Berthold Brecht put it as follows: “If you don’t know the truth, you are a fool, while if you know the truth but say that it is a lie, you are a villain." I seldom object to that kind of language, because I used it all the time when I taught financial economics at Uppsala University,  but it is not always appropriate when the subject is nuclear, and so I modified it somewhat for a talk that I gave a few years ago in Singapore at Nanyang Engineering University, where I was once a visiting professor: If you don’t know the truth about nuclear energy you are probably too tired or unlucky to find out, because learning enough to feel comfortable when the conversation turns to energy is as simple as locating your name on your birth certificate.

 On the other hand, if you know the truth but say that it is a lie – which often happens – it generally means that you don’t want to offend certain persons. For example,  persons who might not invite you to their parties and dinners if you reject their beliefs about this very touchy subject.

The most important project in energy economics at the present time is providing proof that optimal national energy structures of the future will be a mix of all sorts of items – nuclear, fossil fuels, renewables (which includes hydro), alternatives etc. The anti-nuclear booster club wants to eliminate nuclear from that collection, but fortunately they are going to be greatly disappointed. The reason they are going to be disappointed can be explained by referring to what I call the first law of neoclassical economic theory: voters (and others) prefer more to less! They prefer it in both the short and long terms, even though they are often they are confused in the former.

Once this is appreciated, some effort should immediately be put into comprehending perfectly a few basic characteristics of nuclear. This is not always easy, even for the leading academic energy economist in the world, however I congratulate myself on my familiarity with a few things. For instance, I know that while some countries, to include China, make a special effort to pay tribute to renewables, where serious business is concerned they will bet on nuclear. China will make this bet because they are able – or will be able – to construct reactors faster and probably cheaper than any country in the world. I also know something even more important. I know that when dealing with energy matters, you are liable to find yourself confronting a whirlwind of lies and misunderstandings.

Mainland China has many reactors in operation or under construction, and perhaps twice that number  in the planning stages. But even so, the energy directorate in that country is apparently in no hurry to increase the pace at which reactors are produced, because they possess plenty of coal to burn in a clean or dirty manner, and in addition they want to make sure that they are constructing and installing the most efficient and up-to-date nuclear equipment. Perhaps I should mention that the Chinese are in the nuclear business because – given their elaborate industrial agenda – an enormous amount of energy will have to be made available for things like  industrial activities and transportation. Attempting to obtain a majority of this energy from wind and solar would be completely and totally counterproductive. It would be absurd!

When I write papers or give lectures on oil, my preparation usually begins by examining the situation in the United States, by which I mean the situation going back to about 1931, and then transposing the most relevant materials into a short but useful survey which includes things like OPEC and the peak oil hypothesis.  Where nuclear is concerned, I always turn to Sweden for an indication of nuclear capabilities and successes.

In order to get environmental issues off the table, I make a practice of insisting  that Sweden possesses one of the cleanest environments in the world, as most visitors to this country will testify, and in addition has been spared many (though not all) of the macroeconomic stresses afflicting many other countries as a result of the large oil price increases that took place several years ago. One of the reasons for Sweden’s success in these matters is the large- scale utilization of water power (hydro) and nuclear energy: nuclear supplies about 45 percent of electric generating capacity (in e.g. Kilowatts), and probably more than 50 percent of electric energy (in kilowatt-hours).

The nuclear phenomenon that makes an appearance in all my energy lectures and books has to do with the creation of the Swedish nuclear sector, which was a brilliant engineering feat: 12 reactors in just under 14 years.  Even so, when those 12 reactors were constructed, a large part of the inherent (i.e. genetic-based) engineering talent in Sweden (as well as other countries) belonged to women, but  for some silly reason this talent was  not exploited in the most profitable (social and private) economic fashion. For instance, I do not remember a single women being present in my approximately 45 engineering classes at Illinois Institute of Technology (Chicago), or in the large advanced servomechanisms class I attended at the University of California (Los Angeles), or for that matter the mathematics class I commenced at the Royal Institute of Technology the first semester that I arrived in Stockholm.

The obvious and important conclusion here is that since women now make up a sizable fraction of scientific and engineering students in Sweden and elsewhere, and there are many more women in science and engineering, the human input available for the design and construction of more cost-effective reactors has greatly increased, assuming that this input will be correctly allocated. In these circumstances I find it easy to claim that the same kind of engineering masterpiece that appeared in Sweden 30 or so years ago could easily be duplicated almost anywhere in the industrial world at the present time if the political will could be mobilized.

Whether this ‘will’ is mobilized or not is largely uninteresting to me, but at the Singapore conference I attempted to explain that the insistence by the German chancellor Angela Merkel that nuclear can be replaced by renewables, amounts to a clear and present attack on the living standards of gainfully employed people in central Europe (and perhaps elsewhere). Moreover, I do not believe for a single moment that Chancellor Merkel knows less about nuclear economics than I do, because the topic is singularly uncomplicated for anyone completing the advanced science courses in a German or Swedish  secondary school.

