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Logic and Nuclear Energy: A Humble Reminder and Extension

Professor Ferdinand E. Banks
ferdinand.banks@telia.com
September 15th, 2015

In the early summer of 2011 I saw a notice in a Swedish newspaper that the well known nuclear debater, Amory Lovins, has been invited to a large conference sponsored by the Tallberg Foundation. It was to be held at Sigtuna (Sweden), which is located between Stockholm and Uppsala, and comparatively close to my home.

I therefore wrote to the Foundation and suggested that the Dr. Lovins' invitation should be immediately rescinded (i.e. cancelled), and instead I should be given the honor of presenting a brilliant lecture on the economics of nuclear energy. If that was impossible, I suggested that since Dr. Lovins had once challenged me to an 'on-line' debate on this topic, the Sigtuna meeting would provide an excellent opportunity for him to obtain the satisfaction that he desired. Actually, of course, it would have provided me an opportunity to supply both Lovins and the audience with a valuable lesson on economic history, because the adoption of nuclear provided Sweden with some of the least expensive electricity in the world, which in turn had a very positive influence on the rate of economic growth in this country.

My request was blatantly ignored, but when I was asked to present a short course on energy economics in Spain, I made sure to refer to my forthcoming book ENERGY AND ECONOMIC THEORY (2015), and also to describe an encounter I suffered with the environmental celebrity Jeremy Leggett at the Singapore Energy Week in 2011. My part in that program was to deliver a short lecture on nuclear energy (which I later published under the title of 'The Real Nuclear Deal'), and also to participate in a general debate on energy topics.

Quite naturally, I was aware that feelings could run high when nuclear was discussed, or for that matter just mentioned, as I found out several years ago when I gave a lecture on oil at the Ecole Normale Superieure (Paris). On that occasion, my vague reference to the likelihood of nuclear continuing to receive a favourable evaluation in France brought frowns to the faces to dozen or so members of the large audience. But what I did not expect in Singapore was the gratuitous outrage levelled at me by the good Leggett when I informed him that it did not take 10 years to construct a nuclear reactor. I also might have mentioned, en passant, that he would be doing himself a favour if he adjusted his mental processes so that they at least came up to the level of a course in remedial freshman economics at a secondary school like Boston Public.

His reaction to this advice was to contact Professor (of physics) Kjell Aleklett of Uppsala University, and inform him that I had disgraced that noble institution - an establishment at which I have lectured brilliantly on economics and international finance for about 30 years. There was also some question about my bona-fides, i.e. my professional status, which regrettably led to my confessing that I am probably the most productive economist in the history of Uppsala University (700+ years): I have had more guest professorships than ANY ECONOMICS TEACHER NOW IN UPPSALA (12), JUST AS I HAVE ALSO PUBLISHED MORE BOOKS (13) INTERNATIONALLY THAN ANY - OR FOR THAT MATTER ALL - OF THE PRESENT ECONOMICS TEACHERS AND STUDENTS in this community. In addition I have held teaching or research positions in Dakar (Senegal-15 months)), Geneva (Switzerland-3 years), Lisbon (Portugal - 1 term), Brisbane (Australia - 2 months) and a consulting position in Paris at the Hudson Institute. Please observe what I have said: ANY ECONOMIST IN UPPSALA, OR ALL OF THEM TOGETHER, WHETHER WE OR TALKING ABOUT BOOKS OR GUEST PROFESSORSHIPS.

I am also a brilliant teacher, and although I warmly remember and constantly brag about being expelled from engineering school after my first year for poor scholarship, my first university lecture was in mathematical statistics, and my first guest professorship (for 1 year) was in mathematical economics at THE UNIVERSITY OF NEW SOUTH WALES in Sydney (Australia). I also taught at Sydney University of Technology for several months.

1. ALBERT EINSTEIN AND AMORY LOVINS

Two things are eternal, the universe and stupidity, but

sometimes I have doubts about the universe.

