The extraordinarily good record of the nuclear industry

Woke up yesterday morning to hear someone on the BBC Today programme seriously suggesting that we should weaken nuclear safety standards to make atomic power more affordable.

It was in a segment (starts 50 minutes in) pegged to the continuing woes afflicting Hinkley Point C.

To recap quickly, the finance director of intended plant-builder EDF Energy resigned on Monday. Why? Well, he judges Hinckley C’s financial prospects to be so dire that they’ll sink his company if the project goes ahead. And that’s in spite of vast taxpayer subsidies, a guarantee of extortionate electricity tariffs and that ‘we saw you coming’ price tag of £18 billion – half the bill for HS2 for one power station.

The air is tremulous with the sound of huge bets going massively wrong. The bet on unlocking loads of (some … any?) domestic natural gas via fracking. The bet on a ‘friendly’ gas pipeline from the Gulf – a bet that’s a big reason for the desperate brawl tearing up Syria. The bet that nuclear power might ever provide affordable AND SAFE base load electricity.

As unpalatable situations go, this one is up there with a decomposing frog sandwich. Procrastination, wishful thinking and willingly doing the Neocons’ bidding have got the UK exactly where you’d expect. Which is:

  • Plan A. Pour blood into sand for years to come in an unwinable play-off for oil and gas between the US-dominated bloc, the Gulf states, Russia and the many – often overlapping – proxies of all three.
  • Plan B. Pay whatever ransom is demanded by anyone capable of building us a nuclear power plant.
  • Plan C. Anyone got a plan C?

Now, we know the BBC could no more allude to a state of affairs in which Plan A exists than it can ever come to terms with its high-level culpability for the long reigns at Broadcasting House of Jimmy Savile and other molesters of the airwaves.

That leaves the option of selling – sorry ‘examining the issue of’ – Plan B. So with the first hour of Today rapidly closing in on the weather, Sarah Montague introduced a ‘nuclear specialist’ to discuss the ballooning price tag for Hinckley Point C. What, she asked, Malcolm Grimston of the Centre for Energy Policy and Technology, makes it so costly?

”It is a big plant. It is going to generate 7% of our electricity. But nonetheless what we have seen is, as safety system is piled on top of safety system, this has become enormously complex as well as having a vast number of pumps and valves and the like associated with that.”

Right, ‘pumps and valves and things like that.’ Easily explains why Britain’s next nuke could cost, what, £20 billion allowing for the inevitable overruns.

OK, let’s forgive the shaky start. Doing live radio can be a tough gig at ten to seven in the morning.

Mr Grimston had another run at explaining why nuke safety has got out of hand and ought to be reined in to keep the price down:

“Given that the safety record of nuclear power is so extraordinarily good – I mean a single accident in the whole of its history that has had health impacts off site – I’m sceptical as to whether this is really the way forward,” he began.

Woah! How do you jumble up the letters F-U-K-U-S-H-M-A and C-H-E-R-N-O-B-Y-L and come up with ‘extraordinarily good safety record’?

nuke-accident

Had Today introduced Mr Grimston as what he is, that is a career-long PR person and advocate for the nuclear industry, this would have been the moment for the presenter (note the term) to go for his attempted spin like the Beast of Aaaaarrrrrrggghhh savaging Sir Lancelot.

Instead, apparently for the benefit of not-quite-awake-yet listeners, Montague fed him a neat summary of the pitch he was there to sell:

“So are you saying that we should remove some of these layers of safety to ensure that the next generation of nuclear plants are built?”

Grimston:

“Well I think you have to reach a level of safety – which I think we have reached in the nuclear industry – whereby the chance of an accident is extremely small. But we learnt from Fukushima that, actually, the health effects of nuclear accidents are not the radiation – nobody, certainly off site, and probably even on site at Fukushima – is … we’re not going to be able to detect anybody dying as a result of radiation … the evacuation has killed an awful lot of people.”

Oh dear, oh dear, oh dear. It’s so easy to do. I know I have. A friendly ‘presenter’ lobs you a ridiculously soft ball just before they cut to to the weather and you not only fluff it, you end up mangling your message until it looks like the shredded, bloody leftovers from lunch with the Rabbit of Caerbannog.

DON’T MENTION FUKUSHIMA. Yes, no-one’s (yet) apparently been killed by radiation there. But many people died during the emergency evacuation of nearby settlements carried out to avoid exposure to escaping radiation. And two clean-up workers have died of heat-induced heart attacks at the site under the strain of working in full-body radiation protection gear, including masks and helmets covering their entire heads.

