From Port Folio Weekly.

Inside the reactor control room at the Dominion Power's Surry Nuclear Plant this morning, Donald Masiago is watching a computer screen that shows unit two's operating capacity. While there are mountainous and dramatic deviations on the solid graph, they're also a little deceiving. The scale is set to operate between 99.9 percent and 100.1 percent so he's looking at capacity changes in the hundredths of percentage points.

            There was a time when nuclear reactors ran at 50 or 60 percent of capacity. Several were shut down in the 1990s because they were no longer economically feasible for their operators. But the message here is that has changed; the industry has grown up and deserves a second look. "We've just gotten better running these units," says Matt Adams, Surry's station director and safety chief who is serving as my tour guide.

That's the mood I've encountered all morning during a tour of the Surry station. It seems to reflect not only the industry’s optimism, but the public’s perception of nuclear power.

Once, those distinctive cooling towers were symbolic of an industry guaranteed to make you glow or maybe melt through the Earth's core despite the best efforts of Michael Douglas and Jane Fonda.

Now, the great green campaign against global warming may need nukes in its arsenal. Atoms for peace could become atoms for Mother Earth. With the push for "clean" energy to reduce greenhouse gases, nuclear power is undergoing a renaissance both on Wall Street (and in utility executive offices) and public opinion. 

About 70 percent of U.S. energy sources -- oil, natural gas and coal plants -- burn carbon. Citing that, even the environmental movement, which used opposition to nukes as a rallying cry in the 1970s and 1980s, seems open to splitting atoms – or, at least, more open to splitting atoms than burning coal. 

"Even the founder of Greenpeace came out in support of nuclear energy as a way going forward towards solving our energy demands," said Don Jernigan, who runs the Surry station and is the site vice president.

Jernigan, a 30-year-veteran of the industry, sits in his corner office and ticks off what he sees as nuclear power's selling points: it is clean, without emissions, and, relatively speaking, it's cheaper than other sources of energy (though he's quick to say that's adding in the cost of pollution control technologies for coal plants).

            It’s that clean, available power now that has environmentalists suddenly open to the possibility of building nuclear power stations. Gaia theorist James Lovelock of Great Britain was the first to endorse them in 2003. He was soon followed by Patrick Moore, a co-founder of Greenpeace who split from that organization a decade ago.

Stewart Brand, the Merry Prankster, former editor of The Whole Earth Catalogue and founder of the Long Now Foundation, says global warming poses such a threat that nuclear power has to be an option. ''There were legitimate reasons to worry about nuclear power, but now that we know about the threat of climate change, we have to put the risks in perspective,'' he told The New York Times. ''Sure, nuclear waste is a problem, but the great thing about it is you know where it is and you can guard it. The bad thing about coal waste is that you don't know where it is and you don't know what it's doing. The carbon dioxide is in everybody's atmosphere.''

Eileen Claussen, President of the PewCenter on Global Climate Change and a former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs in the Clinton Administration, told me that nuclear will be in the mix to combat global warming.

"It has to be part of the solution," she said. "You cannot make up for 20 percent now provided by nuclear because there is not anything else. Not that nuclear doesn't have problems. It does. But you know everything does. There is no perfect solution. We're going to increase the amount of electricity supplied by nuclear. I don't know how much, how fast, but I think it will increase." 

Other environmentalists remain steadfastly against new plants. They point to the storage problem, the proliferation problem and the cost of building enough plants to make a dent in the coal burned for electricity -- one study estimated that 1,000 new reactors would have to be built by mid-century to have an effect. Imagine, they say, if the sbillion to build a single nuclear plant were applied to insulating buildings, promoting electric cars or other energy efficiencies.

The Sierra Club's policy statement on nuclear power labels it "neither safe nor affordable." It cites toxic remains, "risky" plant technology, vulnerability to terrorism, nuclear proliferation, and the unsolved storage problems as reasons for its continuing opposition.

Dominion officials disagree. “The nuclear industry has a safety record second to none,” said Dominion spokesman Richard Zuercher said. “I think that safe, reliable operation of the nation’s 104 nuclear reactors has gone a long way in causing a new public dialogue on the future of electricity generation.” 

Public distrust, regulatory minders and an industry bent on improving its image over the years have prodded nuclear operators to become safer and more efficient.

Adams is effusive about his participation in the Institute of Nuclear Power Operations (INPO), an industry group that conducts on-site visits and shares lessons to better operate nuclear power plants. Surry got raves in its latest evaluation. "The successful operation of the current fleet is vitally important in making sure the next generation is going to happen," Adams says. "Pristine, excellent operation is paramount for us going forward and starting the next wave of construction."

Indeed, Surry is an example of how far the industry has come. The two units there averaged about 93 percent capacity from 2004-2006, compared with 72 percent capacity over their more than three-decades of operation, according to the Department of Energy.

