers an alternative accounting method called fair-value estimation – an analysis that has come under fire from former OMB Chairman and one-time Congressional budget hawk Jim Nussle. While the fair-value approach has its uses, it does not provide actual data on whether or not Ex-Im is profitable. CBO’s fair-value analysis seeks to compare Ex-Im loans and guarantees to those of private banks. If private banks generated higher returns than Ex-Im for similar loans, one could conclude that Ex-Im and taxpayers are losing out on potential profits. However, there’s a big problem with this logic – there are no comparable loans or guarantees in the private sector. Ex-Im only lends where the private sector is unable or unwilling in order to match foreign competition.

Ex-Im Bank supports national security interests. As a group of former national security officials have argued, Ex-Im Bank provides critical support to exports that have strategic value. Nuclear energy is a prime example. When U.S. firms win foreign nuclear energy tenders, U.S. interests in energy security, nuclear safety and nonproliferation are advanced. U.S. firms face formidable international competitors – all of which receive competitive export financing. Russia, for example, has rapidly expanded its share of the international nuclear energy market – in large part due to its aggressive export finance. Without Ex-Im Bank to maintain a level playing field against Russian finance, the United States will cede many transactions – and influence – to Russia.

Looking at this issue solely through an ideological lens can obscure the facts about Ex-Im Bank. Ex-Im Bank enables the U.S. nuclear energy industry to compete for and win international nuclear energy tenders, reducing the energy dominance of Russian energy suppliers while generating billions of dollars in U.S. exports and tens of thousands of American jobs. But that is not all. Ex-Im Bank also eases the American taxpayer’s burden and reduces the U.S. federal deficit. That is a deal that all of us – and especially the Tea Party – should strongly embrace.

Friday, April 24, 2015

NRDC Misfires on Nuclear in Illinois Energy Poll

We have to hand it to the Natural Resources Defense Council. Their recent poll tries as hard as it can, but it can’t quite hide the truth about Illinois energy and its relative cleanliness, the subject of the poll.

It finds, quite reasonably, that people there are much in favor of clean energy, which NRDC is quite sure includes only renewables. Why should that be, I wondered – well, until I looked at the questions.

This is one of them:

Some people/other people say we should transition to more clean, renewable energy sources like wind and solar power in Illinois. Illinois residents already get most of their electricity with nuclear power; the last thing we need is more safety risks from building more nuclear plants.

This is part of another question.

We already have more nuclear energy than any other state, and it is too risky for our health and environment.

Yet, even with statements like that to ponder, 33 percent of respondents favor expanding nuclear energy in the state. Frankly, we expected pitchforks and hot tar, so this was surprisingly high.

Another finding asks respondents to choose their favored energy resource for an Illinois climate change reduction plan and doesn’t  include nuclear energy as a choice. It just doesn’t rate.

Obviously, this comes as close to useless as any poll on this subject could be. Numbers can always be turned to just about any purpose – polls complicate this because the numbers hide behind questions that can be fairly ridiculous. NRDC does this by associating nuclear energy with environmental and health impacts that it hasn’t had. “Would you vote for so-and-so, convicted kitten killer?” has about as much validity. It’s to NRDC’s credit that it posted the findings of its polling firm, Public Opinion Strategies, but it just makes the results look horribly skewed. And NRDC has really fouled the pot.

I can’t speak to NRDC’s motivation in taking this approach, but it does come on the heels of other  news. Recent legislation in the state house includes nuclear energy in the state’s clean air portfolio, because, after all, it really does produce no emissions, which is what the standard is all about. NRDC concedes that nuclear has a heavy presence in the state, but fails to say what that means: that 47 percent of the electricity in the state is already emission free via nuclear energy (renewables add another 5 percent, so 52 percent total). Illinois has further to go, but a lot less than states that are not suffering those imaginary safety risks.

Thursday, April 23, 2015

What the Ecomodernist Manifesto Says to Nuclear Energy Advocates

EcomodernistTimed for Earth day, The Breakthrough Institute released what it’s calling the Ecomodernist Manifesto, a tract that deserves attention because of the quality of its creators and because it suggests a way forward – or perhaps I should say out of – the impasse between environmentalists and policy makers in crafting ways to protect the environment while maximizing the potential of people worldwide to prosper. It’s a blueprint to guide environmentalists away from seeing people as environmental destroyers – which, of course, turns off the folks they’re trying to appeal to – to partners.

The folks who signed on to this include Pandora’s Promise director Robert Stone and two participants in his pro-nuclear energy documentary, Stewart Brand and Mark Lynas, the latter of whom earned considerable admiration from me for his openness and curiosity toward nuclear energy despite considerable suspicion about it. Of course, it also includes the co-founders the Breakthrough Institute, Michael Shellenburger and Ted Nordhaus. The Breakthrough Institute has always looked at energy policy through an environmental lens but has not until now wrapped together the interests of environmentalists and energy policy makers as it does in the manifesto.

