White House Chronicle

News Analysis With a Sense of Humor

Lessons of ’70s Energy Crisis Have Meaning in Today’s Climate Crisis

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I’ve been here before. I’ve heard this din at another time. I’m writing about the cacophony of opinions about global warming and climate change.

In the winter of 1973, the Arab oil embargo unleashed a global energy crisis. Times were grim. The predictions were grimmer: We’d never again lead the lives we had led — energy shortage would be the permanent lot of the world.

The Economist said the Saudi Arabian oil minister, Sheik Ahmad Zaki Yamani, was the most important man in the world. It was right: Saudi Arabia sat on the world’s largest proven oil reserves.

Then as now, everyone had an answer. The 1974 World Energy Congress in Detroit, organized by the U.S. Energy Association, and addressed by President Gerald Ford, was the equivalent in its day to COP26, the UN Climate Change Conference which has just concluded in Glasgow, Scotland.

Everyone had an answer, instant expertise flowered. The Aspen Institute, at one of its meetings, held in Maryland instead of Colorado to save energy, contemplated how the United States would survive with a negative growth rate of 23 percent. Civilization, as we had known it, was going to fail. Sound familiar?

The finger-pointing was on an industrial scale: Motor City was to blame and the oil companies were to blame; they had misled us. The government was to blame in every way.

Conspiracy theories abounded. Ralph Nader told me there was plenty of energy, and the oil companies knew where it was. Many believed that there were phantom tankers offshore, waiting for the price to rise.

Across America, there were lines at gas stations. London was on a three-day work week with candles and lanterns in shops.

In February 1973, I had started what became The Energy Daily and was in the thick of it: the madness, the panic — and the solutions.

What we were faced with back then was what appeared to be a limited resource base which the world was burning up at a frightening rate. Oil would run out and natural gas, we were told, was already a depleted resource. Finished.

The energy crisis was real, but so was the nonsense — limitless, in fact.

It took two decades, but economic incentive in the form of new oil drilling, especially in the southern hemisphere, good policy, like deregulating natural gas, and technology, much of it coming from the national laboratories, unleashed an era of plenty. The big breakthrough was horizontal drilling which led to fracking and abundance.

I suspect if we can get it right, a similar combination of good economics, sound policy, and technology will deliver us and the world from the impending climate disaster.

The beginning isn’t auspicious, but neither was it back in the energy crisis. The Department of Energy is going through what I think of as scattering fairy dust on every supplicant who says he or she can help. On Nov. 1, DOE issued a press release which pretty well explains fairy dusting: a little money to a lot of entities, from great industrial companies to universities. Never enough money to really do anything, but enough to keep the beavers beavering.

That isn’t the way out.

The way out, based on what we have on the drawing board today, is for the government to get behind a few options. These are storage, which would make wind and solar more useful; capture and storage of carbon released during combustion; and a robust turn to nuclear power.

All this would come together efficiently and quickly with a no-exceptions carbon tax. Republicans will diss this tax, but it is the equitable thing to do.

Nuclear power deserves a caveat. It is unique in its relation to the government, which should acknowledge this and act accordingly.

The government is responsible for nuclear safety, nonproliferation, and waste disposal. It might as well have the vendors build a series of reactors at government sites, sell the power to the electric utilities, and eventually transfer plant ownership to them.

The government has some things that it alone is able to do. Reviving nuclear power is one.

The energy crisis was solved because it had to be solved. The climate-change crisis, too, must be solved.

Beware of the Loving Embrace of the Government

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By Llewellyn King

I am not a government-basher per se. As a reporter, I have covered it too long to say the bureaucracy is always incompetent and lazy. But I have also seen how the government wastes money, veers from one project to another, and is indifferent to any damage done by its autocratic ways.

The government, for better or worse, is the great risk-taker on new technologies. As such, it has added immeasurably to the wealth of the nation, from the creation of the technologies that led to the fracking boom and the Internet to the creative advances one now sees in airliners.

After the Pentagon, the Department of Energy (DOE) is the worst offender of the love-it-then-leave-it school of support for technology innovation.

The country is littered with the carcasses of abandoned projects, such as the Yucca Mountain nuclear spent-fuel repository, which was canceled by the Obama administration to please its political ally, Sen. Harry Reid (D-Nev.). Price tag: more than $15 billion.

