Environment Policy Review

July Edition 2008

THE FUTURE OF ENERGY

A Renegade Against Greenpeace

Why he says they're wrong to view nuclear energy as 'evil'

By Fareed Zakaria | NEWSWEEK

Apr 21, 2008 Issue

Patrick Moore is a critic of the environmental movement — an unlikely one at that. He was one of the cofounders of Greenpeace, and sailed into the Aleutian Islands on the organization's inaugural mission in 1971, to protest U.S. nuclear tests taking place there. After leading the group for 15 years he left abruptly, and, in a controversial reversal, has become an outspoken advocate of some of the environmental movement's most detested causes, chief among them nuclear energy. NEWSWEEK's Fareed Zakaria spoke to Moore about his sparring with the green movement, and why he thinks nuclear power is the energy of the future. Excerpts:

ZAKARIA: At Greenpeace, you fought against nuclear energy. What changed?
MOORE: My belief, in retrospect, is that because we were so focused on the destructive aspect of nuclear technology and nuclear war, we made the mistake of lumping nuclear energy in with nuclear weapons, as if all things nuclear were evil. And indeed today, Greenpeace still uses the word "evil" to describe nuclear energy. I think that's as big a mistake as if you lumped nuclear medicine in with nuclear weapons. Nuclear medicine uses radioactive isotopes to successfully treat millions of people every year, and those isotopes are all produced in nuclear reactors. That's why I left Greenpeace: I could see that my fellow directors, none of whom had any science education, were starting to deal with issues around chemicals and biology and genetics, which they had no formal training in, and they were taking the organization into what I call "pop environmentalism," which uses sensationalism, misinformation, fear tactics, etc., to deal with people on an emotional level rather than an intellectual level.

Why do you favor nuclear energy over other non-carbon-based sources of energy?
Other than hydroelectric energy—which I also strongly support—nuclear is the only technology besides fossil fuels available as a large-scale continuous power source, and I mean one you can rely on to be running 24 hours a day, seven days a week. Wind and solar energy are intermittent and thus unreliable. How can you run hospitals and factories and schools and even a house on an electricity supply that disappears for three or four days at a time? Wind can play a minor role in reducing the amount of fossil fuels we use, because you can turn the fossil fuels off when the wind is blowing. And solar is completely ridiculous. The cost is so high—California's $3.2 billion in solar subsidies is all just going into Silicon Valley companies and consultants. It's ridiculous.

A number of analyses say that nuclear power isn't cost competitive, and that without government subsidies, there's no real market for it.
That's simply not true. Where the massive government subsidies are is in wind and solar. I know that France, which produces 80 percent of its electricity with nuclear, does not have high energy costs. Sweden, which produces 50 percent of its energy with nuclear and 50 percent with hydro, has very reasonable energy costs. I know that the cost of production of electricity among the 104 nuclear plants operating in the United States is 1.68 cents per kilowatt-hour. That's not including the capital costs, but the cost of production of electricity from nuclear is very low, and competitive with dirty coal. Gas costs three times as much as nuclear, at least. Wind costs five times as much, and solar costs 10 times as much.

What about the issue of nuclear waste?
As is now planned, I'd establish a recycling industry for nuclear fuel, which reduces the amount of waste to less than 10 percent of what it would be without recycling. How many Americans know that 50 percent of the nuclear energy being produced in the U.S. is now coming from dismantled Russian nuclear warheads? The environmental movement is going on about how terrible it will be if someone does something destructive with these materials. Well, actually the opposite is occurring: all over the world, people are using former nuclear-weapons material for peaceful purposes—swords into plowshares. This constant propaganda about the cost of nuclear energy—that's just activists looking for the right buttons to push, and one of the key buttons to push is to make consumers afraid that their electricity prices will go up if nuclear energy is built. In fact, it's natural gas that is causing [energy] prices to go up.

Don't you worry about proliferation?
You do not need a nuclear reactor to make a nuclear weapon. With centrifuge technology, it is far easier, quicker and cheaper to make a nuclear weapon by enriching uranium directly. No nuclear reactor was involved in making the Hiroshima bomb. You'll never change the fact that there are evil people in the world. The most deaths in combat in the last 20 years have not been caused by nuclear weapons or car bombs or rifles or land mines or any of the usual suspects, but the machete. And yet the machete is the most important tool for farmers in the developing world. Hundreds of millions of people use it to clear their land, to cut their firewood and harvest their crops. Banning the machete is not an option.