- Albert Einstein

Something that Professor Einstein forgot to say however was that when stupidity turned out to be inconvenient or unsightly, it can often be dressed up with lies and/or misunderstandings. With all due respect, consider the following testimony by the energy debaters Amory Lovins and Joseph Romm in the prestigious organ of the (United States) Council on Foreign Relations, Foreign Affairs (1992-93):

"..., the Swedish State Power Board found that doubling electric efficiency, switching generators to natural and biomass fuels, and relying upon the cleanest power plants would support 54 percent increase in real GNP from 1987 to 2010 - while phasing out all nuclear power. Additionally, the heat and power sector's carbon dioxide output would fall by nearly $1 billion per year. Sweden is already among the world's most energy-efficient countries, even though it is cold, cloudy and heavily industrialized. Other countries should be able to do better.

Note all of the dates here. This statement is a blatant fiction and does not have a slender association with reality. Hopefully, biomass can someday fit into the mix of energy assets that Sweden will require in order to ensure that my pension will be paid and any medical assistance I may require will be made available, but thus far biomass is little more than a gleam in the eyes of certain environmentalists. As for other 'soft' energy options, there is a great deal of talk but little action, and this arrangement is unlikely to change. One of the reasons it is unlikely to change in Sweden is that many people in this country are more against the culture of nuclear and its aroma of academic elitism than they are against the presence of reactors and their output of reliable and comparatively inexpensive electricity.

I never get tired of repeating and examining the above, and if given the opportunity would sing it in a local karaoke club, although it is only of marginal interest when the issue is economic logic. A more suitable approach to what follows is based on a definition of economic dynamics presented in a lecture at the Stockholm School of Economics by one of the first winners of the Nobel Prize in economics, Ragnar Fritsch, and focuses on the study of economic phenomena in relation to preceding and succeeding events. In the present case the phenomena in question are the past, present and likely future of reactor technology, irrespective of countries or regions.

Generation 1 (Gen 1) reactors were the gas-cooled, graphite moderated reactors developed by Britain and France, using 'natural' (or unenriched) uranium. Gen 2 is the light-water cooled and moderated reactor (or LWR), which is the kind that the research director of a major oil company called "tacky", and compared to a "Saturday night special" handgun. The following generation was supposed to be a fast-breeder reactor (FBR), which was the reactor that the cognoscenti were naively thinking of when they talked about "electricity being too cheap to meter". As things worked out, the engineering associated with its construction was more complex than anticipated, while uranium was plentiful, and so at present light (and heavy) water (or Gen 2) equipment constitutes all except a few pieces of the global nuclear inventory.

If I were asked, I would say that a commercial breeder is about a decade away. Some of us once hoped that it will never find a place in our electric generating facilities, because we were told that it represents the first step into a plutonium community, but in point of fact it happens to be inevitable. In the meantime Gen 3 equipment has started to appear (e.g. in Finland and France), where the emphasis seems to be on safety. The gorgeous new world that Amory Lovins and Joseph Romm discussed in their article is still many years in the future, and it might be best if it never appears, because it has the same smell as the lie about 'weapons of mass destruction' that set off the present spiral of destruction in the Middle East.

2. A TEN YEAR ITCH

I would like to assume that if I had informed Jeremy Leggett that I could not only read English, but in addition can add and subtract, he would never have insisted - at the top of his voice - that the 'significant other' known as "they" said that it takes 10 years to construct a nuclear reactor. In any event, I take up this issue in my new energy economics textbook (2015), and just below I attempt to summarize that discussion.

Sweden constructed 12 reactors in slightly more than 13 years, and these reactors eventually provided Sweden with about 45 percent of its generating capacity (in megawatts), and more than fifty percent of its electric power (in megawatt-hours). They would also have continued to provide this country with some of the most inexpensive electricity in the world if Swedish politicians and voters had not been tricked into deregulating electricity. Just as Mr Leggett insists that it takes 10 years to construct a reactor, there were half-baked experts in academia and the corporate world who insisted that electric deregulation would reduce the price of electricity.

