If we suppose, conservatively, that only the 104 plants that currently exist will have to be decommissioned and dismantled by 2050, that could add as much as a $66 billion to the cost of nuclear power. It is unclear whether these estimated costs are realistic or whether the dismantling cost is going to be in proportion to the construction cost. Because construction costs have gone from several hundred million to more than $10 billion, the dismantling costs could also be orders of magnitude greater than presently estimated. And this assumes no costs associated with accidents or the transportation and storage of radioactive wastes.28 Nor does it include insurance, because—and this is important—no private insurance company will write a policy for a nuclear power plant, meaning that the federal government is acting as the insurer of last resort, providing another subsidy for nuclear energy.
In sum, no matter what you may have heard, nuclear power would be really, really expensive, in addition to being an environmental and health problem of huge proportions.
However, many proponents of nuclear power suggest building a lot fewer than 468 nuclear power plants, so let’s consider what they might contribute. Senator Lamar Alexander of Tennessee has proposed building 100 nuclear power plants in 20 years.29 If they were built over the next 40 years instead, that would be more than two a year. They would add about the same capacity as all the presently operating plants, providing approximately 2,344 billion kwh a year. This would be about 12% of the energy required in Scenario 3, so the100 new plants plus the existing 104 would provide almost 24% of the nation’s energy.
As mentioned, the cost of a nuclear power plant is estimated at $6.8 to $14 billion. The average output is 22.5 billion kWh. Wind turbines to provide the same amount of energy would cost $9.5 billion based on today’s average installation costs and energy output. Thus, installation costs of wind turbines appear to be within the price range for nuclear power plants. However, because of a tendency to underestimate their building costs, the nuclear plants can be considerably more expensive to build, and then there’s the annual cost of fuel, the decommissioning costs, and any other costs. So it appears unlikely that nuclear power would be cost-competitive with either wind or coal (Figure 13.6).
Figure 13.6 Comparison of annual costs to convert to non-fossil fuels (using a social discount factor of 5%).
What about natural gas?
I have not considered a natural-gas future because, first of all, as shown in Chapter 2, “Natural Gas,” at current rates of use, the world’s known reserves of natural gas accessible with known technology will last a short time—about four years according to the latest U.S. Geological Survey information, if America becomes energy-independent; approximately 60 to 65 years, to about 2070, if world resources are purchased—not much longer than petroleum. And the nonconventional sources, right now, are both highly speculative and highly polluting at the source.
So what’s the best choice?
In sum, considering only the costs to build power plants, pay for fuel, and deal with coal pollution, wind is the cheapest alternative, coal probably next, and nuclear probably third (assuming there would be sufficient uranium to fuel the power plants). Using solar and wind together to contribute a total of 65% of the energy would be the most expensive. For reasons explained in the chapters on coal and nuclear power, neither coal nor nuclear is a good choice for the environment and for human health.30
How to reduce per-capita energy use in the United States
The only workable scenarios for the future—Scenario 3 and perhaps some of its variations—are based on the assumption that we can and will reduce per-capita energy use by about 50%. How can we do this as painlessly as possible? The major ways are mainly technological, not personal: increased energy efficiency in transportation, especially automobiles; increased efficiency of space heating and cooling; and increased efficiency in lighting.
According to the Department of Energy, of the 29,297 billion kilowatt-hours that the United States uses in a year, 28% is used in transportation; 21% is residential (space heating and cooling, lighting, cooking, and running refrigerators and other appliances); 18% is commercial (the same kinds of uses as residential but in businesses of all kinds, as well as all governments and private and public organizations); and 32% is industrial (agriculture and forestry; fishing and hunting; mining, including oil and gas extraction; and construction).31,32
Energy used in transportation can be reduced even more than 30% by (1) no longer having to transport as much coal, (2) halving the number of miles driven per person, and (3) increasing the average automobile fuel efficiency to 50 miles per gallon. But it is worth repeating the caveat that the rapid increase in consumer electronics is leading to a large increase in domestic use of electricity, and, if it continues at the present rate, will work against energy conservation.
Storing and transporting solar and wind energy, and using it to transport us
Solar and wind energy are not generated 24 hours a day, day in and day out. Thus, for them to meet a large percentage of our energy needs in the future will require finding ways to store and transport their energy, and ways to convert it into a form that can transport us. Little talked about, but I think necessary to the transition from abundant petroleum and natural gas to alternative energy sources, is the development of large-scale chemical conversions to make liquid fuels from energy generated as electricity.