Are you optimistic that there will be an aggressive move toward nuclear power in the industrial world, and in particular in the United States?
There are 32 nuclear plants on the drawing boards right now. Last year four applied for their licenses and this year we expect 10 or 11 more. That's just in the United States. There are hundreds of nuclear plants on the drawing boards around the world. This is a completely new thing: the term "'nuclear renaissance" didn't exist three years ago, and now it's a widely known term. Unfortunately, the environmental movement now is the primary obstacle here. If it weren't for their opposition to nuclear energy, there would be a lot fewer coal-fired power plants in the United States and other parts of the world today.

Utility's solar plans opposed

Some object to lines through state park

By Elliot Spagat | Associated Press

June 16, 2008

SAN DIEGO — It seems like an idea any environmentalist would embrace: Build one of the world's largest solar power operations in the Southern California desert and surround it with plants that run on wind and underground heat.

Yet San Diego Gas & Electric Co. and its potential partners face fierce opposition because the plan also calls for a 150-mile, high-voltage transmission line that would cut through pristine parkland to reach the nation's eighth-largest city.

The showdown over how to get renewable energy to consumers will likely play out elsewhere around the country as well, as state regulators require electric utilities to rely less on coal and natural gas to fire their plants — the biggest source of carbon dioxide emissions in the U.S.

"This is a classic chicken and the egg," said Mike Niggli, chief operating officer of Sempra Energy's utilities business, which includes SDG&E. "No one can develop a project if they can't send [the electricity] anywhere. You need transmission."

SDG&E's $1.5 billion power line would cut 23 miles through the middle of Anza-Borrego Desert State Park, a spot known for its hiking trails, wildflowers, palm groves, cacti and spectacular mountain views. "This transmission line will cross through some of the most scenic areas of San Diego," said David Hogan of the Center for Biological Diversity. "It would just ruin it with giant, metal industrial power lines."

Environmentalists point to Southern California Edison's ambitious plan for solar panels on Los Angeles-area rooftops as an example of a better approach. Utilities say the roof panels will help but won't produce nearly enough power to satisfy state requirements.

The California Public Utilities Commission is scheduled to vote as soon as August on SDG&E's proposed Sunrise Powerlink, which would carry enough power for about 750,000 homes — or more than half of the utility's customers.

The plan calls for 141 towers through the park at an average height of 130 feet. The entire route would include 554 towers from the wind-swept desert of the Imperial Valley to a site near the Pacific Ocean in San Diego.

RECOIL

May 29th 2008 

Painful though it is, this oil shock will eventually spur huge change.

Beware the hunt for scapegoats

In the early 1970s a fourfold rise in the price of oil almost brought the world to a standstill. The shock of the Arab embargo left a deep mark in many countries: America subjected its cars to fuel-efficiency standards, France embraced nuclear power--though sadly SHOENE RUKKU, or "energy-conscious fashion", the inspiration for Japan's fetching short-sleeved business suit, was ahead of its time.

Thirty-five years on, oil prices have quadrupled again, briefly soaring to a peak of just over $135 a barrel. But, so far, this has been a slow-motion oil shock. If the Arab oil-weapon felt like a hammer-blow, this time stagnant oil output and growing emerging-market demand have squeezed the oil market like a vice. For almost five years a growing world shrugged it off. Only now is it recoiling in pain.

This week French fishermen clogged up the port of Dunkirk and British lorry-drivers choked roads into London and Cardiff. Nicolas Sarkozy, France's president, suggested subsidising the worst affected and curbing taxes on petrol; Britain's beleaguered government is being pressed to forgo its tax increases on motorists. In America falling house prices have left consumers resentful--and short of money.

Congress and presidential candidates have been drafting schemes and gas-tax holidays like so many campaign leaflets.

 Gordon Brown, Britain's prime minister, thinks the big oil producers can be persuaded to come to the rescue. But only Saudi Arabia shows any enthusiasm for that. Elsewhere, output is growing agonisingly slowly.

