Recently Written
- Curmudgeon’s View: Waste, DOE, and New Reactors
- Wind and Property Values: Relation Unknown
- What to Make of Climate Science
- Fraud in Calif. Air Board Rules
- Is GE’s Immelt Headed Out the Door
- White House Chews on Chu’s Nuclear Budget
- The Slouching South Texas Nuclear Project
- More on Peer Review and Climategate
- The Plug-in Dead-end
- Energy roundup
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Curmudgeon’s View: Waste, DOE, and New Reactors
Posted on March 11, 2010
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By Kennedy Maize
Washington, March 11, 2010 — As reported in POWER NEWS, the Obama administration has formally pulled the plug on the Yucca Mountain, Nevada, project to store spent commercial reactor fuel, the latest in more than a 50-year record of failure on the part of the federal government to fashion a way to deal with reactor fuel at the end of its useful life. The announcement is also the formal obituary of the 1982 (and 1987-amended) Nuclear Waste Policy Act.
I say, “good riddance.” The nuke waste act was a legal and technical abomination. It was both coercive (eat this, Nevada) and feckless (science? don’t need no stinkin’ science). Yucca became dead dump walking when Harry Reid of Nevada became Senate Majority Leader. The election of Barack Obama nailed down the lid on the Yucca Mountain coffin.
So what’s next in the seemingly endless search for a way to make nuclear waste disappear? Some, including a Republican congressional candidate from New Mexico, are advocating use of the Carlsbad, N.M., salt beds, where the Department of Energy’s Waste Isolation Pilot Project is now storing defense wastes, as an easy answer.
But that doesn’t work. WIPP, which I have referred to in the past as the “wasteful, idiotic pilot project,” is designed to handle transuranic wastes — long-lived, man-made isotopes that are atomically hot, but not thermally alive. WIPP is not designed to handle spent fuel rods, which are not only pumping out radioactivity, but spewing a lot of thermal energy. WIPP isn’t configured to handle conventional heat, and salt has a problem. It melts, and it dissolves in water. Oops!
Others have revived the long-dead nuclear industry panacea of reprocessing. This involves chopping up spent fuel rods, chemically treating them to removed reactor-grade plutonium, and using that as nuclear fuel in sodium-cooled “breeder” reactors that produce more fuel than they use. Here’s the problem: Enriched uranium is cheap. Reprocessed plutonium would be far more expensive than the uranium fuel. On top of that, the remaining liquid chemical residue is nasty stuff of the Superfund variety.
What’s more, as a report from the International Panel on Fissile Materials recently concluded, hopes for breeder technology “are not merited by the dismal track record to date of such sodium-cooled reactors in France, India, Japan, the Soviet Union/Russia, the United Kingdom, and the United States.” The report notes that Adm. Hyman Rickover, the late father of the nuclear Navy, observed that breeders are “expensive to build, complex to operate, susceptible to prolonged shutdown as a result of even minor malfunctions, and difficult and time-consuming to repair.”
What to do? In my judgment, nothing. Let spent fuel remain at reactor sites, in storage judged safe by the U.S. Nuclear Regulatory Commission. Kick the spent fuel can down the road.
LOL Stimulus Money
The Department of Energy has announced that it is willing to offer $100 million in stimulus funds to bring “green” technologies, whatever that means, to the commercial market. DOE has invented what it claims is a clone of the Defense Advanced Research Project Agency (DARPA), calling it DARPA-E.
This, boys and girls, is a joke. DARPA has a multi-decade track record of success, including (eat your heart out, Al Gore) the Internet. DOE has a multi-decade track record of R&D wheel-spinning (recall the hype over geothermal heat pumps and water heaters). Mostly, that’s because DARPA’s research had a real focus on defense-related needs, with little focus on commercial viability. The commercial aspects came later, in the private sector.
DOE’s research objectives are mostly hopeful hand-waving. For example, here is what Energy Secretary Steven Chu allegedly said, reported in a DOE press release: “This is about unleashing the American innovation machine to solve the energy and climate challenge, while creating new jobs, new industries and new exports for America’s workers.”
Huh? Parse that carefully and you get what has been characteristic of the Obama administration, all fluff and no meat. The statement is entirely anodyne. All of the initiatives — health care, financial reform, climate change — the administration claims, achieve multiple goals, not susceptible of quantification. They are the Big Rock Candy Mountain, complete with cigarette trees and lemonade springs where bluebirds sing.
Also, anybody who believes that Chu actually wrote those news release words, please raise your hand. You are voted off the island. Energy secretaries say what their handlers allow them to say and write for them. Chu is a very smart and amusing guy (he was great on NRP’s “Wait, Wait, Don’t Tell Me”) but he doesn’t say anything about administration policy that isn’t scripted by the White House.
And how does this stuff qualify as “stimulus?” Name the jobs created, the businesses revived, the new industries. Bogus. You can’t do it.