Grimston’s claim that “we’re not going to be able to detect anybody dying as a result of radiation” stretches credibility to the absolute limit.

(Sigh). It’s surprising how many take-aways can come out of a two minute slot.

  1. Nuclear accidents do kill people (but not on site, so that’s OK)
  2. ‘Safe’ nuclear plants are stupidly uneconomic to build. But it’s apparently not stupid to reduce safety levels to make them slightly less stupidly uneconomic in the hope that someone will be stupid enough to sign up to build one.
  3. It may be that, like Churchill’s take on democracy, nuclear power is the worst non-fossil-fuel energy option available to us – except for all the others. But if the foregoing lamentable exchange is the best debate the BBC and the industry’s finest spokesperson can come up with, God help anyone hoping to find out.
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Questions and Answers

Dreaming about rockets to Mars is easy compared to, say, transitioning our futureless Agri-Biz racket to other methods of agriculture that don’t destroy soils, water tables, ecosystems, and bodies. It’s easier than rearranging our lives on the landscape so we’re not hostage to motoring everywhere for everything. It’s easier than educating people to both think and develop real hands-on skills not dependent on complex machines and electric-powered devices.

James Howard Kunstler

Scarcity and shortage

Several things make it hard to talk about Peak Oil these days. At the bright end of the Reasons To Be Cheerful About Oil spectrum, there are no zombies or Mad Max gangs on our streets. Some Peak Oilers were die-hard doomsters, so the absence of A-Grade harbingers of apocalypse surely proves that it has not, will not, indeed cannot happen.

Also, there are no shortages of fuel (or at least very few) to be seen. Commonsense decrees that Peak Oil and queues at petrol (gas) stations will go hand in hand.

But that’s just it. Scarcity and shortage are very two different phenomena. They exist at opposite ends of the supply chain.

Scarcity is when the supply of something is limited and no amount of money, technology or prayer will increase the flow rate.

Shortages happen when demand exceeds supply at the point of delivery. You might get a temporary shortage of fuel locally if a tanker driver oversleeps. Here in the UK, we’ve only had prolonged national shortages on two or three occasions since WW2: first back in the days of the OPEC oil embargoes and, more recently, when farmers and truckers blockaded refineries to protest high diesel prices in 2000.

Theory says that scarcity of crude oil shouldn’t lead to actual shortages. That’s because if the supply of crude gets tight, the markets send price signals up the delivery chain. So pump prices go up and in turn demand goes down. It’s that bloody Invisible Hand again.

Plateau

Except that right now, oil is getting scarcer. Conventional crude production is stuck on a plateau so that the short-lived gains from fracking in the US only make up for declines elsewhere. Total world liquids production keeps inching up but a lot of those liquids can’t do the same job as crude and you get the impression the IEA would count the coffee in the rigger’s flasks if it could in order to present an optimistic figure.

OK, what about demand? Well, the basic driver of demand – registered motor vehicles – is going up in leaps and bounds. Having taken 120 years to reach one billion combustion-engined road vehicles worldwide in 2010, we’re on track to reach two billion in under 10 years from now.

By rights, the price of oil should be ratcheting up rapidly so that all that demand will be satisfied without shortages arising at the point of delivery. Instead it is stuck sullenly around $50 a barrel. That’s barely enough to cover the cost of extracting a lot of the remaining conventional crude, let alone very high-cost resources like tight (fracked) oil or tar sand.

Sacrifices

The oil companies (and by extension everyone in the industrial world) are now caught between a rock and a hard place. The experiment with very high oil prices that lasted from 2011 to 2014 showed that consumers will cut back on fuel use rather than make sacrifices elsewhere in their budgets.

But without those high prices, oil producers can’t profitably extract what oil is available. They’re trapped. They can’t satisfy the all demand for $40 oil but if the price gets better from their point of view (i.e. higher) the demand goes away.

Conventional wisdom says that consumers will try to keep driving until their eyes bleed – partly because they have to to get to work and shop for essentials. But that’s no longer true.

People with sufficient money (which usually means capacity to take on debt) can upgrade to more fuel-efficient cars. Those who don’t have the means have to find ways to use less.

That is easier than people think. The average private car spends between 95% and 98% of its time unoccupied and stationary. Unless the vehicle is only used for essential trips – say commuting to work – there’s almost always a way to cut down on mileage. After all, the owner is only increasing their non-use of the vehicle by perhaps 1%.

