Bio-Diesel/Biodiesel Energy Resources, Alternative Energy

Andrew C. White, President & CEO of GE Nuclear Energy

Panel Chairman:
Robert G. Card, Under Secretary for Energy, Science and Environment

CARD: Thank you Skip. Next we’re going to hear the technology industry perspective. I’m pleased to see in the audience that we have representatives from many of the key nuclear vendors, Westinghouse, Framatone, and AECL; but today we’re going to hear from General Electric. General Electric has been involved in all aspects of this business since the beginning. In fact I think they were involved in the Manhattan Project construction, in the Naval nuclear program and in the commercial power program. So with that, we’re anxious to hear the opportunities from Andy White, President of GE NuclearThank you.

WHITE: Thank you Bob. GE was one of the original members of the atomic industrial forum founded 50 years ago. When founded, it was envisioned that three key elements of sustainable nuclear energy would be key, advanced engineering, business acumen, enlightened public policy. As an industry member we can offer solutions to two of the three requirements of a sustainable nuclear energy industry. The third, an enlightened public policy, we can only influence. In short, we feel suppliers, owners and policy makers all have key roles.

When we consider the two elements where we, as a supplier to the industry can make significant contributions in advanced engineering and business acumen, we believe the measure of success today are the same as they were 50 years ago, safety, performance, economics and owner value and environment. I’m going to take a few minutes just looking at each one of these individually. This is very similar to ...(inaudible) that Don Hintz showed you, but also including safety.

Safety is the overriding concern of government, owners, operators and suppliers alike, to ensure that our employees and the public are protected. But safety also impacts performance. And because safety and performance are related, in order to get maximum performance, nuclear plant owners must insure the safety issues, do not impede performance. And where safety events impact availability and reliability.

Looking at this chart, which highlights the past decade, we have consolidated three key metrics for the industry. And the red line, which shows generation, capacity factors, the gold(?) bars(?), and core damage frequency, a measure of safety. And as Don mentioned in his presentation, the capacity factor in 1988 was less than 60%. Since then, the industry has made tremendous gains in capacity factor reaching 90% by 2002. It key contributed to the record levels of generation achieved in 2002 of 778 billion kilowatt hours. At the same time, the average CDF, the measure of safety in the industry, has improved by 70% while, at the same time, achieving the record performance.

As well as performance in the past decade, the utilities, with help from the government, regulators and suppliers, have done an outstanding job in reducing generating costs by approximately 40%. With capital improvement, reduction in operation and maintenance cost and also with advancement in fuel designs have been a key contributor to driving generation costs down while achieving those record performances we talked about previously.

Just looking at the environment, nuclear energy is necessary. It is a sustainable resource with no emissions. The challenge relates to public confidence and acceptance. This can be addressed as an industry with government support to education and enlightenment in public policy. Over the past 50 years, the nuclear plants have generated 13.7 trillion kilowatt hours of electricity with zero carbon depletion, emissions free, avoiding 3.1 billion metric tons of carbon, 73.6 tons of sulfur dioxide and 35.6 million tons of nitrogen.

This is just a glance at the U.S. installed base of pressurized water and boiling water reactors today. And, unfortunately, we will only be seeing probably another additional one unit online with the grounds for a restart. Where are we today? Since the first NE plant was commissioned, we have come a long way in developing more advanced reactors that are safer, more efficient. Today although nuclear power plants are only 12% of the installed energy generation capacity, it generates almost 20% of the energy due to its reliability, availability and performance. And, in short, nuclear energy matters for many reasons.

This is another sad story. Our forecast in GE predicts that between 2003 and 2006 only 15 gigawatts are planned in the United States and none of those are nuclear. Latin American having 28 gigawatts planned, Europe with 50, Africa-India-Middle East 57, and by far the largest being 187 gigawatts planned in Asia, with the majority coming from China. And there is plan, as the previous presenter mentioned, that there will be two gigawatts a year planned for nuclear energy in China.

Setting the stage for new nuclear plants in the United States we believe the economics of a new nuclear plant are very favorable. At looking at the comparison of new nuclear plants and their new advanced nuclear plants, whether that’s the GE version or some of the other supplier’s version, we believe that it’s very competitive with the initial high capital costs of a new nuclear plant being offset in the long-term by fuel costs from either a combined cycle gas turbine plant, a simple cycle gas turbine plant or a new coal plant. So the nuclear economics for new units, in our opinion looks good.

