Home > Market Commentary > The Case for Constructing New Coal and Nuclear Power Plants

The Case for Constructing New Coal and Nuclear Power Plants

by Jim Haines.

“That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. … and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.”

President Obama is right. We are in a crisis. What, at best, he only alluded to in his inaugural address are the common threads that link our military, economic, and energy crises. Perhaps the dominant thread in that tapestry is energy. And energy policy surely presents many and immediate opportunities for president and citizens together to demonstrate their resolve to make hard choices.

It is not a hard choice to endorse more efficient uses of energy or conservation of energy or alternative sources of energy. No reasonable person, no energy company, no interest group is opposed to these as ideas or as manifested in actions that people take to accomplish them. To focus just on electricity, the first hard choice is to recognize two stubborn facts: Under any realistic assumptions about the potential success of efficiency and conservation, and assuming even modest economic recovery, 1) levels of electricity consumption (nationally and globally) will continue to increase over any forecast period, and 2) alternative sources of electricity generation, together with conservation and efficiency, will reduce but will not eliminate our need for new base load power plants fueled with uranium and/or coal. Currently, coal supplies about 50% of US electricity demand and uranium about 20%.

Those facts beg a crucial question: Can the earth sustain energy consumption at the rate necessary to assure global-wide availability of increasing supplies of electricity, if such supplies depend in large part on continued use of fossil fuels? Treatment of that question raises an intense and often emotional debate involving fundamental political, social, and ethical considerations – and that makes the heroic assumption of consensus on the science and responses to climate change.

At the root of it, we are embedded in the Middle East because of energy issues. As the Asian economies continue to grow and as third world economies develop, the pressure on US consumption of foreign sources of energy will only increase. Coal and uranium are our most secure and abundant sources of energy for electricity generation.

President Obama said with emphasis: We will not apologize for our way of life….” Trying to connect the dots, does that mean we will aggressively incorporate efficiency and conservation and alternative sources of electricity into our way of life while still pursuing that way of life – a way of life that even with efficiency and conservation and alternative sources will require increasing amounts of electricity? If that is what he meant and means, then he himself has a very hard choice and he must make it sooner rather than later.

At the same time that he aggressively leads us (as I believe he should) toward challenging goals for efficiency and conservation and alternatives sources, he must also aggressively lead us to continued construction of new coal plants (even as we await the as yet undemonstrated clean coal technology) and/or a resumption of construction of new nuclear plants. Both coal and nuclear plants have long licensing and construction periods. To the extent that climate change is a factor in this consideration (and it should be a substantial factor), then there should be greater emphasis, perhaps exclusive emphasis upon nuclear plants – at least until clean coal technology is proven. Waiting until the safety of a second term to launch such an effort would have catastrophic consequences for US energy security and sustained economic recovery and growth.

Jim Haines, retired CEO of Westar Energy, is holder of the Ned Eldon Clark Professorship in Business at Washburn University in Topeka, Kansas. You can reach Professor Haines via email at james.haines@washburn.edu.

Categories: Market Commentary
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