But from the oil company’s angle, a 1% increase in vehicle non-use translates into a 20%-50% drop in that consumer’s demand for petroleum. You can see that in the 25%-30% falls in oil consumption in Greece and Italy, which have been at the sharp end of enforced conservation since the onset of the eurozone crisis in 2008.

Millennials

This has got huge potential to carry on for a long time. Certainly longer than most oil producers can live with. Millennials are generally happy to take their own sweet time getting a driving licence and even then it’s not a given that they’ll immediately enter the car market. Ride-sharing among commuters has barely got started and it could increase rapidly if real incomes keep falling and fuel costs rise.

Boiled down to brass tacks, the problem is this. Crude oil is scarce and it’s getting scarcer. The reason there are no queues at the pumps is that scarce crude creates a shortage of affordability. That is because the alternative ‘high tech’ petroleum sources, like tight oil, kill their producers unless the global oil price rises to the point of driving marginal consumers out of the demand pool.

Imagining that people will overcome their inability to afford cheap petroleum by switching to electric or hydrogen cars is on par with Marie Antoinette’s brainwave about getting the starving poor to eat cake instead of bread. (Yeah, yeah, I know that’s a mistranslation of cake. But that’s to say that even la Reine Marie was smarter than today’s economists and policymakers. And look what happened to her).

Finally, this is much, much bigger than something that’s just an awkward predicament for the automobile industry and its consumers. Oil is the master resource. It is essential for extracting other fuels and feeding the world. It built the bulk of today’s civilisation’s infrastructure (more than half of which didn’t exist yet when I was born in the mid 1950s).

Oil scarcity will heavily constrain humanity’s ability to unhook itself from oil dependency. For a detailed analysis of how that works in the macroeconomic context, read Oops! Low oil prices are related to a debt bubble on Gail Tverberg’s Our Finite World site.

And if you start seeing queues for fuel in more OECD countries, give a little smile. As bad as that will be, at least it will be a sign that the energy crisis has reached the point where people need to stop pretending and start dealing with it.

Deflation – where things don’t add up any more

Front pages from two of today’s papers illustrate where we’ve got to on our journey to a post industrial society.

Metro runs with the NHS story that’s been at the top of the agenda since Christmas:

Metro newspaper headline - A&E is now worse than a ware zone

The Independent posts a cheer-leading headline that looks awfully like the pharma-oncology complex trying to stage a fightback against a recent outbreak of common sense stories about treating incurable cancer:

Independent headline - Deaths from cancer to be 'eliminated'
I’m old enough to know, or have known, several people who did or didn’t survive encounters with cancer. Aside from one case of prostate cancer, the survivors all received treatment for breast cancer. The non-survivors died from liver, bowel, lung, brain and breast cancers.

The striking thing about the fatal cases was how many of the people were treated to round after round of chemo or radiotherapy after their cancer was clearly diagnosed as incurable. In some cases, a terminal diagnosis came within days or weeks of the cancer been confirmed. Yet the medical establishment did everything it could to persuade the patient and their families to endure what was – medically at least – a hopeless course of action.

Sometimes people need to buy time to put their affairs in order, of course. Some just want to live as long as possible by any means available. But others I knew felt that the last weeks or months of their life were subordinated to the establishment’s desire to gather data about survival time or try out new drugs, instead of their being helped to die with as much dignity and little pain as possible.

Meanwhile, the funding crises consequent on our long-term steady-state-to-shrinking economy are playing havoc with services like A&E. Something has to give and, reading the recent spate of suddenly-realistic stories about treating imminently-fatal cancer cases, it’s been looking as though common sense was getting the upper hand.

Hence the Indy’s front page banner proclaiming the imminent arrival of unicorns sliding down rainbows with cures for every kind of cancer in the next 30 years – if only we keep on taking money away from every other sector of health and giving it to the cancer arm of Big Pharma and the (doubtless well-intentioned) charities more or less tied to it.

One has to ask whether the pharma companies and the increasingly-privatised health service are really trying to recreate the US model over here: where vast sums are extracted from citizens by pointlessly prolonging their final weeks into final months with endless interventions and resuscitation. If so, they’ve probably left it too late although one should not underestimate the clout their vast advertising and lobbying budgets buy with politicians and the mainstream media (or ‘govermedia’ as they’ve become).

