More Opportunity Costs of Foregoing Nuclear Power

We’ve written quite a few times about the helter-skelter path that nuclear power has taken in this country; see this Times column, this supporting evidence, and this blog post for a quick summary.

Here, from today’s Times, is an assessment of nuclear power that has a good deal in common with ours:

“All careful analysis confirms that the risk of nuclear power is small. The chance of a large accident is very low, and consequences of such an accident would be substantially less than most people think. … In the United States, the near-term risk of doing without nuclear power is the risk attached to using oil or coal instead … The problems that these cause include acid rain; enormous balance-of-payment problems in the case of oil; the risk of war to ensure oil supplies; carcinogens in the air as oil and coal are burned; heavy metals such as mercury, lead and uranium emitted to the atmosphere as coal burns; black lung disease as coal is mined; vast areas of the country ruined as coal is strip-mined, etc.”

Like I said, this appeared in today’s newspaper. But when do you think these words were first written?

Try … 1983. The article in today’s paper is an obituary of Herbert J.C. Couts, a nuclear power safety expert who died last week. The text above is from an appendix to a report by a commission assembled to advise New York Governor Mario Cuomo what to do about the controversial Shoreham nuclear power plant on Long Island. It should be noted that Kouts’s advice was ignored: Shoreham was built, but shut down without ever making any electricity.

The obituary is worth reading if you’re interested in the history of nuclear power. Here’s another choice quote:

In 1984, lamenting the decline of the civilian nuclear industry, Dr. Kouts said the problem was that the duty to regulate had been given to the Nuclear Regulatory Commission, without giving it any responsibility for the viability of the industry. The Atomic Energy Commission had had both jobs, but Congress decided that was a conflict of interest for the agency.


For Brian B. above: How many people are not going to read your posting since it a long, unbroken gob of text. Please use paragraphs.

arbitrary aardvark

If nukes are such a great idea, why aren't you guys investing in building nukes in some friendly 4th world country? The energy can then be used to make hydrogen or aluminum or alcohol or some other handy method of storing and moving the energy.
Nukes, as we knew them, were a byproduct of cost-plus regulated utilities, for which we can blame the liberals and Roosevelt. Not FDR, Teddy.
The global marketplace so far hasn't supported nukes as economically viable. They only show up in nationalist economies. That might change with the next generation of nukes, but by then they'll be competing with solar cheaper than coal.


Aardvark, one of those "4th world countries" is France - with 80% of their energy output by nuclear plants. Practically all European countries are heavily indulged in nuclear power - producing, selling, buying. Japan has a share of around 30%. Even Russia, no matter the endless resources, is on the same level as USA. So, your "The global marketplace so far hasn't supported nukes as economically viable" statement is a bit.. you know, half a century old? And "they only show up in nationalist economies" part.. Well.. *shrugs*


Apparently things are more like they are now than they have ever been.

In all seriousness, when one considers the immense potential opportunity cost of failing to utilize nuclear power, could this be one of the costliest mistakes the US Government has ever made?


I predict that the comments to this entry will quickly turn into a heated fight between the pro- and anti-nuclear power crowds, complete with well (and not so well) thought out comments, links to credible research, and maybe even a personal insult or two.

Any takers?

Monte Davis

Next time around, consider a narrower and more specificially economic or Freakonomic angle: I'd be interested in some semi-quantitative thinking about the Price-Anderson Act (government indemnifies any damages above $10B) and its "moral hazard" implications.

As it happens I support more nuclear power generation, but am realistic (cynical?) enough to think it will be "pushed" by rising costs for alternatives -- including carbon taxes if those are implemented -- more than "pulled" by any other argument here or elsewhere. To the extent that Price-Anderson is the industry saying "sure it's safe and we trust it, but not if it could bankrupt us," it's a major distortion of risk signaling - an important part of market signals in general -- and should be phased out ASAP.

neil wilson

I find the nuclear debate amazing. I have been in favor of safe nuclear power for a long time.

