Okay Mr. O, I’ll Give You Props on This One
January 31st, 2010
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Those who know me are probably aware that I’m not very happy with the current administration’s handling of the monetary system, government spending, domestic policy in general, buisiness regulations and many many other things. Politically, I’m pretty much a libertarian, at least to some degree. I tend to favor less social spending, less buisiness regulation and more pro-enterprise policies. I prefer the budget be kept balanced and I prefer the government focus on things with stratigic value, such as scientific research, over things like entitlement spending.
However, I have to admit that even those who I don’t generally support do occasionally get it right, and President Obama has actually done a few things which I can’t help but applaud.
Obama Acts to Ease Way to Construct Reactors
The Obama administration moved vigorously on two fronts Friday to promote nuclear power, proposing a tripling of federal loan guarantees for new projects and appointing a high-level commission to study what to do with nuclear waste.
Administration officials confirmed that their 2011 federal budget request next week would raise potential loan guarantees for the projects to more than $54 billion, from $18.5 billion. A new Energy Department panel will examine a vastly expanded list of options for nuclear waste, including a new kind of nuclear reactor that would use some of it.
The current loan guarantees were provided in the 2005 energy act but have not been disbursed because of bureaucratic delays. The Energy Department has said it would start issuing those soon. Because the loan guarantees are supposed to cover 80 percent of construction costs, the current amount of $18.5 billion would cover only about three projects.
Energy Secretary Steven Chu has been saying for weeks that the administration would seek a greater amount of guarantees; commercial investment has been hard to come by because there is so much uncertainty about the cost and schedule for building plants.
When President Obama said in his State of the Union address on Wednesday that the country should build “a new generation of safe, clean nuclear power plants,” it was one of the few times he got bipartisan applause.
The idea may have more support among Republicans than Democrats, but even opponents of nuclear power concede that the loan guarantees may be necessary to muster enough votes for the kind of measures that many environmentalists favor in a climate and energy bill, like firm national goals for renewable energy and a cap on carbon dioxide emissions.
Obama’s choice of Steven Chu to lead the DOE seems to be showing some returns. Dr. Chu is a long time advocate of nuclear energy and he knows enough about the issue to realize that wind turbines and solar panels are no replacement for real power generators. The appointment of a panel under Dr. Chu may turn out to be a great thing, because it appears that they actually are going to fill it with people who know a thing or two about nuclear energy. Of course, if they do, they’ll know from the beginning that waste is more of a non-issue than a problem.
It seems that Dr. Chu may actually be having an impact on things. The secretary of energy, like all executive departmental secretaries, has the job of advising the president. Of course, not all presidents bother listening to the advice offered, but if Mr. Obama listens to Dr. Chu, he can expect to be well informed and advised.
It is also worth noting that Dr. Chu has what is widely regarded as the world’s most awesome first name. Studies have shown that people named Steve are, on average, roughly 50% more awesome than their peers. Given the accomplishments of Steve Chu, it’s even forgivable that he spells his first name wrong. After all, the name is still the same when used in the diminutive “Steve,” even if the full name is supposed to be spelled “Stephen,”On Loan Guarantees:
It’s important to understand what a loan guarantee is in order to realize that it’s not so much of a subsidy as some might want you to believe. Extremist Environmental groups would like you to believe that a one billion dollar loan guarantee is the same as a one billion dollar handout, and the fact is that it’s not.
Any time you want to build a major piece of infrastructure or big project, you need financing and that generally means you need to borrow money. As everyone is now aware, we’re currently experiencing a financial crisis that can make it difficult to get the financing necessary for such projects. However, for nuclear power plants it’s an even bigger issue. Banks and financial institutions are very weary of lending money to anything that they consider a high risk. If they do agree to lend to a high risk project, they expect higher interest to cover the risk of loss.
Nuclear plants have an admittedly troubled history of construction. This is entirely because of regulations. Due to NRC regulations and federal red tape, Seabrook Nuclear was forced to sit idle for years, simply because it did not have unanimous approval by all political leaders in a ten mile radius. Bellefonte was shuttered when it was within months of completion, again for political reasons and Shoreham Nuclear was completely built and then had to be decommissioned because of a change in NRC rules. Granted that in the time since these events, there has been some streamlining of regulations and hopefully these won’t happen again, but given the history, a bank could be a little concerned that the project might falter, possibly sending the constructor into bankruptcy and causing a writeoff of the loan.