This cancellation has had two other damaging effects: the first is there is still no permanent place to store nuclear spent fuel, which is piling up in America; and the second is the demoralizing of talented engineers and scientists by the government’s vacillation. These effects may be as huge as the price tag.

Gifted people throw themselves into government projects and move their families across the country to the work sites. Then the government says, “Thanks for your work on the project, but we are canceling it. Now, shove off!” These contractor employees do not have government protections; they are subject to government caprice.

In South Carolina, for example, a huge project to build a plant to blend weapons-grade plutonium into nuclear fuel for civilian reactors is 70-percent completed and hanging by a thread. That is because after spending $5 billion, the DOE wants to do something else equally expensive, according to one consultant.

Or take Gen4 Energy, a small, Denver-based company that has been strung along by the DOE and now is preparing pink slips. Its plan is to build a small (25-MWe), advanced nuclear power plant for use at mining sites, military bases and remote places that need electricity, such as Alaskan villages and those in less-developed countries. These reactors would work for 10 years and then would be swapped out and replaced with a new, factory-built module.

Robert Prince, Gen4 Energy’s CEO, who came out of retirement to lead the advanced reactor project, says it is a unique, safe design using tested materials and concepts. The Gen4 advanced reactor design was in the running for development funding from the DOE.

The DOE uses a device called a “funding opportunity announcement”(FOA), to encourage technology developers. In 2013, it issued an FOA and handed out grants of $1 million each to four advanced reactor designers, including General Electric, General Atomics, Westinghouse and Gen4 Energy.

The DOE’s next step was to issue another FOA. This time, the department planned to split $80 million over 10 years for just two designs, provided the grantees came up with their own $10 million. Gen4 and the others prepared detailed proposals and waited.

In January, the DOE picked two rector designs: one from a consortium that includes Bill Gates and the Southern Company, and the other from technology entrepreneur Kam Ghaffarian. Neither were in the first round.

The DOE decision hit Gen4 Energy particularly hard, as it was the smallest contender and probably the one most in need of DOE help as it labored on its design, which had originated in the Los Alamos National Laboratory and was due for feasibility testing at the University of South Carolina, according to Prince. “We really thought we had a shot,” he said.

Not so. Love from the DOE is a sometime thing. Just ask Prince, who now must tell investors and staff that the $10 million or so they have already spent is gone and the business must pack up, technology abandoned, lives shattered, hope sunk.

Gen4 Energy is not alone in its disappointment. Other companies with exciting designs for reactors are also disappointed. Careers, brilliant ideas, and untold dollars are lost in the way the DOE seduces and abandons people and technologies. — For InsideSources


Richardson Says We Should Honor Russia Plutonium Deal

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By Llewellyn King

Bill Richardson could teach Donald Trump something about the art of the deal.

He has done a lot of them. Richardson also wrote a book about the art of the deal, the big deal, entitled “How to Sweet-Talk a Shark; Strategies and Stories from a Master Negotiator.”

In a towering life of public service (U.S. representative, U.N. ambassador, secretary of Energy, New Mexico governor, and peripatetic hostage negotiator), Richardson confronted Fidel Castro, Saddam Hussein, the Taliban, two of North Korea’s dictators, and an assortment of international thugs. He was a five-time nominee for the Nobel Peace Prize.

The essence of Richardson’s deal-making was that the commitment must be kept by both parties.

At present Richardson sees one of his deals in jeopardy, and he was in Washington last week to raise the alarm, meeting privately with former colleagues and appearing at a press conference at the National Press Club.

The deal in jeopardy involves a commitment he made, when he was secretary of Energy in the Clinton administration, with the Russians to dispose of weapons-grade plutonium, the long-lived ingredient in nuclear weapons. There are 34 metric tons of the stuff that the United States is bound, by treaty with Russia, to dispose by integrating it into nuclear fuel and burning it in civilian power plants. This is known as mixed oxide fuel or MOX.

But the Obama administration wants to end the program, before a fleck of plutonium has been processed for fuel. It is seeking to pull the plug on the construction of the facility at a Department of Energy site on the Savannah River in South Carolina, which is two-thirds complete and has already cost over $4 billion.

The administration is now looking not at the completion cost, but at the lifetime cost of the facility. And it is saying that it is too high; although that could have been calculated years ago.