This is just our example of the next generation reactor. We’ve been working for over ten years on the next generation design. And most recently we’ve got this moving through the NRC. This one is particularly interesting. It’s 14 hundred megawatts with simplified systems, passive safety features. As I’ve said, we’ve started moving this through the licensing process and hope to have the approved as a design by 2006. Some of the key benefits, as I mentioned, the passive safety feature, faster construction, lower costs. It has a smaller footprint.

Just looking at hydrogen, as Kyle McSlarrow mentioned earlier today, if there is going to be hydrogen economy, I think all the scientists and economists believe that nuclear has to play a key and major role in this. The most abundant element, with a population of six billion people today moving to 7.5 billion by 2020 with 33% growth in population in China and India and urbanization by 2015, over 50% of the world will live in urban environments.

Transportation demand is two-thirds of the energy growth in developing countries. For example, U.S. has 750 cars per thousand people, India has only seven and China has eight. So we believe as we move forward to a hydrogen economy, nuclear has to be a key player in this. And just some final thoughts, we believe nuclear energy is key to a balanced energy portfolio. We also believe there should be no reason why nuclear shouldn’t receive similar credits or benefits as other non-emitting, non-carbon depleting resources.

CARD: Thank you. Unless my watch is horribly off, we have a generous amount of time for questions, challenges, comments, whatever from the audience. I would just ask the commenter to please state their name and affiliation with the question. I think we have people with microphones so here we have a question and then back there, next, and then over here next and over there. Well, we’re all over. We will go here and there and then we’ll start over again.

COZARELLI(?): I’m Nick Cozarelli from UC Berkeley and my question is that we’ve heard several people talk about the hydrogen fuel cell but, obviously, the amount of energy you are going to get out of the hydrogen fuel cell is going to be less than the amount of energy you put in to making that hydrogen and, given the fact of what we’ve been hearing about this morning, about how far off any kind of really substantial nuclear power is, the hydrogen fuel cell is more polluting than any other form, than just gasoline for running a car.

MAGWOOD: Sure, I’ll-- I think first I’ll say that I don’t entirely agree with your postulate. First, I think that hydrogen fuel cells, especially the advanced fuel cells that DOE is doing research on now, has a great potential for very high efficiencies and I think that if we’re successful in having very efficient means of producing hydrogen, that the overall efficiency will be very good. I think we will be very competitive. What we’re trying to accomplish is not necessarily to achieve an alternative to petroleum that is going to be cheaper than petroleum.

I mean the reason that we use petroleum is because is cheap. What we like to do is have a viable alternative to petroleum that is not vastly more expensive but yet has huge environmental and economic security benefits for the country. And discussing this in the context of a lot of the overseas meetings, I’ve been to, there are many countries that agree with that point of view. So I actually am an optimist on both the fuel cell development and also and possibly for having nuclear technology appear in the foreseeable future, in the next decade or two that will fuel those fuel cells especially.

CARD: Thank you Bill. I will attempt to weigh in just a bit on that. Right now, today I think well-to-wheels efficiency probably would favor a diesel or a diesel hybrid. But we really see an addition to the strategic diversity issues that Bill mentioned, which are vitally important, we’re really shooting for breakthrough technologies. When you couple that with the possibility of fuel price increases and other inputs, we think the hydrogen system is an extremely important alternative.

NEFF: I don’t know if I’m the right person. I think I am. I’m Tom Neff from MIT. I just had a question and a comment about renewables. Everybody there on the panel I think said something very kind about renewable resources and energy and nuclear but there is a link and not much has made of it. It is actually an old point. I wrote a book about it about 25 years ago. Most new energy technologies have payback times. They take two, three, five years even to generate as much energy as it took to make them.

So if you and to get from a low installed base for renewables to a large installed base, you need to expand a lot of traditional forms of energy in order to get that base installed. It takes aluminum. It takes-- Whether it’s wind, wave, solar panels or whatever or hydrogen fuel cells. For example, if you want a gigawatt of solar next year, you’ve got to use about three gigawatts this year. I’m not sure why the point has not been made that, in order to have, say, expansion of renewable resources over the next 50 years or 100 years, we actually need to build a lot more conventional capacity.

