Tuesday, October 19, 2010

Barack Obama Still Deserves an F on Energy

In March of 2009 I wrote a post in which I argued Barack Obama deserved an F for his energy policy. This continues to be the case with the Obama administration continuing to make poorly thought out energy related decisions. Virtually every Obana administration energy related decision over the last 18 months, has been poorly thought out and has wasted opportunities.

Obama has used the stimulus package to offer further subsidies to the renewable energy industry, even though renewable energy is unreliable and is not cost effective when compared to nuclear energy.

Obama has avoided a heads up comparison of renewables and and nuclear energy by failing to appoint a commission on the national energy future.

The Obama administration has mismanaged nuclear loan guarantees.

The Obama administration probably acted improperly in its decision to shut down the Yucca Mountain Nuclear Waste project. I am no big fan of Yucca Mountain, but the Yucca shut down decision was political and not a response to the national energy need. Thus while the national energy situation is existential, the Obama administration continues to engage in political games over energy

What should Obama have done?

I suggested that the next President set up a Blue Ribbon fact finding commission,
to go about determining energy goals and steps required to accomplish preferred goals. . . .

Above all else the blue ribbon fact finders must not simply identify a vision but must begin the contagion process without which the vision will not be realized. They must also provide political leadership with political cover. There will be no doubt political opposition to the vision and the steps that will be taken to realize it. The first line of defense will be, "this is what the experts recommend". Because they are on the front line and ultimately exemplars, members of the blue ribbon commission must be selected for their courage, as well as their intelligence, capacity for rational thought, and vision. They will be exemplars for a nation and for the world, because it is anticipated that they will set a path on which all people will be traveling for the next 40 years.

It would be very nice to find a group of Richard Feynmans to set on the blue ribbon commission, people who are gifted visionaries, who have great respect for facts, and who have to the ability to ferret out the critical facts.
The Obama administration did eventually set up a Blue Ribbon Commission, but one that was mandated to bring recommendations regarding the nuclear future, and primarily offer alternative measures to fulfill the United States Governments legal obligation to manage nuclear waste. Although some of the Commission members were very competent, the Commission's members collectively fell far short of the Richard Feynman level. I made clear the role of the fact finders would face grave responsibilities, including providing political cover for political leaders who would be faced with difficult and possibly unpopular decisions.
The decisions related to electricity generation will be perhaps the most important, because potentially up to 80% of the energy in a post carbon society will be transmitted through electrical lines. Decisions cannot be left to the market. The market, while providing efficient mechanisms to determine price, and product choice, is poorly equipped to make strategic choices for the future. Decision makers have to basically anticipate future markets. That involves informed guesses, something the market regards as speculation. Markets like to gamble only if there is a great deal of money potentially to be made on bets. There is far too much at risk, and too much uncertainty about the energy future at the moment for most investors to feel comfortable about the risks involved in future energy investments. In the case of solar and wind generated electricity, this has led to the demand for government subsidies, both for the construction of generating facilities, and in tax linked support of revenue produced from energy generation.

The stake in the decision making process is such that wrong decisions could easily lead to the misspending of tens, or hundreds of billions of dollars and perhaps even trillions of dollars of tax payer, rate payer, and investor money, without the production of a satisfactory electrical system. Impossible you say. Well just pay careful attention to where the decision making process is today. Mark my word, if the decision making process is not improved, it will lead to very unsatisfactory outcome.

We cannot hope to reach a proper decision without a Judicious determination of facts, and there are at present a lot of of enemies of facts in the environment. Enemies of facts include people who are selling flawed ideas and flawed products. Fact finding needs to be turned over to people who are skilled in determining facts, and this would certainly include nobel prize winning scientists. Others who are somehow representative of the general public need to included among the fact finders, and the fact finding process needs to be open to the public. The fact finders need a first rate staff, and the ability to commission research.

The fact finders need to be aided by skilled politicians who have ascended to the rank of statesmen. My father observed one such politician while attending a hearing of Project Independence in 1974. "I was most impressed," my father wrote. "He is young, intelligent, and highly articulate." Such a figure, if he were still around 34 years later, might well prove a valuable asset to the fact finders, perhaps as chairman of a fact finding commission. And if the politician, by now an elder statesman, were to hold high political office, so much the better. The name of the young politician who so impressed my father was Joseph Biden.

Any group of fact finders would need to carefully separate fact from hype before reaching its decision. As I have demonstrated on Nuclear Green there is a lot of hype in our current discussion of energy options. In fact the hype to information ratio in any discussion of renewable electrical sources is astonishingly high.
Secretary Chu's Blue Ribbon Commission fell far short in its composition and mandate. I wrote,
Blogger "uvdiv" has a negative assessment of many of the panel members, and many panel members are far less distinguished and gifted than could have been hoped. I had hoped for a energy panel chaired by Joe Biden, with members of the charisma and ability of Richard Feynman. In addition the panel reports to Secretary Chu, and not to the President. All of this suggests that the Mr. Obama does not yet know what he is doing.
The latest episode in the sorry story of the Obama Administration's mishandling the Nations Energy future, involves the mishandling of loan federal guarantees for a Nuclear Power Plant project in Maryland. Not only did the Obama administration fail to offer the Calvert Cliffs 3 project a subsidy, but loan guarantee conditions would have made the cost of the loan at least as high as a no guarantee loan would have been. In contrast, the Obama Administration DoE is offering the renewawable power industry sweetheart loan guarantee deals.