The deal was signed by Vice President Al Gore with Russia back in 2000. The Russians, for their part, are burning their surplus plutonium in fast reactors, which we do not have in operation.

The back story may be not about lifetime cost, but about the deployment of federal dollars in the very near future. Nuclear industry insiders believe that the Department of Energy, which makes nuclear weapons and stockpiles them, wants to divert all available resources to its weapons refurbishment program and, in argot of the moment, kick the plutonium can down the road. New funds are harder to come by than re-purposing extant ones.

The department is floating the idea that the plutonium should be “down-blended,” meaning mixed with some secret ingredient that the department believes will render it safe for all time, and stored in a troubled existing facility: the Waste Isolation Pilot Plant (WIPP) in New Mexico.

“I don’t believe this is a good course of action.” Richardson told reporters at the press club event. He said the WIPP facility was designed for low-level waste … there would be a lot of opposition in New Mexico.” He was involved in that project, too, when he was in government.

On sanctity of treaties, Richardson said, “I think that [closing down the MOX facility] would be a grave mistake across the board.”

Richardson said that he had negotiated with the Russians as U.N. ambassador and as Energy secretary. In the matter of plutonium disposal, he said the Russians have kept their side of the deal. There was plenty of tension over Ukraine and Syria, and “we don’t need any more tension.” He said, “This is one potential area of cooperation that should not be discarded, and it would be, should the MOX facility be discarded.”

If the MOX facility is shuttered, it will be one of many nuclear facilities across the country, paid for by taxpayers, which have been abandoned because of other priorities or political agendas. The price is high in enthusiasm, creativity and commitment from the workforce at facilities, like the MOX one.

The dollars spent have no legacy except a sad, new kind of national monument: structures that have been left forlorn and incomplete as politics have zigged and zagged. These abandoned structures range from the experimental Fast Flux Test Facility in Hanford, Wash. to the Integrated Fast Reactor in Idaho Falls, Idaho to the sad, $18-billion Yucca Mountain facility sitting unused in Nevada. There are many more.

As Richardson might tell, in a long life in public service, you have to defend the deal long after it was signed, sealed and delivered. Not so, perhaps, in real estate transactions. — For InsideSources.com

 


Obama’s Second Blow to a Nuclear Waste Solution

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When the Obama administration came into power, one of its first actions was to end work on the Yucca Mountain nuclear waste repository in Nevada. In so doing, it delivered a shuddering blow to the U.S. nuclear industry, trashing the project when it was nearly ready to open. The cost to taxpayers was about $15 billion.

Now the administration is going through the motions to suspend another costly nuclear waste investment when it is about 67 percent complete. Money expended: $4.5 billion. Shutdown cost: $1 billion.

The object of its latest volte face is the Mixed Oxide Fuel Fabrication Facility (MFFF) on the Department of Energy’s Savannah River site in South Carolina. Work started on the facility in 2007, with a 2016 startup envisaged.

But unlike Yucca Mountain, few people outside of the nuclear industry know about the genesis and purpose of the MFFF project.

The project was initiated as a result of a 2000 agreement with the Russians, later amended, in which both countries agreed to dispose of no less than 34 metric tons of excess weapons-grade plutonium — the transuranic element that is the key component of a modern nuclear weapon, and remains radioactive essentially forever.

The DOE’s plan was for the facility to mix the plutonium with uranium to create a fuel for civil nuclear reactors to produce electricity. This recycling technology, developed in the United States originally, has been used in France since 1995.

The DOE has not yet taken a wrecking ball to the MFFF, but it is taking the first steps toward demolition. On June 25, the DOE issued a press release that the industry read as a precursor to a death warrant. The department announced that it was creating a “Red Team,” headed by Thom Mason, director of the Oak Ridge National Laboratory in Oak Ridge, Tenn., to review “plutonium disposition options and make recommendations.”

The DOE statement said the team would “assess the MOX [mixed oxide] fuel approach, the downblending and disposal approach, and any other approaches the team deems feasible and cost effective.”

Industry sources say the choice is between the MOX approach and so-called downblending. In that application, the plutonium is not burned up but is spiked and mixed with a modifier that makes it unusable in weapons. Then it would be disposed either in the Waste Isolation Pilot Plant in Carlsbad, N.M., or in a new repository, if one is commissioned.

