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Subject:  Re: OT-musing about Consequences Date:  3/16/2011  3:42 PM
Author:  Pariseur Number:  67871 of 83815

In one sense, safety comparisons are like any other decision tree. You list the conceivable outcomes. Then you value each potential outcome in some numerical terms (dollars, lives, whatever is appropriate). Finally you multiply that number by the probability of that outcome occurring (as best as you can estimate those two numbers). The choice with the highest product, in general, wins.

We all know that people die yearly while drilling for oil; I'd guess that - on average - more will die digging for coal; and very large numbers very infrequently from nuclear power plant explosions. We know that because we can count them pretty well. They also make for justifiably compelling television that has its own effects on voters and politicians will react.

There is less agreement on how to measure the environmental costs - resulting in sickness and even death - from coal emissions, from oil and other fossil fuels. I may believe that coal emissions kill a lot of people world wide, I may believe that gasoline and coal auto emissions are raising the cost of food worldwide with very tough consequences for poor nations now and richer ones soon, but I make no claim to being a scientist. There is much risk inherent in the storage facilities full of nuclear waste, and in some countries it may be leaching into the water table but certainly the picture of a silent cement structure does not make for good sound-bite television.

I live near Boston and years ago had dealings with the Boston Edison Company at a fairly high level when they were first operating the Plymouth nuclear reactor. Their logo featured the icon symbol for nuclear power but frankly these were not men I would have chosen to arm with a nuclear device. I don’t know whether present management at Plymouth is any better. I do know we have no way as yet or likely soon to deal with nuclear waste, and to bring the issue a bit closer to finance for almost the whole history of nuclear power no single nuclear pant could have been financed without government assistance, limits, and guarantees on liability. No imaginable consortium of insurance companies would have provided similar casualty insurance to that required by any apartment building mortgage lender I ever dealt with. The cost of insuring any single major nuclear disaster is simply more than any insurer can afford to buy

In the case of the Japanese plant disaster, the odds of a tsunami of that magnitude is reportedly one in 300 years, but the costs of that calamity would have bankrupted any insurance syndicate I ever heard of. The regulators frown on single bets that can take down the whole company regardless of how low the actuary says the probability of payout may be.

There is one thing you can be sure of, it is seeing Congressmen sitting around large polished tables on television - and reporters in trench coats standing in front of colonnaded public buildings portentously saying "Time will tell".

In the interim all of this, delays in new energy sourcing, higher costs of financing fossil and nuclear plus the need for Japan to over-burden its citizens with even more national debt, China and India requiring investment capital, and the rest will inevitably put pressure on long term financing costs.

Most good quality REITs are delivered enough by now to absorb that particular hit without collapsing, but it’s just gotten a lot harder to figure out how we can get employment growth to the point where rents will be robust enough to plan on much significant dividend growth any time soon.

I do know that today the Daily Beast rated the 65 US nuclear plants for safety: the Seabrook plant 40 miles north of Boston is rated the 11th riskiest, the Plymouth plant 40 miles south is 20th. I have no way of judging the quality of the Daily Beast’s research but if someone wants to plant a new nuclear plant anywhere nearer to me next month I promise you that they will have a fight coming.

Does that make me a modern-day Luddite?

You may well think so, but I might possibly disagree.
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