We have two choices, basically. Gas is saturated. We have nuclear and we have coal. And I think it’s a great argument for nuclear. Nuclear power plants can generate the electricity that is largely used to make the facilities necessary for renewable for energy generation. And I think that might help disarm a certain amount. There is a certain dichotomy here between those who sort of favor the soft energy path, the renewable resource path as a simple, totally separate kind of path to go forward. But there is no such simple, separate path. They are linked.

RICHTER: I’m Burt Richter, physicist, Stanford. All the techies agree, nuclear power is wonderful and we should go that way. I have a question I want to direct toward Mr. Hintz and I want to start with three comments, first. The present nuclear power plants are gold mines because of the life extension programs, their capital costs are paid off and the utilities that own them are making a fortune. That’s wonderful. (Laughter)

Second, fossil fuels get a huge subsidy in our system because they’re not required to pay for the disposal of waste product, carbon dioxide. Because of that subsidy, fossil fuels and new power plants in fossil fuels are cheaper, generate cheaper electricity than nuclear, at least according to all the studies I’ve seen. Now, Mr. Hintz talked about building new nukes in the United States. The question is, is industry really going to do that without some incentives? What does the government have to do to strike the appropriate economic balance to make up for the subsidy that fossil fuel is getting?

HINTZ: Well, I don’t know if I agree with you that we’re making tons of money on the existing plants (laughter) but they are very profitable and that’s primarily because the production cost is very low compared to other ways of generating power. But getting back to what it would take for say, Entergy to build a new nuclear plant, I guess it’s been about two years ago, I made a presentation. And the title of the presentation was, “The Stars are Aligning” and the theme was that it does seem like everything is starting to come together that would allow us to go ahead and build new nuclear plants.

And the stars I was talking about was, I think the public opinion is continuing to get better. We’re seeing plant operational performance not only being better but I think we have a lot of confidence that we can operate them consistently at high performance levels. And I’d say ten years ago we weren’t sure of that because it always seemed like you could operate them well but then you would end up with a long-term shut down for some reason or another. The safety record has been extremely good.

We still see that operating costs are decreasing or at least stable and we’re seeing most other fuels, the fuel costs are continuing to escalate. And so I mean it looks like everything is coming together that, why aren’t utilities jumping at the chance to build a new nuclear plant? Probably the biggest reason I think is that the capital costs are still quite high. And I know the vendors have done a lot of work in trying to reduce the costs and trying to make the plants a little simpler and having more passive systems and things like that.

But the issue is, with the special things associated with nuclear, a lot of capital dollars, it takes a long time to build them and things like that, that the capital costs are still such that the other forms of generating electricity are more attractive. But it is getting close and I get a lot of questions now, when people see what happens to the price of gas. Well, surely, now, that’s going to be the final thing that’s going to tip it. And I think everybody’s got a different view on natural gas and I’ll give you Entergy’s, which I’m sure is wrong. We’ve never been right on it in the past, but (laughter) we see natural gas is going to be very volatile. I mean you are going to see $10 dollar gas and, we used to say, $2 dollar gas. I don’t think you are going to see that again, probably.

But you are going to see, we believe, fairly low-priced gas. You’re going to have the volatility. So, when you are building a plant, like a nuclear plant, you’ve got to figure out, on average, what’s the price of natural gas going to be? And we’re not convinced on the average that it’s going to be greater then $5 dollars. And if you’re somewhere between $4 and $5 dollars, these capital costs are still too much. But I think if we got any credit or much credit for the environmental advantages of nuclear, I think that would be enough to tip the table and I’d be surprised if you wouldn’t see someone going ahead it.

Let me just say. I know I am taking much too much time. But let me just say one of the problems that you have with building a nuclear plant, besides large capital costs, we can’t get debt on them. And maybe we can’t today, but we built a gas-fired plant with 90% debt and we’re building this nuclear plant with 100% equity. And it could be the greatest technology in the world and vendors can do a great job of getting costs down, but when you’re building something with 100% equity, that does change the financial situation of that plant. I think we’re close but we’re not quite there yet.