Anyway, as far as I can tell, Sweden holds the record where this (reactor construction) activity is concerned, and the incentive for this achievement was the first oil price shock. That trauma brought the bad energy news home to everybody except the single-issue fanatics who believed that if nuclear facilities would not or could not or should not be constructed in Third World paradises, then they had no place in Sweden.

In his brilliant and stimulating book Energy and the Earth Machine (1976), Donald E. Carr - an industrial chemist and executive, who calls himself an environmentalist - refers to nuclear fission as "The Light that Fails" - although his industrial background apparently got the better of him, and he regretted the inability of industrial societies to produce a commercial fast-breeder. What he said he believed is that there is a shortage of "brainpower" as well as common-sense in this old world of ours, which may or may not be true, but in the course of his deliberations he informs us that at the time his book was written, the Japanese were capable of constructing a reactor in 3 years. I have decided to ignore this contention and instead refer to the work of Professor Ken-Ichi Matsui, who refers to what he calls The Seventh Energy Revolution, which he believes will be based on nuclear energy(1998). In my opinion it will definitely be based on nuclear in Japan and Germany, as well as renewables and alternatives, and for it to make economic sense, nuclear is essential.

This might also be the place to recall that after a workshop session in Vienna, and in the course of a walk through that city, a Japanese gentleman informed me that regardless of the circumstances, constructing conventional (Gen 2) 'thermal' reactors was a waste of time and money. He assured me that eventually the voters in Japan would give the decision makers permission to construct breeders, and at that time I believed him. The same is true now.

The next number that is relevant for this discussion is 5 years, which was on the contract that the French firm Areva signed with buyers in Finland. Their reactor will not be constructed in 5 years however, but probably in 8 (or more). According to the former director of Areva though (Anne Lauvergeon), the Chinese are able to construct 1000 megawatt reactors in 5 years or less, which I have also heard elsewhere. An example is the reactor at Qinshan. Moreover, the 4 reactors that are supposed to be constructed in the United Arab Emirate are scheduled to be completed in 5 years each, although I was told that it might take 7 years, which is of no consequence in that rich country. Finally, the two reactors that the Southern Company will construct in the U.S. might also require about 7 years.

The above suggests that 10 years is a misreading of the evidence, however to my way of thinking it doesn't make any difference today what is believed: 10, or 9 or for that matter 29 years from 'ground break' to 'grid power'. Eventually the correct number will be discovered, and it will be much less than 10. I suspect that it will be around 5, and in some cases slightly less. As for me, the only number I am interested in comes from China, where now or soon reactors can be constructed in the same manner as ships were in the U.S. during WW2. The reason those ships were constructed as rapidly as they were is analogous to the reason the Swedes constructed 12 reactors as fast as they did: the importance of relatively inexpensive energy for national economic health, and so there is/was no point in waiting for the approval of voters or politicians who believe that instructions for obtaining their economic salvation can be found in the lyrics of popular songs.

Something that everyone should be aware of is that an important move forward is going to be the construction of smaller reactors. The failure of the recent project in Finland could have been avoided if it had been possible to produce small reactors in France that were easy to ship and furnished the content of a large reactor installation in Finland.

3. THE NUCLEAR FUTURE

First of all it should be recognized that environmentalists and environmental parties in countries like Sweden believe that there will not be a nuclear future, and like 'old soldiers' in the song so loved by General Douglas MacArthur, nuclear energy will simply fade away.

This is unlikely to take place. At the Singapore Energy meeting referred to above the greatest offense to the environmentalists present consisted of my claim that technological change is on the side of nuclear. The construction of breeder reactors is a certainty, and it is possible that these or even present generator (type) reactors will be powered by liquid fuel (molten salt) rather than solid fuel rods.

