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Monday, June 30, 2014

Lessons from a failed energy revolution: the real reasons of the nuclear failure



(Image from global warming art). In this post, I argue that nuclear energy ceased to be a viable option in the world's energy mix as the result of the disappearance of the subsidies it received in the form of plutonium purchases by the military. This event was accompanied by a demonization campaign that forever destroyed the reputation of nuclear energy as an environmentally benign technology. In this story, there are several points of contact with the present situation with renewables, targeted by a demonization campaign destined to prolong the agony of fossil fuels. (note, this post was slightly modified on Aug 2014 in response to requests to clarify that the civilian nuclear industry never "sold" plutonium to the military. This was clear to the author from the beginning, but the way the older version was written could generate some misunderstandings)


So far, no energy transition has been planned or managed in advance. Moving, for instance, from wood to coal or from coal to oil was the result of price mechanisms which made the transition convenient for everybody. There never was any need for governments to subsidize diesel locomotives to replace steam ones.

Today, we are going through a new energy transition, one that will take us from fossil fuels to renewable energy. The problem is that price mechanisms, alone, may not be sufficient to drive the transition fast enough. Hence, many governments have enacted rules and created incentives designed to favor renewable energy. These measures have been successful in promoting the growth or renewables, but, right now, the incentives are under attack everywhere in a situation of increasing competition for ever diminishing resources. So, the transition is at risk.

As it is often the case, the past can be a guide for the future and we can learn something by looking at a past case of a failed energy revolution: nuclear energy. This story is worth retelling today because of the many points which are starting to appear surprisingly similar to the present situation with renewables.

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The nuclear industry started, literally, with a bang; with the first nuclear bomb of Alamogordo in 1945. But nuclear reactors are older than that. The Alamogordo warhead used plutonium produced by the first nuclear reactor in history, the "Chicago Pile" which had started operating in 1942. It had been built exclusively to produce plutonium for military purposes, just as the other reactors built during the same period. These early reactors generated a lot of waste heat and it was soon clear that this heat could be used to produce electric power. That was the origin of the concept of "atoms for peace", popular in the 1950s.

In the mid 1950s, the first commercial reactors for the production of electric power appeared and, subsequently, nuclear energy production grew rapidly, to the point that it seemed possible to create an energy system based entirely on nuclear sources, at least for the production of electricity. It was a moment of great optimism and the age of electricity "too cheap to meter" really seemed to be around the corner.

But, in the 1970s, something happened that brought the expansion of the nuclear industry to a screeching halt. From the mid 1980s onward, the number of new reactors has been barely sufficient to replace the old ones, with the total production of nuclear energy slowing down its growth and showing a decline during the past few years (image on the right from Wikipedia). The nuclear industry failed its objective of becoming the world's main source of electric power; a market that was instead kept by fossil fuels; in particular by coal.


Various interpretations have been proposed to explain the decline of nuclear energy. Often, several different causes are said to have acted together as you can read, for instance, in "Ten Blows that stopped nuclear power." By far, however, the most popular interpretation seems to be that the nuclear industry was killed by the growing environmental movement. It is an interpretation that pleases both nuclearists (it gives them someone to blame) and environmentalists (who see themselves as a powerful force in the issue).

These explanations make some sense. But do you really believe that as many as ten causes all acted in the same direction to explain such a clear trend as the nearly complete stop to the construction of new reactors? And do you really think that the environmental movement could have such a success in bringing on its knees a supposedly healthy industry, considering the success that the same movement is now having, for instance, in stopping the emissions of greenhouse gases from coal plants?

Rather, I propose here that there is a clear single cause that brought nuclear power on its knees in the 1970s. It was, simply, that nuclear energy stopped being subsidized by the US government. At that point, building new plants became unprofitable and the expansion of nuclear power stopped.

