THE FALLING EROI KILLS WESTINGHOUSE: 2 U.S. Nuclear Reactors Construction Halted

Yes… it’s true.  Two state of the art nuclear power projects bankrupted the mighty Westinghouse Electric Corporation, a company founded in 1886.  Actually, this is old news as Westinghouse filed for bankruptcy back in March 2017.  However, the breaking news is that the Westinghouse bankruptcy has now forced two utility companies to stop construction on two nuclear power reactors in South Carolina. (photo: courtesy of 12 News, Augusta, Ga)

While many factors will be attributed to the halting of these two nuclear power reactors, such as rising costs, construction delays, decreasing electricity demand and the bankruptcy of Westinghouse, the real reason is the FALLING EROI – Energy Returned On Investment.

As a refresher for newer readers, the falling EROI means that it’s taking more and more energy inputs to produce less and less net energy for the market.  For example, in 1970 the U.S. EROI of its oil and gas industry was 30/1.  Thus, the burning of one oil barrel worth of energy produced 30 oil barrels to the market.  Today, shale oil production comes in at a whopping 5/1 EROI, six times less that the profitable energy in 1970.

Moreover, those who have been following my analysis on energy, understand that the falling EROI of oil and natural gas are gutting the entire global economy.  Even though nuclear power generation doesn’t come from burning oil and natural gas, the construction of the reactors most certainly consumes a massive amount of fossil fuels.  Actually, it takes a great deal of the burning of coal, natural gas and oil to produce nuclear, solar and wind power plants.

This was especially true for the construction of Westinghouse’s two nuclear power plant projects, the Vogtle Plant in George and the V.C. Summer plant in South Carolina.

Two Nuclear Power Plant Projects That Bankrupted Westinghouse

The Vogtle Nuclear Plant (Units 3 & 4), located near Waynesboro, Georgia, started construction with the new Westinghouse AP1000 nuclear reactors in 2013.  Here is a picture of Vogtle Plant under construction last year.

Vogtle Nuclear Plant (Units 3 & 4) – Georgia

(photo: courtesy of High Flyer at SRS Watch)

As you can see, Vogtle 3 & 4 are the extension of the original Units 1 & 2 that were commissioned in 1987.  Originally, the Vogtle 3 & 4 were to cost $14 billion and be operational by 2016 (Plant #3) and 2017 (Plant #4).  However, the total costs are now estimated to reach $29 billion for the Vogtle Plant, and it won’t be operational until at least 2022. (source: Reuters article).

While work at the Vogtle Plant in Georgia still continues, construction has been halted at the V.C Summer Plant in South CarolinaAccording to the EIA, on July 31st the South Carolina Electric & Gas Company (SCE & G) and South Carolina Public Service Authority (Santee Cooper) halted construction on the two new nuclear reactors  at the V.C. Summer Plant.

The V.C Summer Plant (Units 2 & 3), like the Vogtle Plant, are an extension of an existing older nuclear plant called V.C. Summer Plant 1.  The original cost to build V.C. Summer 2 & 3 were estimated at $9.8 billion, plus a transmission facility and interest costs.  However, schedule delays and cost overruns have also seriously impacted the V.C. Summer Nuclear Plant project.

According to the article, Vogtle, Summer nuclear plants face bleak outlook after Westinghouse bankruptcy, the two South Carolina utility companies stated they would need an additional $11.4 billion to finish the project that won’t be ready for operation until late 2021 or early 2022.  Thus, the total cost would be $25 billion for the V.C. Summer 2 & 3 and would be more than double their original projected cost.  Here is a picture of the V.C. Summer Plant under construction in May, 2017.

V.C. Summer Nuclear Plant (Units 2 & 3) – South Carolina

(photo: courtesy of High Flyer at SRS Watch)

As we can see, both of these nuclear power plants in Georgia and South Carolina will cost more than double their original price tag and will take more than twice as long to complete.  Unfortunately, SCE & G and Santee Cooper finally had to shut down work on V.C. Summer Plant, because they did not receive any response from the Trump Administration for financial assistance.

It will be interesting to see how long the Vogtle Nuclear Plant in Georgia is able to continue construction as they are in the same financial mess as the V.C. Summer Plant.  However, the utility Southern Company in Georgia is waiting until the end of August to announce if they will stay with the Vogtle Plant or walk away.