That next wave may be just over the horizon. There are 104 nuclear reactors currently operating in the United States, but a new one hasn't been licensed in three decades, a legacy of the partial meltdown at Three Mile Island in Pennsylvania and a Wall Street that viewed nukes as too expensive and too controversial.  

That’s changing, nationally and regionally. Dominion plans to apply in November for a license to operate a new reactor it may build at its North Anna site, 100 miles from Washington, D.C. and 150 miles from Norfolk.  “The whole process for licensing units has changed to make it simpler for companies and more attractive for investors while maintaining openness with the public,” Zuercher said. “We are optimistic about the economics of nuclear. That’s why we’re going through the process to have an option to build a new station at North Anna.”

Still, Zuercher said Dominion hasn’t made a final decision on whether to spend several billion dollars to construct the unit. “We are still looking at the economics,” he added. “There have to be a number of factors in place for us to go forward including getting public acceptance.” 

Virginia gets about 35 percent of its energy from the Surry and North Anna plants, 45 percent (and rising) from coal and only 3.7 percent from renewable and "other" sources. According to a 2003 Department of Energy report, Virginia nuclear capacity ranked 14th among states. Seven of the 31 states with reactors, including Vermont, New Jersey, New York, Illinois, Connecticut, New Hampshire and South Carolina, get the largest percentage of their energy from nuclear. (Across its network, Dominion generates 34 percent of its capacity through coal, 24 percent with gas, 22 percent with nuclear, 12 percent with oil and eight percent with hydro and other sources). 

Some of the cost of the new North Anna reactor, located next to ones that began operating in 1978 and 1980, would be covered by tax breaks and other incentives (the nuclear industry has been heavily subsidized by tax dollars from its inception). It would produce1,500 megawatts of power, almost twice what each of the units at Surry produces. Zuercher says plans are for the reactor to go online in 2015, though in the past such projects have not met their scheduled completion dates.

 In response to complaints and concerns about discharge water from the reactor raising the temperature of Lake Anna, which Dominion created and is used for recreation, the company will build a $200 million wet-dry cooling tower, a technology new to the United States, but used in Europe and Japan. “It’s the right thing to do,” Zuercher said.

Dominion is representative of a U.S. nuclear industry that is poised to move into a major building phase. The North Anna application is one of 24 proposed U.S. reactors in the works according to the Nuclear Energy Institute. Globally, nuclear power is proliferating. Finland has ordered a big reactor specifically to meet the terms of the Kyoto Protocol on climate change. China's new nuke plants -- 26 by 2025 -- are part of a desperate effort at smog control. France gets 78 percent of its energy from nuclear power and stateside proponents point to the clean operating record of those plants as evidence the industry has turned the corner on safety and efficiency.  More than 400 nuclear power plants provide about 17 percent of the world's current energy needs, according to a study by the Massachusetts Institute of Technology.

The new push has been aided by federal money. The Bush administration's 2006 budget increased nuclear power funding by 5 percent, even as it cut overall energy funding. In the 2005 Energy Bill, Public Citizen charged there were $12 billion in nuclear subsidies, more than for either the coal or oil industries. In the Lieberman-McCain Climate Stewardship Act of 2007, Public Citizen and the National Resources Defense Counsel claim there were billions in subsides for the nuclear power industry (Public Citizen put the number at an additional $3.7 billion).

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In 1989, the Shoreham nuclear power plant on Long Island closed without producing a killowatt of power at a cost of $6 billion (the plant was fully decommissioned in 1994). In the wake of that and other nuclear plant problems, utilities and their Wall Street financiers stayed away from investing in new plants for two decades. Ratepayers ultimately were made responsible for the debacle. More than a decade later, Long Island electric rates remain among the nation's highest. And Shoreham was just the poster reactor for construction mismanagement.  In 1968, Pacific Gas & Electric projected the total cost of building Unit 1 of its DiabloCanyon plant at $445 million. By 1984, the final bill was $3.75 billion, an 843 percent increase.

Shoreham did give rise to the 1992 Energy Policy Act, which allowed the Nuclear Regulatory Commission to pre-certify reactor models and utilities to work with pre-approved sites. It would be a decade before any would use the new legislation. But the message is enduring: nuclear plants, even with the Bush Administration clearing some of the regulatory paperwork, are time-consuming and expensive to build.

