March 14, 2011

Other energy issues and nuclear power over reactions

5 oil refineries in Japan are shutdown and two of them are on fire.

At least five refineries, with a combined oil-processing capacity of 1.2 million barrels a day, shut down automatically when they sensed the earthquake. This is roughly a quarter of Japan's total refining capacity. A fire broke out around storage tanks of the Sendai and Chiba refineries, but neither has been damaged.

Nuclear Overreactions written up at

Less than a year ago, a drilling rig exploded off the coast of the United States, killing 11 workers and pouring 4 million barrels of oil into the Gulf of Mexico. No natural disaster caused this tragedy. It was entirely man-made. President Obama halted deep-water drilling but lifted the moratorium less than six months later. On Friday, while fielding questions about Japan's nuclear reactors, he proudly noted that his administration, under new, stricter rules, had "approved more than 35 new offshore drilling permits."

That's how we deal with tragedies in the oil business. Accidents happen. People die. Pollution spreads. We don't abandon oil. We study what went wrong, try to fix it, and move on.

Contrast this with the panic over Japan's reactors. For 40 years, they've quietly done their work. Three days ago, they were hit almost simultaneously by Japan's worst earthquake and one of its worst tsunamis. Not one reactor container has failed. The only employee who has died at a Japanese nuclear facility since the quake was killed by a crane. Despite this, voices are rising in Europe and the United States to abandon nuclear power. Industry analysts predict that the Japan scare, like Chernobyl, will freeze plant construction.

Let's cool this panic before it becomes a political meltdown.

Fossil fuel deaths from 1969 to 2000
This is a count of the accidents and not the air pollution deaths or deaths from other pollution caused by fossil fuels

Jerome a Paris is a wind farm investor Here are a few of his non-obvious facts about the incidents of the past few days:

* earthquake kills people, nuke power plants don't kill people. Despite being hit by a very large natural event, damage seems limited to the nuclear plants themselves, with no real material consequences outside the plants. Even with an accumulation of adverse events (earthquake + tsunami), the overall safety design seems to have, ultimately, functioned;

* earthquakes is what costs money. Overall, the damage to the nuclear plants seems less than to much of the infrastructure which was hit by the earthquake+tsunami, and it's not obvious that the damage to the nuclear plants will cost more than a small fraction of the overall damage; an immediate question is thus whether the damage to these plants should be included in the cost of electricity or in the cost of earthquake insurance;

* centralised power plants have a cost. Nuclear power plants are large single points of failure - an immediate cost for consumers will be felt as the large nuclear capacity now offline will need to be replaced by more expensive gas-fired power (fueled, in Japans's case, by LNG imports), if available, and tensions in the power network may lead to rolling blackouts or other form of unreliability - or use of even more expensive oil-fuelled backups; This means that the nuclear industry needs to include such catastrophic events in the pricing of its energy - especially in an earthquake-prone place like Japan, via the incorporation of (i) a lowish, but not far from nil, probability of full loss of large chunks of generating capacity and (ii) the ongoing cost of the availability of a larger permanent reserve capacity to cope with temporary or permanent losses of capacity at large power plants;

* energy policy is the government's job. All of this underlines that the overall design of the power system hinges on the rules established by public authorities - from the mostly technical stuff on how much backup the system should have, to the allocation of the cost of insurance for large catastrophes, to the safety margins to take into account (ie what threshold of frequency for catastrophic events that you have to deal with, and how big a disruption should be factored in) and to the cost of funding the plants themselves as well as whatever additional safety features you impose on them.

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