Gaseous Reactor Money
Along those lines, DOE has also announced $40 million in R&D money for a nuclear reactor technology that has been around for five decades, sucked up hundreds of millions of federal money, and failed to demonstrated anything approaching commercial viability. Failed nuclear reactor technologies never die at DOE. They just smell that way, and continue to rake in money, despite the odor.
The energy agency says it will split the $40 million between Westinghouse in Pittsburgh and San Diego-based General Atomics for work on what it calls, with no sense of shame, history, or irony, the “Next Generation Nuclear Plant” or NGNP. Please, this is a last generation technology: high temperature gas-cooled reactors. Looks good on paper, doesn’t work on the ground.
In making the award to keep alive a technology that has never proven commercial, Chu allegedly said: “This investment reflects President Obama’s commitment to building the next generation of nuclear reactors that will create thousands of jobs and supply the clean energy to power our economy. It’s time for America to recapture the lead in the nuclear energy industry and lay the foundation for a stronger, cleaner, and more competitive economic future.”
I doubt that Chu ever said these words, let alone even reviewed them before the press release hit cyberspace.
Helium-cooled, high-temperature reactors have been a pipe dream of the nuclear industry since the early 1950s. The promise has always been been dual-purpose: electricity and high-temperature steam for industrial purposes.
General Atomics developed a 40 MW pilot reactor at the Philadelphia Electric Company’s (now an Exelon unit) Peach Bottom site in eastern Pennsylvania in the early 1970s. The plant ran well, and that led to several orders for scaled-up commercial reactors (including one at the Tennessee Valley Authority, which, in those days, would buy anything nuclear, no matter how far-fetched). The only HTGR that actually got built was Public Service Co. of Colorado’s 300-MW Fort St. Vrain plant. For a number of reasons, the plant, which operated sporadically between 1977 and 1992, failed. The utility’s successor, Xcel Energy, converted it to a natural gas plant. Sic transit gloria HTGRs.
What are the odds the DOE money will revive this technology? Slim just left the room.
Wind and Property Values: Relation Unknown
Posted on February 16, 2010
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By Kennedy Maize
Washington, Feb. 15, 2010 — Local opponents of wind farm developments often claim that the energy projects depress their property values. It’s a difficult issue to settle. The Department of Energy’s Lawrence Berkeley National Laboratory claimed last December in a $500,000 study, three years in the works – “The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis” – that the fear of property value declines is bogus.
The DOE study concluded that there was no evidence property values near wind farms were “consistently, measurably, and significantly affected by either the view of wind facilities or the distance of the home to those facilities.” A Lawrence Berkeley press release quoted the study’s author, consultant Ben Hoen, “Neither the view of wind energy facilities nor the distance of the home to those of the homes to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes.”
The study team collected data on 7,500 single-family home sales for residences within 10 miles of 24 current wind projects in nine states, according the LBNL press release. The sales took place between 1996 and 2007.
The study drew praise from wind developers. Denise Bode, head of the American Wind Energy Association, the industry’s Washington lobbying group, said, “The conclusions of this study could not be more definitive—wind farms do not weaken property values. These important research findings offer good news for those communities that might be considering the location of wind farms nearby. Wind energy has multiple benefits: it creates jobs, reduces greenhouse gases, and delivers direct economic benefits to rural communities. Now we can also say that wind energy has no impact on property values.”
Not so fast, Denise. Albert R. Wilson, a national expert on real estate valuation, got wind of the study, looked at it, and found its methodology dodgy. His target was the way the LBNL researchers used “hedonic analysis” in their paper.
The LBNL study rests on regression analysis, which is what hedonic analysis means. In a private paper – “Wind Farms, Residential Property Values, and Rubber Rulers” – Wilson explained: “A regression is a statistical process that attempts to quantify a hypothetical relationship between certain factors (explanatory variables) and the value of an outcome (dependent variable).”
Economists Fritz Roka and Raymond Palmquist at North Carolina State University note, “Hedonic techniques have attracted the interest of economists as a means of measuring values of non-market goods. By studying the market transactions of differentiated products such as automobiles and houses, implied values and corresponding demand schedules can be estimated for underlying characteristics such as automobile safety features, two-car garages, and air quality of residential neighborhoods.”
Wilson adds that there are “literally thousands of possible real estate regression models.” There is also “a well developed and tested set of standards” to guide model choices, he says. For the LBNL report, Wilson says, “There is no evidence whatever” that the researchers “employed any standards.”
It also appears, Wilson says, that the LBNL report omitted important variables. The LBNL model may include sales prices in areas of declining population, where prices are not comparable to areas of increasing population, demand, and housing prices. The LBNL analysis, says Wilson, aggregates sales data nationwide, which is “a gross oversimplification that cannot provide for the specificity required to answer a micro-question such as an influence on sales price from a highly localized condition – distance to or view of a wind energy project.”
