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  (Source: Washington Times)
Smaller reactors means lower costs, which in turn mean lower risk to investors

Argonne National Laboratory's former chief scientist and director, Robert Rosner, is on a mission to sell the nation on a clean "small modular reactor" (SMR) nuclear power solution.

I. Good Things Come in Small Packages

As the new director of the Energy Policy Institute at the University of Chicago (EPIC), Mr. Rasner has devoted much his energy into guiding public policy towards financially optimal "green solutions."

With funding from his former research facility, Professor Rasner and his colleague Stephen Goldberg -- a special assistant to Argonne's new director -- examined reactors ranging from the tradition gigawatt scale, down to smaller megawatt-scale designs.

The report simplified the equation a bit, removing interest and construction time.  It dubbed this simplified metric "overnight construction costs".  It puts the cost of a kilowatt of new nuclear capacity at $4,210 USD for a large plant -- nearly twice what large-scale capacity cost in 2004.  The remedy, it argues, is smaller reactor designs.

Professor Rasner cites "commodity price changes and other factors".  While he does not explicitly elaborate on those "other factors" in his press, release, he's likely referring to the strong public animosity for nuclear power in the U.S., in the wake of the Fukushima Japanese nuclear disaster.

But the veteran researcher says those who lump modern nuclear reactors with decades old legacy designs like the reactors at Fukushima are ignorant of the scientific reality.  He states to the contrary, "[Modern reactors] would be a huge stimulus for high-valued job growth, restore U.S. leadership in nuclear reactor technology and, most importantly, strengthen U.S. leadership in a post-Fukushima world, on matters of nuclear safety, nuclear security, nonproliferation, and nuclear waste management."

CSIS president and CEO John Hamre concurs, commenting that the new reactors are virtually meltdown-proof.  He remarks, "The entire heat load at full power can be carried passively by thermal convection. There's no need for pumps."

Critics, it would seem -- tend to write a blank check to solar and wind power when it comes to environmental impact, land impact, safety, government funding, and risk -- while looking to sharply admonish nuclear power firms from seeking those same benefits.

II. Modular Mass Production Holds the Key to Profits, Halting Lawsuits

Again, he says the cheapest way to get their is to develop a modular construction process, perhaps somewhere around the 600 MW scale.  Rather than being custom-built on site, parts could be mass-produced at factories and then shipped to the new reactor for "easy assembly".

Mr. Hamre says its not just public sentiment that's holding reactors back -- it’s the staggering scale of large reactor cost.  A gigawatt scale reactor would cost a company $10B USD to deploy and would not see a pay for 7 to 9 years.

He opines that small reactors currently look like the best energy solution, other than natural gas use.  He says natural gas is less desirable too, because it's a commodity and its cost in 15 years could radically shift.

Mr Hamre and Professor Rasner say that the government must step in as a customer to help small nuclear manufacturers build up factories and deployment networks.    Even at small scales, initial costs will likely be too high versus traditional "dirty" power technologies like oil and coal, they argue.  

"The faster you learn, the better off you are in the long term because you get to the point where you actually start making money faster." says Professor Rosner.  But while there is a rush to get these solutions out there, he warns that he's not advocating a rush to judgment.  He adds, "It's a case that has to be argued out and thought carefully about.  There's a long distance between what we're doing right now and actually implementing national policy."

Another good thing about SMRs mentioned in the report is that they could serve as direct replacements to fossil fuel power plants.  Given the fact that many coal plants produce around 200 to 400 MW, a SMR could be fitted as a direct drop-in, versus current larger designs, which require special grid accommodations.

Another positive not mentioned in the report, is that SMRs would likely strike a blow to opponents who hope to cripple the clean power technology with lawsuits and protests.  Rather than having just one target to focus their wrath on, landowners and "environmentalists" would be forced to divide their time and money between several deployments per state, depleting their resources.

Georgia Plant
U.S. nuclear power stands at a crossroads.  Proponents want it to move ahead to new technologies, and they have backing from some top scientists.  But for every ounce of science leverage in support of nuclear there's and equal violent emotional backlash from public critics [Image Source: Georgia Times Blog]

So what do you think?  Should the U.S. follow in France's bold footsteps and invest big in nuclear, even if it requires mild government "seed funding"?  Or should it go in the opposite direction and pull a Japan, turning its back on nuclear energy?  Or should politicians simply sit there and keep their mouths shut, as President Obama has appeared to do (a reversal of his vocal pre-Fukushima support of nuclear development) -- in an effort to avoid angering either side?

For more reading, dive into the full report below.