Barack Obama was elected to put an end to the non-deliberative policy approach of the Bush administration. So far, however, the Obama administration's attitude toward energy has been anything but fact based. Let us recall Ron Suskind's account of the Bush staffer:
The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."
The Obama administration has not yet engaged in a judicious determination of the facts about energy. Confident in their own power and in their ability to set policy on whim, they have decided to follow what will surely be a disastrous policy if followed long term. We can only hope that during the next few years, as America's war to assure itself an energy future becomes obviously more difficult, and Mr. Obama's ability to see his own mistakes, admit them and correct them will come and prevent a disaster. If not we are headed out into the wilderness without food or water. Leading people toward disaster surely is not progressive.


Anonymous said...

Bill Hannahan

A commission is just a way to kick the problem down the road without doing anything. What is really needed is money.

The U.S. should be spending $100 billion per year on R&D of new energy sources. Most of that money should go toward Development, the expensive part of R&D. It would be far more beneficial to people all over the world than bailing out Wall Street bankers.

It should include the development of several types of fission plants [molten salt, IFR, lead bismuth, small modular designs] up to at least one full sized commercial plant of each.

Anonymous said...

Legislation for Energy R&D Funding is essential. It appears that the transition from fossil fuel to a replacement fuel cannot occur fast enough to prevent some continued drop in our standard of living. This lower living standard can be minimized if government makes a major investment in R&D to develop the most economically viable replacement energy sources. The American Energy Innovation Council, the AEIC, calls for a national energy policy that would increase U.S. investment in energy research every year from $5 billion to $16 billion. Bill Gates, a member of the AEIC, said that he was stunned that the DOE budget for R&D was only $5 billion; by comparison the National Institutes of Health invests a bit more than $30 billion. To pay for more R&D, Gates favors a 2% tax on energy. He does not favor cap and trade or a tax on carbon, but he favors a time table for closing coal power plants so that each utility can have a dependable long range plan.
I had given thought to funding more R&D for energy before I saw Gates’ ideas. My thought was that energy subsidies should be phased out and the government investment in subsidies be placed in the DOE’s R&D fund. The first subside to go should be the 45 cent per gallon ethanol subsidy. It goes to the blenders. Removing this subsidy would not affect the amount of ethanol sold because its use is mandated by our government. The $1.59/ MWH for nuclear power are not justified. Our 104 nuclear power plants are now paid for and the O&M is less than 2 cent/kWh. Our nuclear plants have the lowest generating costs of all generating sources. Renewable subsidies are much larger (wind $23.37 MWH and solar $24.34/ MWH). Wind and solar would not be competitive without these subsidies plus a subsidy for 30% of construction costs. I will make a general statement: Subsidies do not encourage innovation and they often do not favor the most cost effective strategy.
Money spent on R&D, education, and infrastructure is investment that pays back big dividends. Our regulatory infrastructure needs to be streamlined and beefed up to assure timely deployment of the fruits of our R&D investments.

John Tjostem

Nathan2go said...

Today's political climate is very negative on nuclear power on the left and negative on climate action on the right. Do you really expect Obama to accomplish any high-visibility nuclear progress?

I'm hoping that some important behind the scenes work is happening. Like maybe the NRC is staffing up to process new applications.

The good news is that the Very High Temp Reactor has not been killed. Importantly, some of the funding will apparently go to the molten-salt cooled reactor, which is a useful step towards a LFTR.

Steve Aplin said...

Charles, interesting post. When I watched Obama give his SOI in January, and announce the Vogtle loan guarantee in Feb, I thought he had learned from the Copenhagen debacle. (Let's remember he went to Copenhagen all full of ideas from the phoney green lobby, then embarrassed himself with that incoherent speech at the end, which was incoherent because the "greens" have no credible ideas at all).

But subsequent events have proved you are right. So I totally agree with you, he deserves an F. He could have gotten Republican support for a carbon cap by supporting nuclear just a bit more strongly and putting the weight of the White House behind facilitating loan guarantees for at least two of the projects that were in the hopper (on top of Vogtle). He could then have legitimately claimed credit for creating nearly 15,000 high-paid, high-skilled jobs, during a period of persistent low-quality under-employment.

Instead he got nothing.

SteveK9 said...

The idea that what we really need is more R&D is misguided (and I am a scientist). What we need right now is to get on with building as many AP1000's, EPR's and ESBWR's as we can. We have the designs. Once nuclear is generally recognized as the 'way to go' we can develop wonderful improvements like LFTR, etc. If we focus on that now --- we are sunk.

Charles Barton said...

Steve, while I agree with the idea of building as many conventional reactors as possible, conventional light ewater reactors are not appropriate for load following, and back up, power reserve roles. Nore ate they useful for providing industrial process heat. Large LWRs are expensive to build and take a long time. The market seems very uncomfortable with them. We need alternative nuclear technology.

SteveK9 said...


I am less pessimistic about cost and time to build for large reactors. The key is to get going. When you are building a plant with 8 reactors at the same site as China is planning, then I think cost/time are going to drop dramatically.

It's a smaller point and they haven't actually built one but, for example the Atmea design from Areva/Mitsubishi claim: load following capability of 100% -30%, 5% /min, including automatic frequency control, instantaneous return to full power capability, and effluent reduction by variable temperature control.'


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