The Falling EROI Is Killing The Nuclear Energy Industry

I have read several articles on both of these nuclear power projects and some are criticizing that the reason for the shut down of the V.C. Summer Plant in South Carolina was due incompetent contractors not being able to do the job at the projected cost and timeline.  Not only is this completely hilarious, it’s also false.

Why?  Because the Vogtle Plant In Georgia is experiencing the same issues of huge cost overruns and long time delays.  Furthermore, the supposed experts on nuclear energy, the French, are also dealing with serious problems with building new plants.  According to the article, Nuclear industry prices itself out of power market, demands taxpayers keep it afloat:

The nuclear industry has essentially priced itself out of the market for new power plants, at least in market-based economies. Even the nuclear-friendly French — who get more than three fourths their power from nukes — can’t build an affordable, on-schedule next generation nuclear plant in their own country.

So, the entire global nuclear industry is experiencing the same difficulties in bringing on these new generation III+ nuclear reactors (AP1000 & EPR).  Moreover, the Chinese Government also wants to build many of these new generation III+ reactors, but approved no new projects last year due to the construction delays and cost overruns of these new nuclear reactors in the U.S. and Europe.

While the bankruptcy of Westinghouse and the halting of construction at V.C Summer Plant have taken place in just the past six months, an industry expert made this warning about the Vogtle Plant, two years ago (quoted from the article above):

The Georgia debacle should not shock anyone. Bloomberg explained two years ago that “even as sympathetic an observer as John Rowe [former chair of the U.S.’s largest nuclear utility] warns that the new units at Vogtle will be uneconomical when — or if — they’re completed.”

To many Americans, John Rowe’s opinion of the future nuclear power industry might come as a real shocker, but if you understand the Falling EROI, it isn’t.  Again, many factors will be blamed on why nuclear is no longer a commercially viable energy source.  However the real cause is that the ENERGY INPUT is too great a cost for the ENERGY OUTPUT supplied to the market.

Lastly, the quote from the article, Nuclear Power Is In Crisis As Cost Overruns Cripple Industry Giants, sums it up nicely:

Four global nuclear industry giants ‒ French utilities Électricité de France (EDF) and Areva, US-based Westinghouse and Japanese conglomerate Toshiba ‒ face crippling debts and possible bankruptcy because of their investments in nuclear power.

The French government is selling assets so it can prop up its heavily indebted nuclear utilities. EDF plans to sell $13.8 billion of assets to rein in its $51.8 billion debt, and to sack up to 7,000 staff. Areva has accumulated losses of over $14 billion over the past five years.

French EPR reactors under construction in France and Finland are three times over budget ‒ the combined cost overruns for the two reactors amount to about $17.5 billion. Bloomberg noted in April 2015 that Areva’s EPR export ambitions are “in tatters“, and now Areva itself is in tatters.

The four big industrial giants, powerhouses of our high-tech energy future, are now mere shadows of their former selves.  There is no pulling out of this BLACK HOLE.  Oh no… nuclear power is dead for good, even though it will limp along for a while.  Furthermore, I have read analysis that more than half of the nuclear power plants in the United States are not profitable… LOL.

Conclusion & Final Remarks

Evidence shows that the new generation nuclear power plants are suffering from massive cost overruns as well as long time delays.  The first two new nuclear plants to be built in the U.S. in the past 30 years,  have seen their projected costs more than double while their date for completion have been pushed back by 4-5 years.  Unfortunately, if the U.S. Government doesn’t step in with $20+ billion in financial aid, both of these nuclear plants may never be completed.

That being said, it’s just not the U.S. Nuclear Industry that is experiencing serious trouble in completing its two new nuclear power plants.  Europe is also stuck with new nuclear plant projects whose costs are running amuck and will likely not be economical going forward.

The DEATH of the Nuclear Industry is due to the Falling EROI- Energy Returned On Investment…. PERIOD.

While the Collapse of the Roman Empire was blamed by several factors, such as economic decline, reliance on slavery, government corruption, over taxation, debasement of the silver currency, poisoning of drinking water by the use of lead pipes, moral decline, the barbarian invasions and so on and so forth… those were mere symptoms.  Again, the ROOT CAUSE for the collapse of the Ancient Roman Empire was its falling EROI.

