The Oil Drum

On Thursday 10th January 2008 Business Secretary John Hutton announced to MPs that he was giving the green light for new nuclear build in the UK. He is inviting energy companies to bring forward plans to build and operate new nuclear power plants. However considering the nuclear cliff, has the decision come too late to maintain the nuclear contribution?

The nameplate capacity of the UK nuclear fleet, stacked, from the peak capacity in the late nineties and following the published decommission schedule. Three life extensions are shown in red. Source: British Energy & Nuclear Decommissioning Agency

...not when you take into account the uranium-peak, the energy return on energy invested in the nuclear life-cycle, and the prospect of much of the legacy of nuclear waste being abandoned for ever. This is a guest article by Dr. David Fleming. Fleming is the Founder Director of the Lean Economy Connection, and an independent writer in the fields of energy, environment, economics, society and culture. The article is based on Fleming’s recent 56-page booklet, The Lean Guide to Nuclear Energy, which expands and references the arguments presented. The booklet is available to download here: The Lean Guide to Nuclear Energy

We on The Oil Drum spend so much time worrying about oil supply that we tend to think that electrical supply is relatively safe in comparison. If we stop to think about the issues, I think that we will find that the electrical situation is not much better than the oil situation. The likelihood of widespread electrical outages in next five to ten years is uncomfortably high.

We may already be starting to see some beginning examples of electrical shortages, such as this recent story regarding Maine. Residents were being asked to conserve electricity because of a natural gas shortage related to supply disruption and cold weather. Maine has a relatively tight electrical supply and heavy dependence on natural gas, so it is at high risk for this type of disruption. I expect to see more outages like this in the coming months and years, especially in high-risk areas.

In this post, we will look at some areas of vulnerability for the US electrical supply. While this analysis is restricted to the United States, some of the issues discussed may also be relevant to other countries.

(More beneath the fold)

Original Story from Monash University Faculty of Engineering: http://www.monash.edu.au/news/newsline/story/1231

A Monash University environmental engineer has warned in a new report that mineral resources are running out, excavation costs are escalating and the environmental costs of mining are devastating.

The world-first report, The Sustainability of Mining in Australia: Key Trends and Their Environmental Implications for the Future, was authored by Monash researcher and lecturer Dr Gavin Mudd in conjunction with the independent Mineral Policy Institute.

Dr Mudd said the statistics were alarming. "On average, 27 tonnes of greenhouse emissions are created to mine a tonne of uranium. That's equivalent to the annual emissions of nine family cars. To mine one kilogram of gold it takes 691,000 litres of water, and it takes 141 kilograms of cyanide to produce a single kilogram of gold.

In her new book The Shock Doctrine: The Rise of Disaster Capitalism, Canadian writer Naomi Klein uses the example of public sector dismantling in both New Orleans and Iraq as an illustration of Milton Friedman's idea that crisis presents an opportunity to push a pre-existing agenda and achieve sweeping change. This is both an important point and a timely warning, as the developing international credit crunch is arguably approaching a critical phase. The inability to roll over short term commercial paper, often backed by dubious loans, is presenting an enormous challenge to a banking system short of cash. The coming economic upheaval could be sufficient to precipitate far-reaching socio-political changes on a global scale.

On the energy front, CIBC World Markets claims that Canada has 50-70% of the investable oil reserves in the world, for oil majors increasingly shut out of producing regions. However, those reserves suffer from a shortage of pipeline capacity for both inputs and output. Saskatchewan decides against 'clean coal' on cost grounds, but continues to maintain a low royalty, low tax regime for natural resources. In the meantime, the Canadian wind industry is being consolidated in fewer and fewer hands, and there is strong resistance to uranium mining in rural Ontario.

As for environmental news, Holland is developing a 200 year plan for climate change, but with the assumption that sea-levels will rise very little despite evidence of rapid change in Greenland's icesheets. There is considerable concern over the potential for warming to activate microbial oxidation of the organic matter of the arctic tundra, which could ignite a devastating spiral of positive feedback.