This is where a loan guarantee comes in. It simply means the government will guarantee that the loan is paid back. By doing so, the banks are more likely to offer a loan with good terms and credit can thus be found. But will the government actually have to pay? Hopefully not, and it gives the government a big incentive not to interfere with the plant’s construction and completion. In the unlikely event that things do go south, the bank will be paid back with money from the constructor of the plant up to the maximum they have and any that remains could end up being paid for by the government. It’s a small risk, but a real one. However, it’s worth noting that even in the worst case senerio, this would be tiny compared to what the government has done for GM, Chrysler, AIG, Bank of America, Freddie Mac, Fannie Mae (need I continue?).
To use an analogy: It’s akin to a 16 year old who wants to buy a car, but has no credit history. For this reason, dad cosigns the loan, but doesn’t actually have any intention of paying the loan. He just signs it to allow Junior to get decent interest rates and he also tells junior that he still has to pay the loan. If Junior loses his job, dad might give him a hand on a few payments, but dad warns Junior not to expect a handout and if he doesn’t get a new job pretty fast, he’ll return the car.
Greenpeace and other groups want you to think this is identical to dad just giving Junior the keys to a brand new car. It’s not. I know people who talked a parent into cosigning a car loan and I know people who got a new car for their birthday. BIG difference.
Note: The aside is satirical. Jackson Browne did not actually make that statement, but he is one of the major spokespersons for the “No Nukes” campaign which has been alleging that nuclear energy receives enormous subsidies, although it does not, especially when compared to other energy sources. He also has a reputation for beating women, although he hasn’t been charged with it. His first wife did commit suicide and her family and investigators believe that it was at least partially due to abuse. Also, I’m not worried about getting sued, because as seen in the link above, pretty much everyone calls Jackson Browne a ‘wife beater.’ What’s he going to do? Sue all of us.This entry was posted on Sunday, January 31st, 2010 at 2:00 pm and is filed under Enviornment, Good Science, Nuclear, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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January 31st, 2010 at 4:17 pm
An exciting time for nuclear energy in the U.S.
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January 31st, 2010 at 4:39 pm
On the other hand, it looks like OMB is trying to slash Nuclear R&D. Is President Obama talking out of both sides of his mouth or is it a case of the left hand not knowing what the right hand is doing or do they just need to buy a clue? The trouble is that law school doesn’t provide you with the tools to understand the issues. It isn’t clear to me that anyone, besides Secretary Chu, actually has any understanding of nuclear technology.
http://theenergycollective.com/TheEnergyCollective/56734
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January 31st, 2010 at 6:12 pm
The Blue Ribbon commission is a farce. The mandate: “Perform a comprehensive review of all of the options for the back-end of the fuel cycle. Except Yucca Mountain. It shall never be spoken of again.”
RIP Yucca Mtn Project, 1978 – 2010
http://www.lasvegassun.com/news/2010/jan/31/obama-moves-pull-yucca-mountain-license-applicatio/
“Dear NRC, do not bother reviewing the DOE’s license application to determine whether all safety criteria have been met for Yucca Mountain. Harry Reid and I already went through the thousands of pages and did the work for you. Turns out Yucca Mountain is unsuitable, just as I predicted while campaigning in Nevada during 2008. Cheers! Sincerely, Barack Obama.”
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January 31st, 2010 at 7:35 pm
Joel Upchurch said:
Well the unfortunate thing is that as far as R&D goes, it is unlikely that the US will benefit much from that any time in the reasonably near future. As long as the NRC exists it’s going to be a struggle just to get light water reactors built. I think it’s likely that in my lifetime I won’t live to see anything other than PWR and BWR reactors built in the US.
Fast reactors, gas cooled reactors, molten salt reactors and alike are all basically impossible in the US without a very very very major shift in policy. As it stands, they are borderline illegal to even construct on a research scale.
Lets not forget, the United States had arguably the world’s best and most capable fast research reactor at the Fast Flux Test Facility, which was really the best facility in the world for evaluating fast reactors and for testing components in a manner that simulated long term usage. Despite many in the DOE fighting tooth and nail to save it, it was shut down after just over ten years of use and the DOE is not allowed to spend any money on bringing it back. The reason? Proliferation concerns. (Oh yeah, it’s next door to reactors that actually did produce plutonium for weapons at the time)
The Idaho National Laboratory was basically outlawed from perusing further fast reactor research of advanced fuel cycles and the current regulations preclude any kind of fuel reuse.
