LNG at Chiba burned from Mar 11-21 after quake

LNG at Chiba burned from Mar 11-21 after quake


An article titled Backlash Against Nuclear Power Hits the Bottom Line provides some interesting food for thought about the intricate connections associated with the world’s $6 trillion per year energy market. Here is the first quote I want you to ponder.

 

The combination of earthquake, tsunami and human ineptitude produced a fiasco at Japan’s Fukushima Daiichi nuclear complex. Fukushima spewed radiation across Japan, and Weltschmertz across much of the rest of the world. Anxious citizens targeted nuclear plants in Asia, Europe and North America for a rethink or shutdown.

No matter what your view is of nuclear power, it’s a big part of the global grid. For example Germany, a major industrial powerhouse and the world’s fourth-largest economy, has 17 nuclear reactors that supplied nearly 23% of the country’s electricity last year. Nuclear (when it isn’t spilling from containment vessels) is cleaner than many alternatives and—critical for business—cheaper too.

The word choices are a little slanted, but notice the bottom line – the Wall Street Journal admits that nuclear energy is cheaper than many alternative energy sources. It also blames “anxious citizens” without helping put any context of what might have caused and reinforced that anxiety – like non-stop media coverage quoting hand wringers like Michio Kaku, Chris Busby, Ed Lyman and Arnie Gundersen.
 
Another section worth quoting is the following:

That’s left business asking: What now? What combination of gas, coal, oil and renewable energy can replace this big chunk of power? How will the country meet international carbon-emission obligations? Will this make Germany more dependent on mercurial Russia for energy supplies?

And what will it do to a company’s energy costs?

“It’s nearly impossible to make a reasonable assessment of future energy costs—the only thing you know is that costs will go up because nuclear is so cheap,” says Mr. Bischoff of Daimler. “What is so shocking to me is that political decisions were made based on the sentiments of the population in a very limited time frame without really informing people what the alternatives would be.”

I read a lot of business press and market analysis. There are people who are almost salivating at the prospects of a “bullish” period for natural gas enabled by supplying the power demands that nuclear will not be supplying if current decision patterns are maintained. See, for example this story from Sweet Crude Reports titled LNG price surges to three year high which includes the following quote:

“LNG demand will go up, there’s no other alternative,”said P.K. Jain, the New Delhi-based director of finance at GAIL India Limited, the nation’s biggest gas distributor and a co-owner of Petronet LNG Ltd., the largest buyer. “Demand will rise in Asia as Japan increases LNG use after Fukushima and even in Europe, with countries moving away from nuclear, long-term demand for LNG may rise.”

(That quote almost qualifies as a smoking gun, don’t you think?)

I decided to make a comment on the Wall Street Journal story to see if I could attract the ire of any hydrocarbon or advertiser supported media defenders. I’ll let you know how the conversation turns out. Here is my comment:

It may be time for an Atomic Insights post with a parallel but alternative headline:

“Backlash Against Nuclear Power Adds to the Top Line”

The fact that many journalists fail to point out is that rising energy costs do not hurt everyone. The increased “cost” that most of us see is balanced in the world economy by increased “revenues” for the non-nuclear power suppliers. In the six months since the great northeast Japan earthquake and tsunami, the world market price of Liquified Natural Gas (LNG) has increased by 33% and the volume of shipments into Japan have increased by 15-20%.

Publications focused on energy market trading are celebrating the “bullish” impact of the market shift caused by irrationally shutting down German reactors that could never ever experience a tsunami and by keeping safe, intact Japanese reactors shut down longer than required to evaluate their condition after the earthquake.

Do you really believe that these consequences are purely unintended? Can you remember just how many “clean natural gas” advertisements you saw during the Fukushima hyperbole on the network news channels?

The public actually supports nuclear energy, according to numerous polls. It is the established energy industry and their friends in the advertiser supported media, along with some purchased politicians in the oil and gas focused governments that think there is something wrong with a power source that is clean, abundant and proven to be extremely safe over during a five decade long operational history.

Rod Adams
Publisher, Atomic Insights

I guess I really should be a little more fair and not put all of the blame on fossil fuel suppliers. After all, Siemens, which just announced that it is pulling out of the nuclear energy industry reported that its unreliables (renewables) unit produced the fastest growth of any of its various business lines. The unreliables industry will supply whatever portion of the former nuclear demand it can, but the fossil fuel industry will clearly be the largest winner.