First of all, the statements about plant decommissioning and waste management being a significant added cost for nuclear, as well as the implied statement that it is not fully accounted for in the price, are both completely false. I'm not as familiar with the European situation, but in the US all plant decommissioning and waste management costs are paid by the utility, and are therefore fully included in the price. Despite this, nuclear has the lowest operating cost of any power source save hydro (in other words, the 1.8 cent/kW-hr cost includes all these back-end costs). All spent fuel management costs are paid for by a tac of only 0.1 cents/kW-hr on nuclear electricity. Plant decommissioning costs only add ~0.1-0.2 cents more.

These low impacts on power price are due to the effects of long-term compounding interest, and the fact that these costs are not incurred until the end of a plants ~60 -year life. Any financier will tell you that costs that don't have to be paid until way into to the future have very little impact on the cost (necessary price) for a service, or industry.

On the flip side, costs incurred up front have an enormous impact on power price, which is why the higher initial construction costs for nuclear are such a huge issue. The "opportunity cost" effect is so large that utilities, under a "totally free" market system will often still choose to go with gas even if the overall lifetime generation cost (ignoring interest) is far lower for a coal, nuclear, or hydro plant. At today's gas prices, nuclear and coal are more economic even if a substantial interest rate (~10%) were assumed. Unfortunately, utilities (and Wall St.) in the US have such a short term focus (along with a high perceived risk for the 1st few nukes) that even this will not be enough. Hence, the govt. should step in to provide financing under "reasonable" terms, at least for the first few plants.

Concerning the comments from the coal executive about coal being better than gas, I understand how CH4 is a much stronger greenhouse gas, and how gas leakage should be figured into the GW calculation. Despite this understanding, I remain highly skeptical that coal would have a lower overall impact on global warming than gas.

Furthermote, GW is only part of the issue. It is not even the main reason for nuclear's preferability over coal, as far as I'm concerned. People may have started to forget the good old fashioned pollution issues, in order to jump onto the latest bandwagon of global warming, but not me. The main reason to move away from coal is (and always has been) the horrible pollution effects, including emissions of SOx, NOx, Mercury, and particulates. Based upon these emissions (NOT CO2 emissions), it is estimated that coal kills ~10,000 people per year in the US. Also based upon these (non-CO2) emissions, European studies have estimated coal's external costs at ~7 cents/kW-hr (compared to nuclear's 0.1-0.2 cents). Once again, these external cost esitmates do NOT include GW concerns!

For these reasons, as well as GW, nobody should even consider the thought that coal is superior in any way to gas with respect to the environment. The reasons why we need nuclear (as opposed to just using all gas) do not have to do with environmental concerns nearly as much as they have to do with concerns of cost, energy cost stability, energy security, balance of trade, and the conservation of a precious and limited resource.

It bug me to see petroleum executives promoting increased use of the resource like that. Though it is tempting to get mad and advocate some sort of government intervention such as reclaiming of the resource, leaving drillers to make profits on value added by delivery only just like pipeline operators, it's no doubt too late in the game for such a drastic shift. A depletion tax should certainly be considered and no doubt will eventually be introduced as a signal to consumers of the value of the resource.

The only rational step available is an honest and fair "commons use" tax which adjusts the wholesale price of electricity to balance for a) pollution b) security costs for supply c) future costs to society of developing substitutes (eg. a company that burns natural gas now to generate electricity should have to contribute to the next generation's cost of having to substitute hydrogen as a home heating fuel) d) a reliability-discounted estimate amount for scientifically plausible future negative outcomes of nuclear generation which could forever silence anti-nuke's e) a reliability-discounted estimate amount (partly escrowed for international plaintifs) for scientifically plausible future negative outcomes of GHG emissions.

All these signals should be included in the retail prices of ALL the various energy products as soon as economically possible, in order that consumers can make rational choices regarding supplies.

Thank you. Lynne Kiesling runs a weblog at http://www.KnowledgeProblem.com, where you will find much more of her commentary on current issues.

I am old enough to remember the efforts to apply environmental externalities costs to criteria pollutants the last time. Not only was there no hope of agreement regarding applying the costs, there was also no hope of agreement regarding the basis on which to calculate them (control cost or damage cost).

While you are at it this time, you might also address the issue of the costs of government regulation of markets. From my point of view, government attempts to manage too many markets in too many ways. When managed markets fail to perform as desired, the fault is always attributed to the markets rather than the managers; and, the solution is always more management or more management authority.

As for myself, the old don is tired, Sancho is nowhere to be found, Rochinante is lame, my spear is broken, I have promised Dulcinea that I would give up jousting and windmills are the "in thing" anyway.

Another idea would be to simply re-instate the fuel-use act. This act was passed in the '70s when we (also) thought NG supplies were quite limited. The act simply limited the number of hours per year that a gas-fired power plant could operate. Basically, whereas it recognized the compelling arguments for using gas/oil for peaking plants (nothing else is really practical), it basically disallowed its use for baseload power (a role that other sources like coal or nuclear are more than capable of filling). I'm ready to sign on.......

Also, here's another, somewhat more humble idea concerning making gas plants pay all their external costs (or negative effects that occur downstream). Whereas it may be hard to argue about what effects gas use may eventually have in the distant future, it should be relatively easy to argue that, at a minimum, they should have to pay for all indirect costs that they are inflicting in the present.