Naomi Klein: The Shock Doctrine

In one of his most influential essays, Friedman articulated contemporary capitalism's core tactical nostrum, what I have come to understand as "the shock doctrine". He observed that "only a crisis - actual or perceived - produces real change". When that crisis occurs, the actions taken depend on the ideas that are lying around. Some people stockpile canned goods and water in preparation for major disasters; Friedmanites stockpile free-market ideas. And once a crisis has struck, the University of Chicago professor was convinced that it was crucial to act swiftly, to impose rapid and irreversible change before the crisis-racked society slipped back into the "tyranny of the status quo". A variation on Machiavelli's advice that "injuries" should be inflicted "all at once", this is one of Friedman's most lasting legacies....

....I started researching the free market's dependence on the power of shock four years ago, during the early days of the occupation of Iraq. I reported from Baghdad on Washington's failed attempts to follow "shock and awe" with shock therapy - mass privatisation, complete free trade, a 15% flat tax, a dramatically downsized government. Afterwards I travelled to Sri Lanka, several months after the devastating 2004 tsunami, and witnessed another version of the same manoeuvre: foreign investors and international lenders had teamed up to use the atmosphere of panic to hand the entire beautiful coastline over to entrepreneurs who quickly built large resorts, blocking hundreds of thousands of fishing people from rebuilding their villages. By the time Hurricane Katrina hit New Orleans, it was clear that this was now the preferred method of advancing corporate goals: using moments of collective trauma to engage in radical social and economic engineering.

(See also the Finance Round-Up on TOD:Canada.)

Exploring for Oil in the Arctic's 'Great Frontier'

These days, the frontiers of oil exploration include the waters north of Alaska. Nobody knows how much energy is hidden beneath the Arctic waves. But oil companies want to find out.

A federal court blocked Royal Dutch Shell proposal to drill for oil in the Beaufort Sea, above Alaska's northern coast. But the company is still trying. And its story tells you a lot about the forces shaping the Arctic's future.

This summer, Shell assembled an entire fleet in an Alaskan harbor.

Crews were performing maintenance on a drill ship. It carries an oil derrick 190 feet high. That means it steams around with a tower taller than the Statue of Liberty, from its toes to its torch.

"This is the Frontier Discoverer. I would call it the state-of-the-art drilling rig, one of the very few that are capable of working in the Arctic today," says Vince Roes, who works on the ship, which has a reinforced hull.

[editor's note, by Chris Vernon] This is a guest post by TOD member Nick Rouse. It was first published in January 2007, the discussion generated then can be read here.

On the 12th. of December 2006 the UK Magnetics Society held its annual commemorative event with an afternoon seminar followed by the Ewing Lecture. This year the focus was on magnetic fusion energy.

Nuclear fusion has evoked opinions in the various energy blogs ranging from “sixty years of failure and a certain dead end”, to “the reason why we do not need to worry about peak oil”. This event was a good opportunity to gain a clearer view of what part, if any, fusion energy could play in filling the gap as oil and then gas production peak and decline.

Dried-up Arctic ponds evidence of global warming, study says

A University of Alberta scientist has uncovered dramatic evidence of climate change in the Arctic, where ponds that have been part of the landscape for more than 6,000 years are drying up as global warming has nearly doubled the length of the brief northern summer.

Drilling jobs scene bleak

Thousands of rig hands in Western Canada are waiting for callbacks from their drilling-company employers, but industry observers say the high Canadian dollar and a crash in the royalty trust and junior part of the oilpatch mean they could be idle for a long time.

While the drilling industry, which for years worked to build up its labour pool, is reluctant to talk in terms of outright layoffs because of the seasonal nature of its work, it's expected there will be almost 3,500 fewer roughneck positions this summer relative to last year, as the number of active rigs drops to 376, from 512 in 2006.

What's the meltdown price for uranium?

Add another certainty to death and taxes: Barring some sort of nuclear catastrophe or an instant, massive influx of new supply, the price of uranium oxide is going to continue its shocking rise for now.

The question for the fissile metal's producers, and for investors seeking to cash in on the gains, is how high can it get before its key nuclear power plant consumers defer plans to add reactors, or try to cut consumption at existing plants, as they wait for much delayed new mine supplies to come on stream and bring the price back down?

Since bottoming out at just $7 (U.S.) a pound in December, 2001, the "yellowcake" spot price has climbed almost exponentially, hitting $40 a pound about a year ago and a startling $120 a pound last month. This means it is very close to shattering the record high of $43 it hit back in 1979, which, adjusted for inflation, is the equivalent of $122.42 today. Already, some producers are predicting it could rise to $250 some time next year.