The Journal Editorial Report | July 22, 2005 | PBS
This week some Americans were paying more than three dollars a gallon for regular gasoline and with oil prices hovering between 55 and 60 dollars a barrel there is worry about high heating oil prices coming this winter.
Meanwhile, the House and Senate finally got down to work on reconciling their differences about an energy bill which cannot possible help much in the short run, but might, over the long run, improve domestic production of oil, natural gas, coal and nuclear energy.
Nuclear power is at the core of the president's energy plan. Recently he became the first president in more than a quarter century to visit a nuclear plant. The last was Jimmy Carter in 1979, during the crisis at Three Mile Island Nuclear Plant in Pennsylvania.
A cooling pump failed, ultimately causing a partial meltdown in the core of the reactor that threatened to make real the fictional nightmare envisioned in the then just-released movie China Syndrome.
There are 103 nuclear power reactors in the U.S. today using heat from nuclear fission to turn water into steam to drive turbines to produce electricity. They generate about 20 percent of U.S. electricity. Most of U.S. electricity today comes from more cost-efficient, but less environmentally friendly, coal or natural gas plants. By some estimates it will take hundreds more costly nuclear plants to meet U.S. long-term energy demands.
Since Three Mile Island was built, new designs for nuclear plants have been developed with significantly fewer working parts and 80 percent fewer pipes that are touted as less expensive to build and safer to run. And recently, small cracks have been developing in the once solid environmentalist wall against nuclear power.
A few environmental groups have suggested that the potential for a catastrophe from nuclear accidents or of disposing of dangerous nuclear waste may be the lesser of the two evils when compared to the real danger of global warming from continued use of coal or gas.
But most environmental groups still worry about nuclear waste and argue that the subsidies for new reactors, oil exploration and cleaner burning fossil fuels will get all the money, leaving little for developing wind, solar and other alternative energy forms.
PAUL GIGOT: Joining us to discuss all this are Bret Stephens, a member of the editorial board and Steve Moore, also a member of the editorial board who focuses on economics. Kim, France gets 75 percent of its electricity from nuclear energy, we get 20 percent. Are we about to see a nuclear renaissance in the United States?
KIM STRASSEL: There is an enormous amount of optimism right now in the nuclear industry about their prospects. Just in the past three years there's been a huge change. We hadn't made a power plant in 25 years, but just recently there has been money that is being collected. This is really due to two reasons. One is you have seen a big change, the Bush Administration and its nuclear regulatory commission have done a lot to give the industry some security about the regulations, what they need to do to move ahead. But also there has been a change in public attitude in that everyone seems to recognize that we have an energy problem. The demand is going to increase by maybe 50 percent over the next 20 years and we have a choice. We can either do more fossil fuel. There is no way a renewable energy is going to make a big difference here. Or we can turn to nuclear which is cheap, effective and has the added benefits of not a lot of emissions.
BRET STEPHENS: There's an irony here because one of the reasons why nuclear power suddenly seems more attractive is that people talk more about the dangers of global warming. Now, whether or not those dangers are real, the fact is that nuclear power plants don't emit greenhouse gases into the atmosphere. Suddenly there are environmentalists who are saying "Hey, we should take another look at nuclear power. We should not be as afraid of it when we are weighing risks and benefits. The benefits are looking much better from that point of view."
GIGOT: Steve, but can they raise the capital? We believe here in markets and no subsidies. Can nuclear energy compete with these other forms of energy on a market basis?
MOORE: It depends on the price of oil. At $60 a barrel, nuclear energy is looking increasingly economically attractive. The one issue that makes nuclear energy problematic is the political football of the nuclear waste. Where do you put it? That's a big issue in Nevada now in Yucca Mountain.
GIGOT: But right now we already do have nuclear waste. It is scattered at different sites around the country. A lot of the politicians who have those sites are suggesting that maybe it would be better if the waste were in Nevada, as opposed to say Chicago, where Dick Durban for example has come out in support of the waste site at Yucca Mountain, much to the dismay of his leader Harry Reid who is from Nevada.
STEPHENS: People are becoming smarter about the real risks of nuclear energy compared to other forms of energy. People die in coal mining accidents all the time, many more people than have ever died in nuclear accidents, at least in Western Countries. I think it is worth pointing out France, Belgium, Sweden, Japan, Germany, Finland, Spain -- all take more electricity from nuclear sources than the United States does. No one of thinks of those countries as environmentally hazardous places to be. I think more people in this country are realizing it's safer, it's cheaper, it's better, it might work for us.
GIGOT: Let's broaden our discussion. What about the energy bill moving through Congress? President Bush cites time and again that this is going to be a solution to our gasoline price problem.
STRASSEL: This thing just gets uglier every time that Congress deals with it. They are working right now to try to harmonize the Senate and the House bills. As far as I can see, at least the Senate bill, it is just going to raise prices for consumers in the short term. Two things in particular, an ethanol mandate, which is expected because ethanol is expensive to ship around the country. It should raise gas prices by up to 10 cents a gallon at the pump
GIGOT: By the way, do you know what the definition of ethanol is? Take corn, mix it with your tax dollars and you have ethanol.
STRASSEL: But the other thing that is very worrisome is something called the renewable portfolio standard. This is actually going to require electricity producers to have 10 percent of their power from renewable sources, that means solar or wind, over the next 15 years. It is expected to add $18 billion dollars to the cost for electricity companies which of course means $18 billion dollars the consumers will pay.
STEPHEN MOORE: This is deja vu all over again for those of us who lived through the late '70s, the last time we saw the spike in oil. It is almost as if George Bush has hired Jimmy Carter as his energy czar. All of these ideas in the energy bill, some of which you've talked about, subsidy for wind and solar and bicycle paths.
GIGOT: Wind, refined coal, clean coal, metallurgical coal facilities, fuel cells, hydro power, geothermal, biomass and on and on and on.
MOORE : People have such short memories. When we did it in the '70s, we invested billions of dollars in these technologies and guess what, they never produced a single kilowatt of electricity. Why? Because the oil price fell and they were uneconomical. That is as likely to happen this time around as not.
STEPHENS: Again there's another international irony because as we are investing in things like wind turbines. Other countries that have done this previously are discovering these aren't such great deals. Why? The wind doesn't blow all the time. The sun doesn't shine all the time. You have to keep the electricity grid up all the time which means that some of these "renewable sources" actually consume more energy than they produce.
GIGOT: What is the total amount of our electricity, Kim, supplied by renewables right now?
STRASSEL: I think it's no more than two or three percent. Now, there is a greater amount that is supplied by hydro, but environmentalists don't like hydro power because there are dams and water issues and the fish and all that. So they don't count that as a viable source.
GIGOT: Is there any relief in sight then, of these high gasoline and energy prices?
MOORE: Yes, but it is not going to come from these renewable energy sources. It is going to come down because what is happening with $60 a barrel oil is that everybody in the energy business is going out and finding new sources of oil just as in the late '70s. I think there is a good indication that by 2006 you are going to see oil prices start to come down because of new sources.
GIGOT: Because there will be a lot of alternative sources for oil? New sources for oil.
MOORE: Yes. And, by the way, we didn't mention the one positive feature. It's not in the energy bill, but an energy policy which is drilling in Alaska. Hopefully we'll do more offshore drilling. There is an incalculable amount of oil that can come from the sea and from Alaska.
GIGOT: Yes and $60 oil is going to help that Alaska drilling provision pass.