Monday, June 27, 2011
BIS Annual Report
If you read nothing else, read the chapter on low interest rates. I think every adult citizen of the US with a normal to above IQ should read this, and think about it. It's not difficult.
The fiscal sustainability chapter is of most relevance to current US political debate. The BIS takes a position somewhat more adverse to debt than Paul Krugman's, to put it delicately. On page 66 you will find graphs for some of the more significant industrialized countries:
The green line is what would happen if primary balance (gov revenues - gov expenditures less interest) were improved by 10% over 10 years at a rate of 1% a year. In the US, this would only help until about 2025.
The blue line is what would happen in the green scenario AND by holding age-related expenditures constant as a percent of GDP.
As BIS notes:
Coming on top of the improvement in the primary balance, the freeze of the GDP share of age-related expenditures leads to a faster decline in the debt/GDP ratio or a slower rate of increase. Preventing age-related spending from growing faster than GDP for the entire projection horizon may be somewhat unrealistic. Nonetheless, the results suggest that early efforts to reduce future age-related spending or finance the spending through additional taxes and other measures (discussed below) could significantly improve fiscal sustainability in several countries over the medium term.In fact, BIS takes an extremely anti-Krugman position:
Although the evidence on the growth implications of high levels of public debt is slim, it suggests that the effects could be significant. Among countries with a debt/GDP ratio of more than 90%, the median growth rate of real GDP is 1 percentage point lower (and the average is 4 percentage points lower) than in countries with a lower ratio. Recent evidence also suggests that the expected increase in the debt/GDP ratio in the advanced economies for the 2007–15 period may permanently reduce future growth of potential output by more than half a percentage point annually.6Please note that the BIS' inflection point for the US is about 2015. When you are playing around with the debt levels we already have plus the demographics we have plus the deficits we are running, delaying action for just a few years can have a huge effect on future outcomes.
Jill, this chapter contains the answer to your questions. We have to make policy decisions by 2017 that will change the social contract in the US for the worse. If we don't make them, the social contract in the US will change hugely for the worse.
From the point of view of the average family, the economy of the US in the 2020's will seem far more like the economy in the later 50s and 60s if we correct earlier. If we correct later, it will be worse.
This need not lead to dire disaster for most people and for most families if we address the situation realistically. Unfortunately, most of our current catalog of public authorities on the issue are unwilling to be realistic. Electoral time is running out. One key in the US is to abandon our current energy policies - they are too destructive of economic growth. Eventually the correction in the US will lead to more production of items for consumer needs, and you can't run an industrialized economy on wind and solar. You can do coal, NG and/or nuclear, but you cannot do current "green". Germany is about to find this out; Japan is probably going to NG to provide power.
The other thing one can clearly derive from this report is that China is facing a huge economic transition which will be difficult.
We definitely haven't helped the pension funds with our national policies.
Assuming 1 minute per page * 11 pages and say 125 million adults with IQ >= 100 means that you would spend about 32 life-times on that endeavor. (I'm not saying anything about whether or not it would be worth it, but I try to always be conscious of how these kinds of things add up.)
I liked the summaries along the side though -- I wish more texts did that.
"Eventually the correction in the US will lead to more production of items for consumer needs, and you can't run an industrialized economy on wind and solar."
It seems like it should be possible to do it with solar power of the molten salt type (so you can get 24 hour power). Unfortunately that appears to still be about twice as expensive as nuclear. (I haven't looked at the specific costs so I don't know why, but I would guess it's a matter of size. Lots of mirrors needed to gather power from a low-density source [sunlight], and lots of capacity needed to hold enough molten salt to be able to continue delivering power when the sun isn't available.) Might need a better distribution grid too, otherwise specific areas that are unfortunate enough to get lots of cloudy days in a row are going to run out of power (even with a reasonable amount of overcapacity).
China might be the one place where that kind of solar power makes sense. They currently have an abundance of capital and in the future they are going to need lots of power. The expense of building solar now might be better for them to deal with than the lack of power later, and they don't have massive amounts of coal like we do. Nukes would seem to be cheaper for them right now, but that's only if they are actually going to keep them around for enough decades for the investment to pay off. Solar should have less "political push-back" risk than nukes (which Germany is now experiencing first-hand).