Lastly, those who believe that Thorium Reactors are better and will be the ENERGY SAVIOR of our future, this is delusional thinking at best.  I am sorry to be so blunt… but there it is.  Thorium reactor technology is still decades from reaching commercial status… if ever.  Unfortunately, we have run just run out the clock.

HOW TO SUPPORT THE SRSROCCO REPORT SITE:

My goal is to reach 500 PATRON SUPPORTERS.  Currently, the SRSrocco Report has 105 Patrons now!!!   Thank you very much for those who became new Patron supporters as well as members on the SRSrocco Report site.

So please consider supporting my work on Patron by clicking the image below:

Or you can go to my new Membership page by clicking the image below:

Check back for new articles and updates at the SRSrocco Report.  You can also follow us at Twitter, Facebook and Youtube below:

Enter your email address to receive updates each time we publish new content.

I hope that you find SRSroccoReport.com useful. Please, consider contributing to help the site remain public. All donations are processed 100% securely by PayPal. Thank you, Steve

50 Comments on "THE FALLING EROI KILLS WESTINGHOUSE: 2 U.S. Nuclear Reactors Construction Halted"

  1. Jonathan Rutherford | August 15, 2017 at 6:28 pm |

    I am on board, in general, with the significance of declining EROI. HOwever, the price of oil is currently relatively cheap. So I am not convincined the cost overruns for nuclear are due to oil/gas inputs – unless they refer to costs incurred from i.e 2000-2014 when oil prices were very high. Can you elaborate on the connection you see?

    • Jonathan Rutherford,

      You bring up a good point. However, the price of oil has been down below $60 for two years now. The projected cost to finish these plants are still $20+ billion… even at $45-50 oil. Regardless, it isn’t just the price of oil and natural gas, its the EROI – Energy Returned On Investment of these two sources.

      When the U.S. was building Nuclear Power Plants in the 1960-1970’s, the EROI of U.S. Oil and Gas was 30/1. It is much more difficult to construct a complex Nuclear Power Plant today with U.S. Shale OIL EROI of 5/1 than using conventional oil at 30/1+. Again, it’s not just the price of oil and natural gas, its the EROI of these energy sources.

      Johnathan… also, the price oil in 2005 was the same as it is today. Furthermore, the projected the costs of these U.S. nuclear power plants were based on energy costs between 2008-2011, when the price of oil was even higher than it is today. So, its not really the cost of energy that is causing all the havoc… its the FALLING EROI.

      steve

      • Steve,

        I share Jonathan’s thoughts and, even after your answer, I’m still struggling with the answer to his question of what the EROI of oil and gas has to do with the construction costs of the nuclear power plant. Isn’t it the current market price of oil and gas (which is currently relatively low) which can cause an increase or decrease of these costs? Assuming a given price for oil and gas, why should it make a difference for the contructor whether EROI of oil and gas is 30/1 or 5/1 (or in other words: whether the supplier of the oil and gas is profitable or not)? Even if one looked at the EROI of uranium, this should not impact the construction cost but rather the later profitability of the power plant. So, could you please explain in more detail what exactly is the connection between EROI of oil and gas and the construction cost?

        Many thanks,
        Cendy

        • I’m like you as well. The only thing I can think of is the cheap price of electricity which would impact the bottom line of a neclear plant.
          This might be due to cheap natural gas and a politicaly more favorable view of coal.

        • Christoph Weise | August 18, 2017 at 12:42 am |

          The higher the cost to construct and operate a nuclear power plant (or to frack oil and gas) the more energy is employed to extract energy. If the ratio approaches 1 it is futile to continue. What you, other readers and myself are struggling with is the disconnect between rising EROI and energy prices. Old wisdom assumes that rising cost to extract energy triggers higher market prices. But this is presently not happening because the price building mechanism is distorted.

          • I understand what your saying and agree. For me the best way to understand the effect of EROI is to think in terms of quantity rather than price.
            Ergo it takes X calaries to extract X calaries from underground.
            True, there is still large amount of petro energy underground, but it is no longer easily retrevied.
            However nuclear power plant is still on surface, not under ocean or mountain top, so IMO the difference in construction cost today compare to 20-30 yrs ago is probably comes from many redundant safety features now required by regulation.
            I am assuming a X kW size nuclear plant is much more involved today than same size plant was many yrs ago.