The regulatory system currently in place even precludes the licensing of CANDU reactors in the United States, despite their long tract record and their general acceptance as a mainstream GIII reactor type.
The US is not going to be able to benefit at all from research into nuclear energy until this entire legal blockade is torn down.
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February 1st, 2010 at 1:01 am
Maybe I’m overlooking something, but couldn’t the President fix a lot of the problems at the NRC by executive order if he choose to do so? In the end, isn’t he responsible for all the regulations written by the federal government, even if he usually delegates the authority to the various executive departments? Can’t he replace anyone who fails to executes the regulations they way he chooses? It is very difficult to fire a federal employee, but I’ve seen them moved aside and given a desk and chair and no responsibilities until they retire. Could the NRC be bypassed by moving reactor development to DOD? I don’t recall that the Navy submarines have to be approved by the NRC.
Of course, I’d admit a similar reaction when President Obama talked about problems with Medicare. Doesn’t he already own it? Does he actually need our permission to fix it? How much problem is in the laws and how much is in how the laws were implemented.
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February 1st, 2010 at 7:29 am
http://nukefree.org/news/renewableenergyrisesto10.5%25inUS
Ironic, Obama makes this announcement, just as Renewable energy has risen to 10.5% of the portfolio (see above link).
And, the blue ribbon panel is the responsible thing to do, Allison MacFarlane consulted with the Obama administration on this. Her studies have made clear, Yucca is a reducing environmnt, and as such, is not a appropriate repository for nuclear waste. With a responsible administration in the WH, I’m sure she will consult on any decision, and a future site will be driven by good science, not politics.
http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=10852
Also, anyone interested in stopping this handout can find relevant information here:
http://nukefree.org/news/actnowtostoploannukeloanguarantees
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February 1st, 2010 at 9:48 am
Oh look, Bruce is back. Hi Bruce. What are you doing here? Those billy goats will get across your bridge!
I hope that Obama is serious about getting additional nuclear plants online. I wonder how serious he is about it, though. He could, with the stroke of a pen, override the Carter-era prohibition on re-processing spent fuel and provide a much better way of dealing with waste than Yucca Mountain.
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February 1st, 2010 at 9:54 am
Bruce said:
HAH! Did you even bother reading the fine print at all? Nuclear power production dropped a miniscule amount (not surprising really, considering we are not yet building new reactors and putting them online) and “renewable energy” might look up, but did you bother reading it at all?????
The “Renewable energy” portfolio is made up nearly entirely of hydropower and biomass/biofuel.
Nobody here will deny that hydropower doesn’t account for a lot of energy. It’s one of the only renewable sources that actually does work. It produces a signifficant portion of electricity. Just one problem – we’ve run a little short on rivers.
Then there’s biofuel. The biggest single biofuel in the US (by far) is corn ethanol. You know, that expensive ecologically disastrous stuff that drives up both fuel and food prices? “Biomass burning” is a euphemism for incinerators.
Wind = 8.25% * 10.5% = .8% of energy. Even that seems generous though. I suspect that they’re just counting the raw kilowatts output and not bothering to consider whether it actually displaces anything. Studies of wind when combined with reasonably fast dispatch natural gas show that even under good conditions 2/3 of the energy is lost due to the need to maintain spinning reserve and the loss of throttling and grid response. That being so, you’re actually looking at an even smaller number.
Then solar, what’s that at? A piddly half of that.
PATHETIC
Bruce said:
You didn’t read the post did you??????
54 billion of loan guarantees is not a 54 billion dollar handout. That’s simply a BOLD FACED LIE.
But now someone doesn’t like subsidies?
Read it and weep:
http://www.instituteforenergyresearch.org/wp-content/uploads/2008/07/substypeandfuel.jpg
OUCH
YOU LOSE
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February 1st, 2010 at 9:58 am
Joel Upchurch said:
No the DOD is exempt from the NRC and Obama could do much to change things, although it’s also possible that any executive order could be overridden by congress. Also, one should consider that there’s the political factor too. I mean, he’s done enough for nuclear power recently to upset at least a portion of the “green” sector, that makes up part of his base, so further action is going to need to be weighed against the political implications.
He would need congress to change anything that’s written into the law. A president can’t, on his own, change legislation that already stipulates something directly.
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February 1st, 2010 at 5:31 pm
Bruce,
You’ve made yet another disengenuous implication that spent nuclear fuel is dangerous.