I don't know much about thorium reactors, although I do know that they are not supposed to be capable of uncontrolled fission reactions. You have to constantly feed power in to sustain fission.
Has anyone ever built a Gen IV?
Regarding solar thermal, the older plants built in the west are still running. When I look at the utility reports, I can see the impact of the stored energy in the solar totals most day. I know they are expensive, so it is not at this time a long term solution, but I think they are probably better than individual PV installations.
Ah, the 60's, when anything was possible and the Boomers' self-indulgent narcissism was still pubescent and mostly harmless, but I digress.
A nice 'everything you would want to know about Thorium Breeder reactors in 10 minutes' is at: http://www.youtube.com/watch?v=5LeM-Dyuk6g
Oh, look, more reactor problems in Japan:
"Prefecture and city officials found that the operator had tampered with video images of the fire to hide the scale of the disaster. A top manager at the plant recently committed suicide, on the day that Japan's atomic energy agency announced that efforts to recover the device would cost almost $21.9 million. And, like several other reactors, Monju lies on an active fault."
"The rest of the reactor remains highly dangerous. And an accident at Monju would have catastrophic consequences beyond what we are seeing at Fukushima."
"Monju was reopened in May 2010, and just three months later, the 3.3-ton fuel relay device fell into the pressure vessel when a loose clutch gave way. In the two decades since the reactor started tests in 1991, the atomic energy agency has managed to generate electricity at the reactor only for one full hour."
"The presence of an estimated 1.4 tons of highly toxic plutonium fuel at the reactor makes it more dangerous than light-water reactors, which use mainly uranium fuel, critics charge."
"You have to constantly feed power in to sustain fission"
Pure thorium doesn't self-sustain fission. You can make it react by injecting neutrons from some external source. Or rather than having to do that all the time, you can just spike it with a bit of Uranium or Plutonium. The Gen IV design I saw was doing the latter.
Gen III+ are currently being built and will start coming online in a couple of years. (They're really not as impressive -- mostly tweaks to what we have now.) Gen IV is still only in the design phase. However, the idea of molten salt reactors was tested here in the US back in the 60's. And India has a thorium (but not Gen IV) reactor in use right now.
according to http://en.wikipedia.org/wiki/Generation_IV_reactor:
"Most of these designs are generally not expected to be available for commercial construction before 2030, with the exception of a version of the Very High Temperature Reactor (VHTR) called the Next Generation Nuclear Plant (NGNP). The NGNP is to be completed by 2021."
under "claimed benefits" they have:
- Nuclear waste that lasts a few centuries instead of millennia
- 100-300 times more energy yield from the same amount of nuclear fuel
- The ability to consume existing nuclear waste in the production of electricity
The problems with thorium are real. These reactors will become acutely radioactive. The waste generated is extremely long-lived.
Thus they are vulnerable to attack and to violent natural disasters such as the recent Japanese quake.
I think it's more of a chicken/egg question. I think a lot of the loosening of F&F standards and financial regs were in part a gift to pension funds that had already made promises they couldn't fill. But increasing the moral hazard the last couple of years is only going to make them crash even harder.
This is more enviro-liberal clap-trap. Putting weapons-grade plutonium into a nuclear reactor does not make it more dangerous than a regular uranium nuclear reactor. Plutonium is a natural by-product of uranium fission. You'd get it regardless, but my, my, it sounds so much more dangerous.
The article also has some of Monju's history, which is one of sorrow and failure. It is highly unlikely that the reactor will be restarted this year.
The link you provided says exactly the opposite of your first sentence. Other stuff I've read counters your second sentence -- at least on a relative basis, because current reactors generate waste which remains radioactive 10 times longer than what thorium may provide. (I.e., waste that is radioactive for 100s of years is better than waste that is radioactive for thousands. It probably depends on the specific tech though -- there are many kinds of thorium reactor.) Plus if we can extract 100+ times as much energy out of the same volume of fuel (as wikipedia suggests) that means we will go through 100 times less fuel and therefore there will be 100 times less waste.