Wilson says he has “no opinion on the influence of wind farms on residential sales prices.” But his concerns with methodology lead him to argue that the LBNL report “should not be given serious consideration for any policy purpose. The underlying methods cannot be show to be reliable or accurate.”
So where does that leave us on the question of whether windmills reduce property values? After three years and half-a-million in research, the question, in my mind at least, remains unanswered.
What to Make of Climate Science
Posted on February 3, 2010
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By Kennedy Maize
Here at my western Maryland farm, we just got the fourth significant snowfall of the winter. We caught four inches while we were on vacation in the South Pacific in late November, over 20 inches on December 20, six inches a few days ago, and four inches last night (Feb. 2). The National Weather Service says we are going to get another foot or so over the weekend.
Last winter, we had very little snow. According to the Washington Post, the region got fewer than 10 inches of snow each of the past three years.
Must be global warming, right? Wrong, of course. Weather and climate are not the same thing. This is an El Nino year, and the results are showing up on my farm. I’m prepared for the snow, and I’m not complaining. Winter snow means a well-charged summer aquifer for those of us who live on wells and septic systems.
I raise the issue because the louder acolytes of global warming — or, as they now prefer, climate change — always claim that extreme weather events are the result of man-made emissions of carbon dioxide. Unless, of course, the events are wintry. Hurricanes, glacial melts, torrential monsoons, all reveal the hand of man, according to the climate orthodoxy. Snow storms and frigid temperatures are just weather.
You can’t have it both ways.
Now, the orthodoxy is faltering and the heterodox crowd (count me in) are beginning to gain some public traction. As the science behind the United Nation’s 2007 Intergovernmental Panel on Climate Change (IPCC) report becomes increasingly suspect, who can honestly believe that anything weather-related is climate-related? Or vice-versa?
The recent revelations about the allegedly scientific endeavors of the IPCC are very troubling. In December, we learned that the climate gurus at the UK’s Climate Research Unit were cooking the books on past climate patterns in order to forestall skeptical analysis, AKA “Climategate.”
Then it turned out that the IPCC accepted unscientific reports on glacier melting in the Himalayas and South America, in order to bolster the case for policies to reduce CO2 emissions. The IPCC report relied on unreviewed claims put forth by an advocacy group, World Wildlife Fund.
Now, a leading researcher has disputed the IPCC’s assessment of the impact of global warming on the Amazon rainforest, also apparently based on unreviewed material in a WWF report. A leading academic researcher called the IPPC work on the effects of global warming on rain forests “a mess,”, adding that the WWF report “contains no primary research data”.
A couple of years ago, after Hurricane Katrina, climate campaigners, including some reputable scientists, claimed that climate warming was causing extreme hurricane events. The actual hurricane scholars scoffed. Since then, hurricane seasons have been relatively benign. The advocates of catastrophe were proven wrong.
The lesson from all of this is that climate claims, particularly those based on the 2007 IPPC report, are not reliable. They may be right, but they may be very wrong, and it’s difficult to tell who has the correct story. That’s always been the case, but the latest revelations show that some scientific “claims” were meaningless from the beginning and remain bogus.
How to tell what’s real and what’s faked? That’s the trick, and it’s a difficult task for anyone really concerned about the science of global warming.
Fraud in Calif. Air Board Rules
Posted on January 27, 2010
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By Kennedy Maize
This is so California. The all-powerful California Air Resources Board, which drives regulations affecting cars, power plants, and virtually anything with moving parts in the state, has ordered a new study of the health effects of diesel engine emissions, after it turned out that a staff member who did the analysis leading to expensive new regulations on diesel engines falsified his credentials.
Here’s the California part. The CARB did not suspend it’s new diesel rules when it discovered that the health effects report upon which it based its regulatory decision could be flawed. Instead, it ordered a new report.
What’s worse, when the board adopted its regs last year, based on a report by staffer Hien Tran, who claimed a Ph.D. in statistics from the University of California at Davis, CARB chief Mary Nichols knew that Tran’s degree was actually from an unaccredited, online institution, before the board voted on the new rules. She didn’t speak up at the time.
Nichols, the clean air chief in the Clinton Administration’s Environmental Protection Agency, and a Natural Resources Defense Council attorney before that, apologized to the board after the fact at its December 2009 meeting.
In it’s defense, the CARB did tell the staff in its reworking of the study to look at potential amendments to the rules, which are designed to reduce particulate emissions. The air board is scheduled to take up the diesel rules again in its April meeting.
The regs, which would go into effect in 2011 and ratchet up over the next 10 years, rely on a requirement for a new diesel low-carbon reformulated fuel that would not be required anywhere else in the U.S. It would apply to all diesel engines, from trucks to cars to power plants. The fuel required under the California rules does not yet exist, according to trucking industry claims. They argue that it will require costly technology retrofits on existing engines.