The question of the subsidies needs some explanation, because the nuclear industry often claims it needs none. A list of subsidies is given in the 2011 report by Doug Koplow, who, however, seems to have missed what was probably the historically most important subsidy to the Western nuclear industry: the production of plutonium for the US military to be used for military weapons. This market was probably of the same order of magnitude as that resulting from the sales of electricity (for an estimate of the budget involved, see note at the end of this post)

With the expansion of nuclear power, the production of plutonium increased in proportion. But, in 1977, the US senate approved a law forbidding the reprocessing of spent fuel from nuclear plants nuclear plants to produce plutonium. In a sense, it was a badly needed decision, since the growing production of plutonium was creating an economic and strategic disaster. The risk of nuclear proliferation increased with the amount of plutonium produced and the number of warheads in the US and in the URSS military systems was growing out of control with more than 30,000 nuclear stockpiled in the US alone. That gave to the concept of "overkill" a whole new meaning (image source). Apart from the strategic problems it created, plutonium purchasing was also a considerable financial burden for the US government, at that time in a serious financial difficulties generated by the ongoing oil crisis.


The disappearance of the market for plutonium reprocessing was a major blow to the nuclear industry. Not so much in purely economic terms, because the civilian nuclear energy never could produce plutonium - they were not equipped for this purpose. But it cast a general doubt on the financing of new plants since the original market for which they had been developed - military plutonium - had disappeared. As a result, in the tight financial moment of the late 1970s, it became nearly impossible to find the resources to pay for new nuclear plants. Coal plants could produce higher revenues at smaller initial costs and it is there that investments in energy production were directed. In a sense, we can say that the nuclear industry was a victim of the crisis of the industry that it was supposed to replace: the fossil fuel industry.

The (apparent) end of the oil crisis in the second half of the 1980s eased the world's financial situation, but it didn't help the nuclear industry, which had failed in developing lower cost technologies and still couldn't compete with fossils at the low prices of that period. The new crisis of the first decade of the 21st century reversed again the trend. Today, we see new claims about the need of going nuclear and some evidence of new nuclear plants being programmed. But this nuclear renaissance is slow to start and it may do little more than replace the obsolete plants which badly need to be scrapped.

An interesting point in this story is how stop to the nuclear subsidies was accompanied by the demonization the nuclear industry.  Up to the early 1970s, environmentalists had been generally neutral and often favorable to nuclear energy. Afterward, instead, the tide turned decisively against nuclear energy, with the fortunate slogan "Nuclear? No thanks" created in 1975. We have no evidence that the anti-nuclear campaign was masterminded by some secret agency (but it cannot be ruled out, either). What we can say is that the campaign was extremely effective and in turning nuclear power into the absolute bugaboo of all environmentalists.

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Now, let's move forward to our times and let's look at the situation of renewable energy. The similarities with the story of the nuclear industry stand out clearly. The renewable industry enjoys significant subsidies from governments and grew rapidly to production levels comparable to those of the nuclear industry.  Whereas nuclear subsidies were generated mainly by military needs, subsidies to renewables have been generated by the perception of the horrendous external costs of both fossil and nuclear energy. In the first case (fossils) mainly in terms of climate change, in the second (nuclear) in terms of proliferation, contamination, etc.

The problem with external costs, however, is that they are paid by the whole community while the profits of the activities generating them go only to the owners of the plants. Hence, when subsidies or "internalization" start to bite on profits, fossil lobbies will start fighting back. One of the ways they have to undermine public support for renewables is to use demonization campaigns in the media. These campaigns are especially evident in wind power, but also for photovoltaic power and other clean energy technologies. It seems that this approach is starting to pay off for the fossil lobby. Today, a significant fraction of the environmental movement seems to be considering renewable energy almost as evil as nuclear energy. 
 
We are not yet to the point to see the diffusion of slogans such as "Photovoltaics? No thanks" but never underestimate the power of media and the gullibility of people. PR campaigns tend to generate entrenched legends which, in the long run, are extremely difficult to dislodge from the collective perception. We have examples of this behavior with the demonization of the study "The Limits to Growth" of 1972 and, today, with the demonization of climate science. There is a real risk that a well financed negative PR campaign coupled with punitive financial measures could reduce the renewable industry to something similar to what the nuclear industry is today: obsolete plants and old men reminiscing of past glories.


But the transition to renewable energy is the only hope we have to overcome the resource crisis and the climate crisis we are facing. Renewable energy is showing rapid progress: costs are going down, efficiency is increasing, and new solutions for energy storage are being developed. Renewable energy is now a credible competitor for fossil fuels even without subsidies and it needs not suffer the same failure of nuclear energy. But we need to watch out for a last ditch attempt of the fossil lobby to get rid of a competitor by lies and slandering. We need to keep the momentum for the transition to a better world. And to keep it, we must fight for it.


