One of the reasons I am so certain that hydrocarbon producers dislike the idea of competing with nuclear energy is the fact that their ads, stockholder communications, and predictions of future energy supply scenarios virtually ignore nuclear energy. They apparently hope that it will go away long enough for them to accumulate an even larger portion of society’s wealth.

In the below ad, Shell, one of the world’s largest oil companies that is not government-owned, apparently believes that nuclear is the other ‘N’ word that cannot be spoken or written in polite company.

I like the products that the world’s hydrocarbon suppliers extract. Over the past four decades, I’ve purchased more than my share of gasoline and diesel fuel. All hydrocarbons make an amazing contribution to human health and prosperity at the cost of heretofore acceptable changes to our shared environment. However, they are not the best available power technology for many applications. They remain dominant out of inertia and because they are supplied by some of the most powerful entities on earth.

By studiously ignoring nuclear energy and avoiding investing an appropriate portion of their capital and engineering skills into the nuclear energy alternative alternative, they have vastly enriched themselves and their shareholders at the cost of slowing human progress and putting the long term stability of the earth’s climate-controlling atmospheric chemistry balance at risk.

Though I have not completed anything like an academic study of the situation, my “arrow analysis” method of viewing gross movements in economics tells me that one of the reasons for the anemic recovery from the Great Recession has been the persistence of high energy prices around the world. Too much of our income is going into too few pockets, leaving less available for airlines, restaurants, housing, clothing, electronics, medical treatments and all other items we need or want to purchase.

The saddest thing is the short-sighted nature of this money-making decision. If the rest of us struggle to make ends meet, who is going to keep paying the highly profitable prices that continue to persist in the petroleum market?

Perhaps there is a reason why one of the oil and gas industry’s fastest growing uses of their enormous free cash flows has been buying back shares, even while accumulating an increasing debt level.

Average cash from operations [for 127 major oil and natural gas companies] from 2012 through first quarter 2014 increased $59 billion [to a total of $568 billion], or 12%, compared to its 2010-11 average. At the same time, major uses of cash increased by $136 billion, from an average of $548 billion in 2010-11 to $684 billion in the 2012-14 period. While capital expenditures, typically the largest use of cash, accounted for most of the increase, cash spent on share repurchases increased $39 billion on average. In fact, net share repurchases was a source of cash for the 2010-11 average, changing to a net use of cash in mid-2011.

To meet spending with relatively flat growth in cash from operations, companies increased their borrowing. When comparing the major sources of cash for the first quarter only, the net increase in debt has made up at least 20% of cash since 2012.

(Source: EIA Today in Energy 7/29/2014 As cash flow flattens, major energy companies increase debt, sell assets.)

The post Shell’s future scenarios ignore nuclear energy appeared first on Atomic Insights.