The California rule would also apply to trucks coming into the state from other states that do not have similar rules. According to legal experts, that could trigger lawsuits alleging that the California rules are a violation of the Commerce Clause in the U.S. Constitution. Similar attempts to bar out-of-state coal in Ohio and Illinois fell afoul of the federal courts on Commerce Clause grounds.
Writing in the San Diego Union-Tribune, former CARB member and chairman (1994-1999) John Dunlap said, “What has emerged, it seems, is an attitude and belief among some CARB staff that the ends justify the means and that full disclosure and transparency are not required before the board or the public. This runs counter to the very tenets of democratic law and due process.
“It is a system that begs for scrutiny and reform and can only benefit from more board-level involvement. As it now stands the CARB chief counsel plays the role of a sort-of regulatory sheriff, prosecutor and judge. It defies due process and fundamental separation-of-power principles that CARB staff – or any government official – could be allowed to assume all these positions of power – with unlimited discretion and without any meaningful checks and balances.”
In my judgment, Mary Nichols should be looking for a new job.
Is GE’s Immelt Headed Out the Door
Posted on January 21, 2010
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By Kennedy Maize
Is Jeff Immelt, General Electric CEO, headed out the door at the enormous conglomerate he took over from “Neutron” Jack Welch in 2001? As GE continues to deliver lackluster business performance, and as Immelt continues to focus on what appear to me to be peripheral business targets, I’d suggest his days are limited. There is scuttlebutt among large money managers to the same effect.
Immelt has made big bets on alleged green technologies, particularly wind, as GE has become one of the largest wind developers in the world. As former Enron employee Rob Bradley notes in his MasterResource blog, Enron bought a floundering Zond Corp. wind business in 1997, failed to generate a profit from it, despite persuading Texas to adopt a very wind-favorable renewables standard, and sold the business to GE in 2002, under Immelt’s leadership.
Wind has been a core in GE’s loopy “ecomagination” strategy, which it appears has never shown a profit (GE’s financial disclosures are less than transparent when it comes to sussing out the results of this goofy strategy).
The latest GE wind news is that T. Boone Pickens, an oil and gas magnate who has been backing wind as a play to boost his gas assets, is rapidly backing away from wind in general and General Electric in particular. Pickens has scaled back his 687 wind turbine order from GE and will deploy the rest of his turbine buy in various sites. Pickens earlier abandoned plans for a 1 GW West Texas wind project, using GE turbines, because of the lack of a transmission grid to move the power from where it would be generated to where it would be used.
Immelt’s latest business move was to unload NBC Universal, the company’s ill-fated entertainment enterprise, to Comcast (in fairness, Welch bought NBC). Dumping NBC was an admission that GE has been pursuing false gods and abandoning its core competencies in manufacturing.
In a year end, year-to-come forecast, Immelt said GE has put “the worst behind us,” and, “We’re going to be very disciplined” in the year ahead. I don’t believe that, and I don’t think investors do either. Discipline has not characterized Immelt’s reign. GE’s market capitalization has tanked in recent years, as the stock has underperformed an underperforming market since 2007. I share the views of Welch, who said in April 2008 that he would shoot Immelt if he didn’t meet the company’s targets for 2008 and 2009. Immelt didn’t, but Jack was, fortunately, unarmed.
Under Welch, GE went from a $13 billion manufacturing company, heavy into machines such as railroad locomotives, airplane engines, and electric power turbines, into a $500 billion conglomerate, including RCA, the owner of NBC and Universal Studios. Value Expectations, an online financial advisor, commented, “Welch, once the youngest CEO in GE’s history, is highly regarded for his innovative management strategies, leadership style, and a good understanding of how to create shareholder value. From 1980 to 2001, Welch was able to grow GE’s revenues from just over $26 billion a year to $130 billion and took GE’s stock price from around $1.25 a share to nearly $50 a share. Welch streamlined GE and made it a more competitive company in the market through his dedication to identifying and improving ways of adding value to its shareholders as well as numerous successful acquisitions. During the 1990s, Welch transformed GE from a simple manufacturing company to one of the world’s largest conglomerates.”
Immelt came on board promising more of the same, and emphasizing politically correct businesses such as wind power. That all quickly turned brown and runny. The company’s stock crashed by 60%. GE’s financial arm, GE Capital, became the only element of the company that was turning a consistent profit.
