Nuclear: Cost of Source Mining

This post will compare the spot prices of the mineral resources that go into different energy sources, and compare them to the price of uranium, U3O8. The sources that will be looked at are coal, natural gas, oil, and rare earth metals, which are used in renewables like solar energy. Since prices change depending on market conditions, it should be implied that the price indicated is an approximation of what the source fuels cost.

The price of natural uranium, U3O8, is $25.50 per pound, according to Ux Consulting Company. The ten year price ranging from $19 per pound to $139 per pound. The price of coal is $52.05 per short ton. The ten year price ranging from $50 per short ton to about $125 per short ton. The price of natural gas is $3.30 per million BTU. The ten year price for natural gas has ranged from $2.00 per million BTU to $12.00 per million BTU. Indium and tellurium are both rare earth elements that are frequently used in solar panels. Indium costs about $720.00 per kilogram, and tellurium costs about $51.34 per kilogram.

However, these units are all different from each other, and need to be converted to a comparable unit, which will be in heat content measured in BTUs. According to the Energy Information Administration, a short ton of coal produced about 20.16 million BTUs. According to the World Nuclear Associate, one pound of natural uranium in a light water reactor can produce 214,961 million BTUs. Since solar power is a renewable source, it is difficult to figure out how much heat content 1 kilogram of tellurium or indium will provide via energy generated. Not only is the source renewable, but it is also incredibly variable, as it depends how much sun is shining, what kind of solar array is being used, and what kind of maintenance is performed on the arrays.

With the numbers provided, the heat content provided per dollar spent on a fuel source can be calculated. For every dollar spent on coal, about 387,320 BTUs are produced. For every dollar spent on natural gas, about 303,030 BTUs are produced. For every dollar spent on uranium, about 8,429,843,137 BTUs are produced. It is worth noting that this is not the full price of generating this heat content, but just the price spent on fuel only. However, when considering fuel prices, nuclear energy is without a doubt the cheapest source.

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Do We Know Enough About Energy Policy?

Energy policy can be really boring to most people. Energy policy combines a lot of technology and science issues with socio-economic and political issues, which creates a complex relationship. Within this complex relationship, there is a lot of published data, ongoing research, and political work-arounds.

Furthermore, its topics don’t grab young minds like drug policy or foreign policy. I suppose oil and gas is not as sexy to think about as the implications of joints and bombs. I get it. Well, I understand you, but I don’t agree with you.

However, something that became clear to me when I became more interested in energy policy is that almost no one seems to understand it even a little bit. It is like there is a complete black out of knowledge among Americans when it comes to our energy policy and interests. This surprised me because energy policy is so important. It effects everyone in the United States no matter what. If you are reading this blog, you are using energy to read this blog and to keep the servers up for this blog. We all have lights to turn on. We all have vehicles to ride in, whether it is our own car, a bus, or an Uber. Our lives, our planet, and our standards of living are all in wedlock with the energy policies of the nation.

Many friends of mine were fascinated with the Standing Rock protests, which how could you not be with the terrible brutality those protesters had to go through. Yet, very few of these friends had much of a coherent clue of what it was they wanted. They didn’t know how much pipeline had already been built in the United States (around 2.5 million miles), and why this was decided as an effective method to transport oil and gas. They didn’t know what alternatives there were to a pipeline, and they didn’t really know where this pipeline was being placed and who had ownership of this land. However, these to me were minor lapses of understanding. I mean besides industry leaders and top policy wonks, who could really give you the amount of pipeline built in the US right off the top of their head? (Me. THAT’S WHO!)

The most egregious misunderstanding is that many of them truly believed we could live in a world without fossil fuels right now. That we could simply pack up our oil, gas, and coal operations, and there would only be minor complications. This is laughably ignorant, and it is such a widespread idea among college students! Even students at South Dakota School of Mines and Technology, which is an engineering and science school! I don’t want to get too bogged down on this specific point and will devote a post on its own to this topic, but looking at the primary energy consumption data posted by the U.S. Energy Information Administration should help clear up this fable. Looking at the amount of energy produced in total from 2015 (97.22 quadrillion BTUs) compared to the amount of energy produced by renewables, which includes hydroelectric, geothermal, wind, solar, and biomass, in 2015 (9.450 quadrillion BTUs), it is clear that renewables have a lot of work to do before we can completely throw away fossil fuels. Getting rid of oil and gas outright would clearly cause widespread shortages, which means immense suffering among people that need electricity right now (think hospitals, 911 responders, etc).

And my anecdotal evidence of my friends is not the only evidence I have for people being grossly ignorant on energy policy issues. Americans have been historically really bad with energy policy.

