]]]]]]]]]]]]]       NUCLEAR POWER ECONOMY     [[[[[[[[[[[[[[[[[[[[[[ 
        [Five years old, and not a thing has changed!]

Dear Dr. Beckmann:                                        05/24/83
     ...I entirely agree with your statements condemning the primitive 
critics of nuclear technology. But you are not critical enough about 
the costs of nuclear plants. The nuclear industry allowed an explosion 
of their costs, and unless it invents a containment to this financial 
explosion, it will face difficult times.
     L.S., Zuerich, Switzerland

                         *  *  *
Dear Dr Beckmann:
     I stopped subscribing to your newsletter because you never say a 
word against the nuclear industry pricing itself out of the market... 
     I have no quarrel with you over nuclear safety, and I agree that 
nuclear is far safer than any other source, but if the nuclear 
industry cannot keep its prices down it deserves to perish. They 
charge billions for what used to cost four times less -- why rescue 
their inefficiency?
     J.P.G., Alexandria, Va.

                         *  *  * 
Dear Mr. S. and Mr. G.:
     The nuclear industry has many faults, especially servility and 
cowardice when faced by noisy political opponents. But it is fairly 
easy to show that the steep rise in reactor costs -- far steeper than 
inflation -- is not caused by the industry.
     Indeed, the manufacturers of nuclear reactors (General Electric, 
Westinghouse, Babcock & Wilcox, Combustion Engineering) are the same 
companies and practically the same engineers as those who built the 
power plants in the sixties and early seventies at far lower cost, and 
those plants are now running cheaply -- at half the cost of coal-fired 
plants for Commonwealth Edison of Illinois, for example. Obviously, 
then, it is not the industry that has changed.
     What has caused the steep rise is two closely interconnected 
factors: the witch hunt against nuclear power, and government regula-
tion (often retroactive) seeking to cater to it. 
     The first is directly at play when the nuclear saboteurs play 
their legalistic delaying games. Interest and other costs amount (in 
California) to $1 million a day. Even more destructive is the cost of 
complying with the retroactive and ever changing requirements of the 
NRC, which are in some cases counterproductive (when they LOWER the 
safety of the plant, see reference below), and in ALL cases damage 
health and safety in the sense that even without any of these require-
ments nuclear reactors are safer than fossil-fired or hydro plants, so 
that the delay causes unnecessary health effects by these sources. The 
absurdity of this situation and the NRC's reckless posturing as guar-
dians of safety are of course consequences of the witch hunt. 
     It is interesting that even so, nuclear power is still competi-
tive with coal (and far cheaper than oil) in the US. In Germany, it 
costs half as much, and in virtually coal-free Switzerland, as you 
know better than I, its cost is an even smaller fraction of all 
alternatives except hydro.
     However, a utility's decision on what kind of plant to build 
(right now they build few or none of any kind) is no longer based on 
economics alone. It has to consider the uncertainties of government 
regulation and the prospects of being targets of a witch hunt.
     If this were not so, and the price of the product were determined 
only by a free market, I would see no more reason to rescue an 
uneconomical product than you do.
Reference (not yet out, but well worth waiting for): "Nuclear Power 
Economics and Prospects," by B.L. Cohen, a chapter in the forthcoming 
book "Energy in a Free Market Environment," sponsored by the Heritage 
Foundation. Should be out by the end of 1983.
                              * * * 
[May 1988: It came out in 1984 -- Universe Books, 381 Park Ave. South, 
New York, NY 10016.]

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