Moreover, molten salt reactors are ideal for using thorium as a fuel, and thorium is cleaner, safer and more abundant than uranium. It has also been claimed that these reactors can consume nuclear waste from other reactors, although it is uncertain if it is necessary to wait for molten salt equipment in order to deal with nuclear waste. There is much talk about new reactor technologies, and also about how slow things are moving, but this problem will be solved by the Chinese government which works with - or perhaps supervises - industrial and academic interests in China on issues of this sort. Obviously this could not take place in the U.S. at the present time because President Obama is totally without the capacity to comprehend the prevailing logic in the great world of energy, nuclear or otherwise, while his energy ministers probably have an insight into the thermodynamics of the subject, but not its economics.

Among the things the latter probably know is that the latest World Nuclear Association report forecasts that global nuclear capacity with grow from to 552 gigawatts equivalent (GWe) by 2035, as compared to 380 GWe at present, while the International Energy Agency (IEA) claims that a larger amount is necessary if the battle against climate change is to be won. Knowing what I know about the IEA, I inform my students and anyone else within range that their predictions are mostly worthless, although I am willing to accept that the output of nuclear generated electricity is going to rapidly increase, particularly when the absurdity of Germany's Energiwende is fully absorbed. (And if you are interested in examining that absurdity begin with the fact that the highest electricity price in Europe is in the capital of wind-power, Denmark, while Germany is in second place.)

As for the (global) cost of investment of new nuclear installations, which someone has estimated at approximately 82 billion dollars a year, I regard this as trivial, and had I been invited to the Stockholm Energy Summit might have revealed why. First and foremost though it needs to be demonstrated for countries where nuclear is not a 'pet hate' that under almost all circumstances a 1000 GWe nuclear plant can be constructed in 4-5 years, which in countries like the U.S., Canada, France etc. suggests (overnight) construction costs of $1000 - $1500 per kWe of capacity. (Overnight cost is the cost of a construction project if no interest was incurred during construction, as if the project was completed "overnight." The overnight cost is frequently used when describing power plants

4. CONCLUSION

I would like to conclude this exposition with an extremely important prediction. Where nuclear is concerned, the conversion of the broad masses in countries like Sweden - as well as their so-called experts - will not come through polemics, but through revelation: they will wake up some fine morning and get the message. As has already happened with some of us, they will realize that if the price of electricity was what it could and should be, then violins would be singing, and they would be able to afford still another week in wonderful Paris next April.

Of course, if you do not want to believe that I know what I am talking about, please refer to an article by Michael McDonald in which he announces that SWEDEN'S NUCLEAR SHUTDOWN IS A SIGN OF WHAT'S TO COME (2015). I suspect that Mr McDonald is not an incompetent scholar, but like Messrs Lovins and Romm he is unable to deal with this topic, because the shutdown that he talks about will not take place, and more important has not taken place. To my way of thinking, the lies and misunderstandings about nuclear have worked miracles among readers of the popular press and viewers of CNN, but even so the truths that will eventually emerge from the Chinese nuclear sector will settle the issue for all except the hopelessly deluded.

REFERENCES

Banks, Ferdinand E. (2015). Energy and Economic Theory. London, Singapore and New York: World Scientific Publishing Company.

______. (2012b) 'In the head of US Energy Secretary Chu'. Conference handout.

Carlen, Tove and Jacob Bursell (2011). 'Olika Syn pa lofte om reaktorstart' Svenska Dagbladet (29 September).

Carr, Donald E. (1976). Energy and the Earth Machine. Abacus: London.

Constanty, H. (1995). 'Nucleaire: le grand trouble'. L'Expansion (68-73).

Matsui, Ken-Ichi (1998). 'Global demand growth of power generation.' The Energy Journal 19.(2):93-107.

McDonald, Michael (2015). 'Sweden's nuclear shutdown a sign of what's to Come' OilPrice Com. 27 August.

Tanguy, Pierre (1997). Nucleaire: Pas de Panique. Paris: Editions Nucleon.

Professor Ferdinand E. Banks
ferdinand.banks@telia.com
September 15th, 2015




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