Over the past month, I’ve been doing a lot of thinking about how much things really cost. Costs are something that everyone thinks about, but lately I’ve been doing a lot wondering about what truly comprises a price tag, especially when a salesperson is giving you a pitch.
Over the next three blogposts, I’m going to be looking at a few things which have been on my mind about costs over the past month.
What got me started on this was my own investigation into the price of nuclear energy. As some of my readers might know, I, along with a few other interested residents, started a new organization, Nuclear Free Sudbury, earlier this month. We were growing concerned with what we were hearing in the media about the Nuclear Waste Management Organization’s (NWMO’s) site selection process for a permanent home to house spent fuel bundles, the very worst kind of nuclear waste. With Wawa and Hornepayne being considered by the NWMO, it increases the likelihood of having nuclear materials transported through Greater Sudbury, especially if rail transport is an option.
Our Nuclear Heritage
Although I’ve been a member of the Green Party for some time now (whose member-approved policies are to say no to new nuclear), I’ve always positioned myself somewhere in the middle of the debate when it comes to nuclear energy. I confess, I’m one of those people who is fascinated by the technological, and the idea that a few tiny atoms can unleash such incredible power which humanity has the ability to harness, well, that kind of stuff excites me. Unless we’re talking about unleashing that power over cities in a time of war. I remember watching the made-for-TV movie “The Day After” when I was growing up, and later the British movie, “Threads”. With awesome power comes awesome responsibility.
So, despite having very clear memories of Chernobyl unfolding on national news programs, I’ve never thought of myself as a nuclear-phobe. That the environmental movement is still arguing whether nuclear energy has a place to address the climate change crisis says to me that there remains a bit of a misunderstanding about nuclear energy. However, when the disaster in Fukushima happened earlier this year, striking one of the safest nuclear facilities in the world, I told myself that it was time to dig a little deeper.
And so I dug. And in my digging, I became increasingly alarmed with what I was finding out about the nuclear industry in general, and specifically with the alarming series of cover-ups and misinformation which the Japanese nuclear industry was providing to their government, to the Japanese people, and by extension, to the rest of the world.
It’s easy to write off Fukushima as being the result of tsunami, but given that tsunamis aren’t particularly unusual events in that part of Japan, it really raises some questions. Further, it seems that meltdown began when power was severed from the reactors, which occurred before the tsunami struck. Of course, the whole situation was clearly aggravated by the tsunami itself. The point, however, is that the Japanese nuclear industry has been the safest in the world – up until disaster struck.
Canada’s nuclear industry likes to make the same claim about itself regarding its safety record. And for the most part, Canada’s nuclear industry has a lot to crow about. Not only have our reactors not melted down (aside from that little incident at Chalk River back at the dawn of the nuclear age), but radiated materials are transported by the nuclear industry all the time, and there hasn’t been a recorded incident made public.
Of course, spent fuel bundles have never been transported off site in Canada, and when it comes time to move these extremely dangerous materials, whole new technical challenges will need to be overcome. Can we move them safely? Probably. At least until something goes wrong. And that’s the problem with the nuclear industry: when something goes wrong, invariably it goes very badly wrong.
A Long-Term Storage Facility for Canada’s Nuclear Waste
We’ve got a lot of this nuclear waste sitting around at reactor sites, in shorter term storage facilities. After 60 years of generating nuclear power, Canada has yet to come to terms with exactly what we’re going to do with these spent fuel bundles, which will remain radioactive for millions of years (and folks, that’s not an exaggeration, that’s just physics). In response to this problem, the NWMO has begun looking for a permanent home for spent fuel bundles.
Now, at first blush, it might seem pretty silly to think that a community will voluntarily make itself home to Canada’s first-ever repository for the most hazardous nuclear materials ever produced by humanity. I mean, that’s not exactly the sort of thing a community would brag about in a travel brochure. “Come Visit Beautiful Wawa – Home to Canada’s Nuclear Waste”. Nah.
But the NWMO has dangled this carrot in front of communities, which is a very real incentive for a potential host: an investment of between $16 billion and $24 billion dollars in order to meet today’s needs. And, of course, jobs jobs jobs. Constructing the facility will take years, and once it’s up and running, skilled technicians will need to be on hand to make sure that it’s running properly. And a small army of security guards will be needed to make sure that nothing bad goes wrong. They’ll be receiving nice paycheques, which they’ll be spending in the host community.