That is causing hardship and recrimination. But it could also come to represent an opportunity. The slow-motion shock seems irresistible today, but in time it will give rise to an equally unstoppable and more positive slow-motion reaction

ACTION REPLAY

It is clear that high oil prices are hurting many economies--especially in the rich world. Goldman Sachs reckons consumers are handing over $1.8 trillion a year to oil producers. The wage-price spiral of the 1970s has been avoided, but the income shock is painful. Beset by scarce credit, falling asset prices and costly food, developed-country households are hardly well-equipped to foot the oil bill. America's emergency tax rebate, voted this year to help people cope with the credit crunch, has in effect been taken right away again.

Stuck for answers, politicians have been looking for scapegoats. Top of the list are the speculators profiting from other people's hardship. Some $260 billion is invested in commodity funds, 20 times the level of 2003. Surely all that hot money has supercharged the demand for oil?

But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of "paper barrels", but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.

If the speculators are not to blame, what about the oil companies, which have failed to increase output in spite of record profits?

Profiteering, say some. However, that accusation doesn't stand up to much scrutiny either. The oil price is set in a market. For Shell, Exxon et al to hoard oil underground would be to leave billions of dollars of investment languishing unused. Others fear that oil is pricey because it is running out. But there is little evidence to support the doctrine of "peak oil" in its extreme form. The Middle East still seems to contain a sea of the stuff. Even if new finds elsewhere have been rarer and less accessible than in the past, vast quantities of oil could now be profitably stripped from tar sands and shale.

The truth is more prosaic. Finding and developing new oil fields is an expensive and time-consuming business. The giant new fields in the deep water off Brazil are unlikely to produce oil for a decade or more.

Furthermore, oil is perverse. When prices are low, oil-rich countries welcome the low-cost, high-tech and well-capitalised oil firms. When prices are high, countries like Russia and Venezuela kick them out again. Likewise the engineers, survey ships and seismic rigs that oil firms need to find and produce new deposits are expensive right now.

The costs of finding oil have, temporarily, doubled precisely because everybody wants to give them work.

HOPE AT THE BOTTOM OF THE BARREL

So the oil shock will take time to abate. Some greens may welcome that, seeing three-figure oil as a way of limiting greenhouse emissions.

Conservation will indeed increase. But everything high prices achieve could be done better by sensible carbon taxes. As well as curbing oil use, high prices have put tar sands in business which create far more carbon dioxide than conventional oil. Profits are going to ugly oil-fed regimes, not Western exchequers. And the wild unpredictability of prices will blunt the effect of dear oil on people's behaviour.

From this perspective, governments should speed up the adjustment--or at least stop delaying it. Half the world's people are sheltered from fuel prices by subsidies--which, perversely, have boosted demand and mostly benefited the better off. Now countries like Indonesia, Taiwan and Sri Lanka have begun to realise that they can ill afford this.

Cutting fuel taxes in the rich world makes no sense either (see article[2]). There are better ways to return cash to struggling voters.

The 1970s showed how demand and supply, inelastic in the short run, eventually give rise to conservation and new production. When all those new fields are on-stream, when the SUVs have been sold and the boilers replaced, the downcycle will take hold. By then the slow-motion oil shock could have catalysed momentous change. Right now motorists have no substitute for oil. But it is no coincidence that car companies are suddenly accelerating their plans to sell electric hybrids that are far cheaper to run than petrol or diesel cars at these prices. The first two oil shocks banished oil from power generation. How fitting if the third finished the job and began to free transport from oil's century-long monopoly.

Illinois has coal, so why not burn it?
By Mike Riopell, THE SOUTHERN SPRINGFIELD BUREAU
Monday, June 16, 2008 7:42 AM CDT
SPRINGFIELD - Illinois needs a lot of electricity. The state also has a lot of coal to burn.

Nevertheless, building a coal power plant in Illinois has proven difficult over the last several years as increasing pollution controls and ballooning construction budgets have hampered several projects across the state.

In Taylorville, a massive project is on hold awaiting hard-to-find support from state lawmakers.

In Mattoon, the federal government decided to all but scrap an experimental coal plant there that would have pumped pollution underground.

And in Will County, a Joliet-area coal plant has been abandoned.

Those developments continue to frustrate the state's coal industry. Illinois is rich in coal reserves, but the heavy-polluting fuel has fallen out of favor at a time when environmental controls are strict.

The Taylorville and Mattoon projects both sought to burn coal more cleanly, but at least in the case of the proposed Taylorville Energy Center, lawmakers' skepticism of the new technology played at least some role in the project being continuously stalled.

"But you've got to do something," said Senate Minority Leader Frank Watson, R-Greenville. "It's got to go somewhere."