CARD: Thank you Don. I think it was important to have that dialogue so that the audience understood that it is not a national policy issue -- why we are not seeing more nuclear plants. It’s the financial structure and the thing the Don didn’t delve into but I think is a big deal is that since we have liberalized the market and we’re in favor of that and Europe is doing the same thing, when you apply corporate rate of return to that capital, it makes it very hard to recognize the long-term investment potential of a nuclear power plant.

WAGNER: Henry Wagner, Johns Hopkins. I would like to ask the panel what role nuclear energy has in desalination. Fresh water availability is a major, major problem for the future. And sometimes I dream of seeing a nuclear submarine temporarily parked outside the island of Kauai(?) in Hawaii, making enough fresh water for next year and then moving on to another place and producing more fresh water. Could somebody comment on the role of nuclear energy in desalination?

BOWMAN: I see a golden opportunity to use nuclear power in desalinization. I see less opportunity for using a nuclear submarine to do that. First of all, just very quickly, we need all the nuclear submarines that we can get and then some to do what’s going on in the world today. It’s not that outlandish a proposition, by the way. I’ve been approached several times in the seven years I’ve been in this job to back a submarine into the piers in New Hampshire and perhaps feed the energy grid there.

The truth of the matter is, if you look at the size of our reactors and you look at the devotion of the majority of that energy to propulsion power and not to electrical generating power, you will see that it is a non-starter from the standpoint of contributing measurably to any of our deficits. But nuclear energy as a means of desalinization, you’re right, we do that onboard our nuclear powered aircraft carriers and submarines today and it certainly, with the advent of new systems, reverse osmosis systems for desalinization, I think it is another thing we should be thinking about.

BUGAT: Yes, I can add some more on the subject. We are studying 300- megawatt electric co-generation nuclear plant for electricity and desalination and it works. The Indian people are studying too. But roughly speaking, with the 300- megawatts you can use 250 for electricity and use 50 megawatts for desalination and with that 50 megawatts you can produce 200 thousand cubic meters by day. So that means that that kind of is able to furnish electricity and water for one million people, an area of one million people.

So it cannot be-- We are not plenty of that kind of population who need the water. That is tropical countries with networks and are able to transfer the electricity. And more of that, what is important, the cost of the kilowatt that is produced is two times the cost of one thousand megawatt plant, which means, how do you build the investment? How do you build the capital for the investment? It was a question on which every company is locked(?) now.

DOWNEY: Good morning. Lieutenant Colonel Jim Downey. I’m currently a fellow at Harvard University. And I want to ask just a little off question. We’ve spoken about nuclear power and land and also the sea. I’m interested in the medium of space. NASA has a new program to develop a nuclear reactor based propulsion system for deep space. And what surprises me is so far, it has not received a lot of attention in perhaps the environmental concern arena, although it may in a couple of years.

BOWMAN: I’m still developing some understandings. I believe it will forward the cause of nuclear energy. I suggest that your opening salvo may come true sooner than we want, that the environmentalists will notice and we will begin having to answer some questions about it. But the idea would be-- The first idea that NASA is working on is an orbiter unmanned for the icy moons of Jupiter and the JIMO project. It’s funded. It has received funding for the past two years in NASA and, indeed, the possibility that Naval Reactors will be delivered another national mandate similar to the two that I discussed earlier, that Admiral Rickover received is very real and we’re looking at that even as we speak.

CARD: --Space nuclear. Bill, did you want to add anything to that?

MAGWOOD: Sure, I’ll just add that I think that whenever you are able to use nuclear technology to take on an activity such as exploring space that the public gets excited about, I think it’s something that has potential benefit all over for nuclear power. I often, in talking to school children about nuclear technology, point out the wonderful pictures we’ve gotten from the planets, from Jupiter, from Uranus and others-- And to be able to point to that and say, “We wouldn’t be able to do that without nuclear technology,” I think is a real advantage.

And the fact is that as we’ve worked with NASA over the years about what their future visions are for space exploration, it became extremely clear to them-- We had to sort of drag them into it but it became very clear to them that they couldn’t accomplish their mission without nuclear technology. And someone mentioned earlier there needs to be an education process and that is part of the education process because there are things you can do with nuclear you can’t do with other things, not just in space exploration power but also in medical treatment and other things and I getting that story out has to be very important.

