With more than 7,500 views and 180-plus tweets, I want to thank everyone for taking the time to read the original HBS Working Knowledge piece, The Case for Combating Climate Change with Nuclear Power and Fracking, and, in particular, for sharing your thoughts with one another. I don't expect the article has changed minds, but I do hope it encourages people to open their minds to consider new possibilities.
Things that were once seen as relatively safe are now understood as likely to be quite dangerous, such as coal burning's contribution to global warming driven by worldwide cumulative CO2 emissions. Perhaps, the opposite is also true. Are things that were once seen as quite dangerous now potentially relatively safe as result of new understandings and innovations?
My own concerns about climate change have led me to put "new" nuclear back on my table of alternatives that must be actively explored as well as to clarify my own attitudes toward fracking and its role towards any global solution. We must have a global solution—a set of new choices that change plans not only in the West but also in China and India—or we will have no solution at all.
I will make a few more comments on fracking and nuclear, as well as some thoughts on a path forward.
The Intergovernmental Panel on Climate Change Fifth Assessment Report's focus on managing cumulative CO2 emissions makes sense to me given the incredible long-life of CO2 in the atmosphere. Hence, I like burning natural gas much better than burning coal because it gives us more time to come up with the zero-carbon alternatives that we need. (The infrared radiation-trapping potential of short-lived CH4 ((methane))is not nearly as concerning to me as the long-lived CO2 generated by combustion of that CH4.) A shift towards natural gas from coal does not solve the world's climate change problem, but it is a bridge. We need to stop burning all fossil fuels, but in order to do so, the world needs much cheaper dispatchable, zero-carbon alternatives.
The trucking of fracking fluids to (and drilling at) well sites associated with shale gas development can be incredibly disruptive locally, and fracking water usage clearly competes with local values and legacy uses. But shale gas production appears environmentally manageable, (including the risks from fugitive emissions, seismic threats, fracking water disposal, water supply contamination, etc.), as long as production takes place in a state or other legal jurisdiction with a history of sensible oil and gas production regulations and regulatory capacity in-place to enforce those regulations.
“Cleaning up Chinese air quality is most likely to come at the price of significantly higher Chinese contributions to world-wide CO2 emissions”
My big concern with fracking is that coal-to-natural gas fuel switching can be short-lived if $/BTU flips back in coal's favor. I am told that this "flip" has already happened at some dual-fuel plants in the midwest United States, so the plants have quickly returned to their original CO2 emissions. Other dual-fuel power plants will do the same flip quickly unless there is a carbon cost in place or a high capital cost associated with meeting smoke stack air quality standards. I want to emphasize that I have nothing against coal. I fear traditional coal burning's CO2 emissions. Regrettably, I have not seen to date a scalable technology for making coal a zero-carbon alternative because the associated costs lead to energy costs that history says will be unacceptable to policymakers in India or China.
At this point in time, I think that China and possibly India will move to clean up their nationwide air quality, including particulates, sulfur, mercury, etc. Unfortunately, cleaning up Chinese air quality is most likely to come at the price of significantly higher Chinese contributions to world-wide CO2 emissions. Leaders in that country have already announced plans to replace older coal-fired plants with gas-fired plants near Beijing, Shanghai, and Guangdong. While no doubt improving local air quality, much of this gas is syngas produced by coal-to-gas conversion plants near the Inner Mongolia coal fields which piped to the population centers. Syngas fuel-based power systems have much higher end-to-end CO2 emissions than either natural gas or LNG based systems.
In my mind, it is better to learn how to manage fracking risks than to encourage even more coal burning with its currently irreversible contribution to cumulative world-wide CO2 emissions.
While rich countries can afford to do whatever they wish to do, policymakers in poorer countries consistently make the trade-off in favor of the certain benefits of electricity to their citizens today over the uncertain costs of global warming to their citizens in the future. To change that trade-off significantly, I believe we need to get new dispatchable, zero-carbon technologies on the table within the next 10 years that can beat coal on price in India and China in order to change Indian and Chinese national energy policies.
In my opinion, the newly approved Gen III+ nuclear reactors (e.g., AP-1000 variants or even the still-to-be-approved, but largely derivative Small Modular Reactors) are not likely to produce power cheaply enough to change the currently forecast build out of fossil fuel power systems in India and China. While China will make significant commitments to nuclear power internally and aggressively export nuclear power plant components, the bulk of its power generation will remain with coal, serving markets—domestic and foreign—where demand for low-cost will in all likelihood overwhelm the drive for low-carbon emissions. Without establishing the availability of much cheaper (coal-competitive) zero-carbon alternatives within the next 10 years, I just don't think "the world" can do enough, fast enough to keep cumulative CO2 emissions below the levels that—again in my estimate—threaten us all with "unknowable" risks.
My concern with nuclear—even "new" nuclear—is the issue of catastrophic core failures, à la Three Mile Island, Chernobyl, and Fukushima. Historically, those core failures have been "Hindenburg disaster" events with immediate loss of life and property as well as the additional uncertainty of lingering contamination. While gripping, the actual loss of life from these events has been similar in magnitude to the loss of life of relatively more common disasters—BP Deep Horizon blowout, Exxon Valdez grounding, BP Texas City Refinery explosion, Gyama Mine landslide—which take place relatively often within the world's existing energy systems. As part of a Bayesian analysis, Jack Devanney of Martingale estimates that on average we will have one such nuclear core casualty every 3,000 reactor years. For the current fleet, that's about one every 10 years. If the world were to go all-out nuclear for electricity, we would eventually be talking about one core damage event every calendar year, unless we can substantially reduce the failure rate with new designs.