Local projects stalled

"Somewhere" was thought to be east-central Illinois' Mattoon for a while, after the President Bush-inspired FutureGen program was slated to be built there earlier this year. But amid rising construction costs, the federal government pulled its support.

The state coal industry saw the project as a way to start using Illinois' vast amounts of coal, but the project is at least delayed now.

Illinois Coal Association President Phil Gonet said that the industry could stall until FutureGen-style technology - where harmful carbon dioxide is stored underground - is ironed out.

"What's going to happen with carbon capture and storage?" he said.

The $2.5 billion Taylorville Energy Center project proposed by Nebraska-based Tenaska would use different technology but also fit the "clean coal" label. The developers have said they need help from lawmakers to get financing for the massive project.

But after more than a year of asking, they haven't yet succeeded.

Tenaska Vice President Barton Ford said the company previously specialized in plants that make electricity from natural gas, which are "easier to do in general."

Because of the delays, Ford says Tenaska has considered moving the Taylorville project out of Illinois. He said the company originally chose the state because the amount of coal underground would lead to a political atmosphere that would support the project.
"If Illinois isn't willing to do it, who at the state level is going to be willing to do it?" he said.

Illinois Department of Commerce and Economic Opporunity spokeswoman Marcelyn Love said the interest exists. "Illinois has had more genuine interest from clean-coal project developers than any other state," she said.

Besides the Taylorville project, Tenaska company is starting to develop a $3 billion coal plant in Texas. Both have proven complicated, but Ford said the company has focused on coal for a reason. "Because it's the future," he said.

Some successes

Coal is the future for some in Washington County, where a major Peabody Energy Inc. plant is under construction after years of planning. And a smaller-scale coal project is nearing development for Decatur. Secure Energy Inc. is working to build a $550 million plant that converts coal to natural gas for sale.

Lars Scott, founder of the St. Louis-based firm, says the company was formed to focus on coal gasification plants because it's "more straightforward" than trying to develop ones that generate electricity.

The Decatur plant had been under contract to get its coal from a mine in Elkhart. That contract has run out, but could be renewed, Scott said. Secure Energy is trying to get financing now, and could be helped by a $14 million state grant.

"It's not done until it's done," Scott said.

Canadians and US Recognize Value of Oil Sands as Part of Long Term Energy Solution

Canadians evenly split on economy versus environment

A majority of Americans said the potential of the Canadian oil sands as a secure, non-foreign source of oil to North America was more important than environmental concerns, while Canadians were evenly split, according to results of a major cross-border survey released by Fleishman-Hillard. However, a high percentage of Canadians (85 per cent) think the oil sands is important to the Canadian economy.

With oil sands development on the rise, FH Canada Research surveyed the attitudes of 500 Canadians and 500 Americans to gauge how people are attempting to reconcile the need for a secure supply of oil against the backdrop of environmental concerns.

The survey shows that nearly half of Americans are aware of the oil sands. Canadians and Americans both see the oil sands as a major secure energy supply. Also, only a slightly higher percentage of Canadians (roughly half) put environmental concerns over secure supply and economic growth issues.

Specifically:

• 67 percent of Canadians and 47 percent of Americans were somewhat to very aware of the oil sands in Alberta.

• When asked if future development of the oil sands was a “good or bad thing,” 75 percent of Canadians and 68 percent of Americans said “a good thing.”

• When asked how important the oil sands are to their respective economies, 70 percent of Americans said the sands were important, versus 85 percent of Canadians.

• When asked how important the Alberta oil sands are to the overall security of the North American energy supply, 83 percent of Americans versus 73 percent of Canadians said it was important.

• Canadian respondents were almost equally divided amongst economic and environmental concerns with 46 percent of Canadians and saying the environment was more important to them while 43 percent of Canadians said secure supply was more important. American respondents put a significantly higher priority on secure supply 55 percent.

• Forty percent of Americans said the Alberta oil sands are critical for dealing with the issue of North American dependence on foreign oil. Among Canadians, 26 percent describe the oil sands as necessary to dealing with dependence on foreign oil.

The poll was conducted online between May and June 2008. One thousand people were surveyed, with 500 on each side of the border for a margin of error of 3.1 percent overall, and 4.3 percent for each country’s population. The sample of the survey was representative of the populations of the U.S. and Canada in terms of region, age, language, and gender.