BRODSKY: Alan Brodsky again, ...(inaudible)RC and Georgetown University. But I’m speaking for myself. Not even my wife approves very much of what I say. (Laughter) I congratulate the nuclear energy industry and the great safety record and I wonder why they don’t-- My question is, why don’t they spend more advertising funds to educate the public properly. I’ve made my own miniscule efforts through professional society and have had very little success.

The President, as opposed to the conditions under which President Eisenhower was able to promote nuclear energy, has to face the possibility that he won’t be re-elected because so much of the mis-information that some of the people I know have spread through the media to the public. I have some ideas about the proper kinds of information to be given by the public but have not been able to reach anybody in a leadership position who can present this information.

You know, I personally think at times we spend too much time educating the people that believe in our product and we’re speaking to the choir. So I think we have to look at that more, other ways to educate the public including using more advertising. But, it is costly and when it’s been recommended by NEI that the industry spend more money on it, we got sort of mixed support on how much we want to spend on the advertising.

(Unidentified Speaker)__: Great. So, I’m a physics professor at Michigan and like Bart Richter, I work at high energy accelerators. We’re not producers of electricity; we’re customers. But I’m going to talk about nuclear engineering. President Eisenhower’s 1953 “Atoms for Peace” speech, certainly helped to make nuclear engineering a very exciting field. Therefore it attracted some of the best and brightest young students. As I say, I sure am not a nuclear engineer but for a complex reason, I came to know and admire some of the ex-students about 20 years later in 1973, when there was some problem.

Is there any plan for DOE or the nuclear power industry to start rapidly providing some scholarships in nuclear engineering for freshman engineers, some fellowships for graduate students in nuclear engineering and some post-doctoral fellowships to keep these young guys occupied so that you can start attracting people? I started talking to some of the kids in my physics class into going into nuclear engineering and I work at it and I got a few. But it’s hard when there is not clearly any jobs downstream.

MAGWOOD: We’re currently funding about 150 scholarships and fellowships for nuclear engineering students every year. That’s not enough. I mean I would like to do twice as many but it’s a start and it’s a basis to build on. The point you make is absolutely correct. There is a real threat in the United States particularly, that the infrastructure that was built after Atoms for Peace-- It is not just the people. It is the research reactors. It’s the program. They’re all aging to the point where many schools are abandoning their programs.

We’re making a bigger investment. When I first took over the Office of Nuclear Energy, we were spending about $3 million dollars a year on nuclear engineering. We’re now spending about $20. So we’ve increased it. I would like to do more. I will do more. But the fact of the matter is there is a limit to how much the government can do unless Don here gets his industry, galvanizes it to build more plants because when we talk to students about the future prospects for nuclear, it’s very clear that the people we’re seeing are the people really excited by the science and technology.

IRVINE: I’m Reed Irvine the founder of Accuracy in the Media and I want to say that like Alan Brodsky, I was rather amazed to come and have a panel like this where it has indicated that economic reasons were the reasons that we have not built nuclear plants in this country. And, of course, the ...(inaudible) experience, shows that it is fear that has stopped the building of nuclear plants, the misapprehensions that the public has.

And I give you an illustration of ...(inaudible) well they could advertise. But it isn’t necessarily a matter of advertising. It’s a matter of getting you message out and there are many ways that that can be done. I’ll give you an illustration. A couple of years ago The New York Times ran an article in which they said that thousands of people had died as a result of the Chernobyl accident. How many of people here, I wonder believe that thousands of people died at Chernobyl?

IRVINE: As a result? Well, so it happened that ten years after the accident, there was a conference in Vienna where all the people that had studied the impact of Chernobyl on health met and it may surprise you to know that they agreed at that conference in Vienna that the number of people who died as a result of that accident was less than 50. You may find that incredible but I invite you to go look at the record, the report of that conference, which you can find on the Internet.

IRVINE: Yes, except they pointed out that there were a lot of lives lost as a result of the abortions because the mothers feared that the babies would be malformed or something like that. So, what you should do, Mr. Blitz is when you see something like that in The New York Times, you might have done what Accuracy in Media did and that is write them a letter and tell them they were wrong and lean on them to persuade them that they are on the wrong track in terrifying people. I’m sure that the people who were resisting putting that $7 billion dollar plant at Shoreham(?) into operation, were not concerned about economics. They were not even concerned about their taxes or electrical bills. They were concerned about the danger that they perceived even though the industry has an outstanding record for safety.

