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A Nuclear Dream from London

Professor Ferdinand E. Banks
ferdinand.banks@telia.com
March 15th, 2012

During the 10 years of so that I taught international finance at Uppsala University (Sweden), I made two things clear: I didn’t teach nonsense any longer (meaning a large part of advanced macroeconomics), and so whatever I taught had to be learned perfectly. I also informed my students that they were never to mention The (London) Economist in my presence, or to refer to it on the very long examinations I graciously gave them to conclude the course. I was also accustomed to refer to that publication as “a compendium of London wine bar gossip”.

A few days ago I found myself face to face with the latest issue of The Economist (March 10, 2012), and on the cover was the title of a particularly obnoxious ‘leader’ called “The dream that failed”, which had to do with the charmless future of nuclear, and the termination of a fantasy of nuclear-based energy “transformation”.

I have discussed this topic frequently over the past decade, and anyone interested in my latest thoughts can examine them in the leading ‘net’ energy publications ‘The Energy Tribune’, or ‘321 Energy’. What I did not say in those articles or in my energy economics textbooks, is that I find it difficult and often impossible to make fools of persons whose ideas on this topic are different from mine, because of their almost complete ignorance of pertinent economic theory.

In the final paragraph of the leader in question, we are told that “Reactors bought today may end up operating into the 22nd century, and decommissioning well-regulated reactors that have been paid for when they have years to run – as Germany did – makes little sense”.

A silly claim is now making the rounds the United States now has a supply of natural gas that – at unchanged production – could last a hundred years. Until I see more evidence of a scientific nature, I intend to believe that, with luck, the present production of natural gas in that country could be continued for at most 50 years. On the other hand, it is certain that there is enough uranium and thorium to supply every reactor being constructed (or for that matter contemplated) for at least a hundred years. This is because, as I pointed out in my latest Energy Tribune article, it is nuclear and not natural gas or anything else that will benefit the most from the march of technology.

That contention, by the way, brought fury to the face of a celebrity environmentalist when I made it a few months ago at the ‘Singapore Energy Week’. Fortunately though, during a short pause, he announced that the construction of new reactors would always take ten years, which is so fruitcake a statement that it was unnecessary for me to formulate a civilized reply.

Other than saying that the nuclear foolishness proposed for Germany is no more than a brazen attempt by Frau Merkel and her foot soldiers to prolong their tenure at the helm of the German government, I would like to make it clear to the leader writers of The Economist and similar publications that if we are prepared to deal in time horizons of 100 years or more, the most expensive nuclear equipment now being purchased or contemplated is, in reality, less expensive than the least expensive alternatives that are presently available!

If you require a proof of this, ask your favourite economics teacher to give you a helping hand. Assuming that he or she can add and subtract – which unfortunately is not certain – and can do the kind of algebra taught in the remedial math classes at Boston Public, I am sure that they can acquaint you with what you need to know when various kinds of dreams are mentioned in widely circulated periodicals.


Professor Ferdinand E. Banks
March 15th, 2012
ferdinand.banks@telia.com