The same online analysis firm, Value Expectations, slammed Immelt last year: “Jeffrey Immelt on the other hand has not been able to achieve the same success as Welch in his time as CEO so far. To be fair, Immelt took over GE at an unfavorable time, just days before the 9/11 terrorist attacks, which cost GE’s insurance arm over $600 million. Along with 9/11 Immelt also had to deal with last year’s financial crisis and the prolonged economic recession in developed nations, which dealt a huge blow to GE Capital and GE’s industrial businesses. Under Immelt the company lost two/thirds of its stock’s value, missed earnings estimates for the first time and has continued to miss, and lost its place as the largest company (by Market Cap) in the U.S. to Exxon Mobil. GE’s stock price has gone from $39/share when he took over to less than $12/share, underperforming the Dow Jones Industrial by nearly 60% (price return). Despite the above-mentioned environment Immelt had to deal with, it is not encouraging as an investor to see Economic Margins evaporate away while other businesses have adapted and been able to change their misfortunes. It is yet to be determined if Immelt can recover but it is certain he has yet to prove his ability to create shareholder value.”
Last year, GE slashed its dividend by 68 percent, the first dividend cut since the 1930s. The stock has traded at dismal levels, recently moving into the teens from single digits, a result of the general rebound in U.S. stocks as the U.S. recession has apparently receded.
Given the performance history, Jeff Immelt should be toast when GE’s board next gets together to assess his performance, unless the company has seen a major turnaround. So far, there’s not much evidence of that.
But in reality, I doubt GE will unload Immelt, regardless of the company’s performance. Most boards of directors these days at major corporations are lap dogs to company management.
White House Chews on Chu’s Nuclear Budget
Posted on January 15, 2010
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By Kennedy Maize
Energy Secretary Steven Chu can’t serve two masters, only one: the White House. Chu is going learn that truth, in an ongoing battle between DOE and the Office of Management and Budget. Predictably, the showdown between the entrenched bureaucracy and industrial interests that Chu serves daily and the political administration he serves ultimately has come over nuclear energy research. Chu will lose, unless the White House wants him to win.
The Energy Daily has reported that, in the traditional federal budget kabuki that characterizes this time of the year, Chu has objected to the “pass back” budget document from the White House’s OMB. The pass back, which came last December, was the OMB’s final version of the DOE budget that the administration will present to Congress sometime in February.
Chu’s lament is that OMB doesn’t look kindly on DOE’c spending desires for non-traditional nuclear technologies. In particular, according to The Energy Daily account, based on DOE documents almost certainly leaked to the newsletter by the agency, Chu is irritated that OMB doesn’t support the agency’s requests for “fast reactor” research (we’re talking liquid sodium cooled, fast neutron breeder reactors), and for small, modular light-water technology.
The “fast reactor” funding is the crux of the dispute, according to my sources with close ties to OMB. The nuclear power industry, led by GE-Hitachi, is pushing a revitalization of sodium-cooled fast neutron breeder reactors, touting their ability to process nuclear waste into plutonium fuel. GE-Hitachi have long been touting their machine, dubbed PRISM, aiming for substantial DOE R&D support. That orchestrated campaign has included an entirely credulous article in a recent issue of Esquire magazine, touting liquid metal fast breeder reactors as the next great thing in nuclear power. That, of course, is bogus.
The Energy Daily story noted, “Chu’s letter did not explain the rationale for OMB’s proposed nuclear R&D restrictions, which are surprising on several fronts and which appear likely to harden perceptions among industry officials and others that the administration is fundamentally anti-nuclear.”
Let’s deconstruct that run-on sentence. Surprising? On what fronts? Sodium-cooled reactors using fast neutrons to breed plutonium have been a dream of the world nuclear industry for over 50 years. They have never worked at a commercial scale. Just reference Detroit Edison’s Fermi 1 plant, Japan’s Monju, France’s Superphenix. All failures. There’s no surprise in the OMB decision that it has better things upon which to lavish federal dollars.
Liquid sodium coolant has great thermal properties, but it’s nasty as a snake to deal with in terms of chemistry. It’s corrosive, and it catches on fire and explodes if it leaks from reactor coolant systems. That’s what happened at Monju. Leaks also shut down Superphenix, touted as the exemplar for future breeder reactor plants.
The U.S. Congress more than 25 years ago pulled the plug on the Clinch River (Tennessee) Breeder Reactor. It was a wise decision to kill an outrageously expensive project with little hope of success. Ironically, the Democratic Carter administration proposed to kill the project in 1977, but a Democratic Congress refused. When Republican Ronald Reagan became president, he pushed the project in a big way. Congress, despite a Republican Senate led by Tennessee’s Howard Baker, terminated Clinch River in late 1983. I covered the whole fight on a daily basis, writing for Congressional Quarterly and The Energy Daily.
Despite the breeder’s failures, the nuclear industry hasn’t given up. Steven Chu has fallen into a trap that has ensnared many of his predecessors. He’s apparently concluded that his job is to represent the views of his industry constituents. His decision, says The Energy Daily, could “harden perceptions among industry officials and others.” So what? That’s not who Chu works for. His boss lives at 1600 Pennsylvania Avenue. Obama was elected by a majority of the American voters. Obama hired Chu.
