A Plan that Adds Up

An Engineer Looks at Global Warming, Part 3.

This concludes the three part series: An Engineer looks at Global Warming.

In Part 1, we found we probably have the better part of a century to react to global warming. In Part 2, we discovered the enormity of attempting to replace fossil fuel. If we screw this up, we could kill billions and rip civilization to shreds in the process. We also found that the current plan based on wind and solar has been and will continue to be a profligate failure. This brings us to the core question: what should we do? How do we balance the costs of global warming and the costs of replacing fossil fuel?

Our ability to adapt to global warming and, if necessary, climate engineer depends on a wealthy, cohesive society. We have some time. We must use it wisely. Greta notwithstanding, disruption and panic are precisely what we do not need. The reduction in GHG emissions must be orderly, balancing the benefits of the reduction against the costs. In David MacKay's words, we need a plan that adds up.

Unless we have a low CO2, massively scalable, non-intermittent source of electricity that is cheaper than coal, nothing happens. With such a source, the grid will automatically decarbonize over a power plant life. If and only if competition and technical progress keeps pushing the real cost of this power down, we can electrify most building heating and most light vehicles. If and only if we have such electricity, we have a shot at producing hydrogen at $1.50/kg. Now we can make ammonia for fertilizer without methane, and possibly convert primary steel making away from coal and coke. If and only if we have hydrogen at this price, we should be able to produce synthetic liquid fuels, at a cost that is close enough to petroleum that a tolerable carbon tax will make them competitive.

Where in the world are we going to find a low CO2, dispatchable source of electricity that is cheaper than coal? To find out, we need to go back to the 1960's.

A tragic history

Nuclear power emerged at just about the most difficult time possible economically. In the early-mid 1960's, the real cost of oil was at a all time low. The majors were buying oil in the Middle East at about a penny a liter. Oil was so cheap that it was pushing into electricity generation, the long time preserve of coal. This in turn forced the price of coal down, so it too was at an all time low. This was the cutthroat market that a technology that did not exist 15 years earlier, a technology that was just starting down a steep learning curve, had to enter and compete in. Amazingly it did so. Thanks to nuclear's incredible energy density, these fledgling plants were able to produce electricity at 0.37 cents per kWh in 1965.¹ That's less than 3 cents/kWh in 2020 money.

But the cost of nuclear power escalated rapidly in the 1970's. By pricing oil out of power generation, the Oil Crisis created a boom for coal and nuclear. In the boom of the early 70's, nuclear lost control of its costs, as did coal. This was accompanied by futile regulatory attempts to ensure we would never have a release of radioactive material. These attempts led to ALARA, the regulatory principle that any exposure to radiation is unacceptable if the plant can afford to reduce it further. In other words, there are no limits. And the criterion is not whether the benefits of the reduction, if any, outweigh the costs. The criterion is: can the plant afford it? ALARA mandated the regulator to force the cost of nuclear power at least up to the cost of its competitors.

ALARA quickly priced nuclear out of business. In the USA, new nuclear plant ordering dried up in 1975. This was four years before Three Mile Island, and a time during which nuclear power enjoyed strong public support, When the boom ended, coal costs fell back to pre-boom levels in real terms. But this prohibitively expensive regulation could not be rescinded. The regulatory ratchet only works in one direction. US nuclear was stuck with top of the boom costs. Vogtle 3 and 4 will cost more than $10,000/kW.

When we build a nuclear plant, we give an omnipotent regulator control over the project. The regulator sees no benefit from the zero pollution, nearly CO2-free electricity produced by the plant, but he owns any problems. To escape that responsibility, he relies on rigid procedures and voluminous paperwork, which documents that all procedures have been followed religiously. So whatever happens, it's not his fault. By stifling technical progress, squashing competition, demoralizing workers, diverting management, and diluting responsibility, this perverse set of incentives often results in shoddy quality. It always results in additional costs and delays. If unchecked, those costs explode and the delays become interminable, as happened at Vogtle and elsewhere. This does not concern the regulator and it is his incentives that control the project. Unless this is changed, we are going nowhere.

Market Regulation of Nuclear Power

We have faced the problem of regulating beneficial but hazardous activities before. In the 18th century, ocean transportation was both highly beneficial and extremely hazardous. The solution was insurance. But the insurers needed to understand the risk they were insuring. So they set up ship inspection services called Classification Societies. The Classification Societies not only inspect ships, they set the rules by which ships are built, and certify that a ship complies with those rules. There are roughly a half-dozen major Classification Societies. They are paid by the shipowners. The Classification Societies must compete for shipowners. This sets up a balancing mechanism. If a Classification Society is too strict, it loses business. If a Classification Society is too lax, its certification becomes meaningless and won't be accepted by the insurers.