The authors takes as their premise that progress has caused people to “decouple” from nature, as agricultural technology has changed largely rural populations into urban ones. But the technological advances required to do this has presented its own problems:

The modernization processes that have increasingly liberated humanity from nature are, of course, double-edged, since they have also degraded the natural environment. Fossil fuels, mechanization and manufacturing, synthetic fertilizers and pesticides, electrification and modern transportation and communication technologies, have made larger human populations and greater consumption possible in the first place. Had technologies not improved since the Dark Ages, no doubt the human population would not have grown much either.
Potential solutions:
Urbanization, agricultural intensification, nuclear power, aquaculture, and desalination are all processes with a demonstrated potential to reduce human demands on the environment, allowing more room for non-human species. Suburbanization, low-yield farming, and many forms of renewable energy production, in contrast, generally require more land and resources and leave less room for nature.
You could say that’s the nub of it for nuclear energy advocates and some of the argument plays into what one may call the “moral” argument for nuclear energy.
Plentiful access to modern energy is an essential prerequisite for human development and for decoupling development from nature. The availability of inexpensive energy allows poor people around the world to stop using forests for fuel. It allows humans to grow more food on less land, thanks to energy-heavy inputs such as fertilizer and tractors. Energy allows humans to recycle waste water and desalinate sea water to spare rivers and aquifers. It allows humans to cheaply recycle metal and plastic rather than to mine and refine these minerals. Looking forward, modern energy may allow the capture of carbon from the atmosphere to reduce the accumulated carbon that drives global warming
In other words, people must have access to energy to advance. But if the goal is to facilitate this advancement without further ecological damage, then nuclear energy has a unique role to play. It produces a lot of energy in a relatively tiny footprint.
In the long run, next-generation solar, advanced nuclear fission, and nuclear fusion represent the most plausible pathways toward the joint goals of climate stabilization and radical decoupling of humans from nature. If the history of energy transitions is any guide, however, that transition will take time.
That “radical decoupling of humans from nature” has a grad-school ring to it – it’s more idealistic than realistic - but the authors mean by it less of a reliance on natural resources and more on technology to advance human progress while allowing animal and plant life more latitude to reassert themselves in land cleared of humans.

There’s a lot more to this than I’ve described here. Some of it strikes me as a bit – overthought – and perhaps it is better at description than prescription. But in all, this is an exceptionally intelligent and practical survey of the environmental/energy nexus. That nuclear energy informs its view of how restoring nature while advocating human progress seems exactly right. Read the whole thing and tell us what you think. It’s not long and it’s bracingly optimistic – just right for Earth Day.
---
I found Robert Bryce’s opinion on the manifesto interesting, because he turns it into a club to beat the the Divest Harvard crowd (which wants their college to divest from fossil fuels).
The absolutists are anti-energy. In a Divest Harvard video posted on YouTube, the group stated that its goal is to “stigmatize the fossil fuel industry.” The absolutists try to do that all the time. Just last week, the Sierra Club announced the expansion of its “beyond coal” campaign. The group’s backers — who include former New York mayor Michael Bloomberg — have pledged some $60 million in funding for the effort, which aims to shutter half of U.S. coal plants by 2017.
Even I’m reluctant to call anti-nuclear energy types anti-energy; Bryce’s formulation is pretty absolutist in itself.

Here’s what he says about the manifesto:
While the absolutists want one of America’s most prestigious universities to sell some of its investments — with the only goal being to stigmatize the world’s biggest and single most important business [coal, that is] — the ecomodernists are arguing not only that greater global energy consumption is inevitable, but that it’s good, that more energy use will allow more people in the developing world to live fuller, freer lives.
The manifesto does not argue for unfettered growth nor does it discount climate change. It favors nuclear energy and solar power as solutions for these reasons. It’s fair to say that the Harvard Divests crowd haven’t thought things out that far. Their protest represents a largely symbolic way to do something about climate change – much as the college students of my time protested against investments into South African Krugerrands.

But you could say that Bryce has zeroed in on his interest – the free market – as we have on ours – nuclear energy. So there’s that. That’s why you should read it yourself – from your own perspective.

Wednesday, April 22, 2015

Turkey Point's Innovative Waste Water Cooling Plan

Artist's rendering of Turkey Point 6&7
Today and tomorrow, the Nuclear Regulatory Commission will hold a public meeting in Florida concerning adding two reactors to FP&L’s Turkey Point Nuclear Generating Station. In this guest blog post, NEI’s Bill Skaff takes a quick look at how the nuclear energy industry is breaking new ground in using reclaimed water for reactor cooling.

Carbon-free nuclear energy must continue to play a major role in climate change mitigation and adaptation. Moreover, the industry is responding in innovative ways.

For instance, Florida Power & Light's (FP&L) Turkey Point Nuclear Generating Station plans to use 80-90 million gallons of recycled municipal waste water each day for the cooling system of its two new nuclear units (6 and 7). This shouldn’t be a surprise since the nuclear energy industry has been and continues to be a pioneer in the large-scale use of reclaimed water for cooling.