Is the Obama administration “fundamentally anti-nuclear?” I doubt it, although there are elements of the administration for whom that shoe fits. But ask Exelon’s John Rowe if Obama is “fundamentally anti-nuclear.” And how does opposition to spending on low-priority, low potential payoff R&D constitute fundamental opposition to nuclear power? Simply put, that analysis by folks in the industry is brainless, or self-serving, or both.
When he picked Chu for DOE secretary, Obama was buying a reputation to burnish his new administration – Nobel laureate in physics – and an unknown quantity. The guy had never played in big-time energy politics, which may have been a good thing. But now he’s exposed to the real world, not the Alice in Wonderland environment of the DOE national labs.
So far, Chu has chosen to make the fight for DOE’s traditional constituents, going up against OMD Director Peter Orszag, who’s every bit as smart as Chu and has a lot more heft in terms of administration politics. Chu’s move is no surprise, but unwise.
My bet is on Orszag. In these disputes between DOE secretaries and OMB directors over budget submissions and spending priorities, OMB has won every time.
The Slouching South Texas Nuclear Project
Posted on January 7, 2010
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By Kennedy Maize
The alleged U.S. “nuclear renaissance” has been slowing creeping toward the horizon of reality for over five years. Developers have filed plans at the U.S. Nuclear Regulatory Commission. The Department of Energy has dangled $18.5 billion in loan guarantees for new nukes, although so far it’s just financial foreplay. The nuclear industry avers, with fingers’ crossed in longing, that new U.S. plants are real.
Will it every happen? Not without the DOE money, according to virtually everybody in the nuclear business, utilities and vendors alike. And even then, it’s uncertain. So far, it’s a costly game, nuclear chess, as the parties line up for moves to advance their strategic positions.
Many in the game acknowledge that the first plants in the renaissance have to go well, otherwise the end game is checkmate. The units have to be financed prudently, built properly, and operated efficiently. Jack Davis, chief nuclear officer for Detroit Edison, one of the pioneers of the first round of nuclear development over 50 years ago, said in an Edison Electric Institute forum recently that “success in the renaissance will balance on whether the first plant is a success or not. Actually, the first two or three really have to go well.”
In regard to Davis’s analysis, the news today isn’t good. One of the first movers – NRG Energy’s plan for two new advanced boiling water reactors at the existing South Texas Project – is in financial trouble. San Antonio is seriously considering pulling its City Public Service municipal utility – a 50-50 partner with NRG and Toshiba – out of the project because of escalating costs. Toshiba originally estimated the project cost at $8.5 billion. In late 2008, the cost estimate escalated to $12.7 billion (a figure that was not provided to the city government until late in 2009). There are independent estimates for the plant of close to $17 billion.
The city government was scheduled to vote in late December whether to go ahead with its participation in the South Texas expansion, but has delayed the vote.
The city’s investments are crucial to the project, because the Texas wholesale power market is competitive and South Texas will have to bid its power into that market. San Antonio, as a muni, is not part of the Texas wholesale market So the city offers a safe, and lucrative, haven for a significant portion of the expansion’s output. San Antonio, as a muni taking advantage of tax-free bonds, can also finance its portion of the project at lower interest rates than NRG.
On December 6, the city sued NRG and Toshiba, claiming $32 billion in damages linked to the cost increases for the new plant. On December 23, NRG and Toshiba, through their joint venture, Nuclear Innovation North America (NINA), called on the city to make a deal. NINA said it could not afford to buy out the city’s share of the project, but suggested other, unspecified, ways of working out the dispute.
NINA CEO Steve Winn said the city should make a deal quickly. “Time is of the essence in making the determination of whether CPS Energy is in or out of the project,” said Winn. “The Department of Energy is only going to select two projects for loan guarantees. STP was number one and now is second with another project close behind. Further delays could move STP to third place, losing the loan guarantee and reducing the value of both parties’ investment to zero.” A preliminary hearing on the city’s suit is set for January 25.
I’m reminded of William Butler Yeats’s magnificent 1919 poem, “The Second Coming,” which ends: “And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?”
More on Peer Review and Climategate
Posted on January 6, 2010
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By Kennedy Maize
Some additional damaging brush strokes on “Climategate,” these related to statistical analysis and peer review.
When the story of the climate emails surfaced, and the apologists insisted that there was nothing behind the alleged doctoring of evidence, I first thought about the NAS review of the Mann “hockey stick” representation. It was far from favorable, although the climate evangelists spun it as supporting the hockey stick analysis by climate researcher Michael Mann.
So I resurrected the NAS report and reported here that it wasn’t a clean bill of scientific health for Mann et al. Far from it.