The basic idea is simple: An electric current passed through water separates the water into its components: hydrogen and oxygen. Hydrogen can be burned as a fuel but is difficult to store and ship. Professor Nathan S. Lewis, of Caltech’s Division of Chemistry and Chemical Engineering, has pointed out that chemists can make methane from hydrogen and carbon atoms. When methane is available, the next step is a straightforward chemical process to convert methane to wood alcohol (methanol, whose molecule is just a methane molecule with one oxygen atom added to it) or to ethanol, a slightly more complex molecule.33,34 Alcohol can be, and is, used to fuel automobiles, trucks, and many other internal combustion engines.
Some more imaginative chemistry can then take hydrogen, methane, ethanol, and methanol and make gasoline and jet fuel in a kind of reverse refinery process. Each chemical step uses some energy, so the overall energy efficiency goes down, but there is enough alternative energy for this not to be a serious problem. Now is a good time for the big chemical, petrochemical, and power corporations to get together and start developing the chemical technology and building the reverse refineries that will be required.
Improving transportation energy efficiency
If Americans do not drive less, and automakers do not increase the average miles per gallon of fuel, then in 2050 the United States will need 173 billion gallons of gasoline. But we’ve already proved that we can manage very well with less. In response to the soaring prices of gasoline in 2008, people stopped buying gas-guzzlers and pickup trucks, used public transportation more, and took shorter vacation trips or none at all—taking “staycations” at home and pretending to be on a trip. The Energy Independence and Security Act of 2007 requires that passenger cars average 35 mpg by 2020, a 44% improvement overall but still asking for a less than 1% improvement in gas mileage per year.35 If the miles driven per person dropped 50%, the total fuel used by motor vehicles in the U.S. would drop to 42 billion gallons, 10% less than we used in 2007.
More than 6% of all energy used in the United States is for transporting coal, so if the nation stopped burning coal, U.S. energy use for transportation would decline by that amount. In Scenario 3, energy from coal declines from 6.7 trillion kilowatt-hours to 205 billion kilowatt-hours (just 3% of what it was before).
The costs to build railroad lines are said to be no higher than $2.5 million a mile for construction and equipment. Taking into account the additional costs to purchase land and rights-of-way, a reasonable average cost is between $20 million and $40 million per mile. On this basis, the price to build from scratch a new high-speed railway between Los Angeles and San Franc
isco or Sacramento would be as low as $700 million. Adding in the cost to purchase land would bring the price to between $7 billion and $14 billion.
This is comparatively inexpensive in comparison to the installation costs of new power plants—about the same as one nuclear power plant or a wind turbine installation that provides the same energy output as the nuclear power plant, with a big payoff in energy conserved. It is also small compared with the estimated $1.6 trillion needed to restore America’s infrastructure—including bridges, tunnels, highways, airports, sewage lines, dams, hazardous-waste disposal, schools, and navigable waterways.36
So, why all the opposition to high-speed rail in the United States? The claim is that it is too costly without adequate payback, but if in restoring America’s infrastructure we shifted our emphasis from highways to railroads, the costs would be small by comparison to everything else we have discussed. This leaves us with the sinking feeling that the opposition to railroads cannot be based simply on overall economics but instead is influenced by special interests in automobile and truck transportation, the building and repair of those vehicles and their highways, and the profits made from selling fossil fuels to run them. And without question it is also influenced by a cultural attitude about railroads, that they are just plain old-fashioned and for that reason alone not worth bothering with. Add to this the wonderful convenience of the personal automobile and you have an arsenal with which to argue against railroads, as if it were an economic argument, when it isn’t.
Savings in residential, industrial, and commercial use of energy
Savings in these areas could be accomplished by using low-density geothermal energy and passive solar energy—that is, the natural flow of energy without mechanical pumps—to move air or water and by using modern insulation and insulated window glass in heating and cooling, as discussed in Chapter 12, “Saving Energy at Home and Finding Energy at Your Feet.”
Solving the energy problem the American way, which is ...?
If the third scenario—reducing our per-capita energy use by 50% and replacing fossil fuels with wind and solar—is the future, how might it be achieved in the United States? No doubt there will be heated debate as to whether the changes in energy sources and energy use would best be achieved by the free market or by the government. But the answer seems clear from the history of photovoltaic manufacturing in the United States. At the current rate of increase in photovoltaic production, the amount needed for Scenario 3 would be reached by 2037 if all photovoltaics produced in the U.S. were installed in the U.S. Whether the future manufacture and installation of solar facilities will be determined by the free market or by government depends largely on whether our society views the supply of energy as a social service, therefore to be funded by government, or as just another commodity to be traded in a free market.
The modern world has not settled this question, one that is especially troubling and is at the heart of the energy debate and energy dilemma of the United States. If energy is just another commodity, then an argument can be made that it is not the business of government, but only the business of business.