            While the adverse EROI for petro is changing because of placement in the earth, it is my feeling adverse EROI for nuclear is a result of govt regs.

      • Steve,
        The biggest problem is the availability of nuclear fuel which is increasingly scarce. Could you enlarge on this issue?

  2. Robert Forshee | August 15, 2017 at 7:22 pm |

    After reading this, my understanding is that even given a 40 year service life, these projects don’t pay off? WOW!

    I didn’t know. What are we (the world) going to do now?

    I hope the Man from Mars will come and save us. If not, we may revert back to the late 19th early 20th century.

    Bob F.

    • Robert Forshee,

      First... thanks for becoming a SRSrocco Report Patron. I really appreciate your support.

      Second…. you bring up a good question. WHAT ARE WE GOING TO DO?? Actually, we don’t have a PLAN B. So, I gather we are going to muddle through this until things start to really fall apart and get ugly. I really don’t like to be the Party Crasher, but I don’t see much in the way of real wisdom to deal with the Falling EROI and its impact on our modern society.

      steve

      • That’s not correct. Most plants went through NRC review and inspection and received 20 year license extensions. Some are considering a second 20 year extension, taking them to 80 years. And plenty have more than paid for themselves. Nuclear plants have very low production and fuel costs per MW-hour put on the grid.

    • Do not be upset, capitalims is, albeit slowly indeed, is dying, which is the best thing which could happen on earth.

  3. Clearly the mega nuclear power plants are finished. Construction costs and bureaucracies have pushed the costs well past their potential for return. What many don’t realize that the growth of wind and solar that has helped sealed the fate of the nuke plants.

    What ever happened to the small, self contained mini nuke plants that were supposed to be coming on line? I believe the company was Hyperion and is now Gen4 with a product that generates 25 MWe for 10 years when you replace the whole reactor? The Chinese were supposedly also working on something similar but nothing really shows up on Goolag.

    • Small NPPs have lower EROI. Cost of fuel enrichment, equipment development and fuel recycling do not scale down much. At best, in a fanasy land really, EROI of a small plant may match EROI of a big plant. And by small, I mean hundreds of megawatts range, not tens. There are numerous projects of small reactors, but they are and will remain on paper due to economic reasons. Russians have had civillian small reactors in operation for decades, but now they are deploying them only in Arctic to replace expensive diesel generation and old reactors. That is the land of 2 dollars per kilowatt cost of power, not 2 cents. Chinese are working on the same — for islands, offshore facilities, select locations, etc. A national grid cannot run on small reactors for economic reasons — not even in China.

  4. The 1973 so-called “oil embargo” which reduced oil supply to the USA by somewhere around 3% or 4%. It slammed the US economy, caused the largest stock market crash since the great depression, doubled gasoline prices, severely damaged US industry and caused a 55 MPH national speed limit which remained in effect for ten years. The government also put restrictions on how much gasoline you could purchase. There were fist fights and even a couple murders between the public at gas stations. Just wait until we experience a 10% or 20% drop in oil supplies. In a few years or sooner we certainly will. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently.

    http://i.imgur.com/7aMKHdp.gif

    • MASTERMIND,

      Well put. However, I thought I was PESSIMISTIC… LOL.

      steve

      • Our entire economy is a house of cards. The entire food chain is a process of just in time inventory that relies on transportation and machinery. I suppose some people could survive by eating wild plants and animals. But that too will become scarce. More likely scenario is people eating one another.

    • Chaos ? Because you think that the last couple of centuries has not been chaos ? What are you smoking ?