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Note: plutonium and the nuclear industry. 

I haven't been able to find data on how much money the military paid for the plutonium they used for nuclear warheads during the 1960s and 1970s. Maybe it is still a military secret, but we can at least make a rough estimation.

First of all, the total amount of plutonium produced for the US military alone is of some 111 metric tons (source). Since plutonium does not exist in the Earth's crust, all of it must have been created in nuclear reactors. How much is this plutonium worth? At present prices, plutonium is said to be worth something between 1000 and 5000 $/g (source). So, all the plutonium stored by the US military is worth something of the order of 100 - 500 billion dollars. No peanuts, indeed  Now, consider that this sum was paid in an arc of time of about 20 years and that today the nuclear industry in the US sells about 40-50 billion dollars of electric power (source). We see, therefore, that the subsidy to nuclear energy coming from the sales of plutonium was very significant.

Let's try another approach. A 1 GW nuclear plant was reported in 1976 to generate something like 250 kg of plutonium per year (source). At today's prices, that could be worth between 250 million dollars and one billion dollars. According to the data available (source) a total nuclear capacity of 100 GW in the US generated 790 million MWh, that is, about 8 million/MWh per GW of nominal power. Let's take a value of 50 $/MWh (source), it follows that a 1 GW nuclear reactor generates revenues for 400 million dollars per year. Again, we see that the plutonium produced by the reactor  worth a significant fraction of the revenue from electricity sales, perhaps even more than that!

Of course, these data are obtained using the present plutonium prices; at the time, prices were surely different. And note also that the civilian nuclear industry never could  "sell" plutonium to the military - they couldn't do that because they lacked the facilities to extract and refine plutonium (of the right isotopic composition) from their spent fuel. They just provided their spent fuel rods to specialized plants which would extract and refine plutonium 239 which then was transformed into weapons or stockpiled. The calculation is just an estimate of the value of the plutonium production during the heydays of the nuclear industry, and that must have provided a significant benefit to the industry.



20 comments:

  1. For once I am going to take issue with you.

    Nuclear energy and renewables both started out as expensive (and therefore subsidised) alternatives to the older "dig it up and burn it" type of power production. But there the similarity ends. I have watched, over the last several years, the costs of wind power, and particularly solar power, descend gracefully from the realms of science fiction (suitable only for space programmes and islands) through large government subsidies to encourage take-up (by people such as myself) and on to the point now where "grid parity" is beginning to be reached (in, for example, India). The same thing simply hasn't happened with nuclear power: there has been no "learning curve" that the subsidies have helped.

    Here in the UK we had a very high feed-in tariff in 2010, which the government has since slashed. Though they did this for ideological reasons, by a happy coincidence it also made perfect sense: the price of solar PV has halved, so has the fit!

    Renewables come in smaller quanta (MW rather than GW) than nuclear power stations and can thus be mass-produced: this I think is the main reason for the price "learning curve" that we have seen, though there will be others.

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    1. Why take issue? I think we are in perfect agreement! The problem is that - yes - the cost of renewables is crashing down, but it still remains slightly above that of fossil fuels. That's perfectly sufficient for many people to say that renewables are completely useless. Basic economic principles at their best.

      So, what I say is that until we are well below the cost of fossil fuels, renewable energy risks to be demonized and marginalized.

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    2. I also added a few lines to the post to explain this point better.

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  2. Ugo, Are you sure about this? Without doing any extensive research, I think that virtually all of the plutonium acquired by the US military was from Hanford and Savannah River reactors, not from civilian power reactors. I think that all of the plutonium created in civilian reactors is still in the waste fuel rods.

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    1. Reasonably sure. Two single reactors wouldn't have been enough to create a hundred tons of plutonium. And then, otherwise, why should the US Senate have bothered with a law to forbide plutonium reprocessing?

