White House Chronicle

News Analysis With a Sense of Humor

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


A Tale of Two Technologies

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It was the best of outcomes, it was the worst of outcomes.

The nation is awash in natural gas and oil. This did not just happen: It is the result of a long and fruitful collaboration between the government and private industry to develop advanced hydraulic fracturing. But one corporation and one man stand out: Mitchell Energy and its late visionary founder, George Phydias Mitchell.

Whenever I point this out I get a flood of mail, often abusive, claiming that modern fracking was a natural development of the traditional stimulation techniques used in the oil patch for many decades.

I love the story of fracking because it proves a lot of truths about how things get done.

First, the private sector needed to realize there were better ways of doing things, and that scientific resources in seismic and mapping would be essential. They also needed a better drill bit.

Enter Sandia National Laboratory. Government support for advanced drilling and extraction began in 1976 and continued through the 1980s and 1990s. Commercial exploitation began in the 1990s and exploded a decade later.

Previous government ideas about fracking were a little crazy and featured huge underground explosions using nuclear devices. Yes, just a little bomb was what was proposed. There were at least two government programs aimed at nuclear stimulation of natural gas in the 1950s and 1960s: One was called Wagon Wheel and the other, Gasbuggy.

Back in those days, nuclear was popular and people wanted it to have civilian uses of all kinds, possibly as an expiation for the bomb. Anyway nuclear gas stimulation ran into an immutable problem: the gas thus produced was radioactive. Not the kind of blue flame you want on your stovetop.

The nuclear enthusiasts, led by the congressional Joint Committee on Atomic Energy and the Atomic Energy Commission withdrew. Still, many were convinced that there would be a fix if the programs would just be allowed to continue. These programs, well, bombed. There were contractors, but no private partners.

Another tale of the government going it alone in energy had a dismal end. It was a program at Los Alamos National Laboratory to produce geothermal steam in a new way. The idea was scientifically sound. Los Alamos sits on an extinct volcano and deep in the earth there are what are known, rather unscientifically, as “hot rocks.” The plan was to drill into these heated formations, pour in some water and, wham, there would be steam aplenty to drive turbines on the surface.

This program was the brainchild of Los Alamos, and I crawled over the site in the early days. Enthusiasm was abundant. It seemed to be an elegant addition to the geothermal resource base. However, there was too much government, in the form of the national lab, and not enough input from commercial geothermal operators.

After 17 years, the government funding was threatened, and I was invited to what turned out to be the burial for the project.

Finally, the government people met their commercial opposites and it didn’t go well. The scientists knew, down to the smallest microbe, life down the well. They had oodles of data but it was the wrong data. In commercial geothermal, the cardinal question is the projected life of the reservoir. Sadly, Los Alamos had not kept records from which that could be calculated. The scientists had not thought of that necessity.

Then there were questions about what to do with the brine that would be a pollution problem when discharged from the turbine on the surface of the fragile high desert. There will be no brine problem, said Los Alamos. “We’ll not bring the waste water to the surface. We’ll use a heat exchanger ,and the brine will dissipate down the well.” The commercial operators said, “That won’t work. Your temperatures are not hot enough to use a heat exchanger. You’ll have to bring the steam to the surface and deal with it there after it comes out of the turbine. We’ve tried heat exchangers down geothermal wells and the heat degradation is too great. No deal.”

This is tale a tale of huge success and dismal failure, and it has a moral: Public-private partnerships can work. The government, on its own, gets off track and screws up with our money. But private industry needs the government to shoulder the risk and provide its huge resources of capital and science to further the public interest.  — ​This column was previously published in Public Utilities Fortnightly.