CONNOR: Hi, my name if Mike Connor and I’m the President of Nuclear Resources International. But along with Don Hintz, I think I’m one of the few utility people that’s here at the conference. I manage the nuclear fuel for the Robert Emmett Gina power plant outside Rochester, New York. And I just thought after listening to these papers that you might enjoy a small success story. Ginna is 500-megawatt Westinghouse PWR.

I wanted to call your attention on page four of the program, the first bullet says, Three Mile Island and Chernobyl cast a very dark cloud over the nuclear industry. Now that we have greater historical perspective, how should we view these incidents? What have we learned from these events? It was just published two days ago that the other Three Mile Island Plant just hit a record of 680 days continuous operation before it shut down for its refueling outage. So, that’s some perspective on Three Mile Island.

BOWMAN: One other-- In the same vein as to the Accuracy in the Media report that we heard. Three Mile Island, of course, I said in my discussion, was a non-event from a radiation standpoint and I truly believe that. The number of the public that received the most radiation from that event was back calculated to have received 37 millirem, which we, in this audience know is not very much, about a little over a tenth of what she would have received in her home anyway, for that year.

Thirty-seven millirem is a little over a third of the allowable non-occupational exposure. The occupational worker who received the most did not exceed the occupational limits on Three Mile Island. So I couldn’t agree more with the perspective that more needs to be done in educating the public. I would suggest that along with advertising, we need to, as a group, go ahead and go for the throat and speak to the concerned scientists who are legitimately concerned but need some information, need some education about some of the things that we know that they don’t know. Indeed we do sing to much to the choir, preach too much to the choir.

We need to go, maybe to the concerned scientists and sit and walk through some of these facts and figures and we’ve been in operation long enough now that it might be time that we stop trying to prove the negative and put the onus of responsibility on the other side, bring forward the proof of the bad effects of this rather than challenging me to show that there is no bad effect, that we’ve been through two and a half generations of Navy nuclear power and there’s nothing there; there’s nothing to show.

(Unidentiefied Speaker)__: I think there is one other threat that we haven’t mentioned, a threat to the commercial nuclear industry. We talk about threats on public opinion and maybe not having the public educated and we talk about the economics of the new nuclear plant. But I think there is another big threat that industry is dealing with as we speak and that is the consequences of 9/11 and the impact on security on these nuclear plants. I mean we were the most secure major infrastructure in the United States prior to 9/11.

But as a result of 9/11, we are an industry that has been put in the spotlight and we spent a lot of money on security already and it’s not over yet. I mean we just have to keep dealing with the bigger bomb and we get that done and we start on something else. And, you know, the industry, we’re advocating that at some point in time, we would like to get thrown in with all the other critical infrastructure in this country. And if we were and you compared the threat associated with a nuclear plant compared to chemical plants or any other critical infrastructure, we look, actually, pretty good.

GARWIN: I’m Dick Garwin again. In January of this year I published with George Charpak a book, Megawatts and Megatons: The Future of Nuclear Power and Nuclear Weapons and we did look at all of the accidents including the 1986 accident and the ten years afterward. And our judgment is that (a) a couple of people probably, unidentifiable, died from Three Mile Island. It’s a very safe plant. We advocate the wide expansion of nuclear power.

But 24 thousand people, we anticipate, have died, will die from Chernobyl. It is just a tiny fraction of the population. It does not influence the positive views on the expansion of the nuclear industry but we provide the quotes from Abo(?) Gonzales, from the IAEA who never did the multiplication but says the 600 thousand seabirds, 60 million person rem, would correspond to that number of deaths and that’s the cost of doing business. You kill many more people from air pollution from coal-fired plants.

CARD: Thank you. With regrets to the at least dozen people who are still waiting for a dialogue on this-- I’m thrilled with the interaction. We’re going to go to lunch now. There were some logistical instructions. Do any of the hosts want to-- If it’s about lunch we’ll do it. Otherwise it will have to wait. Anybody want to offer any directions about what we do for lunch other than just go out the door and look for lunch. That’s what we’re going to do. Yes, Bob. Bob, do you have a mike?