And yet, I asked you here:
Chuck P. said:
and here:
Chuck P. said:
to provide evidence of any member of the public that has been harmed by spent nuclear fuel. I notice that you failed to respond. To repeat, name one single member of the public that has ever been injured by spent nuclear fuel. If this material is so dangerous, why is it so difficult for one of its opponents to demonstrate that it does harm?
It escapes me how anti-nukes like you can expend so much “intelectual” energy on something that harms noone and yet pay so little attention to the wastes of other sources of energy.
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February 2nd, 2010 at 1:12 am
Chuck P. said:
While I am completely in favor of nuclear energy, I just couldn’t resist calling you out on the whole “nuclear waste isn’t dangerous at all” thing. Though I believe the main concern is more to do with how to deal with the stuff, it certainly is far from harmless. Don’t agree? Try sticking your face in one of those big cement containers. It certainly has the potential to cause harm, there’s no possible way you can argue that. It’s not exactly distilled water, for sure. Oh, and if you count non-American people, here’s a shining example of the dangers of nuclear waste/Soviet incompetence:
http://www.damninteresting.com/in-soviet-russia-lake-contaminates-you
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February 2nd, 2010 at 1:23 am
Mike said:
That would depend on how long you stuck your head in there for and how old the spent fuel was. If it’s like 20 years old, it has lost a huge portion of its gamma radioactivity.
Mike said:
Well, yeah, you shouldn’t eat spent fuel. There are a lot of things that are hazardous if you eat them. I’m sure I could find some things under most people’s kitchen sink that you don’t want to eat.
When it comes to ecological disasters that take years to clean up and make huge areas uninhabitable, I could name many circumstances where this has happened due to a huge pile of toxic coal ash spilling and leaving acres covered in toxic gritty sludge. I could also name more than a few examples of oil tankers, chemical storage facilities, hydro electric dams, sewage spills or other disasters that have absolutely decimated enormous areas.
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February 2nd, 2010 at 5:52 am
Mike,
The so called “nuclear waste problem” is a non-issue. Of course it needs to be handled carefully, it is handled carefully. No matter how potentially dangerous the material is, it IS being safely dealt with. This is something pro-nukes need to push back on at every opportunity.
Whenever trolls like Bruce say, “There’s no solution to the waste,” there needs to be someone rational to respond with, “what do we do with the coal waste?” THERE’s a problem without a practical solution.
All forms of energy create waste. Nuclear power is unique in that we are actually capable of dealing with its waste and that its waste doesn’t actually hurt people.
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February 2nd, 2010 at 7:38 am
On a related note: Obama has decided to change teh budgets for NASA. In short NASA is ordered to go for Mars, not the Moon, and to get some new tech to do so instead of just wokring on old tech.
This means the Constellation program gets the axe and Ares/Orion will not fly in the forseeable future.
Also he is extending ISS to at least 2020, possibly beyond.
http://www.nasa.gov/news/budget/index.html
Basically he has gone with the Augustine Commission. Constellation and the subprojects of Ares and Orion were slipping. The commission says that the programs were reasonably well managed and the problems faces would in all likelyhood have been solved eventually. But the scope was too large so extra funding would have been needed to complete, while the slipping timetable would have meant that nothing fruitful happens in a long time. Bascially we’d sit around and wait for them to finish before we can do something fun while the ISS crashes and burns (literary).
http://www.nasa.gov/pdf/421061main_augustine_statement.pdf
To carry people to space, the administration is telling NASA to go shopping: get bus rides to orbit from private ventures.
The new direction is supported by among others astronaut Buzz Aldrin.
http://www.nasa.gov/pdf/421062main_Buzz_Aldrin_Statement.pdf
/Michael
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February 2nd, 2010 at 11:34 pm
Spelling error here:
“Junior to get descent interest rates…”
I believe you meant “decent interest rates…”
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February 3rd, 2010 at 7:58 pm
noted and corrected
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August 26th, 2010 at 9:17 am
We shouldn’t attack Jackson Browne using ad-hominem methods (as in your image here). He is simply a hypocrite. He made songs about cars and girls, burning lots and lots of gasoline, yet when the next generation energy is to be developed – nuclear – he blocks it and thus supports the “conservation” movement, which aims to withhold cars for all but the very wealthy. This seems to be a recurring theme of the “baby boomer” generation: they had a hell of a party in the 60ies and 70ies with all that freedom, but their children and grandchildren, oh, they have to live green and make sacrifices “for the earth”.
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