Saturday, March 19, 2011

THE CONSEQUENCES OF NATURAL CATASTROPHES ARE MAN-MADE

Not always, but often.

Hurricanes, earthquakes, tsunamis, volcanic eruptions, floods—many big, bad things happen. To some, when they happen at the wrong place, always at the wrong time, the message is that natural forces, inevitably and invincibly, can overcome man-made cities or facilities, and that we are powerless to stop them. The message is one of fatalistic despair. Only one phenomenon is worse because it exists on a global scale: a falling sky.

The earthquake registering 8.9 on the Richter Scale and the 30-foot tsunami which it created caused thousands of deaths, devastated the east-central coast of Japan’s main island, and damaged a nuclear power site with six reactors. They recovery will take years and years. Some have concluded that the threat of severe accidents or disasters, with resulting radioactive releases, makes reliance on nuclear power as an alternative to fossil fuels problematic.

The arguments for and against nuclear power are another topic for another day. The simple facts are that the current nuclear power regime, now half a century old, provides a substantial amount of electrical power to the grids of many countries. This first regime reflects the false starts of a complex, nascent technology and an overconfident, emerging industry: many poor siting decisions, poor plant designs, poor reactor designs, poor accident-prevention or -mitigation strategies, and more.

Whether the second regime, now waiting for the right technological developments, economic conditions, and regulatory approval, can do better remains to be seen. My hope is qualified by an understanding that the problems with nuclear power have less to do with technology and more to do with management. Perhaps, a better way to put it is to say that the problems with nuclear power are the desire, here as elsewhere, for low-cost, short-cut, politically convenient solutions.

Consider the dikes built centuries ago to protect New Orleans. Modest upgrades over the years to protect the city against a Category III hurricane were far from perfect mainly because of poor design, poor materials, and poor equipment. But the major problem was the decision not to protect the city against a larger hurricane. The decision seemed like a good idea at the time because no larger hurricane had struck the area in centuries and because no one wanted to pay the costs of prevention or mitigation, which increase proportionately to estimates of the severity of the threat. Worse, it ignored the size and scope of the consequences to a growing population in a growing city, with an expanding, expensive residential, commercial, and industrial base. Unlike homeowners who increase their insurance coverage as their houses appreciate in value, government at all levels did not proportionately increase their protection and preparation as the city grew.

Or consider the Japanese government decision to site six nuclear power plants in an earthquake- and tsunami-prone area—most in Japan would be prone to one or the other, if not both. Given the risks, it might have stipulated earthquake-resistant designs capable of tolerating quakes one or more orders of magnitude greater than the greatest earthquake registered in the country, tsunami-resistant structures and above-crest support facilities, separate power sources for each plant, and separate, on-site water stored to flood each containment vessel. These and other stipulated features would have cost much more than current features did, but they would have spared the far greater costs of what can be recovered and, in the lives of thousands, what cannot be recovered.

Since we already have an old, large nuclear power regime, we will need a new, larger regime to meet future electrical energy demand, including displacement of fossil-fuel energy. This second regime must avoid the past’s cheaper and easier approach which ultimately jeopardizes safety, health, and the environment, not to mention the economy.

The biggest problem-avoiding strategy is to develop the second regime in a mixed-free-market manner. On the one hand, the industry pays its way, without guaranteed loans, subsidies, or liability caps. On the other hand, the government simultaneously does two things. One, it establishes and enforces regulations and standards reducing the probability or the consequences of natural disaster and human error. Two, it eliminates all energy taxes and all support of other energy industries so that the public faces the full, real costs of energy in any form. Let energy competition begin.

These points are the start of a national energy policy. A mixed-free-market in energy means that all forms of energy compete on a market-price-clearing basis. Thus: Energy industries pay their way—including all costs posed by the consequences of operations, disasters, or accidents—by setting prices to cover costs and make profits. Government regulates the energy industries to require that they build into their operations, facilities, and equipment whatever it takes to reduce risks to safety, health, and the environment from operations, disaster, or accident. It regulates the infrastructure for energy or fuel distribution to maintain reliability and efficiency. Finally, it conducts basic research to support industries’ applied research and development.

No one can prevent natural phenomena from occurring or accidents from happening. But we can prepare and act sensibly and safely. We can start by addressing fossil-fuel-energy industry conduct, its influence on government, and government efforts to encourage fossil-fuel-energy industries, all of which lead to realized threats to, and harmful effects on, the public. We have to encourage government officials to do the right thing, make energy industries pay their way, and make us pay taxes for the government to fully discharge its energy-related responsibilities.

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