"Thus they are vulnerable to attack and to violent natural disasters such as the recent Japanese quake."
But that's not exactly what's important. The question is: What happens *after* such an attack or natural disaster? The problem with current reactors is that answer includes "they melt down and explode and spew lots of radioactive material over a very wide area". What happens if an earth quake ruptures a pipe containing molten thorium salt? It spills all over the floor and cools and solidifies. (Even if the floor is cracked open by the quake, the salt's going to very quickly form a solid plug in that crack because the ground temp is way too cool for the salt to remain liquid.) It may be very dangerous to anyone in the plant, but not so much to people outside of the plant.
Using the stuff as dirty bomb material is still a possibility, which suggests that these reactors won't actually be built all willy nilly like the link you provided suggests, but will instead be kept in larger facilities where an appropriate level of security is feasible.
"This is more enviro-liberal clap-trap."
I only quoted that sentence because I was impressed (not scared) by the amount of plutonium. Kind of like if I found out someone had a 1.4 ton stash of platinum.
"Foo - actually that problem at Monju was resolved! Shroud out."
From the linked article (and just because it sounds funny) -- something no one probably wants to hear with respect to a nuke plant:
"We will have to retrieve any pieces that have fallen off."
"A medium-term storage facility for nuclear waste is under construction in the village of Mutsu in northern Japan."
I wonder how pissed people in Mutsu will be when that temporary storage facility becomes a permanent one.
For completeness -- note that there is one case where that isn't true, and that is if the molten salt can actually self-ignite. Some designs use stuff like elemental sodium which can self-ignite in air (and explode if it hits water). So ideally they would not use such a highly volatile material -- and there are a number of Gen IV designs that avoid it. Here's hoping they have the common sense to not pack nuke plants full of what is essentially an explosive. (But considering that current fuel rods are coated with a material that self-ignites when exposed to air... maybe those hopes shouldn't be too high.)
"Fukushima residents' urine now radioactive"
"More than 3 millisieverts of radiation has been measured in the urine of 15 Fukushima residents of the village of Iitate and the town of Kawamata, confirming internal radiation exposure, it was learned Sunday.
Both are about 30 to 40 km from the Fukushima No. 1 power plant"
"The water seeping into a trench outside the Number two reactor at Fukushima Daiichi nuclear plant in northeast Japan had a radiation level of more than 1,000 millisieverts per hour."
"A temporary meltdown inside the core of the Number 2 reactor was possibly the cause of the building's contaminated water"
Inflation is transitory, metldown is temporary. They're all using the same playbook.
"In terms of radiation leaking into the sea, this would be diluted very quickly and there would be no particular risk to fish for example"
I'm surprised they don't just put a bunch of explosives around the area and blow it all into the sea. (And like anyone really cares about the risk to the fish. It's the people eating the fish that have to worry.)
@ 7:40 the slide shown mentions that the heat from the reactor can be used directly in the process of converting coal to gas.
@ 8:54 there's a slide comparing light-water reactors to this particular type of thorium reactor (LFTR). It mentions another one of the efficiencies -- because it runs at a higher temp than light water reactors, the steam turbines run more efficiently. That all by itself provides about a 42% efficiency boost. For the reason see here: http://en.wikipedia.org/wiki/Carnot%27s_theorem_(thermodynamics)
That slide also says this particular reactor type generates 1/30th the amount of waste as LWRs.
@ 9:13 they mention that one company claims it has a 1,400 acre piece of land that all by itself has enough thorium to last (at 1998 energy rates) 3,600 years.
It was surprisingly apt. I'm so used to him spouting banalities about making all children above average, this has caused me re-evaluate my opinion of him.
Hit on many of the things talked about here:
* "cute" energy vs. industrial base load
* politicians mucking things up
* manufacturing going to China because they have the will to build
* no-nonsense economics of poor people/countries
It's long at an hour, but pretty nice to know that someone besides nameless internet geeks "gets it".
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