  5. Informative article Steve, thanks.

  6. One small but essential correction.

    > The Falling EROI Is Killing The Nuclear Energy Industry

    It is killing the low-EROI branches of nuclear industry, regardless of their flag or brand. French NPPs are expensive, US NPPs are expensive too — that is why these branches are dying. In a perverse way, that is also the reason for a sudden and nonsensical suicide of Korean nuclear program — they are winning, including the export contracts (i.e. Baraka NPP in UAE that is nearing completion), and US has enough influence to encourage that suicide. Chinese are still new to this, hence a lot of teething problems, but they are relentless and hedged by native wind and solar industry (hedged, not deluded). Russian new build cost for 1 gigawatt unit is in range of 3 to 5 billion dollars, and the running cost is also low. Their nuclear industry is vertically integrated in full, from uranium mining to spent fuel recycling. That is why their costs keep low, and they have more export contracts than they need. At the very core of their advantage is EROI: their uranium enrichment industry has used and perfected nine generations of centrifuges with high and very high EROI, while US used diffusion plants with low EROI. Chinese have smething like 5th or 6th generation Russian centrifuge, which provides good EROI, but far from the best. As centrifuge enrichment business is essentially energy producing energy, the concept of EROI has a short and explicit feedback loop in it. Russians have run that loop for many decades, while US did not care much — that is why they are winning in nuclear power.

    • Insightful addition Reader to another interesting revelation I wasn’t aware this time on the health of the nuclear industry, at first sight (without the effort of digging deeper…) in appears like incompetent / fudged initial WLC to get a project off the ground that should never have been sanctioned in the first place. I’ve always been a fan of nuclear probably having been indoctrinated during my first qualification in applied physics, I wonder how effective the project management / contractual control was, that’s a lot of money being spent possibly more to this than meets the eye that just EROEI…😃

  7. Subsidies by governments doesn’t help either, that money comes from the buying power of their citizens and thus cannot be used anymore to soak up other parts of economic output. That is what falling eroei does. It cripples. We are already compensating the falling eroei for decades now by printing money and lowering rates. This cannot go on much longer, i wish i had more on the timeframe but that’s the hardest part.

  8. So basically you are saying that Uranium Energy Corp (UEC), Energy Fuels (UUUU), Uranium Resources (URRE) and Urannium One on the Canadian exchange are going to tank. Admir Amani is going to the poor house.

  9. Steve, you keep stating the Roman empire collapsed due to falling EROI.
    Exactly what kind of energy did they deplete?

    Best regards /Markus

    • Tarjei T. Jensen | August 16, 2017 at 5:31 am |

      Same problem as the East Romans in Byzantium. They ran out of people. Wealthy landowners owned all the land and that meant there was no middle class to recruit armies from. Poor people tend to not be fit enough for soldiering.

      Bysantium had at least one land reform which gave them a respite, but there was no policy to keep the middle class growing.

    • They logged vast areas of forests along the Mediterranean, with lasting consequences (to this day, vegetation wise). Though Steve may know about other aspects of energy…

    • Markus, Cendy, Jonathan & Reader,

      The Falling EROI goes well beyond the burning of Coal, Oil and Natural Gas to produce the Nuclear Power Plants. And the Falling EROI in the United States is different (lower) than in other countries such as China and Russia… for example.

      We have to look at EVERYTHING we do as in ENERGY TERMS. Once you look at the entire economy as ENERGY and not as individual components, you will understand why advanced Western Countries can no longer build Nuclear Power plants because the U.S. EROI is too low to do it.

      Furthermore, we aren’t considering the massive amount of debt in the system that has artificially propped up the Economy and EROI. The Falling EROI is why the U.S. Government cannot really rebuild or maintain our massive infrastructure. There is just too much debt in the system and not enough Net Energy.

      While tougher regulations, more environmental controls and higher technical problems with building these newer Nuclear Reactors have indeed cost more time and money, this is all apart of the Falling EROI. While some regulations are probably unnecessary, most are due to the industry understanding more dangers and problems that weren’t considered back in the 60’s-70’s.

      Furthermore, the cost of labor is much higher because the FALLING EROI impacts everything. Thus, wages have to be high for this sort of technical skill to work on Nuclear Reactors. Actually, here is a better example. When I went to college, I paid my way. in the 1980’s I could work a regular job, save money and pay my college tuition. Sure, it was hard to work and go to school, but I could pay for it. Today, it is impossible to work a regular job and pay for ones college tuition and etc. While many will say that the College Industry is corrupt, that may be true to a certain extent, but the Colleges are HUGE today and so are the salaries of teachers and professors.