Calculating the true cost of a kilowatt from a nuclear power plant is complex and controversial, not only because of the construction costs, but the storage costs and the risk assessments (a nuclear accident, for instance, would cost in the hundreds of billions of dollars). But with the cost of coal and other energy sources rising due to pollution controls and some sort of cap and trade program aimed at greenhouse gases in the near future, proponents say even with construction costs nuclear is an option. A Department of Energy paper in 2006 forecast the following prices for energy in 2015, without considering the environmental impact: 

Coal: $0.0531 per kwh

Wind: $0.0558 per kwh

Natural Gas: $0.0525 per kwh

Nuclear: $0.0593 per kwh

Solar: $0.30 per kwh

Biomass: $0.075 per kwh

 A report issued last month called The Nuclear Power Joint Fact-Finding put the cost slightly higher, at between 8 and 11 cents per killowatt hour. The task force was a group of 27 individuals from a broad spectrum including the nuclear industry (GE Energy, Duke Energy, the Nuclear Energy Institute), environmental groups (The Natural Resources Defense Counsel, The National Wildlife Federation), and others (The Pennsylvania Office of Consumer Advocate, the Kansas Corporation Commission, the Union of Concerned Scientists).

Dominion’s Zuecher and others in the industry say the Bush Administration’s new policy streamlining the plant approval process through pre-certified designs and public hearings loaded on the front end will decrease construction times and lower costs.

The fact-finding report noted that "factors other than cost can have an acute impact on the outlook of investors, CEOs, and regulators about the potential risks and benefits of a nuclear investment, including the market structure, certainty of regulatory oversight, public perception, and the disposition of nuclear waste."

One cheaper possibility lies in technology developed outside the United States. Fourth generation pebble-bed reactors being developed in China and South Africa are championed for being meltdown-proof, but they are also cheap and fast to build, perhaps as cheap as $300 million a reactor. Instead of water, a pebble bed reactor uses an inert or semi-inert gas like helium as the coolant. However, even proponents concede the technology will not be market competitive until 2020, well after China and other countries are on their way to building large numbers of new reactors. 

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Unit 2 at the North Anna Nuclear Plant automatically shut down June 29 about 5 p.m. after a safety system started to inject water into the reactor vessel. The NRC described the event as of "low safety significance." There were no injuries and no release of radioactivity. The reactor was back on line in a week. A report should be issued by the NRC later this month.

When environmentalists and nuclear opponents campaign against nuclear power, it's usually on safety and security issues. Proponents say they’re ignoring history. In more than 10,000 cumulative reactor years of operations worldwide, according to the Joint Fact-Finding report, there have been two major accidents involving nuclear power reactors—at Three Mile Island and at Chernobyl.

Both sides concede plants are much safer since the Three Mile Island incident, though the security concerns have grown dramatically since Sept. 11, 2001. At Surry during my visit, there was always an armed guard, sometimes one with an automatic weapon, within a few feet of me.

There have been incidents to cause concern. In March 2002, boric acid had nearly eaten completely through a six-inch reactor pressure vessel before being discovered at the Davis-Besse Nuclear Power Station in Ohio on the shore of Lake Erie. The NRC labeled the incident as dangerous and eventually fined the reactor's owners $5.4 million. Corrective maintenance took two years and cost $600 million. In 2006, the reactors owners entered into an agreement with federal prosecutors to defer prosecution and agreed to pay fines of $23.7 million. Two former employees and one former contractor were indicted for making false statements to inspectors attempting to hide evidence of the corrosion.

The Joint Fact-Finding report notes that safety concerns should focus on existing reactors, which are likely to receive license extensions, as both Surry and North Anna have. But the fact-finding participants could not agree that there was a "strong enough" safety culture at all U.S. power nuclear plants. The task force also expressed concerns about nuclear plant expansion in other countries, especially those with weaknesses in the rule of law, construction practices, regulatory oversight and security.

Germany, which decided in 2000 to phase out all its nuclear plants by 2021 but recently appeared to back away from that plan, has seen a storm of controversy about its 19 aging plants in the wake of a fire at a plant near Hamburg last month and an incident last year at another reactor that required operators to manually shut it down.

Zuercher said the industry knows that to be able to build a new generation of more efficient nuclear plants, it must safely and effectively operate the existing fleet. And the industry through INPO and the World Association of Nuclear Operators needs to instill the highest standards worldwide. “Let me tell you that an event anywhere in the world has repercussions through the industry,” he added. “Someone once said we are hostages of each other.”

            What about nuclear proliferation if the commercial nuclear industry grows? Proponents say the bad guys like Iran and North Korea already have the capacity to enrich uranium for bombs. The NJFF says the challenges will increase as the industry grows. "There are critical shortcomings in the current IAEA (International Atomic Energy Agency) safeguards," the report concludes, adding that "the international community has demonstrated that the enforcement mechanisms are effective."

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The problem of waste storage is something the nuclear industry has been promising to solve for 40 years.

In his office at the Surry plant, Don Jernigan says it has. He's been to YuccaMountain and he has says the technology works. But he concedes the political reality is different. "The issue is whether or not the state of Nevada wants to become the repository for the country's spent fuel," he adds. And, so far, Nevada has said no thanks.