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    2. Ugo, seriously :-( It's physically impossible to use the plutonium generated by commercial boiling or pressurized water reactor inside a bomb. The percentage of Plutonium 240 inside it is so high that the bomb will never properly explode. And even the reactors that are technically able to have this dual use, UK Magnox, Russian RBMK, former French UNGG, it's very inconvenient to actually do it, requiring constant removal of the fuel before too much 240Pu accumulates inside it, so much that it has actually almost never been done. Plutonium for bombs is generated inside dedicated reactors that don't generate one bit of electricity, like Israel's Dimona. Read the very complete explanation here if you wish http://depletedcranium.com/why-you-cant-build-a-bomb-from-spent-fuel/
      In France, which has one of the cheapest electricity of Europe, the economy of it is fully based on PWR reactors.

      So why so many difficulties for nuclear ? In your description above, you seem to forget that there was a very simple and cheap alternative to nuclear, coal power. In the 70's, all the nuclear power that wasn't build had been directly replaced by coal, big centralized power replaced by another big centralized power, several proposed coal were directly replaced by coal ones on the same spot. So the replacement just required that the efforts of the environmental movement make the cost higher than coal, nothing more which wasn't as hard as you imagine.

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    3. Jmdesp, I think you didn't really read my post: it is exactly what I say: nuclear never could compete with coal in economic terms. It could compete in the energy market only because of its military applications.


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    4. Dear Mr. Bardi,

      I've read your posts for many years and you have been an inspiration to me and to many. But you are completely wrong on this one! Military grade plutonium was not produced by the civilian nuclear power sector. It was almost completely sourced from fully government-owned, special purpose reactors. As several commenters have already explained.

      I would be very grateful if you reviewed this article and (re)checked very carefully the statements you are making. The nuclear power debate is extremely important and many renowned scientists and environmentalists (including Dr. James Hansen) believe that nurturing and expanding the nuclear option is extremely important in the battle against climate change (and other urgent energy related issues). I am concerned about the effect your article will have on the people who (like me) read your work and consider your opinion seriously.

      Would you consider writing a follow-up article in which you correct some of the statements about nuclear power economics that you made here which are clearly completely wrong?

      Thank you,

      Joris

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  3. From this source http://fas.org/sgp/othergov/doe/pu50yc.html

    "The total DOE plutonium acquisitions for the period 1944 to September 30, 1994, were 111.4 metric tons. Of the 111.4 MT plutonium acquired, 104 MT were produced in Government reactors; 103.4 MT in production reactors, and 0.6 MT in nonproduction reactors. In addition, 1.7 MT were acquired from U.S. civilian industry, and 5.7 MT from foreign countries."

    "The United States Government has used 14 plutonium production reactors at the Hanford and Savannah River sites to produce plutonium for the U.S. nuclear weapons stockpile and DOE research and development programs. From 1944 to 1994, these reactors produced 103.4 [note 12] metric tons of plutonium; 67.4 MT at Hanford, and 36.1 at Savannah River."

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  4. Ugo - this is an interesting comparison you propose, and I think a timely warning.

    There is one matter of record that perhaps warrant some expansion - namely that there wasn't a transition from wood to coal, but from wood to charcoal in the start of copper smelting around 6,000BC, with the development of coppice forestry as a standard means of the efficient production of the feedstock. That sustainable energy resource endured for over 7,700 yrs until the largest industrial building on the planet, an iron foundry, was operating at Backbeck in Cumbria, UK. It was importing iron ore by sailing barge from Sweden and carting it a few miles to the steep ground of the foundry, and it was drawing its charcoal from coppices across a huge area of the lake district, with trains of ponies with panniers as the transport.

    It was of course limited in scale by the additional costs of transporting charcoal from hill land further off, and by the costs of putting good farmland nearer to the works under more coppices.
    That factor of lack of growth capacity was surely a major component in the decisions to invest in coal mines and iron pits in South Wales which, within a few decades had taken a huge fraction of the rising demand for iron.

    This is not really to challenge your proposal that transitions have been driven by price mechanisms, but actually rather to support your proposal that the choice of energy technology is also driven by a range of other factors.

    With regard to the rate of the renewables growth of market share, it seems worth noting that they face not one but two hugely wealthy centralized large scale incumbent technologies, one of whom has been fighting for its survival for over three decades. There is a point here worth putting as a question:
    How many nuclear plants would have been ordered worldwide in the last decade, if the huge funds that have gone into the R,D&D of intermittent Wind & Solar since 1983, had instead gone into baseload Geothermal and Wavepower ?