I actually started a pro-nuclear protest in Iowa in 1979 and it was the one time where the pro nuclear side made the front page of the two biggest newspapers in the state.

However, it is amazing how few people are in favor of safe nuclear power. There are a bunch of people who think that nuclear power can never be made safe and there are a bunch of people who think nuclear power is safe now.

How many people do you know who say "I am in favor of nuclear power and I want to build more plants but I want them to be safer than the plants are right now."?


We should call the French since Sarkozy is suddenly a BFF to America. They are so much better at it because they trust scientists and technicians to be as safe as possible. The issues about legislating safety standards here are just so warped by the corporate culture. I don't know the numbers but I suspect that $10B in liability is enough to force the industry to invest heavily in safety. In fact I think the public concerns are enough to force the industry to invest in safety and the whole issue is a combination of the not in my backyard phenomenon and the larger, waste storage externalities.


Nuclear power is one of those areas that has never been exposed to free-market forces in our country.

Utilities love nuclear power because of it's huge startup costs. Most utilities are virtually guaranteed a rate of return by their regulatory bodies. In my region that return is about 8.5% and covers all investments in building and decommissioning the Trojan nuclear plant, that never generated any power.

The development of nuclear energy was not (at least at first) spurred by the need for the energy supply, but by government's need for the technology and it's byproducts, enriched uranium and plutonium.

On the other end of the spectrum, many people place inordinate weight on the possibility of a bad accident, because of the horrible images we all share. This is the opposite of the way it is usually observed, say, on wallstreet, where the weights of the very small chances of extreme negative events are usually underestimated.



Is anyone considering the cost of nuclear waste? Sure, it's great energy but what about the waste created from obtaining this energy? It is highly toxic and hard to dispose of.

Randy Drouin

Idea's, a CBC show did an episode recently about Hydrogen. In the show they talked about the problem with transporting goods, and how 2/3 of all the worlds energy is consumed in moving objects.

It is true that electricity is a small part of the energy equation, but it's also true that if we eventually want to drive electric and hydrogen cars, (and use hydrogen for plains, boats ect.) we are going need a lot of power to get them moving. There are only so many rivers to dam, and wind simply doesn't provide the juice we need. Nuclear is the only option, in my opinion.



Have you considered the waste from burning coal and oil? It's highly toxic and is released directly into the environment.

Nuclear waste has the distinct advantage of being contained. Plus it can be recycled and used to generate more power. If that was not enough, by definition the more dangerous the nuclear waste is; the shorter amount of time it is dangerous for.


For everybody out there that thinks adoption of technology is based on rationally weighing pro's and cons and the best technology always wins, here's a reading tip (very insightfull about the development of nuclear power generation and perception of its risk): "Beyond Engineering, how society shapes technology" by Robert Pool.

One of the cases Mr Pool discusses is that most currently operating reactors are the result of the technological choice made almost 60 years ago (nuclear submarines). And that choice (light-water reactor)was not based on primarily on safety, but on aspects like reactor size, cheap to build, operate and maintain. Because of the experience gained with this technology, it was less riskier to build power plants based on this principle than try potentially better, but more riskier designs.

Technological lock-in occurred and now we are stuck with proven nuclear reactors that never will be 100% safe, and design/prototypes that are inherently safe but unproven.




While it is true that the more dangerous (radioactively) an element is, the faster it decays, that statement is a bit misleading, because this is not a linear decay, but rather a geometric one. As an example, plutonium has a half life of 87 years, which is not that long in the scheme of things, but it decays into uranium 234 (still somewhat dangerous) with a half-life of roughly 250000 years.

Moreover, radioactive substances impart some of that radioactivity to the materials that they are stored in. So, continuing the example above, after storing your plutonium for 87 years, not only are you left with some uranium, you are also left with some radioactive water, or lead or something.

By the way, I know that plutonium is not exactly considered 'waste' A better example would have been say polonium with a half-life in minutes, but the chain becomes too long before the point is illustrated.



