This is one of the best articles I have read regarding our current energy situation as it actually tells the truth instead of the media's wishful thinking. No one wants to accept the fact that coal and nuclear are our only realistic options for affordable baseload electric power generation. Renewables such as wind and solar certainly have their place, but baseload power generation is not it.

http://www.youtube.com/watch?v=AHs2Ugxo7-8&feature=channel_page

First, let's talk about coal. Until the structure of the carbon tax is known, and the type of sequestration to be used for the carbon can be determined, the capital and operating cost of the plants cannot even be estimated. Unfortunately the Bush administration cancelled the demonstration plant which had been under construction, on the grounds it was too expensive. That may well be true, but we need to know how much more expensive, and that is going to take at least a year or two to research. There have been conflicting estimates of the cost of power from a coal fired sequestration plant – I have seen a range of 30% to 100% higher. Depending on the carbon tax rate, it may be cheaper to pay the tax.

TXU had started a program to build new coal plants, but Wall street refused to finance the plants and instead took over TXU in a leveraged buyout, and cancelled the program.

One option would be to assume that sequestration could be retrofitted to a new plant later, and proceed with current technology. However, some of the better technologies need to be designed into the plant from the first. Specifically, the really difficult part of sequestration is separating the carbon dioxide from the nitrogen gas that comes from buring air. It may be cheaper to separate the nitrogen gas from the oxygen in the air, and then burn the coal in an oxygen/carbon dioxide mix. (Pure oxygen would burn too hot for the power plant engine materials to handle). The result would be a carbon dioxide/water vapor mix, which would be much easier to separate.

These three reasons – unknown and probably hostile regulatory environment, lack of capital from Wall Street, and technological uncertainties – mean that few power companies will attempt to build coal plants.

Let's talk about nuclear power. As you note, it takes at least four years to get regulatory approval for a plant (it has taken as long as twelve years). It takes four to five years to build a plant once approval has been obtained. The year 2017 is the earliest a new plant could produce energy, and from my point of view, the regulatory environment is even more hostile to nuclear than to coal. To take him at his word, as long as Reid is Senate Majority leader, the Nevade disposal site will not happen and there is no obvious alternative site that wouldn't run into similar problems. And to take Obama at his word, no new nukes until the disposal problem is solved.

You mentioned the new Toshiba S4 reactor. This is based in part on research that was done at Argonne Lab in Idaho back the the late 80' and early 90's. The program was supported by the Reagan and first Bush adminsitration, and cancelled by the Clinton administration. The program was called the Integral Fast Reactor, which referred to the integrated recycling process which it used. Current reactors produce highly radioactive waste that must be stored for over 100,000 years. Integral Fast Reactors produce only a tenth as much waste, and it is dangerous about 300 years. Integral Fast Reactors can utilize high level waste produced by other reactors as fuel. They can also burn depleted uranium as fuel. They are also much safer than the current generation of reactors. The rationale for the Clinton administration cancellation has never been adequately explained, but a recent article in Scientific American by Frank Von Hippel, the Clinton administration science advisor, says that cost considerations were most important. However, the tone of the article suggests that the real reason was that Integral Fast Reactors are just too good, and Von Hippel's real agenda was to kill nuclear power.

Howover, other countries such as France and Russia already have many years experience with related reactor types, and both China and India, in addition to Japan, are working on this technology.

Long range, I think Integral Fast Reactors are going to dominate electricity generation both for the US and the world, but that will not happen during the Obama administration.

One consequence of Integral Fast Reactors will be to ruin the uranium market. Current reactors burn about 1% of natural uranium. About 90% winds up as depleted uranium, and about 9% as high level waste. Since the Integral Fast Reactors can burn both of these as fuel, it will be several hundred years before any new uranium is needed.

So, during the next four years, my guess is – few new coal plants and no new nukes (actually make that one new nuke – there is one where construction had been suspended years ago that is now being completed).

So how will any new power needs be met? Wind power, even with huge government incentives, is no longer competitive with natural gas since the price dropped this fall. Boone Pickens has shelved his ambitious plans until the Obama plan is clear. So, natural gas will dominate for the foreseeable future.

That's why my money is on companies like Kinder Morgan Partners.

Today's email on "Surprise! Coal and Nuclear Power…" is extremely well written. The research was thorough, the projections clear, and the recommendations specific. I appreciate all of your professional work as do other readers I am sure.

Sincerely,
C.J. Langley