    The year 1983 is chosen specifically because that was three years after the EU Comn had a report delivered on the potential of Wave Power, which was found to be capable of supplying 80% of the EU15 nations' total power requirements. And 1983 was the year when one Walter Marshall, nuclear engineer risen to be head of the UK's Central Electricity Generating Board (then the largest generator on the planet) chose for no visible reason to put the world's largest wind turbine on the Shetland Islands north of Scotland. For its opening he flew a planeload of journalists up from London for a tour and talk and very liquid lunch, with no opportunity given for hearing the locals' views on the thing. The journos duly wrote glowing reports with some nice pics and never went back. Marshall by contrast made steady use of the plant, feeding his version of its production rate and RoC both to the ministry in London and to the EU commission in Brussels. And by his efforts officials were trained to view wind power as the viable option for renewable power across N Europe.

    This might seem against the interests of a nuclear proponent in the midst of massive anti nuclear demos, but consider the outcomes.
    The society was steered into promoting the most intermittent and visibly intrusive version of RE available, thereby neatly splitting and weakening the environment movement while also driving a wedge between wind proponents and country people preventing their co-operation that would have been to the massive detriment of future nuclear construction. And those two splits are still potent to this day.

    Continued

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  5. Continued

    The CEO of EON, is on record explaining to politicians that they nust limit RE to 20% of supply for the nuclear industry to have a viable fraction of the baseload market share, but the industry has evidently gone far beyond lobbying into outright interventions.

    For instance, in '75 a scientific team in Cornwall sent in the results of their test bores for Geo-thermal, which were very positive. As one of them described it, "It was an entirely positive report, and we sent it in to the ministry expecting the first wells to be sunk within a year or so, and then, nothing . . ."

    And for instance, the world class Wave Energy engineer, Prof Stephen Salter, worked on a range of devices until the mid '80s, all of which were ignored. He then designed the Osprey, a large beach-mounted air-breathing device that was to be floated into position. Having grudgingly funded the prototype after insisting that it be beach-mounted not offshore, the ministry then took over its delivery from the River Clyde to Doonray, a beach in the far north contaminated with nuclear waste where nobody goes without a pressing reason. The huge and supremely well-maintained ocean-going commercial tug towed the device out onto the river, and then stopped, claiming it had broken down. It sat there for two days with Salter unable to get any information, while the weather window narrowed. Suddenly it was working again and set off out into the Atlantic. By the time it reached Doonray the incoming storm had arrived, and there wasn't time to pump its ballast tanks full of sand before it was destoyed by the pounding from storm waves.

    Meanwhile, the ministry had decided that the government's Nuclear Research Establishment at Harwell should be used to examine the very positive report on the design's projected commercial viability. Salter somehow got sight of the results, which consisted of them having decided it needed ridiculous components and materials, such as £800/T special steel rather than £150/T marine grade, and having simply reversed the positive findings in the executive summary for the minister to read. A nasty fuss ensued within the establishment of which the public heard nothing. Salter told the Guardian newspaper that he'd been told funding for a replacement would be made available if he didn't talk to the press, but no such funding ever appeared. Salter now works on the Marine Cloud Brightening option of the Albedo restoration mode of Geo-engineering.

    So how many nuclear plants would have been ordered worldwide in the last decade, if the huge funds that have gone into the R,D&D of intermittent Wind & Solar since 1983, had instead gone into baseload Geothermal and Wavepower ? My guess is none at all. There would be simply no justification for investing in hideous and potentially hazardous plants that provide profits for construction companies' shareholders, wildly expensive power for one generation and a rotting concrete hulk of nuclear wastes for perhaps a thousand more generations.

    From this perspective I very much doubt that the fossil fuel lobby is behind the general obstruction of action on climate or that it is not the prime opponent of the deployment of RE. It knows full well that the CO2 outputs are going to have to stop. The nuclear lobby by contrast sees a potential renaissance if it can only hold off the renewables, particularly the baseload options, for a few more years until old plants' closures make nations desperate enough to subsidize nuclear once more.