Arguments about nuclear energy are too ften long on emotion and short on data. A good starting point for non-scientists, IMHO, would be to read Gwyneth Cravens's Power to Save the World: The Truth About Nuclear Energy. Cravens set out to write an anti-nuclear book, and had even participated in the protests against the never-opened Shoreham plant. However, the more she learned about the industry, the more she came to realize that nuclear energy has to be part of the mix if we really are interested in reducing pollution, curbing greenhouse emissions, and reducing our dependence on imported oil.

Yes, nuclear waste is a problem, but as mentioned already the waste products from coal, oil, and natural gas are many orders of magnitude more numerous and worse for us. How many people die *each year* worldwide because of the pollution from fossil fuels? Thousands, at least. How many people have died in US nuclear accidents? Zero.

Yes, Chernobyl was awful, but had the USSR been following Western standards for constructing, operating, and maintaining that plant, no one would have died. They basically would have had Three Mile Island, and for all the hype and fear that accident generated, no one was killed, no one was injured, and no study has yet found any environmental impact outside the containment structure.

Anyone who claims to be serious about "green" concerns or about reducing our dependence on foreign fuel but does not support expanding nuclear energy production is just being a poseur.



If I were to purchase bonds to build a new power plant I would like to know
1) How long will it take for the plant to earn enough to pay off the bonds with interest?
2) How long will the plant last relative to the payback time?
3) How long will it take to get approval to build the plant?
4) How long will it take to build the plant?
5) How much will it cost to safely dispose of combustion byproducts or radioactive byproducts?
6) If there were a serious accident or health problems caused by the plant how much harm can be done and does the company has sufficient resources to pay compensation?
5) What are the decommission costs?

If windmills have a useful lifetime of 20+ years they appear to be a good investment particularly if the project has tax incentives. At the moment neither coal or nuclear look like good investments to me.

Brian B.

It amazes me that as general public becomes aware of the energy crunch there hasn't been a greater push to educate them about the relative safety and efficacy of nuclear power. I think at this point, now that we have a couple of generations bred to equate nuclear power with unimaginable and unavoidable cataclysm, the big problem with nuclear power is that there isn't anywhere near the requisite level of public knowledge and support for the technology itself, let alone the reforms that would make nuclear power viable in this country. People just shut their ears to it--I used to work at an environmental nonprofit, and in the usual big-picture bull sessions common to all activist organizations I couldn't get anyone to even look at the data on the relative merits of nuclear...partly it seems to be this strange habit that we tend to have when evaluating potential technologies: Cases in which the technology (or one of its predecessors--there seems to be little discernment between the current state of the art and the former state of the art when the public has little access or understanding of the field in question) doesn't work are included in the evaluation of it, whereas cases in which it works as hoped (and yes, there isn't a country on earth using nuclear energy that hasn't had mishaps, but again, it's a matter of comparing it to what we have now and what we could expect to get up in running in the next 50 years that would really make a difference) are excluded. Speaking to people categorically against nuclear leads to a few places...a scary number of younger people I've spoken with, mid-20's and below, think that one of the big drawbacks of nuclear power is that nuclear plants can actually detonate--i.e., become a nuclear bomb. Then there's the terrorism concern, then there's the remark about big business, about poor government oversight...some people have also said that nuclear just gives the impression that we can continue to grow the way we have instead of really hunkering down and creating a workable system that requires far less energy to begin with, which I think is a valid concern, since it still seems to be only the growth-obsessed political circles talking about nuclear. There are valid criticisms about the track record for nuclear energy in this country, but my point is that I think there's zero room for robust reform and development until the concerns of the public are allayed and the issue reframed...and until media (outside of Wired and Popular Science and such) start demonstrating to the public that not all the people who want to bring nuclear power back wish to do so for purely economic reasons: Completely clean energy would be great, but pollution we can bury is a huge improvement. My personal opinion is that energy is a public good and since government is being looked to create real nationalwide energy infrastructure they ought to be running production as well, top to bottom (in the case of nuclear). Remove the risk and if something goes wrong government takes the hit. And for gods sake, someone somewhere needs to get Harry Reid to stop opposing Yucca Mountain. Represent a huge expanse of barren desert and you have to expect the nation might want to use it (as opposed to the obviously far-safer on-site storage system, dargh!).