      It just takes a lot more ENERGY to maintain the complex system we have today. So, it is not just the Falling EROI of Coal, Natgas and Oil that should be considered in building Nuclear Power Plants. Its EVERYTHING. Furthermore, the more technology we throw at a problem, the more it lowers the EROI. Technology has never increased the EROI of Energy. It only lowers it.

      This is what is not being considered in the FALLING EROI in the Nuclear Industry. We must remember, TECHNOLOGY does not increase the EROI, it lowers it. If we look at new technology and go back and trace all the LEVELS OF MANUFACTURE and ETC, it consumes a massive amount more of energy than the more simpler technology in the 60’s-80’s.

      steve

      • Steve,

        Good point on technology and EROI, but it has to go with an important clarification. Some “technology” is pure waste of energy, other technology is a massive boost to EROI. Perhaps the balance in this odd mix is the reason why a collapse is still a matter of doubt for some.

        I will provide several examples of both, starting with “good” nuclear, and going to the opposite side of productivity. The most common Russian design of a commercial nuclear reactor is VVER-1000 — a 1 gigawatt of electric power output, tens of them installed in Russia and elsewhere. When Chinese bought a couple of them, they called them something like “a money making machine”. That is high EROI — necessarily in context of the full fuel cycle, which is different for all “nuclear houses”. But after Fukushima, in order to compensate for the anxiety (a very costly indulgence in terms of energy), Russians added a few things to cover for the infinitisimal probability of a complete meltdown, such as a trap for the melted core under the reactor. With all these things added up, the new design, called VVER-1200, reportedly trippled in capital cost. Just like that. Every other nuclear house does the same to some extent, degrading the EROI of nuclear industry. On the far negative side of EROI I put the whole IT industry of the last 15 years or so. Almost all that these people did, has long since ceased to exist. All the software, which is pure labour, was paid for essentially in energy to support the providers of labour — it is all gone to the dump, down the pipes and into oblivion, over and over, with each round of a software fad. That is pure loss of energy, which is growing as a tumor, and cannot be compensated for by anything in the economy. I have read wonderful things about it, if put side by side: on one side, some bank out there is proudly growing its IT costs into billions in order to save of office labour; on the other side, at the same time, at least three high-EROI commercial nuclear projects (fast reactors) are put on hold because they are underfunded by a few billions. Fifty years from now a (say, Russian) newly built nuclear power station will still be there, doing the same thing, providing high-EROI energy to the economy; at the same time, 20~25 rounds of software fads will be done and forgotten, along with reasons for them, and people who pushed them through. As there is more of the latter in the economy, by orders of magnitude, your point on technology and EROI is valid; yet it has to go with a little note on some technology that increases EROI and temporarily holds the economy from collapsing. But only temporarily.

  10. Once upon a time . . . I remember “they said” . . . “nuclear power will be so cheap there will be no point in metering it . . . ”
    R.Marsh
    United Kingdom

    • That opportunity was squandered over the last thirty years. A lack of investment and development of anything over thirty years all but guarantees a demise. If that happened to farming, tomatoes would be a myth.

  11. Donald Matson | August 16, 2017 at 7:09 am |

    Your rationalization for the demise of nuclear power is way off base. Nuclear power was never economical. The US (as well as the U.K. and France) developed its commercial nuclear power to support (socialize the cost) of its military nuclear weapons program.

    Calder Hall, first connected to the grid on 27 August 1956. The Calder Hall design was codenamed PIPPA (Pressurised Pile Producing Power and Plutonium) by the UKAEA to denote the plant’s dual commercial and military role. In its early life Calder Hall primarily produced weapons-grade plutonium, with two fuel loads per year; electricity production was a secondary purpose.

    • Donald Matson,

      Yes… I know that. Nuclear was never economical if we considered the FULL CYCLE EROI COSTS, including decommissioning. However, now…. many can’t even be built without going bankrupt. This wasn’t the case 30+ years ago.

      steve

  12. WE could easily build nuclear power plants 50 years ago. Now with better technology and relatively cheap oil (for the moment), we cannot build. I suspect the real issue is permitting, enviromental regs, and hysteria. In most construction today, a group of highly paid people attend countless meeting on how to permit the darn thing and get rid of the lawsuits and injunctions, etc. This phase takes twice as long as the construction. It drives the cost to the moon and delays the projects until they make no econmic sense. The opponents of nuclear energy know very well how to play this game.