The Palo Verde nuclear plant in Arizona was the first nuclear plant in the world to use recycled municipal wastewater for cooling since it began operation in the 1980s. Proving that recycled water can be used to cool large baseload power plants, Palo Verde is the largest power plant of any type in the United States, as measured by electricity production.

In addition to the planned use of recycled water, Turkey Point has also been innovative in sourcing water used for cooling. The existing nuclear plants at Turkey Point draw their cooling water from a network of self-contained cooling canals. The canals are replenished by rainfall, plant storm water runoff and salt-water aquifers.

Another innovative idea at Turkey Point to offset the recent drought, which has increased the salinity of the canals, is to utilize excess storm water from a nearby drainage canal. The company will ensure that the required amount of storm water to meet Biscayne Bay requirements is first met before it is added to the cooling canals. Despite what some opponents have tried to argue, none of the water being added to the canal system to lower the salinity comes from the state’s drinking water supply.

Editor's Note: Besides being good stewards of the environment, FP&L's two nuclear plants also help power the state's economy to the tune of $1.4 billion per year.

Why the China 123 Agreement is Good for America

Dan Lipman
Dan Lipman is NEI’s Vice President for Suppliers and International Programs. Before joining NEI in 2012, he spent 31 years at Westinghouse Electric Corp.

In 1985, China had only recently begun its transformation into an economic powerhouse, and had just begun construction of its first nuclear power plant. It was also the year that the United States and China agreed to cooperate in commercial nuclear energy technology.

Thirty years later, China has overtaken the United States as the world’s largest economy and it is the world’s largest market for nuclear power plants, equipment and technology. Consider: 23 reactors are now in operation, another 26 are under construction, and even more are preparing to break ground. Consider further: China’s nuclear generating capacity, which is about 19 gigawatts today, is expected to increase three-fold to 58 gigawatts by 2020 and to some 150 gigawatts by 2030. In short, for any company that is a global player in nuclear energy technology and equipment, China is the most important market in the world.

Major Chinese contracts awarded to U.S. suppliers have created billions in U.S. exports and tens of thousands of American jobs here at home. American companies supply not only reactors, but also equipment and a broad range of services, including engineering, construction, fuel cycle and training services. On top of all this, the progress China makes in building the U.S. nuclear plants in China directly benefits the plants of the same design that are currently under construction in the United States. Moreover, American companies are forming valuable joint ventures and business relationships in China to serve growing markets in third countries.

All this will be abruptly halted, irrevocably so, if Congress blocks renewal of the U.S.-China nuclear cooperation agreement from coming into force. These bilateral agreements between the United States and its nuclear cooperation partners are also known as “Section 123 agreements” after the part of the 1954 Atomic Energy Act that sets the terms for sharing U.S. peaceful nuclear energy technology, equipment and materials. Without such an agreement, negotiated by the State Department, signed by the President and reviewed by Congress, none of this can occur.
AP-1000 construction at Sanmen

In recent years, certain nuclear trade agreements have attracted controversy. We have seen debates over whether to add new conditions for U.S. nuclear energy cooperation, such as a proposed requirement that partners foreswear technologies for enriching uranium or reprocessing used reactor fuel. China, a recognized nuclear weapons state, has used enrichment and reprocessing technologies for decades, so such concerns do not apply. If for some reason Congress were to oppose the renewal of the U.S-China Section 123 agreement that would be remarkably short-sighted. While China stands to gain safe, carbon-free electricity through partnerships with U.S. industry, the United States stands not only to promote its economic interests through exports and domestic job creation, but also to advance other national interests.

U.S. engagement with China has fostered significant advances in China’s nuclear nonproliferation policies and practices. The use of U.S. equipment and technology allows China to deploy top-flight technologies, including an advanced reactor design that has been standardized for most of China’s planned nuclear facilities. In addition, management systems employed by U.S. nuclear companies regarding operational excellence and safety culture are the envy of the world. Having China implementing these techniques is imperative. U.S.-China nuclear energy cooperation is deep and mutually beneficial on many levels, all of them consistent with and supportive of American priorities.

U.S.-China nuclear cooperation also plays a critical role in addressing China’s pollution and carbon emissions -- a regrettable byproduct of China’s economic rise. There is growing unrest in China over air quality, especially in Beijing, where residents are literally choking on the smoke generated by its electricity generators fueled by coal and other fossil fuels. Expanding the use of nuclear energy is essential if China is to fulfill its ambitious transition to a lower-carbon energy portfolio. Given China’s standardization of a U.S. reactor design, the loss of U.S. cooperation would seriously disrupt China’s plans to reduce its carbon emissions by 2030.

The current Section 123 agreement is scheduled to expire at the end of this year. China will continue to expand nuclear energy with or without the U.S., but at considerable potential cost to this country. We cannot know precisely how the Congress will proceed with their upcoming review of the renewal of the China 123 agreement. But there are many, many reasons to renew it, including critical U.S. national interests.