But cheerleading has its limits. A dozen pages in from its blue skies ‘n’ roses puff coverage of the cancer investment story, the Indy carries a damning report from an under-resourced, under-funded, overstretched A&E department. Staff are coping with the fallout from the closure of two nearby casualty departments while the funding that was promised to expand their facility never materialised.

That’s the way things are in an advanced industrial economy when the indispensable tide of energy it floats on starts to ebb. There are tough choices and tougher choices.

Debt junkies pile in again

UK new car registrations hit a decade high in September. So everything is lovely on God’s green Earth and all is well with the Blessing of Material Progress bequeathed by Him unto His favourite experiment creation.

How does that work, you ask. Where are Brits getting the money from to go piling into car showrooms when the rest of the retail world, from mighty Tesco to the humblest corner store, is suffering enforced withdrawal from their spending habits?

The Society of Motor Manufacturers and Traders knows. It says:

“Demand for the new 64-plate has been boosted by intensifying confidence in the UK economy, with consumers attracted by a wide range of exciting, increasingly fuel-efficient, new cars.”

But watch out, children. Whenever you see the word ‘consumer’ you need to know that they mean ‘debt junkie’. The bit about the economy is irrelevant context, or what it is more commonly called ‘balls’. Nor are these consumer debt-magnets especially attracted by ‘exciting’ cars. Half of them couldn’t tell you their new ride’s engine capacity. The deal clincher is availability of finance. And who provides the loans? Well, it is the industry that makes the cars. It’s like getting a special offer on drugs from your local pusher.

Crazy though the banks are, though, they tend to draw the line at throwing money at total deadbeats. So traditional unsecured loans are off the table. Luckily, the Gummint has ways of diverting QE into the hands of zombies when the need arises. Ladies and gentlemen, we give you Payment Protection Insurance pay-outs – neatly gauged to match the average deposit on a new car from your friendly auto finance company (which gets the car back if when the borrower can’t keep up the payments).

But shouldn’t these poor folks be persuaded to do something more useful with the unexpected cash windfall they were cold-called relentlessly into accepting? Like pay off one of their credit cards or reduce their mortgage or pay down some of the kids’ tuition fee loans? Dream on suckers. The best they get is new guidelines from the financial authorities, which go something like this:

  1. Put on serious face
  2. Say: ‘You really can afford this, can’t you.’ (Tip: If you like, you can make it sound like a question)
  3. Point to the dotted line for them to sign on.

Meanwhile, deficits increase in spite of austerity. The NHS totters. The pension funds these mostly late-middle-aged auto buyers count on get shakier by the day. Oil’s insidious death spiral notches down again as falling prices chase decreasing affordability, killing-off investment in high-cost resources like shale and polar formations.

It’s sub prime all over again, tailored to an economy where mere mortals can’t even begin to think about playing the housing market. And it looks like it’ll end the same way as 2007.

London’s (gonna be) burning

No, no, no listeners! I’m not calling for mayhem or trying to organise socially-networked insurrection.

I’m just paraphrasing today’s front page article in the Guardian.

Looming London transport crisis ‘risks sparking riots’, says TfL chief | The Guardian

London could see riots again unless more trains and buses are provided at affordable fares for the poorest communities as the population soars, the city’s transport commissioner has warned.

He said the city will face “overwhelming” overcrowding on its congested transport networks by 2030 without urgent progress on new rail lines.

“London’s poor don’t live in Harrow Road, they live in Enfield and Tolworth and if you can’t get them to jobs they want, your city’s going to be in a bad way: it’s not going to progress and contribute to national economic growth,” [head of Transport for London, Peter] Hendy said. “The stakes are pretty high. If you’re not able to increase transport capacity, and people find accessing work impossible, you risk social unrest. You can expect trouble.”

Read the whole thing. You rarely get to enjoy quite so rich a mix of unconscious irony and unusual candour, even in the dear old Grauniad.

Maybe its something to do with the fallout from the referendum but all of a sudden we’re dropping the euphemisms and talking about people in honest four-letter words. Not ‘socially and financially disadvantaged householders’ or whatever. Poor people. And that’s good because once you start calling the poor the poor you can also start calling the rich the rich. Then you can begin to have a proper debate about trying to spread the wealth around a little more evenly, rather than indulging in hand-waving about transit investment corridors and strategic regeneration plans.