    All the best,

    Lewis

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    1. Yes, this is a fascinating story where choices made in the past will be affecting us for a long time in the future. Surely, these choices are not made rationally, but on the basis of pressure from this or that lobby. We are moving into the future like a drunken man trying to get back home by crossing a busy highway......

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  6. Ugo - please ignore the word 'not' in the last para's second line.
    Working too late - won't do.

    L

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  7. The Nuclear Industry is trying to hold back renewables while holding all the responsibility for waste storage and decommissioning.

    Good luck with that.

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  8. Ugo - some further rather off-topic thoughts.

    As you may recall, I've had rising doubts about the predictability of what may be called a PALF event - being a Peak of Affordable Liquid Fuels -
    since exploring the potentials of coal-seam gasification + GTL, and of methane hydrate extraction + GTL.

    However, with an interest in co-product methanol from biochar production for Carbon Recovery,
    I've been searching George Olah's work and have found a 2011 article on a new plant in Iceland
    that uses geothermal power to produce methanol from electrolytic hydrogen plus CO2 (captured by more electricity I think).

    The plant is intended to provide 2.5% of Iceland's liquid fuel, cut with petrol,
    and is claimed to be commercially viable to scale up to match the vast conventional gas-to-methanol plants.
    Very little info is given on the process,
    apart from it being electro-chemical at low temperature and pressure and needing little space
    - which is very different from the conventional wood-to-syngas-to-methanol process.

    IF the claims of commercial viability at scale pan out,
    it would appear to offer a replacement for much of the depleting fossil oil's end products,
    thereby avoiding the PALF event.
    However it is at best considerably less than carbon neutral,
    and as it is essentially electricity-to-methanol there has to be a question
    over the viability of deploying dedicated renewables at a sufficient rate to match crude oil's depletion.

    The rather poorly written article is at:
    http://www.chemicals-technology.com/projects/george-olah-renewable-methanol-plant-iceland/
    and I wonder, if it is of interest to you, whether you might apply your expertise
    to posting further info on the technology's process and prospects ?
    Of particular interest is the issue of whether it may be adaptable to a CO+CO2+H2 syngas from charcoal production,
    as a low pressure and temperature process would greatly raise feasibility in remote poor communities.

    Regards,

    Lewis

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  9. I have to take issue with this post as far as the US government bying Pu from utilities- it basically didn't happen. As Joe pointed out above, nearly all the weapons Pu was produced by dedicated government-owned reactors. Commercial reactors would go too far in burnup, depleting the Pu-239 with higher isotopes which are less desirable for weapons. A short-lived reprocessing facility at West Valley, NY eventually closed for economic and environmental reasons in 1972. The presidential directive banning reprocessing (initially by Gerald Ford, later affirmed as permanent by Jimmy Carter) came about after India demonstrated a nuclear weapon developed on the back of commercial reactors.

    What led to the slowdown in reactor deployment was that, after the initial enthusiasm and contruction starts, the huge cost over-runs of the new reactors was becoming apparent to investors. The economic slowdown of the later 1970s, along with the environmental concern and impasse over nuclear waste storage killed the industry in the US. In short, the US commercial nuclear power industry never made any significant money- and never planned to- from selling Pu to the military.

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    1. You are right: the government did NOT buy plutonium from plants. If you look at my post, you see that I never say that they did. My interpretation is that for a certain period plutonium was a commodity and as such had a commercial value. This commercial value added value to the nuclear industry, although not as in terms of direct sales. So, I believe that when this value was lost, then the nuclear industry lost its profits. IMHO!

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    2. But you said:
      "...important subsidy to the Western nuclear industry: the production of plutonium for the US military to be used for military weapons. This market was probably of the same order of magnitude as that resulting from the sales of electricity and WERE A MAJOR SOURCE OF PROFIT FOR THE OWNERS OF THE NUCLER PLANTS"

      I think saying "major source of profit" is a bit misleading if you instead meant "potential lost commercial value."

      -Nathan

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    3. Right. I'll fix that sentence. It is indeed misleading. Thanks

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  10. To Hell with transitions, with planning, and with subsidies. If it isn't profitable it should not exist.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)