At the same time, I recalled from the recesses of my increasingly unreliable memory that there was a profound critique of the statistical analysis and alleged peer review of the Mann analysis about the same time as the NAS report. It pains me to attack Mann, who now works at Penn State, as I am a proud Penn State graduate, as is my wife, and as were my mother, father, uncles and aunts. My father was on the faculty, teaching mining engineering. But I still recalled a devastating critique of Mann’s work.
So I did some searching – of my mind and the internet – and came up with a 2006 House Energy and Commerce Committee hearing, where a panel of statistical experts, pro bono, analyzed the Mann analysis and found it lacking in statistical heft and displaying a form of peer review that might be better characterized as “a circle of friends.”
The major statistical problem, found the panel chaired by George Mason University statistician Edward Wegman, and including David Scott of Rice University and Yasmin Said of Johns Hopkins University, was the “centering” of the proxy data, a topic that was central to the email traffic revealed by the Climategate revelations. “Centering” involves where Mann and his colleagues chose to balance, or “calibrate” their series of climate data.
Wegman testified in the 2006 hearings, “The reasons for setting 1902-1995 as the calibration period presented in the narrative of [Mann’s work] sounds plausible on the surface and the error may be easily overlooked by someone not trained in statistical methodology. We note that there is no evidence that Dr. Mann or any of the other authors in the paleoclimate studies have significant interactions with mainstream statisticians.”
In short, Mann and his colleagues are statistical neophytes, and appear to have been doctoring their analysis to suit their preconceived notions. That’s the case that the emails, revealed four years later, makes clear. The earlier congressional testimony bolsters the case.
As for peer review, the Wegman panel explored “the social network of authorships in the temperature reconstruction area. We found that at least 43 authors have direct ties to Dr. Mann by virtue of coauthored papers with him. Our findings from this analysis suggest that authors in this area of the relatively narrow field of paleoclimate studies are closely connected.” Translating, Wegman is charging that the circle of paleoclimate scientists routinely review each others’ work in so-called peer-reviewed journals, providing a gloss of review that isn’t independent.
Wegman’s group suggested remedies for what it viewed as shoddy scientific method revealed in the case of the Mann calibrations. The first recommendation: “Especially when massive amounts of public monies and human lives are at stake, academic work should have a more intense level of scrutiny and review. It is especially the case that authors of policy-related documents like the [UN’s Intergovernmental Panel on Climate Change] report should not be the same people as those that constructed the academic papers.”
As the Climategate emails demonstrated, the researchers went to great lengths to prevent public disclosure of their data, frustrating those who wanted to try to duplicate the analysis. The Wegman report four years ago concluded, “We believe that federally funded research agencies should develop a more comprehensive and concise policy on disclosure. All of us writing this report have been federally funded. Our experience with federal funding agencies has been that they do not generally articulate clear guidelines to the investigators as to what must be disclosed. Federally funded work, including code, should be made available to other researchers upon reasonable request, especially if the intellectual property has no commercial value.”
The Plug-in Dead-end
Posted on December 21, 2009
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By Kennedy Maize
Plug-in hybrid electric cars? Phooey. They don’t make economic sense. They don’t represent “green” technology. But they do help the electric utility industry, which has been pushing them hard for a decade, as a way to get some load and revenue from power that otherwise would be dumped.
Now, my curmudgeonly view gets confirmed. The National Resource Council – the working arm of the National Academies of Science – in a December 14 report mandated by Congress and funded through the Department of Energy – concluded that plug-in hybrids are likely to be a dead end at least for the next couple of decades. This despite massive federal subsidies.
The outrageously-high costs of plug-ins, said the academy, “are unlikely to drastically decrease in the near future….Cost to manufacture plug-in hybrid electric vehicles in 2010 are estimated to be as much as $18,000 more than for an equivalent conventional vehicle. Although a mile driven on electricity is cheaper than one driven on gasoline, it will likely take several decades before the upfront costs decline enough to be offset by the lifetime fuel savings. Subsidies in the tens to hundreds of billion of dollars over that period will be needed if plug-ins are to achieve rapid penetration of the U.S. automobile market. Even with these efforts, plug-in hybrid electric vehicles are not expected to significantly impact oil consumption or carbon emissions before 2030.”
So, it is clear, subsidies for plug-ins, including R&D support, and tax write-offs to purchasers, are not going to produce significant national benefits. Let’s hope that Congress is paying attention (although that’s not likely).
The problem with the hybrids is well-known: battery technology. The batteries of choice for the plug-in sedans proposed by GM, Ford, and others remain lithium-ion technology. The NAS report notes that lithium-ion batteries have basically maxed out in terms of performance and cost reductions through scale economies. No improvements to the existing technology or new technologies are on the horizon. “Battery technology has been developing rapidly,” says the academy, “but steep declines in cost do not appear likely over the next couple of years because lithium-ion batteries are already produced in large quantities for cell phones and laptop computers.”
