'Dirty' Energy - A Misappropriation of Resources

This is a response to Energy: why we need coal and [sic] oil and nuclear power.

Let's first define the overall problem: The world needs energy, and we are getting most of it from a finite resource base. When we run out of coal, or oil, or yellowcake, we better have an alternative.

The benefit of shifting away from 'dirty' sources has been tied to environmentalism, but I will posit that instead, the shift should happen, and should happen for economic reasons.

The finite resources available to us are better spent on creating durable goods than creating energy.

Let me address the hydrocarbons first: Coal and oil are both crucial components to certain industrial processes, ones that make our lives infinitely more comfortable. Oil is a key component of pharmacuticals, lubricants, and plastics. Our lives wouldn't be that comfortable if we couldn't make hydrocarbon-based tumor suppressants, couldn't lubricate our engines, and couldn't have plastic.

If we burn these resources for energy, we are screwing ourselves out of durable goods. The better example is coal. Here we are burning all this coal for energy, wasting it, when the resource could be better used. The second largest use for coal is in steel production. There is no better way to make steel from iron ore than through a basic oxygen converter. This process requires massive amounts of O2 and massive amounts of coke (charcoaled coal). As we mine out the Appalachian mountains, we are using up our stockpiles of low-sulfur high BTU coal. We then have to shift to the inferior coal of the Powder River basin. By using coal for energy, we are screwing ourselves out of eventual high-yield steel production. Electric arc furnaces with recycled irons and steels will not sate worldwide demand.

The other argument against coal is an opportunity-cost argument. Say we strip-mine 100 million tons of coal from West Virginia. We just got ourselves 2 billion dollars of coal. However, we just rendered many square miles into an uninhabitable, unusable, heavy metals laden wasteland. We lost the opportunity to use that land for the next 25-40 years. We could have farmed it, logged it, hunted in it, fished in it, or done any number of things. The opportunity cost of using coal is often higher than not using it. That is a problem.

So, do we want to use a finite resource for short-term benefit (namely generating electricity), or do we want to use it carefully, to create durable goods, and thus wealth.

The last point has to do with nuclear energy. Modern reactors are a fine example of how far the nuclear industry has advanced. Waste levels are fractions of what they were decades ago, and the energy source is more viable now than in years past. The problem is, nuclear energy isn't a viable solution right now.

Once nuclear plants are a certain size, the only way to construct them safely is with a monocast/monoforged containment vessel, cased in concrete. So, unless you want several hundred small plants (which is not economically viable), you need to use a monocast vessel.

Here is the kicker: We can't build the containment vessels. If we wanted to, it would take 10 years to develop the infrastructure, do a half-dozen practice castings, and finally, maybe install one. Oh, and find someone who wants to spend the tens of billions needed to do it.

Japan Steel Works, famed for its Katanas, is the only company in the world that can do precision casting/forging 600 tons at a time. Yes, competitors are gearing up, but mainly for their respective domestic markets. Besides, given recent quality assurance issues, do you really want to buy a nuclear containment vessel from China First Heavy Industries? QA is tough, especially 500-600 tons at a time. I was doing some research about precision cast parts related to a barge accident in the Northwest US, and we can barely cast 20 tons with high precision in the US. So, we are not about to cast these in the US of A.

So, the answer is: Get in line. Give Japan Steel Works $100 million, wait 9 years, give them another $250 million, wait a year, and you can take delivery of a brand new precision-cast and forged containment vessel.

Alternatively, find someone willing to drop $10 billion to build a steel plant comparable to Japan Steel's facility. Drop another $2 billion on research, tests and failed castings, and you will have a decent casting 10 years later. Maybe. Don't plan on making any more than 20 containment vessels, because that is all the US market will support. Given the sunk cost of building the plant capacity, no investor will touch it. Of course, the government could do it, but that is what Republicans call socialism, and admitting that the government can function beyond the capacity of private industry is not something that comes easily to many conservatives. Perhaps another few dozen can be sold on the export market, but we don't subsidize our steel industry enough to make it competitive in the global market.

Bloomberg article for details.

I think nuclear energy done well is a good idea, especially with newer disposal technology. It just isn't that feasible right now, and has to be thought of in a 25-year timeframe.

The bottom line with 'dirty' energy is that it is not a good direction to expand in. We have spent decades externalizing or ignoring the associated costs, and it is time to move on to energy sources that leave us less vulnerable to finite resource allocations.