In those terms, perhaps that’s not such a bad deal after all. The nuclear waste will be buried, so it’ll be out of sight and out of mind. The facility itself will be built to last for a staggering 300 years (what do we ever build to last that long? I mean, I’ve been through 4 laptops in the past 3 years). As long as you don’t mind the trucks carrying their space-age storage bins, hosting a nuclear waste storage facility really does seem like a good idea.
I can’t fault the communities of Wawa and Hornepayne and the others for looking into the NWMO’s process. Although I still don’t understand why the NWMO is looking at inhabited locations for this kind of facility, when there’s all that blank territory on maps of Canada (well, actually I do know, and it has to do with politics). Anyway, the site selection process isn’t the specific point of today’s blog. Instead, I want to talk about those $16 to $24 billion in costs.
The Price Tag for Nuclear
So, who’s going to pay for all of that? Ultimately, it’s going to come out of my pockets and your pockets, either through direct funding by our federal and provincial governments, or by the nuclear power companies who will have to hit ratepayers up for the costs. Either way, though, these are unbudgeted expenses right now. No one is setting aside any money to actually build this facility.
NWMO’s site selection process is expected to cost about $9 billion dollars, all just to figure out which site will be best. Some of that money has been budgeted, and we electricity ratepayers are funding it. That’s good, in my opinion. We’ve derived the benefits of nuclear energy for the past 60 years now. It’s about time we start paying some of the costs of those benefits, such as those costs needed to find and fund a permanent secure storage site.
Of course, I wasn’t alive when the decision was made in Ontario to build our first nuclear reactors. I know, though, that those reactors didn’t come in on time or on budget, and no reactor built in Ontario since then has either. I, specifically, in my 40 years of existence, have benefited a lot from nuclear power, which has been produced at pretty cheap rates, so I’ve been told (something like 5.5 cents per kilowatt hour, that’s what I keep hearing from the pro-nuke industry).
Of course, I haven’t been paying the real costs for nuclear energy. Nobody has. This long term storage facility question mark which will cost more than $30 billion to identify a site and build a facility, well, no one has been paying for that yet. Those are costs that we and our children will have to pay over time. Never mind that it was my parent’s generation that benefited from cheap nuclear power. They, and my generation today, have only done so because we refused to pay the full price for it.
There’s a term for that, you know. When you don’t pay the true costs for a product or a service, and those costs are passed on to be paid in the future. We call that a “subsidy”. And with regards to what we’ve been doing related to nuclear power, we’ve been subsidizing the production of energy by passing on these real costs to future generations.
So not only are we leaving our kids and grandkids with a monumental environmental hazard in the form of never-before-seen-on-Earth nuclear waste, we’re also going to stick them with the bill for disposing of it all properly.
Of course, they may choose to add their own nuclear wastes to the ever-growing pile of spent fuel bundles, if they decide to refurbish reactors, or build new ones. I, however, think that our kids are going to be better financial managers than my generation was, and certainly better money-managers than my parent’s generation proved to be. Our kids are going to have an enhanced appreciation of the term “full cost accounting”, and a much better understanding of environmental and social externalities forming part of the real costs of any undertaking.
The End of Our Economic System
I believe this because we are now experiencing an end to capitalism as we’ve come to know it. Not an end to capitalism, mind you. Just an end to the way in which we’ve practiced it. Here I mean specifically to our wasteful and polluting ways, all in the pursuit of growth as if it were some Holy Grail. Well, it’s rapidly becoming clear that if growth is a Grail, we’ve actually found ourselves stuck in a Monty Python movie.
My daughter had her first birthday this past summer. By the time she is 80 years old, she will have lived through a time of massive change, due to the end of inexpensive energy and the climate crisis. In her lifetime, she will witness the collapse of either the current economic system, or the massive reduction of individual users of resources. One or the other has to happen, because we are pushing up against the limits of growth.
Right now, we are using up our non-renewable resources at an unsustainable rate. It can’t go on. We will either have to make the difficult switch to renewable resources, or we will have to figure out some way where there are fewer of us available to access our limited non-renewable resources. Think about the second part of that sentence for a moment. That’s the only other way to prolong our unquenchable thirst for oil.
Nuclear Subsidies as Snake Oil
Will nuclear power be a part of our energy future? I don’t think so. We’re starting to understand even now that the costs of producing nuclear energy are simply too staggering to come to terms with. We all want inexpensive energy. That’s why nuclear should have never been considered an option in the first place, but when you don’t do a full cost accounting, you end up being swindled by salespeople.
When you hear that nuclear power can be produced at 5.5 cents per kilowatt hour, but wind power costs upwards of 12 cents per kilowatt hour, it sounds like nuclear is a great deal. However, when you factor in the true costs of nuclear, which include the mining and refining of uranium ore, along with the multi-billions in unbudgeted costs related to the long-term storage of radioactive materials (not to mention transportation costs for those materials to the facility, if it ever gets built), it’s clear that wind is a better deal, as it doesn’t produce any hazardous waste materials.