In 1978, two thirds of Americans polled thought that a nuclear power plant accident could result in an explosion like Hiroshima. Furthermore, this was around the same time that James Bridges’ movie, The China Syndrome, came out, which claimed that during a nuclear power plant melt down, the fuel rods would be so hot that they could burrow all the way to China. People watched and, presumably, believed this movie.

In 1977, 52% of Americans polled by Roper answered that they thought solar power would overtake foreign oil imports in the next 5 years, and 16% thought that wind power could do it. Yet here we are, still importing foreign oil 40 years later.

In the 1970s, a majority of Americans thought that the gas lines and energy shortages were due to oil companies greedily hiding their oil somewhere out of the United States so that they could sell oil for higher prices! As if the instability in the Middle East (particularly Israel and Egypt), environmental regulations, and inflation played absolutely no roles in rising oil prices!

But perhaps, people are smarter now. All these examples are from the 1970s, and after 40 years, perhaps the public became wiser. I will delve into this question on future blog posts. I have to get you to come back to my blog somehow!

 

(The historical polls referenced in this post all came from Eric R.A.N. Smith’s book Energy, the Environment, and Public Policy, which can be bought on Amazon here)

What does it mean to be agnostic on energy?

Simplistically, it means that we support the free market methods of finding a preferable energy source, whether it be renewables, fracking, nuclear energy, or some other energy production method.

It seems that there are many conservatives and libertarians across the United States that are against renewable energy, namely wind and solar, in and of itself. However, this shows a complete misunderstanding of the free market position. Oil and natural gas are not libertarian sources of energy, whatever that may mean. The whole point of a free market is that it is undesigned. There are no winner and losers chosen, but instead our energy source is “chosen” through consumer demand, prices, supply, and a multitude of other factors.

The truth is that I have a soft spot for renewable and clean energy. The environment is important to me, and I wish for people for years to come to enjoy the same Rocky Mountains I have enjoyed my entire life. I hope most people would think it would be absurd to claim otherwise. However, I still do not think it is appropriate for the government to mandate or skew markets for the sake of what a few may determine is a preferable energy supply, as it would most certainly be arbitrary.

For example if I were to choose, I would probably choose nuclear energy as a preferable form of energy production as it is clean, really awesome (totally not a value statement), and relatively effective. However, nuclear energy is not perfect as it can be really expensive to build the infrastructure for and takes incredibly specialized professionals to do the job. If some environmental leftists were to choose, I assume they would choose wind energy. Wind energy production doesn’t create emissions, and the wind is a resource that won’t be going away anytime soon. However, wind is not a reliable enough source of energy to depend on and the materials used to build these farms are not environmentally friendly either. Similar things could be said about solar energy. If a traditional conservative were to choose, they might choose hydraulic fracturing, which is relatively cheap and cleaner than crude oil drilling. However, fracking is not emissions-free and is also not currently politically desirable in many ways.

So when we set up a system that chooses winner and losers, the winner is only dependent on who the chooser is, which is not something that I think anyone is particularly interested in.

However, that does not mean we can’t have an effect on the energy being used today. We certainly can, but we can’t use government preferences for these ends. Consumer demand is a powerful element of a market, and it is something that we all can affect. If you are interested in cleaner energy, educate people about it. Make people really desire having cleaner energy or whatever form of energy you think is best. This isn’t an impossible task, but it is more difficult than using the government as a tool to your ends.

Furthermore, as surprising as this may sound, we must check our own privileges when discussing sound energy policy. Yes, the environment is important and we should protect it, but this does come with a higher bill. While this higher bill is mostly affordable to the high and middle class, the same can’t be said for the less fortunate and lower class. While they would certainly benefit from a cleaner environment, I am not sure they would find the tradeoff of being able to afford more food, better clothes, and so on desirable. However in a free market of energy, they could make such a choice if they so desire.

When it comes down to it sound energy policy is quite difficult, and even more so when you think the government should pick winners and losers in the market. People think that it is so easy when they post things to Facebook like “of course the government needs to subsidize renewable energy” yet they know very little about the costs of such a policy and who it effects. Likewise, people think it is so easy to say “oil and gas is the cheapest therefore the best”, but they don’t even bother to consider the externalities of such a decision or how different people may value its environmental effects.

Trevor Burrus, a research fellow at the Cato Institute, recently wrote about the difficulties of gun policy in which he explains that the gun control argument is not as obvious of an argument as its advocates would like you to believe and the gun rights argument is not as obvious of an argument as its advocates would like you to believe. The same could be said about energy policy, and most policy matters. It is hard. It is nuanced. There is no cure all policy or energy source, for that matter.

This is why I am agnostic on energy sources, and this is why the free market is so important. There are certainly market failures in addressing issues throughout history, but freeing up the market takes the hard decisions out of the hands of an arbitrary decider, or deciders, and into a complex system in which we all are a part of.