    The price of nuclear fuel is at record lows. About $25/lb. most new mines need at least $70/lb. This is not the reason.
    Cheap oil is not a negative factor here. In fact, it lowers the cost of construction. However, construction is not the biggest cost. Permitting is.
    A falling EROI is a big negative to an oil company. It is a big negative to society in general. It will lead to collapse. I think Steve’s point is: society is collapsing so fast right now that we cannot get our act together to build a power plant. This may be true??

    If these plants are not built where is the power going to come from to power all the electric cars?? Natural gas? The usa does not have 100 years of gas. The best sites have been drilled. EROI is falling.

    Here’s my prediction.
    1. The oil will eventually be depleted due to poor economics. 2030 – 2040 seems an optimistic endpoint.
    2. Electric cars will be available but only to a relatively few. Even if we build them cheaply, the power will not be around. transmission and even generation is going to problematic. All the AC units will have to shut down so we can drive?
    3. Given this, public transit will need to be built. The outer suburbs will collapse.
    4. This will create social problems that have never been seen before in America.

  13. Diogenes Shrugged | August 16, 2017 at 3:59 pm |

    I’m fully aware that this wasn’t the thrust of the article, but I’m afraid that when it comes to nuclear power, this is all that matters:

    https://www.youtube.com/watch?v=ZUQ-Mhb4OVo&spfreload=10

    And since that’s all that matters, it becomes an important factor in calculating a nuclear plant’s EROI. It’s a factor that’s never adequately accounted for in any calculation – anywhere – ever. A factor so expensive that it portends a negative EROI from nuclear energy all by itself.

    By the way, I’ve watched that movie three times, once for the soul-crushing “entertainment value” alone.

    • What a load of bullhockey. Hauntingly beautiful and intriguingly presented, but bullhockey nonetheless. The problems associated with used nuclear fuel disposition are entirely political, not technical.

  14. Diogenes Shrugged | August 16, 2017 at 5:27 pm |

    Make that four times.

  15. My paternal grandfather died in 1963. He lived a simple life, no water connected, no garbage disposal, no electricity, no car. He lived within 10Km (6 Miles) of where he worked, he either rode his push bike or walked to work. People would walk greater distances to go to the local Friday night dance and then walk home later that night.

    That was not that long ago, mind you a bit more difficult if you live in a larger city BUT smaller communities will get by. Cityite’s used to visit the community I live in (in the past) to buy fresh vegetables.

    Steve! and the rest of you having contributed somewhat to my despondency over the last day or two; I thought I should give you all some hope for the future.

    Now I realise my solutions require energy, so don’t destroy my day altogether 🙂

    How to feed 10,000 people from food grown on 3 acres in the city….
    https://www.splendidtable.org/story/how-to-feed-10000-people-from-food-grown-on-3-acres-in-the-city

    The Good Food Revolution

    https://www.amazon.com/Good-Food-Revolution-Growing-Communities/dp/1592407609/ref=sr_1_1?s=books&ie=UTF8&qid=1502938855&sr=1-1&keywords=will+allen

  16. Andrew Maggard | August 17, 2017 at 6:05 am |

    There continues to be the matter of safe handling and a repository for spent reactor fuel. Currently these fuel rods are stored on site at plants throughout the nation and world, seemingly waiting for the advent of the technology to properly and safely store the ever increasing totals of spent fuel rods. A case in point, Fukushima, the greatest industrial disaster in history has over 1,200 spent fuel rods stored in four damaged and highly radioactive reactor sites, even after six years, the site continues to leak radioactivity in the Pacific Ocean at an estimated total of 3 hundred tons of highly radioactive water per day, It would also appear that the current and unpublished costs to store spent fuel must also be addressed.

    • The technology is there. And it has been for a few decades. Plus the cost is built into electricity rates. The issue of used nuclear fuel disposition is entirely political.

  17. Robert Braker | August 17, 2017 at 7:05 am |

    While your research on EROI is wonderful, you seem a little bit like Al Gore with his climate alarmism where EVERYTHING is because of global warming. Even after all of your “explanations”, I still cant make the connection.

