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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Haim R. Branisteanu who wrote (93850)4/27/2008 8:10:13 AM
From: Elroy Jetson  Read Replies (1) of 110194
 
French government owned COGEMA / AREVA are well run in terms of safety and under no obligation to break-even or turn a profit.

This sort of arrangement led to the enviable safety record and great service of Qantas airlines. It remains to be seen if Qantas can continue this record since they have become private.

It seems this can provide superior results to a profit driven organization bent on cutting costs at the expense of safety.

The question that needs to be asked is how big of a blank check should be written, and why?

Gasoline would be tremendously economical if the purchasing of crude oil were done by a government corporation and resold at a reduced price to refiners. Gasoline could be sold for perhaps $0.32 per gallon and the subsidy paid for with higher income taxes. In part this is done already with oil depletion tax allowances.

This is basically the arrangement COGEMA and AREVA have. Electric power is sold at a reasonable but a truly unknown part of their costs are paid for by income taxes. If everyone feels they're adequate receiving value for money paid, then fine. Otherwise, what's going on?

The problem with financial calculations for nuclear is they are atypical. What is the net present value of the cost of guarding nuclear stores for 10,000 years. America has been around for 200 years. Ten thousand is a tough thing to model.

At some point it's tempting to take short-cuts rather than really face up to facts. In the U.S. we simply store ever larger amounts of waste at each power plant because no one has a better solution. COGEMA wanted to dump their waste in the ocean but the rest of Europe said, excuse me but no.

Then there's the costs associated with a Chernobyl event, when even the safely designed and run plant goes wrong. When a safely designed and run refinery explodes, its easy to project the maximum cap on damages.

Nuclear is more like an LNG port in a crowded city, except worse. What's the cost of incinerating everything and everyone in a 12 mile radius in Long Beach in an LNG accident or criminal attack? With nuclear, the damage is generally less obvious but utterly larger in geographic area. With LNG the answer is isolation, as with an offshore mooring.

No one has really yet addressed these primary nuclear cost issues which simply destroys the real economics of nuclear power. Sadly as a result there have been minuscule efforts to truly reduce cost by switching to systems which reduce waste production and have magnitudes lower catastrophe costs when the inevitable accident occurs.
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