The American Association for the Advancement of Science has been pushing the downblending option. But it is using numbers that many believe to be extremely speculative. They come from a private consulting firm hired by the DOE, Aerospace Corporation.

The first number is that the life-cycle cost of the MFFF would be $30 billion, while the life-cycle cost for downblending would be only $9 billion. These numbers are contested by the contractor building the facility, a joint venture between the construction firm Chicago Bridge & Iron Company and the French nuclear technology giant Areva. They point out that plutonium has never been downblended and that the WIPP in New Mexico has had its own problems. On Feb. 5, 2014, the plant closed after a salt truck caught fire; there was an unrelated radiological release nine days later. The plant is still closed.

It is believed that Secretary of Energy Ernest Moniz favors the MFFF approach as a permanent and scientifically attractive solution, rather than burying the plutonium in New Mexico or elsewhere. However, he may be overruled by the White House and the military chiefs, who know that they are going to have to raise money on a huge scale for nuclear weapons modernization, in light of the deteriorated relationship with Russia and China’s continuing military buildup.

If the MFFF is canceled, it will join a long list of nuclear projects that the government has ordered up and canceled later, often with a huge waste of public money. Another negative is the wastage of engineering talent. Families move to sites, buy houses and send their children to local schools. Then come the pink slips and years of demanding engineering effort are nixed by policy, politics and general incoherence in Washington.

Wanted: Renaissance Person for Energy Secretary

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While most of Washington is fascinated with the triangle of strong personalities that President-elect Barack Obama has empowered to preside over foreign policy (Jones, Clinton and Biden), another constituency is wracked with the agony of hope. It is the bitterly divided energy constituency which hopes that a new secretary of energy will lean their way.

The most hopeful of these are the greens who have taken Obama at his word, and who expect a flood of money for wind, solar and biomass; great new jobs; and crippling limits to the use of coal and nuclear.

But there is another constituency that believes that it is the real green alternative: coal. Or, more precisely clean coal. Already, this receives nearly $1 billion a year in funding, much of it going to carbon capture and sequestration–a concept fraught with legal, political and technical difficulties but popular with the utilities and the miners. Died-in-the-wool environmentalists look at it as a trick at best and a semantic obfuscation, designed to deceive the public, at worst. Clean or otherwise, coal will be burned for decades to come–most of it in its dirty form, the experts tacitly acknowledge.

Another constituency, which was just feeling it could be listened to is nuclear. John McCain raised hopes when he talked about 45 new reactors, and nuclear advocates hoped that Obama heard that loud and clear.

Now, two clouds hang on the nuclear horizon: opposition in the Democratic Congress and the credit drought. The advocates believe they can coax the Congress to their point of view, especially with a pro-nuclear secretary. But they are not so sure about the credit markets, even with loan guarantees. A new plant could cost between $10 billion and $14 billion. That is a lot of borrowing and John Rowe, the chief of mighty Exelon Corporation, has said no utility can build the plants unaided.

Then there are the seldom heard but influential nuclear weapons hawks who would like to see a secretary who understands the aging nuclear stockpile, and worries about the effectiveness of weapons that have not been tested in a generation. They want the stockpile updated; new weapons designed and built and, if feasible, tested underground. They are said to be lead by that grand old man of Washington policy wonks, former national security adviser Brent Scowcroft. They point out that $20 billion of the Department of Energy’s $25 billion budget is earmarked for weapons. It goes to the somewhat autonomous National Nuclear Security Administration.

To be secretary of energy is to preside over a complex archipelago of almost totally unrelated responsibilities. The department has nuclear waste, nuclear verification, nuclear stockpiles, warhead decommissioning, and various black programs to deal with before one calorie of energy is produced.

A source with 30 years of experience in the DOE warns: “You can’t turn a battleship around in the bathtub, and budgeting here is like that.”

The department is not only remarkable in its reach but also in its staffing. It directly employs about 7,000 people. But through the big nine national laboratories, it has dominion over 130,000 people. This makes the DOE unique and, in some respects, advantages it. While the labs work on far-flung projects for other agencies, and sometimes private corporations, they are controlled and funded by DOE. One secretary told me: “It’s like having a private army. The labs, with all of their Ph.Ds will do anything so long as you fund them.”

What is certain is that the new secretary, unless he or she has had extensive experience with the department, will be shocked to learn that the DOE has little to do with energy today. It is really a series of giant sandboxes for scientists to play in.