Plug-ins, relative to conventional hybrids, won’t have much impact on oil consumption by 2030, says the academy, particularly if fuel economy in conventional cars continues to improve. If 40 million plug-ins were in the U.S. fleet in 2030, says the report, they might save 0.2 million barrels of oil per day compared to conventional technologies. That’s a paltry 2% of current U.S. light-duty vehicle fuel consumption.
Nor will plug-ins make a dent in CO2 emissions (for those who care). The plug-ins will produce less carbon emissions than conventional gas and diesel vehicles, but not less than the non-plug-in hybrids, “after accounting for emission at generating stations supplying their electric power….”
The NAS report prompted a Dec. 18 Washington Post editorial, noting – which the NAS report did not address – that plug-in subsidies will flow to upper-income people, “the sort of people who can even contemplate buying, insuring and maintaining a car that is more expensive than usual.” The report says that improvements in efficiency of conventional cars – hybrid and old-fashioned internal combustion only – would reduce gasoline consumption by 40% over the next 40 years – without requiring taxpayer dollars.
“Politicians,” said the Post, “prefer plug-in electric hybrids and other flashy vehicle technologies. Pouring on subsidies makes it looks like the government is doing something effective about unemployment, energy independence and environmental pollution. The recent evidence, however, suggests otherwise.”
Energy roundup
Posted on December 14, 2009
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By Kennedy Maize
Having just returned from three weeks of vacation, where I paid no attention to power issues, here are some items I’ve discovered since my return. I hope my take will spark some conversations.
First, “Climategate.” This flap of major proportions, threatening to unravel the alleged scientific consensus behind global warming, blew up while I was gone. My email queue was filled with messages about it when I returned.
What to make of the apparent scientific fakery behind the work of the climate scientists? My recommendation is to read Bob Peltier’s commentary in the current issue of Coal Power magazine. He paints the problems the revelations of the UK’s Climate Research Unit quite lucidly, and predicts, I think accurately, that the action will also move to the U.S.
Global warming evangelists are, predictably, trying to downplay the messages depicting the massaging of the scientific data. “No big deal,” they claim. “Science is messy. Beside that, the National Academy of Sciences vetted the work in 2006 and found it valid.”
No quite. I covered the 2006 NAS report, and it was not a clean bill of scientific health for the climate hysterics. As the emails discuss, one of the issues facing the scientists working with Michael Mann to built the “hockey stick” curve was how to deal with anomalies. Tree-ring data indicate that 1,000 AD was hotter than today, with no significant man-made carbon dioxide emissions. So the scientists manipulated the data to hide the inconvenient truth.
The academy said in “Surface Temperature Reconstruction for the Last 2,000 Years” (ISBN: 978-309-10225-4) that there is pretty good data for the temperature of the planet from the past 400 years. “Less confidence can be placed in large-scale surface temperature reconstructions for the period from AD 900 to 1600, although available proxy evidence indicates that temperatures at many, but not all, individual locations were higher during the past 25 years than during any period of comparable length since AD 900,” said the NAS report.
The scientific solons added, “Very little confidence can be assigned to statements concerning the hemispheric mean or global mean surface temperature prior to about AD 900, primarily because of the scarcity of precisely dated proxy evidence.”
Next, smart meters. Matt Wald in the New York Times Dec. 14 reported that smart meters are prompting consumer revulsion and revolution. “Consumers in California are in open revolt, and officials in Connecticut and Texas are questioning whether the rush to install meters benefits the public.”
In California, Pacific Gas & Electric has installed 4 million smart meters and plans another 6 million in the next three years. One part of the problem is that the utility bills the customers immediately in rates – at about $220 per meter – but any real customer savings from the technology are years away. The only immediate savings flow to the utility, as the meters allow remote reading, cutting costs. For consumers, the meters alert the utility when a customer has lost power.
Wald’s report notes that Connecticut Attorney General Richard Blumenthal has convinced state utility regulators and Connecticut Light & Power to run a pilot program before a widespread roll-out of smart meters. In Texas, the Office of Public Utility Council, a state consumer-protection agency, persuaded the state’s utilities to mount a multi-million dollar education program on advanced meters.
Will the revolt against smart meters spread? Stay tuned. My guess is that it will.
Finally, more on the subject of shale gas. The news is that oil-and-gas giant ExxonMobil is buying natural gas company XTO Energy for $31 billion in stock and assumption of $10 billion of XTO debt.
Based in Fort Worth, Texas, XTO has become a major player in both the Barnett shale reserves in Texas, and the Marcellus shale formation in Appalachia. The company says Appalachia will be a major focus of its production in 2010 and beyond.
I’d look for more M&A action in oil and gas in coming months, as shale gas continues to be the hottest play on the planet. Big oil has the resources to gobble up independent gas companies. I’d look for a bidding war for Chesapeake Energy, a major player in Appalachia and the Marcellus shale.