Mulling this over, I called Tom Veblen, a retired corporate executive whose career included major positions with Cargill, a corporation that describes itself as “an international provider of food, agricultural and risk-management products and services.” Tom organized and for many years has led “The Superior Business Firm Roundtable,” an informal gathering of retired CEOs and other interested people who discuss what makes for a superior business, what are the roles of business in a democratic society, and, by extension, what makes for a better society. I told Tom about the conclusions I had reached and asked how he thought America should approach solving its energy-supply problem.
As a believer in free-market capitalism, Tom replied that we should do nothing, that the market would take care of it, that the rising price of energy would drive activities to conserve energy. But, he said, this will never happen, because elected officials will be asked to do something and will feel that they have to do something. In that situation, he suggested, the government should promote mass transportation and the rebuilding of inner cities to reduce overall energy consumption.
Those with different economic/philosophical perspectives will point to Nick Taylor’s 2008 book American-Made: The Enduring Legacy of the WPA.37 The author reviews the events of the Great Depression as a time when the free-market philosophy per se failed. Before becoming president, Herbert Hoover, an accomplished and smart man, had risen to fame when he was secretary of commerce and led a response to the 1927 Mississippi River flood. He had gone on the radio and helped the Red Cross raise $15 million for flood victims. He had visited 91 communities suffering from the flood, and coordinated eight government agencies, arranged for 600 ships with supplies and a trainload of feed for cattle. Altogether, he appeared to be a man who cared for the welfare of the ordinary person.38
After becoming president, however, he said no to a proposed federal response to the economic crisis, believing that business is not the role of government, and that helping the needy was the province of private charities. In 1932 he vetoed a $2 billion public-works jobs plan, which he called “a squandering of public money,” while thousands of out-of-work veterans of World War I marched on Washington seeking jobs. When the unemployed veterans camped in Washington, Hoover sent in troops led by Douglas MacArthur and George S. Patton. The campsite was destroyed, and several small children were killed.39
When Franklin D. Roosevelt became president, he appointed Harry Hopkins to head a program under the newly passed Federal Emergency Relief Act. In some states 40% of the people were out of work, and in some counties 90% of the people were on relief, and people began to agitate for improvements. Roosevelt pushed legislation establishing the Tennessee Valley Authority that built major hydroelectric dams in the Southeast, and later the Bonneville Power Administration to do the same in the Pacific Northwest, the point being not just to generate electricity but to provide jobs. Hopkins meanwhile helped the Civil Conservation Corps get started on employing out-of-work people in doing good works: building fire towers, clearing firebreaks in forests, stocking fish in rivers, planting trees to retard erosion, and so on.40 Roosevelt got the National Industrial Recovery Act passed, which allocated $3.3 billion for dams, bridges, and other large projects.
Proponents of this kind of government action say there are times when the free-market approach just doesn’t work, at least not fast enough to avert a crisis and ease the suffering of millions of Americans. They firmly believe that today’s energy crisis is one of those times. They fear that the rapid increase in the cost of energy and decline in energy availability will have disastrous effects on the American economy and possibly help to cause a major depression. In sum, they argue that at least temporarily federal programs will be necessary to promote the transition to alternative energy. A Civil Energy Corps, for example, could employ out-of work-people to build modern intercity and intracity railroads, retrofit government buildings for more efficient heating and cooling, and so forth.
My own experience during the last ten years has brought me face-to-face with a curious contradiction: Although the U.S. government provides large subsidies for fossil fuels and nuclear energy, even my environmentalist and environmental-economist friends and colleagues almost always raise the question of why solar and wind can’t pay for themselves. It’s interesting, and disturbing, that the old energy sources that pollute the environment and are going to run out soon will continue to benefit from special-interest lobbying and heavy government subsidies, whereas developing new forms of energy to replace them must pay for itself. In my view, it’s not really a “free market” unless either all energy sources are equally subsidized or none are subsidized. But this is unlikely to happen at present because of the heavy influence of special interests.
My guess is that most Americans will see energy not as a completely free-market commodity but as a combination of social service and commod
ity. For example, we are currently seeing what happens when a major form of transportation, air travel, is treated not as a national and international necessity but as an ordinary commodity whose problems are left to be solved by the marketplace. Regulated only minimally now, primarily for safety and traffic flow, airlines are having difficulty making a profit and are cutting flights to all but the most profitable destinations. Some existing airlines may not survive. Because air (and rail) transportation is essential to our market economy and fundamental to our way of life, most Americans will almost certainly want some government assurance that adequate transportation to and from major cities will be restored and maintained.
Many years of interactions with government agencies that deal with natural resources, planning, scientific research, and data gathering have left me with a mixed picture and mixed feelings. Although it has become clear to me over the years that huge government bureaucracies are inefficient and often unproductive, these agencies have nevertheless done some necessary things that would not have happened otherwise. Our highways, railroads, and hydroelectric dams are just a few examples.
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