Even when you factor in manufacturing costs for turbines, that’s nothing in comparison to building a new nuclear reactor. Energy from new nuclear reactors will actually have a baseline costs closer to 20 cents per kilowatt hour, and even that doesn’t take into consideration costs associated with mining/refining and the long-term storage of nuclear waste. Wind just makes a lot more sense from a cost perspective.
Moving to a Renewable Energy Future
But Canada won’t be powered exclusively by wind, because the wind doesn’t always blow. Solar power is becoming cheaper due to better technology, and its waste by-products aren’t anywhere near as dangerous as nuclear. And let’s not forget that hydro power in Canada is abundant. Right now, thanks to the historic wise investments made in hydro power in Quebec and Manitoba (while Ontario experimented with expensive nuclear), there’s more power being produced in Canada than we need as a nation. A lot of that excess capacity travels south to the United States. And when the Lower Churchill area is finally brought on line, presuming Quebec and Newfoundland figure out a way to play nicely together, we’ll have even more renewable capacity.
It’s true, there are environmental costs associated with hydro power which we’ll need to factor into any equation. It would be remiss of me to suggest otherwise in a blog about the importance of costs. But those costs, whatever they may be for a specific project, will need to be assessed fully and comprehensively at the time a project comes forward.
The best way to reduce our costs, however, when it comes to energy, is to simply use less of it. Canadians are one of the world’s biggest per capita energy consumers. If we simply used less of it, we could save ourselves some money while simultaneously increasing supplies. Conservation doesn’t have to be hard. But in our culture of convenience, it’s something that’s rarely top of mind. It’s easier for all of us to demand more energy production than to make the decisions to use less.
Time of use pricing, of course, will start to play a role in conservation efforts. If I can save money by using energy during off-peak hours, I’ll be more than happy to do so.
Bequeathing Our Debt to Our Children
We need to start getting serious about passing on our costs to future generations. Canada is running a $40 billion deficit right now, thanks to gluttonous spending of stimulus dollars. Sure, some good things happened from spending that money (although I think we could have spent the money much more wisely, by focusing on energy efficiencies!), but what are our chances of paying for those costs any time soon, and still enjoying the level of services we’ve come to expect as Canadians? Simply put, there isn’t any chance. Either taxes will have to be raised, or cuts will need to be made. Or we’ll just have to keep passing costs on to our kids.
Eliminating the deficit is one thing, though. The fact is, the spending from 2009 and 2010 is now a part of our debt, which stands at over $230 billion. Our kids and their kids will be paying down the debt, unless nations around the world get together and hit the reset buttons, which doesn’t seem likely. Much more likely is that we’ve already started bumping up against the limits of growth, and either we’ll find a way to move towards sustainable local economies (and away from an unsustainable global economy), or there’ll need to be fewer of us around to consume resources at the rates we’re doing so today.
Change is coming. I remain optimistic that we’ll find a way to meet the challenges head-on. A good start will be to begin looking at the full costs associated with any proposed investment which relies on our taxpayer dollars. That didn’t happen in 2008-10 with the so-called “economic stimulus”. Did we really need more gazebos at a time when there’s a two year long wait for social housing? Did we have to repave roads without thinking about simple little things like bike lanes? Was important for us to bail out the auto sector without requiring them to get their act together on fuel efficiency for their vehicles? No, we just through money at stuff and hoped that jobs would be created (or maintained).
Getting our Act Together
We can’t keep doing this. Unless an economic case can be made for new investments, we shouldn’t be using taxpayers dollars to subsidize any project. We can’t keep passing along the costs to our children, after deriving the benefit of the subsidy ourselves. It’s time to get serious about living within our means. And that’s why this dogmatic idea that we need to grow our economy at all costs will have to be abandoned, because it’s not working.
If living within our means and fully costing public investments sounds radical to you, guaranteed that it will make perfect sense to your grandchildren. I’m very worried about what my daughter is going to think about me and my wasteful generation when she turns 20. Already, Generation Y is pointing to my generation and that of my parents with accusatory fingers, telling us that we’ve f***ed up the planet. Sure, we’ve done a lot of good, but we did a lot of that good for ourselves, and passed along the costs for that good to our kids. That’s not really the best way to manage our finances now, is it?
(opinions expressed in this blog are my own and should not be interpreted as being consistent with those of the Green Party of Canada)
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