Statistics show that demand for gas OTHER than for power generation is basically flat, whereas power generation demand is increasing rapidly. The data shows that overall use of gas is increasing rapidly, and that the increase is ENTIRELY due to new gas-fired power generation. I'm also hearing that an enormous amount of money (hundreds of billions) will have to be spent, in the near future, on the gas production and delivery infrastructure, in order to increase the capacity (i.e., to meet increased demand). For the most part, none of this investment would be necessary if the demand for gas were flat. Thus, all the need for new pipelines, pumping stations, all the money spent on new drilling, as well as the entire need for the upcoming LNG infrastructure, is primarily due to the use of gas in power plants.

However, even if the govt. didn't help with subsidies (which it probably will), the way the "free" market will work is that the infrastructure costs will be paid for by an increase in the price of NG. That's the price of NG for EVERYONE, not just the gas-fired power plants. Thus, residents trying to heat their homes, chemical plants that use gas as feedstock, etc..... will all have to pay for all this infrastructure by way of higher gas costs, even thought these costs are almost entirely due to power plants, and power plants alone.

Many communities have passed laws requiring new housing developments to pay for all the infrastructure related to that development, including the roads, water lines, power lines, sewer lines, etc.... The costs would then be included in the price of the new homes, as opposed to having the city pay for it all, using taxes (including taxes on the existing residents).

Put simply, I would propose this for new gas-fired plants. They would not only have to pay for the gas lines and power lines to their plants, but all increases in the national infrastructure that are related to increase in gas demand would be paid for ENTIRELY by new gas-fired capacity. Note I said capacity. If you build a new, efficient gas plant to replace an old, inefficient plant that used the same amount of gas, the policy would let you escape all such payments.

As you know, since the continent is running dry, we are going to have to shift to imported LNG for much of our gas, and this will set the market price much higher, in the $5 range. I'm almost inclined to make gas-fired plants pay a higher price, and let all other users pay a lower price (more like $3), given that gas plants are entirely responsible for the higher price.

Getting back to the infrastrucure costs. Based on the cost numbers I've been hearing about, if those costs were distributed solely on the new kW-hrs from new gas plants, the per kW-hr cost would increase substantially, by multiple cents/kW-hr. This would be enough to remove gas plants from consideration as a baseload power source. But of course, this is not how it's going to work. These massive infrastrucure costs, that are primarily (solely) related to new gas-fired generation, will be paid for by govt. (i.e. taxes) and by all the other users of gas.

Several difficulties, e.g. sorting out maintenance investments from capacity increases, is domestic drilling covered, etc.

Given forseeable lifetime of domestic resources, likely much simpler just to declare "all electrical generation from gas shall be supplied by imported LNG", much simpler to enforce. To use gas in a gen plant, must be able to prove purchase from an LNG importer, subject to audits and fines.

I know, "Don", but I like the joust even though I have yet to learn to tilt my head back at the moment of impact.

I think many engineers get confused about this. The mission of a company is not to supply all possible customers where and when they want at as low a price as possible. The mission of a corporation is to maximize long term profitability and returns to share holders.

Gas selling at $5.00-$10.00 per million BTU is far more profitable than gas selling at $2.00 per MMBTU.

Keeping nuclear tied up in regulations and indecision and keeping new gas production areas off limits helps to keep that price up. There is a reason that administrations with numerous key members from the petroleum industry (Bush, Rice, Cheny, McLarty, Gore) keep making decisions that seem aimed at putting our energy security at risk. It is more PROFITABLE to sell a product where the supply does not quite match the demand.

Rod Adams www.atomicinsights.com

Following that logic though, Bush & Co. also would have signed the Kyoto protocol. You think gas prices are high now??? You can't imagine what effect that would have had. These guys are unabashedly pushing coal, killing regulations and making life easier for coal in general.... This behavior (pushing coal) acts to reduce gas prices. Thus, it is a weak spot in your theory. It's well known how the coal industry has them in their pocket (campaign donations, etc....).

Cheney's home state of Wyoming produces both coal and gas. Perhaps they're trying to help both sources (i.e., raise both coal and gas costs) even though these two objectives seem at odds with one another. I must say that it seems that they've been succeeding. As we all know, gas prices are higher by a factor of 2 to 3 from the late '90s. A less known story is that coal prices have also increased (by ~50%, I think) from a few years ago. I don't know how they've simultaneously accomplished these conflicting goals, but it seems that they have......

You are certainly correct that the price of coal has been increasing almost as fast in the past two years as gas and oil. As the price of competitive fuels increases, it allows coal companies more room to increase their prices.

I guess it is kind of like big families - fossil fuels fight amongst each other, but when threatened by an outsider (like nuclear or hydro power) they fight together against a common enemy. All of them benefit when energy supplies in general are a bit less than the demand - a rising tide lifts all boats.

Of course, it helps that few fossil fuel companies have interests in just one fuel - petroleum companies own coal mines, coal bed methane is a source of natural gas, oil wells produce both oil and gas, pipeline routes often have both oil and gas pipes, shipping companies have both tankers and colliers, etc.

I know that there will be some that will remember that oil companies invested in uranium, but the investment was tiny in comparison to the total capital of the companies and none of them could figure out how to really profit in an industry where raw fuel material is essentially invisible as a cost component of the produced power.

Rod Adams www.atomicinsights.com

Regarding Kyoto, the key issue is not the first step (7% below 1990 consumption by 2012), but rather the end point and the timeline (not actively part of the public discussion at this time). The end point matters a great deal, because some approaches to meeting the current Kyoto reductions are inconsistent with the greater reductions in CO2 emissions acknowledged to be required to stabilize CO2 concentrations. The timeline is important because many of the same approaches involve massive investments in long life assets, which might be obsoleted if the end point CO2 emissions levels are too low, or the timeline is relatively short.

In the immortal words of that great American philosopher, Yogi Berra: "You've got to be careful, if you don't know where you're going, because you might end up someplace else."