Until and unless the political winds shift, YuccaMountain may remain one big, deep hole in the ground. The most optimistic timetable for opening the facility is 2017 -- if ever -- at a projected cost of $58 billion. In addition, the mountain has a statutory capacity of 70,000 metric tons, well below the amount of waste that will be created by current reactors. Jernigan and others say if the other hurdles are surpassed, Congress may up that capacity.

Claussen and the members of the Joint Fact-Finding group see Yucca as a dead issue. "What the nuclear industry has to do is figure out the waste problem," Claussen said. "We've spent years and years arguing about YuccaMountain and that is not the solution because we're still arguing. I don't see the politics changing there."

The Joint Fact-Finding group concludes that a deep underground geologic repository is the best long-term disposal for spent fuel, but in the interim on-site fuel pools and dry cask systems can store spent fuel safely and securely.

At Surry, spent fuel is cooled in a pool, then moved to dry, concrete casks sitting forlornly on pads in the near distance.

            Jernigan and Zuercher both mention reprocessing as a means to reduce waste. Reprocessing of spent fuel is done in other countries, but was outlawed by President Jimmy Carter in 1977 because it is one way to make the key ingredient of a nuclear bomb. The Bush Administration has been pushing its Global Nuclear Energy Partnership, which includes reprocessing, as a means to expand nuclear power abroad and in the United States by reducing the waste. However, reprocessing is expensive and creates low and intermediate-level nuclear wastes itself, wastes that need long-term management.

Zuercher thinks reprocessing may become more economical and may offer a short-term solution to the storage problem. “There’s a lot of energy in that used fuel and it can be reprocessed so that you can use that energy and reduce the amount in the waste stream,” he said.

But he says Dominion does believe a repository like YuccaMountain is necessary. “Fuel should not reside at the site forever,” he added. “That’s not acceptable in our view. It’s not responsible.” 

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There is no doubt that nuclear power will proliferate worldwide. But can it mitigate global warming? The United States is currently responsible for about 20 percent of all greenhouse gas emissions and the generation of electricity is responsible for about one third of that. In short, generating electricity is the single largest source of greenhouse gases. So targeting electricity makes sense. And proponents like Brand and others say the move to nuclear power is the obvious answer.

Most of the nuclear growth is expected to take place in Asia and India. In the U.S., the Nuclear Power Joint Fact-Finding report concluded the rate of new plants being built would not replace the capacity of old plants being retired.

But the report raises doubt whether enough reactors could be built fast enough to make a difference. One or two plants at North Anna won't dent the need. According to the report, 435 nuclear plants around the world are likely to be retired in the next 50 years. Indeed, there are doubters who think even replacing their capacity is unlikely.

Two decades ago, the United States had about 400 suppliers and 900 nuclear certificate holders licensed by the American Society of Mechanical Engineers. Today, the report said, those numbers are 80 and 200. The report also noted a limited forging supply for key components. Only two qualified companies in the world can supply the heavy forgings needed by the nuclear industry and their prices have increased by double figures in just the last six months.

To replace aging nuclear plants and add enough capacity to stabilize greenhouse gas emissions would require constructing, on average, 14 1,000-megawatt-plants annually for the next 50 years. That's trillions of dollars of investment. The report also concluded a ramp-up in nuclear capacity of that size would require:

- 10 nuclear waste repositories the capacity of YuccaMountain.

- 11-22 large enrichment plants, compared to 17 existing plants.

- 18 fuel fabrication plants, each producing 1,000 tons of fuel year, compared to 24 existing plants.

 "The NJFF participants agree that to build enough nuclear capacity to achieve carbon reductions of a carbon reduction wedge would require the industry to return immediately to the most rapid period of growth experienced in the past (1981-90) and sustain this rate of growth for 50 years," the report concluded.

 In the U.S., the task force concluded the rate of new plants being built would not replace the capacity of old plants being retired. Some participants in the task force thought with higher capacity new generation nuclear plants, that goal could be reached. Others did not.

Zuercher said the need for that growth may be mitigated by relicensing of existing facilities. “We anticipate that most of the existing nuclear power stations will have their licenses renewed for another 20 years,” he said. Theoretically, those plants could then be relicensed a second time for another 20 years. “It is possible to renew again and again, depending upon the condition of your station and whether it makes economic sense,” he said.

“We personally believe nuclear needs to be part of the future,” he added. “The decision point it all boils down to is will it be economical to build and operate?”

That’s a trillion-dollar question given the energy needs of the next century. And, when you ask it, the next question is inescapable: what if we spent those trillions innovating and building renewable sources of clean energy without nuclear power’s waste problem?

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