“The effects of these nuclear disasters, while no doubt tragic, seem small compared to the well-documented year-after-year impacts of coal-burning”
For example, some 70 people have died as a result of Chernobyl to date. The 6,000 cases of radioactive iodine-induced thyroid cancer, while fortunately treatable, are unnerving. The radioactive iodine was most probably ingested within a few months of the disaster through dairy products from cows who ate moderate-level contaminated grasses. The UN Scientific Commission on the Effects of Atomic Radiation (UNSCEAR) appears to be continually lowering their estimates of long-term radiation effects from low-level Chernobyl exposures and apparently has decided to make no estimates of cancers induced by low-level doses. The US Nuclear Regulatory reporting on Chernobyl is the most accurate I know of.
To me, the short- and long-term effects from these nuclear disasters, while no doubt tragic, seem small compared to the well-documented, year-after-year impacts of coal-burning, with deaths due to severe smog (estimated between 3,000 to more recently 10,000 in London between December 1952 and March 1953) now officially acknowledged and seemingly routine in China today as well as coal burning's lingering cardiovascular and lung disease impacts that public health officials believe shorten the lives of millions of people around the world.
The position that nuclear failures won't happen does not make sense to me. Until we establish otherwise through the operation and physical testing of new nuclear designs, I believe we should take the position that failures are going to be similar to the failures we have seen historically. Again, I believe private markets should price and provide the catastrophe insurance for the resulting risks, not public guarantees. The issue in my mind is should we accept the likely human costs of nuclear in return for replacing coal with coal's certain loss of life and order of magnitude higher health hazard as well as the potentially massive uncertainties of global warming driven by coal burning's CO2 emissions.
A Path Forward
In spite of all of nuclear's issues, private capital is relatively abundant. There is even a privately financed, venture-backed fusion reactor program today, Tri-Alpha Energy, of Rancho Santa Margarita, California. There is a whole crop of privately financed "new" Gen IV nuclear power technologies—like those at Martingale or Transatomic or TerraPower as well as others—that have the potential to be significantly cheaper than the current Gen III+ plants or the proposed Small Modular Reactors, even though much work needs to be done before we know that these Gen IV designs will actually be cheap enough to beat coal in India and China and safe enough for regulators to permit for deployment. It is the inability to get access to sites for stress testing of prototype designs, as well as high upfront cost and uncertain timeliness of the regulatory process, that are the primary barriers to raising private capital today.
The United States President's Blue Ribbon Commission on America's Nuclear Future makes sensible recommendations in my mind to improve the pace of nuclear innovation. A clear direction for improvement would be to adopt a Food and Drug Administration-style drug development type regulatory model with clear stages for testing coupled with public and industrywide financing, not payment, of regulatory costs for new entrants. However, given the threat from worldwide CO2 emissions and the demanding cost thresholds necessary to beat coal in China and India, the panel's recommendations are not being pursued with nearly enough urgency.
“We all need to keep our minds open to those changes, while urgently pushing for achievable, effective, and truly global solutions”
There is a clear opportunity to hold ARPA-E style design challenges around the world focused on nuclear power that call for entrepreneurs to submit designs that meet the cost, safety, construction, and operational scaling required to beat coal in India and China in less than 10 years. It will take new ideas to break coal's momentum and to open up the minds of policymakers. This is a time when small teams can often uncover brand new or even forgotten paths to new solutions while large teams get trapped into non-solutions by incrementalism and convention. But to convert these new ideas into real alternatives, the world's governments need to go even farther. They must provide the nuclear regulatory redesign and physical facilities for prototype evaluation that will let private capital take on the tasks of technical innovation, experimentation, and rigorous stress testing, even as the eventual permitting authority remains with public regulators. Innovation and regulation must proceed hand-in-hand, but regulators must allow entrepreneurs to pursue those innovations with a relentless urgency that matches the severity of the "unknowable" threat which the world faces from global warming.
Finally, if you have the time, you might look at the online Forbes comments section as well as the HBS Working Knowledge comments section at the bottom of the article. The exchange between Forbes commenters 'daviddelosangeles' and Jeff Walther is well worth reading, as is the discussion among Walter, Mohammed Athari, and Paxus Calta. Also, Robert Hargraves dropped by and mentioned his book, THORIUM: energy cheaper than coal, which I found to be a useful compendium of energy information of all kinds.
I certainly don't know the future. Many things have happened that I would never have thought possible. I would have never believed that Chinese social choices around urbanization and industrialization could lift hundreds of millions out of poverty so quickly. I would have never believed that the technological innovation around shale gas and tight oil would allow the US access to such huge stores of secure, domestic energy so rapidly. Things change and often quickly. I think we all need to keep our minds open to change, while urgently pushing for achievable, effective, and truly global solutions to the challenges of global warming.
Thanks again for your time.