  18. Steve thanks for another interesting report! I have to say that I find the evidence for Peak Oil as %100 but some of your conclusions in this article seem a bit odd to me. You claim that the reason why nuclear energy is not now viable because of falling EROEI yet you did not provide a logical mechanism for this reason that Nuclear is not economic anymore and too expensive because of falling EROEI. I totally agree about all the petroleum energy inputs involved with nuclear and all forms of energy but right now oil is relatively cheap even on a historic scale. It seems to me that the reason that nuclear energy is not economic now is because of all the Federal Reserve created inflation that is driving up the prices of all materials and as of right now that is the driving factor for nuclear energy being too expensive with constant cost overruns. I agree with you that eventually the EROEI of all forms of fossil fuels is falling but I don’t agree with you that oil will become cheaper in the future because of this. I definitely think that as oil production falls in the future it will become more valuable relative to the production of good and services. I do agree that oil consumption will fall in the future but just as long that oil demand will outstrip available future supply (as it will) oil will definitely get more valuable. Also remember that during this future time that the governments will respond with more artificial currency so what will this oil be priced in fake currency? Very expensive! Put another way – oil will only fall in price if future demand falls faster then future falling supply – which it won’t. I agree totally with you on the value of precious metals being a store of future wealth and energy. Thanks for you great reads! Check out a Peak Oil article I wrote many years ago on Seeking Alpha – https://seekingalpha.com/instablog/206975-starkoski/25519-peak-oil-investing-mach-2-part-1-the-sixth-sense

    • Hi Izzy,

      “oil will only fall in price if future demand falls faster then future falling supply – which it won’t.”

      This is my biggest hangup with the Hills group and EROEI theory. What is the evidence or calculation that decreasing production/supply will not cause the economy, and hence demand, to fall even faster, thereby maintaining a constant downward pressure on oil prices/demand ? In other words, the economy is dangerously dependent on plentiful/cheap fuel, perhaps more dependent than any of us can think.

      • Hi Hubbs, yes you knew I was referring to the Hills Group report on petroleum losing value as it becomes more scarce. This makes no sense to me at all and seems to violate the economic laws of physics. And as I said what will it be going down in $dollars? It is far more likely that the dollar will go towards zero and petroleum will have increase in value relative to goods and services available. Like cigarettes in a prison – they will get very valuable.

  19. Tore Johansson | August 19, 2017 at 9:35 am |

    If this theory is true it must mean also almost all human activity and investing in all sort of producing will start fail further on.
    Not only energy investing

  20. this is simply wrong—when china runs their small nuclear (200 megawatt each or so) FACTORY units—ala henry ford production line –watch out –mass produced cheap —desalination ,localized power always on, …many other benefits for climate change.

    • You have a point here Jay. There will be responses to peak oil and falling EROEI and this could be one of them. Cheap modular nuclear modules that have inherent passive safety features could be productive. This would make a great future report by SRSrocco and others.

  21. Maybe the economics are worse for nuclear because nat gas is cheaper and so is a nat gas power plant per GJ produced?

  22. Thank you, Captain Obvious. At their core, aren’t all bankruptcies and business failures a result of problematic ROIs?

    The harder question is why nuclear generation doesn’t compete better with other energy technologies. The reason is that the “regulatory” burden far outweighs the technical risk. In addition, some other technologies benefit when the technical risk is not fully mitigated by regulatory burden.

    By “regulatory” I mean more than the NRC. The industry has many stakeholders enforcing requirements. I also include policies that distort the energy market such that renewables are cost effective. To wit, solar farms in New Jersey. NEW JERSEY.

    Nuclear industry leaders had the opportunity and enthusiasm 10-15 years ago to execute a 10 year plan of outreach to completely remake the image of nuclear from grassroots, grasstops, and all the way to policymakers. It didn’t. And they actually allowed additional regulatory creep. The transgender community turned millennia of social stigma on its head in the same time period. And the “renewables” community made it a lifestyle and moral choice. The nukes buried their heads back into their data and tried to make the machine more perfect.

    It is devastating for people like me that have dedicated so much time, money, and energy into our careers and advocacy for this beneficial and needed technology. The “decline” of nuclear isn’t about safety, or personnel errors, or design flaws. It’s entirely about leadership.

Comments are closed.