Sources: Univ. of Chicago, EPIC

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RE: Government intervention
By tastyratz on 12/15/2011 10:47:47 AM , Rating: 0
They hardly pay out compared to what they make, but I think you are confusing tax breaks with subsidization. They see tax breaks (which is a load of horse crap that they see a penny) and then it is subsidized to make it more affordable to the consumer, ironic size it is also taxed by the government not just the state. Tax breaks on that plane are absolutely subsidizing in my book too. If the government subsidized all but $1000 on the price of a new vehicle, would you buy that car thinking you paid good money as well as the auto plant workers taxes and not consider that purchased subsidized?

Together, these external costs total $558.7 billion to $1.69 trillion per year, which, when added to the retail price of gasoline, result in a per gallon price of $5.60 to $15.14.

RE: Government intervention
By ppardee on 12/15/2011 1:06:41 PM , Rating: 2
The effective (US) tax rate of oil companies is roughly 41%, which is far greater than the average non-oil industrial companies pay, which is about 26.5%. In addition to the nearly 15% extra that the government taxes oil companies, the end product is taxed as well at a rate of about $0.18 per gallon of gasoline and $0.24 per gallon of diesel fuel. And that doesn't count state and municipal taxes, which bring it up to about $0.50 per gallon.

Now, I don't put it past the government to play Shell games (HA! I made a funny!) but it seems rather stupid to directly subsidize an industry, and then reclaim those subsidies via taxes on the companies and the tax payers.

The progressive movement's propaganda doesn't jibe with the real numbers. You can spin it both ways. Exxon-Mobile paid $1.45 in US taxes (Federal, state and local) for every $1 they earned in the US between 2006 and 2010. Where are the tax breaks?

RE: Government intervention
By gamerk2 on 12/15/2011 2:36:53 PM , Rating: 2
Now, I don't put it past the government to play Shell games (HA! I made a funny!) but it seems rather stupid to directly subsidize an industry, and then reclaim those subsidies via taxes on the companies and the tax payers.

Not really. You subsidize the costs to make it cheaper (IE: Economically viable) to begin initial production, and in exchange, you take a percentage of the profits. Many things are simply unaffordable without subsidies from the government.

Exxon-Mobile paid $1.45 in US taxes (Federal, state and local) for every $1 they earned in the US between 2006 and 2010.

So...Exxon-Mobile went bankrupt because they couldn't turn an after-tax profit? I think your numbers are just a *little* bit off...

RE: Government intervention
By Etsp on 12/15/2011 2:40:09 PM , Rating: 2
Exxon-Mobile paid $1.45 in US taxes (Federal, state and local) for every $1 they earned in the US between 2006 and 2010. Where are the tax breaks?
That doesn't make sense. That would be a tax rate in excess of 100%. Do you mean that for every $2.45 they earned they paid $1.45 in taxes? That sounds like cherry picked data to me. Especially given their trend of breaking profit records year after year.

RE: Government intervention
By ppardee on 12/15/2011 3:45:00 PM , Rating: 5
It was an example of how to spin the numbers, which the liberal media does constantly. These numbers are 100% accurate (insofar as they aren't falsified).

First, this is US taxes and US earnings only. The corporate tax around the world is much lower. Second, the 'earned' refers to net profits. So, while this statement seems to say that they had an effective tax rate of 145%, in reality, it only means that they paid more taxes to the government than they were able to retain as profits in the US (The taxes came out of gross earnings). The extension of this statement and yours would be that even though they made record profits, they also paid record taxes.

Another spin in the other direction is that Exxon's effective tax rate is lower than the average American's, (this is Center for American Progress's spin) which takes Exxon's global effective tax rate (about 24%, but CAP figures it down to 17% some how, and 2% in the text with the given numbers) and ignores American's who don't pay any taxes and uses average rather than median, which would give a better idea of who pays what.

In any case, it's all bogus and you have to actually look at the real numbers to see that the oil industry isn't screwing anyone or getting a sweet deal from the government and their profit margins are about 5%, which isn't insane. Record profits are a result of record demand. Same way Wal-Mart makes money (without giving the shaft to employees.)

RE: Government intervention
By Ringold on 12/16/2011 2:48:18 PM , Rating: 2
They hardly pay out compared to what they make

I wont link any opinionated website with any agenda whatsoever, just hard numbers.

Look at those numbers, and engage the brain. It's a profit margin of 10%, which is downright mediocre, it's simply that Exxon has built up massive operations and thus its 10% on a large revenue base. Further, if you dig in to it just one layer deep, by my math Exxon pays almost 41% (as someone else said) of its earnings after expenses in taxes.

The only way to really say that integrated oil companies are subsidized is pointing at the sort of tax credits that many companies benefit from that boost incentive for investment and benefit from various sorts of public infrastructure which, again, exist to boost business. The link you provided are littered with such things; MANY businesses get to take advantage of expensing, foreign income tax credits (where do you get off saying a company unit operating entirely overseas owes the US money anyway?), etc.

So again, according to that sort of logic, all businesses are subsidized, or given special tax treatment, heavily.

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