Unfortunately that’s where this promising story goes off the rails. I mean, instead of threatening fire and brimstone unless the rest of the UK’s taxpayers stump up billions to buy the capital a load of new rail and tram networks, wouldn’t it be cheaper and quicker to move the jobs to where London’s poor people already are?

Yeah, but that wouldn’t work, would it? They’re not the kind of jobs you can relocate. They’re cooks, bar staff, cleaners, ticket collectors, doormen, domestics. The people who lived in or around and between the well-to-do classes in imperial Rome or Victorian London. Ugh …such a primitive arrangement. The modern way is so much better: we simply allow poor people to ‘find their own level’ geographically-speaking, by moving to where they can afford to buy or rent a place. Like Tolworth.

Of course the big downside to this approach is that it makes it harder and harder to get everyone into the centre to do their jobs and then get them all out again. Go down that tunnel and you’re going to get – and Mr Hendy does not flinch from using the word – ‘overcrowding.’ Lest we miss the point, he mentions Mumbai and Rio de Janeiro as the kind of hell-holes plagued by fare price riots that London is en route to becoming (unless the rest of the country subsidises ticket prices, infrastructure, etc, etc).

This story has ‘exercise in trying to sustain the unsustainable’ written all over it. As the global economy goes through the transition from fossil energy to renewables, we’re entering a long stretch where we won’t have the capital or the juice to keep on pushing people further and further from their jobs in the expectation that we’ll simply build costly and complex transportation systems to ship them back in again every morning.

Perhaps that is what Mr Hendy is really trying to get people to understand. After all ‘poor’ is a great dog whistle word for getting the attention of folk for whom these issues are usually, shall we say, ‘remote’. He does say:

“But if the poor are not living in Tower Hamlets, Stockwell, Hackney and Southwark any more and all the places where people on low incomes used to live, they are living a long way away and a future mayor is going to have to make sure they can afford to get to work.”

So, hey son-of-Boris. Like maybe stop allowing the developers to push them out, man? Could we, like, try that?

But if Mr Hendy is serious, it goes to show how hard-wired our leaders’ imaginations still are to the cheap energy paradigm. As the saying goes, to a hammer every problem looks like a nail. If London’s problem is that its poor people are increasingly in the wrong places, perhaps it’s a pretty dumb idea, in a world where transport is only going to get more and more expensive by historical standards, to ask a transport planner to provide the answer.

Broke and broken

Sooner or later people will have to start listening to the folk who keep Britain moving.

Civil engineers tend to be a phlegmatic bunch. Design it. Build it. Move on to the next project. But in recent years they’ve been getting more and more vocal about the widening gap between the imaginary future peddled by our leaders and the one that’s probably really in store for us.

The Institution of Civil Engineers interviewed hundreds of professionals in industry and government for a new report, State of the Nation: Infrastructure 2014. The consensus is that our power, water and transport infrastructure is starting to crumble from to neglect and the effects of severe weather. The media immediately jumped on the weather angle (cue pointless arguments about the reality of climate change), rather ignoring the ICE’s other point, which is that what we actually face is a shortage of capital.

The Guardian reported the ICE’s vice-president Keith Clark saying:

‘It will become more difficult to run all services in all conditions: it will not always be cost-effective. Funding will always be constrained as their are only two sources-tax and user charging – both ultimately falling on the consumer. Clearly there are some difficult decisions ahead…what networks can and should operated 24/7 in what conditions.’

The engineers also pointed to the narrowing gap between energy supply and demand. As Gail Tverberg tirelessly explains on her blog, we live in a system where energy shortages lead to capital shortages and vice versa. Power politics will influence where the consequences bite will first and hardest internationally but the ICE’s blunt language shows it doesn’t believe Britain will be able to stave them off for very long.

Not so long ago, the ICE put out a report on Britain’s prospects for breaking its dependence on fossil fuels before they become so scarce and costly to extract that we can’t run our economy on them. The short answer is that we cannot do it in time. As you’d expect, no government policies were visibly harmed by the report and since then the story has all been about fracking saving the day. Too bad that fracking’s great white hope is on schedule to turn to dust in a year two, at around the same time as conventional oil and natural gas liquids begin to decline inexorably.

So, even with the best will in the world and the most judicious applications of scarce capital to the maintenance of  existing infrastructure, the ICE believes we’re eventually going to have to put up with intermittent power, water and transportation. Quite how that verdict squares with our leaders’ persistent determination to pour billions into vanity projects like HS2 or a third runway at Heathrow or Gatwick is anyone’s guess.