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Crisis Response in Energy

11/26/2014

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Deepwater Horizon Oil Spill as seen from NASA satellite in 2010.
By Lenka Kollar

Unprecedented catastrophes can happen in many industries, from energy to transportation to space. Some are caused by man-made errors while others by severe weather or other uncontrollable conditions. Regardless of the cause or magnitude, any perceived major crisis will get media attention and likely have a negative affect on that industry and/or company. 

The economic affects on a company or industry after a severe accident are generally dependent on the status of the industry before the event, according to a study by The Boston Consulting Group (BCG) on the Deepwater Horizon disaster (pictured above). Industries and companies with positive public perception and economic growth before a catastrophic event will be able to better bounce back afterwards. While sectors with a negative perception are more likely to experience very negative affects or even die out after a crisis.

While governments attempt to respond to these accidents, regulations and policy changes are usually quite limited and very local. In addition, BCG states that the impact on the industry largely depends on the existence of economic alternatives and public perception. The huge amounts of effort that firms put into risk identification and mitigation could perhaps be better spent on preparing better crisis response.

This theory can be applied to the nuclear industry because severe accidents, such as at Fukushima Daiichi in Japan, are extremely unlikely and difficult to predict, especially if they are caused by uncontrollable conditions. More preparation can be spent on the response effort required after an accident. Nuclear power plants in the United States already have robust emergency planning involving the community, state, and country that can go into effect immediately during an accident. But these response efforts should be reevaluated and possibly redesigned to make sure that they do not cause panic in the community and include accurate information dissemination to the media and public. The accident at Fukushima can be used as a case study to come up with more effective methods in dealing with an unpredictable crisis in a way that keeps the public safe and the industry functioning after.
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Support Nuclear Equality

11/24/2014

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We discussed before how the EPA's Clean Power Plan ignores nuclear and there's still time to submit your public comments by December 1st. It is important that the EPA here's from you that they should:

  1. Treat existing plants equally by including 100% of their current output in the baseline CO2 calculation.
  2. Allow states with new plants under construction to count their clean energy generation toward their EPA emissions target.


Submit comments to the EPA here!
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Does the EPA’s Clean Power Plan Ignore Nuclear?

11/5/2014

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By Nicholas Thompson

The Environmental Protection Agency has proposed a rule for regulating carbon emissions, or to be more precise, average carbon emissions per power produced. There is a fundamental difference between these two things, which will have a large impact on whether or not emissions actually decrease, and by how much.

What the Clean Power Plan proposes is setting emissions targets for each state based on a formula that calculates pounds of CO2 emissions per megawatt-hour of energy produced. To use an analogy, imagine you ran a delivery service and had a fleet of delivery vehicles; this regulation would be looking not at the total emissions of those vehicles, but the average miles per gallon across the fleet. Retiring old vehicles (coal) that don’t get as good mileage and replacing them with better ones (natural gas) would be one way to reduce the fleet’s average miles per gallon. To extend the analogy though, the best way to reduce the miles per gallon of the fleet would be to switch to electric vehicles (nuclear and renewables), since they consume no fuel. This is where the problem begins with the Clean Power Plan.

In order to calculate the state’s target goal for emissions, all of the emissions from all sources are added up, and then divided by the sum of all the power produced by coal, oil, natural gas, renewables, but only 5.8% of the power produced by nuclear. This 5.8% number seems out of place; all other sources (except hydro) are fully accounted for, so why wasn’t nuclear?

The answer is not clear, but what is clear is that a number of environmental groups, most notably the National Resources Defense Council (NRDC) played a large hand in helping shape the new rule, according The New York Times (reports here and here). When an attorney for the NRDC was asked about this, he responded by saying,  
“I observe that most of those nuclear plants were built a long time ago…Including them all would imply that states need to make sure all of them continue to operate. Compliance in states that had to close them down would be more difficult." Source
Essentially what he’s saying is that nuclear plants shouldn’t be included in the regulation, because if they are, we can’t hit emissions targets without them. This is exactly the point that advocates for nuclear energy have been making; when nuclear plants close, emissions rise. However, since only 5.8% of nuclear is accounted for in the proposed regulation, closing of a nuclear plant and replacing it with natural gas can actually lead to a lower calculated emission per power produced, especially in states that are large consumers of coal. 

Going back to the example with the fleet of cars, this would be like excluding 94% of the miles electric cars drove from your calculation of the fleet’s miles per gallon. In this case, getting rid of an electric car and buying a moderately fuel efficient car could yield a lower calculated miles per gallon of the fleet, even though overall emissions rose. In fact, if you go through the math, as PhD students Justin Knowles and Remy Devoe of UTK have done, there are a number of states which would have a lower calculated emissions/power produced if all the nuclear plants were closed and replaced with natural gas (even though this would yield much more emissions).  

Luckily, there is still time to look at all the documentation and submit a public comment on this proposed rule, the link for which is at the bottom of this document. How do you think the proposed regulation should be changed? 

Documents for the Clean Power Plan and how to submit a public comment to the EPA here.
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Photos used under Creative Commons from Idaho National Laboratory, Jim.Richmond, Idaho National Laboratory, IAEA Imagebank