Overall the Classification Society system has done an excellent job of delivering the benefits of international trade. The real cost of transporting goods across oceans has decreased by multiple orders of magnitude. And vessel safety has improved markedly, albeit from abysmal levels.

With the advent of high pressure steam in the 19th century, all sorts of formerly unimaginable things became possible. Trains, ocean liners, electricity. At the same time, a whole new danger was unleashed on the public. In the mid-19th century, fatal boiler explosions were running at better than 100 per year. Between 1837 and 1878, there were at least 10 steamboat explosions that killed 20 or more people. The worst of these occurred on the Mississippi near Memphis on April 27, 1865. The steamboat Sultana was badly overloaded with Union soldiers on their way home at the end of the Civil War. At least 1547 were killed when 3 of her 4 boilers exploded.

Once again the solution was insurance combined with inspection and certification outfits. In Europe, the inspection services are called TUV's. Like the Classification Societies, the TUV's must compete with each other for the inspection business. Like the Classifications Societies, they must find the sweet spot between being overly strict and overly lax. The system has worked well, delivering the benefits of high pressure steam, allowing technological improvement, with eventually an excellent safety record.

The Classification Societies and TUV's have expanded their services to include all sorts of facilities: offshore platforms, dams, refineries, etc. The core problem in the regulation of hazardous, beneficial activities is finding the right balance between safety and economy. The Classification Societies and TUV's don't always get the balance just right, but they cannot stray too far from the sweet spot.

We must replace the current omnipotent regulator with a system based on the insurer and competitive Certification Societies. If do that and make sure that nuclear power plant vendors must compete with each other in the way coal plant vendors do, competition and technical progress will force nuclear plant costs down to less than $2000/kW and then keep pushing those costs down. The power would cost 3 cents/kWh or less.

Coal could not compete. Gas could not compete for baseload in most places on the planet. Wind and solar could not compete except in a few niche markets, avoiding a debilitating drain on the planet's precious resources. The electrical grid would decarbonize automatically, efficiently. and reliably.

Net Fifty by 2100

If and only if we quickly come to our senses and regulate nuclear intelligently, then largely decarbonizing the electricity grid, over the next 40 years is possible. But that only cuts GHG emissions by about 25%, Figure 1.

Figure 1. GHG emissions by sector

If and only if we keep the cost of nuclear electricity close to 3 cents/kWh, can we expect to make solid inroads into building heating (6%) and light road transportation(8%). But battery based electric vehicles will only cut life cycle emissions by about two-thirds. Another 10% is as much as we can expect here. If and only if we push the cost of nuclear electricity down to 2 cents/kWh, we can expect to replace fossil fuel based hydrogen in ammonia (fertilizer) and refining (1-2%); and possibly use hydrogen as the reductant in steelmaking (6-7%). With and only with truly cheap nuclear and a tolerable CO2 tax, we have a shot at replacing as much as 50% of fossil fuel emissions by 2100 in a non-destructive fashion.

This future is similar to but not quite as optimistic as the IPCC Scenario SSP2-4.5. Table 1 shows the IPCC AR6 projections of the average global temperature rise in 2090 relative to 2005 for their 5 major scenarios. Unscreened is a straight average of all the models in the IPCC stable. Every model gets an equal vote. Screened is an attempt to give more weight to the models that do a better job at replicating the past than the models that don't. But based on past model performance, even the screened numbers are probably 25% high.

Table 1. IPCC 2090 temperature rise for 5 major scenarios.\cite{ipcc-2021}[Tables 4.2, 4.5]}

Accepting the IPCC numbers, our schedule will result in about a 2C increase in average global temperature relative to now by the end of the century. The IPCC claims this will result in a mean sea level rise of about 0.5 meters. Is this tolerable or do we massively disrupt society in a futile attempt to avoid this warming?

Unchain nuclear power

So here's the plan:

1) Eliminate all feed in tariffs, tax credits, mandates, renewable energy certificates, subsidies of any kind, to any source of power.

2) Impose an incrementally increasing CO2 tax.

3) Stop telling the Two Lies.

4) Regulate nuclear power like we regulate other hazardous, beneficial activities. Underwriter Certification will work.

5) Ensure there is competition in the provision of nuclear power.

6) Encourage the testing of new designs by providing a nuclear protopark on a tenant pays basis.

7) Do nothing else.

Simple. All this can be done with pen strokes. Many will say such a simple policy is impossible. They may be right; but, if so, we are going to find out what happens in the doomsayers' worst CO2 emissions scenario, almost certainly compounded by a famine spreading, civilization destroying, futile attempt to avoid whatever that outcome is.

1. Bupp, I. and Derian, J., Light Water, How the Nuclear Dream Dissolved, Basic Books, 1978. page 90.