This alone makes it particularly distasteful for me to find myself among the potential victims of Frau Merkel’s goofy nuclear retreat, because it will be difficult or impossible for me to avoid the outcome of  the eventual  decline in the German macro-economy that is certain to take place  if the grotesque attempt to replace nuclear by wind and solar is continued.  Equally as annoying is the failure of German voters to react strenuously to the threat posed to their incomes and life styles, but on the basis of what I learned about that country (and Japan) when I served in them with the American army, I doubt whether their citizens are eager to play the energy fool for ambitious politicians and the academic charlatans they can mobilize to broadcast their precious messages.

When a student of nuclear energy walks through the streets of beautiful summer Stockholm, he or she might conclude that without the contribution of nuclear energy, the standard of living might be lower. As for me, when I walk through the streets of summer or winter Stockholm, I don’t think about the standard of living as such, but the Swedish welfare system, and how my modest pension and possible future medical requirements might be influenced by a total or partial nuclear retreat. They would be influenced in such a way that I could eventually be in very serious trouble, although as a partial compensation I am thrilled by my belief that the rich inhabitants of this country would hardly notice the change.

I engage in many polemics about energy in my articles, lectures and especially my energy textbooks (2000, 2007, 2015). I also have long conversations with myself on the subject, usually in the silence of my lonely room. This might be why I once received a number of strange mails from a Catalan engineer (who says that he is a PhD from the Massachusetts Institute of Technology) informing me that a large team of experts at MIT have produced research on the cost and desirability of nuclear energy that – in his opinion – casts some skepticism on my humble work on these subjects.

Their research casts no skepticism on my work, because I doubt whether they are capable of understanding my work. The calculations made at MIT or IIT (Illinois Institute of Technology) or CIT (California Institute of Technology) or the storefront university that gave me my economics degree may or may not be correct for the short run, but as for the long term – where the issue is mainly economics – they are probably as wrong as the Dean of Engineering at Illinois Institute of Technology thought that I was when he expelled me from his school for failing physics and mathematics, both of which I failed (twice),  and told me to never come back.

 Wrong because there are no electricity generating assets on the horizon that are as flexible as nuclear reactors when it comes to providing large amounts of reliable electric power. Flexible in what way?  How can someone look at a nuclear facility and talk about flexibility? The answer is that flexibility in this context means the ability to greatly improve the technology and economics of future generations of reactors, although improvements might also be made where wind and solar equipment is concerned.

 Readers with an interest in microeconomic theory should also take a look at some aspects of the paper by Fabien A. Roques et al (2006), which views nuclear as a hedge against uncertain fossil fuel prices, and also suggests that it might be fruitful to view energy as a ‘public good’ (like e.g. streetlights and defence). I certainly can accept that, since it is clear to me that investing in energy makes more economic sense than investing in stupid wars on the other side of the world.

 Also, and please note carefully, with nuclear installations located domestically, you know almost exactly what you will get over very long time frames. With other energy resources there can be large uncertainties about fuel availability and prices.  This is why Finland, with Norwegian gas on one side of that country, and Russian gas and coal on the other side, decided to buy the largest reactor in the world from Areva of France. The story behind that decision is simple: Finland has one of the best educated populations in the world, so why should they endanger their economic future by playing the energy fool?

It was recently announced in the Wall Street Journal that pension funds and institutional investors in Europe have become interested in the financing of offshore wind parks. Well why not? Wind parks are heavily subsidised in Europe and elsewhere, and as long as those subsidies are in place, and are substantial, wind parks  probably make sense for investors in physical assets as well as Wall Street wheelers and dealers.    The thing to notice here is that where financial markets are concerned, issues such as engineering and scientific efficiency and logic are secondary to financial returns. Thus it is easy to equate wind parks to nuclear facilities if they yield the same expected financial return for the ladies and gentlemen who are instrumental in their financing.   

Just as important, the clients (and sometimes the officers) of these financial institutions are under constant assault by a barrage of lies and misunderstandings. Not only the former Swedish Energy Minister, but one of the most important environmental executives in Sweden decided to inform the faithful that wind turbines can replace nuclear assets as providers of the electric base load, although such a claim would never pass the lips of men and women whose own salaries and perks would be jeopardized if their own money and careers were at risk. By way of contributing to the deterioration of economic knowledge about energy matters, a former head of the Swedish government went so far as to pronounce nuclear “obsolete”.

I can close by admitting that many persons would hesitate to support the opinions I offer in this paper. If so, and if they can arrange to appear in an Uppsala seminar room, I will make them the same offer that I made the chief energy economist of the London Economist, which is that I will make them feel so inferior that they will never want to hear the word energy again. Of course, the bottom line for the present contribution is not what I or Mister Lucas believe, nor the outcome of a modest discussion between he and my good self, but that where energy is concerned, voters should wake up and do the elementary amount of thinking that is necessary to obtain the energy they both need and deserve.

References

Banks, Ferdinand E. (2015). Energy and Economic Theory. London, New York and   Singapore: World Scientific 

(2007). The Political Economy of World Energy: An Introductory

Textbook. Singapore, London and New York: World Scientific’ 

(2000).Energy Economics: A Modern Introduction. Dordrecht and Boston: KluwerAcademic.  Roques, Fabien A., William J. Nuttall, David M.

Newberry, Richard de Neufville, Steven Connors 

(2006). ‘Nuclear power: a hedge against uncertain gas and carbonprices.’The Energy Journal, (Volume 27, No 4).