The primary concerns regarding the economics of nuclear plants seem to boil down to:

Risk - of a meltdown. Hasn't France shown how to run an industry safely? Are we still spooked by Three Mile Island which caused no damage, and Chernobyl which was a horrible design run by incompetents? What about these new reactors that are "passively safe" - they never reach meldtodwn temps, so even Homer Simpson at the helm with one too many Duff beers couldn't cause a meltdown

Waste - As has been shown umpteen times, the U.S. is the only major country that doesn't re-process its waste (thanks to Jimmy Carter). Why are we not doing this? Even more energy can be created from the waste, and it becomes less dangerous after each cycle. What about storing it in some country that's willing to accept it - like Darfur, Sudan? I know this will send western elites into a frenzy, but I guarantee you if you took a democratic poll, those people would prefer to get cash/food for agreeing to store it (in a facility as safe as Yucca Mountain). They avoid the REAL risk of starvation today while only taking on a HYPOTHETICAL risk of a leak. And the storage may not necessarily be for the entire 10,000 year radioactive life, because scientists may find out how to safely dispose of it before then

Terrorism - Several countries in Europe and Asia (some with large Muslim populations) are already transporting reprocessed, weapons grade fuel around on road and rail. Why are we not worried about its security? How is it possible that increasing the nuclear industry in this country suddenly increases risk? Seriously, aside from the private security (think Blackwater) that would "ride shotgun" on these trips, don't we have enough local police, highway patrol, national guard to provide adequate security?

Cost - the fixed/captial costs of a nuclear plant are quite high - the highest for any type of plant. And regulatory/construction delays as well as interest rate fluctuations only add to the uncertainty. But the marginal costs of nuclear power are among the lowest (and it can provide consistent "base" power, while coal/gas are reserved for "peaking" power due to their higher marginal costs, and solar/wind is intermittent).
One thing that would dramatically lower the payback time for a nuclear plant is the rapid electrification of the U.S. auto fleet. If we all switched to plug-in hybrids that allowed us to do our typical commute on electricity from overnight charging - off-peak rates - (with a gas engine for longer drives) we would create a huge new market for nucear power plants that would otherwise be idle (there is already enough spare power generating capacity during the night to "fuel" 85% of the cars/trucks in this country with electricity)



Just a couple notes:

"coal/gas are reserved for "peaking" power due to their higher marginal costs"

The marginal cost of coal-based generation is very low and it cannot be easily ramped up/down, hence it's strictly baseload power, never peaking. Until carbon regulation became more imminent in the last year or two, new coal plants were being proposed left and right, but the lack of economic capture/sequestration technologies has put many of those on hold again.

Gas on the other hand can be used in both combined cycle plants (which are more intermediate) as well as peaking facilities.

Also, it should be noted that oil is used for only about 2% of all power generated in America. In that way, the quote Stephen cited is no longer relevant, as oil is no longer a significant portion of America's fuel mix.


The reason nuclear is being touted as a 'solution' to climate change is because the market has not yet priced the externalities of current fossil fuel power generation. The lesson... properly identify, quantify and include *all* costs of competing power sources, then let the market decide.

Yet nuclear advocates overlook - or externalise - the most important risks and costs, ie disposal costs (incl environmental degradation), health & safety risks, clean up costs, 'security' costs (increased risk of terrorist attacks?) etc.

And then the state ultimately ends up underwriting these costs, either directly (because the private developer threatens to withhold investment) or indirectly (when the developer fails and the populace still needs power...).

That the costs are difficult to quantify is not a reason to assume they don't exist...we've done that once before, remember?!