Obama’s “Nuclear Renaissance” Hit Again By Bankruptcy

by

Since it was first announced almost a decade ago I’ve followed the “nuclear renaissance” that Obama touted and noted that it would likely end in failure due to the poor economics of these projects given our current, failed regulatory climate. The Federal government provided loans to get some of these projects off the ground. Now, with the bankruptcy of Toshiba’s Westinghouse unit, the whole process is collapsing and leaving half-built reactors and rate payers (and investors) in many jurisdictions likely to hold the bag for huge investments that aren’t going to generate power any time soon.

Toshiba Corp’s U.S. nuclear unit Westinghouse filed for Chapter 11 protection from creditors on Wednesday, just three months after huge cost overruns were flagged, as the Japanese parent seeks to limit losses that threaten its future. Bankruptcy will allow Pittsburgh-based Westinghouse, once central to Toshiba’s diversification push, to renegotiate or even break its construction contracts, though the utilities that own the projects could seek damages. It could even pave the way for a sale of all or part of the business. For Toshiba, the aim is to fence off soaring liabilities and keep the group afloat.

These partially built reactors in Georgia and South Carolina were commissioned because local laws and regulations allowed for the costs of these investments to be passed on to the rate payer (local folks paying electric bills). In other states with different sorts of regulatory models, these sorts of investments would have been uneconomic, which is the primary reason why everyone else in the USA balked at the nuclear renaissance, even when it was partially underwritten by the Federal government with loans.

There are now two problems for rate-payers in Georgia and South Carolina:

1) the companies now have to build these reactors without price guarantee from Toshiba, meaning that the (likely) giant costs of the overruns will be borne by local ratepayers or the companies themselves. If the unit is in bankruptcy and walled off from the funds of the parent corporation (which is the purpose of the bankruptcy, I am assuming), it seems unlikely that anyone else would step up and backstop such a guarantee.

2) this bankruptcy is likely to cause significant delays in construction, meaning that the long, miserable process of getting certified to start up the reactor is going to be pushed out further into the future. This means that it will be that much longer until the unit starts generating power and “earns back” the investment, and all the costs of the reactors will accrue interest and financing charges for that much longer while construction proceeds (rate payers)

Note that there is precedent for taking gigantic write downs and abandoning abandoned reactors. Here is a link to the abandoned reactors in Washington and the famous Shoreham debacle in New York.

None of this seems to be impacting the stock prices of Southern Company (SO) and Scana (SGC) this morning so maybe the market knows something that I don’t. Scana is holding a press conference to describe their next steps in the process today and I didn’t seen anything yet scheduled on Southern Company’s web site.

Cross posted at LITGM

Worthwhile Reading & Viewing

by

Some people find it very upsetting that President Trump likes to put ketchup on steak.  (Not something I’d do, but then I never put ketchup on french fries, either…)  Matthew Continetti says:  It is hard to read stories like these without coming to the conclusion that so much of our elite’s abhorrence of Trump is a matter of aesthetics.

There’s considerable truth in that point, I think.  Lead and Gold quotes GK Chesterton:  The modern world will not distinguish between matters of opinion and matters of principle and it ends up treating them all as matters of taste.  Follow the link to read what L&G has to say about the worship of ‘taste’, using the Bloomsbury group as an example.

How Communism became the disease it tried to cure:

Contrary to the socialist promises of making a new man out of the rubble of the old order, as one new stone after another was put into place and the socialist economy was constructed, into the cracks between the blocks sprouted once again the universals of human nature: the motives and psychology of self-interested behavior, the search for profitable avenues and opportunities to improve one’s own life and that of one’s family and friends, through the attempt to gain control over and forms of personal use of the “socialized” scarce resources and commodities within the networks and interconnections of the Soviet bureaucracy.

Stuart Schneiderman writes about nationalism vs internationalism, and Don Sensing has some thoughts on tribalism.  Both are well worth reading.

Why college graduates still can’t think:

Traditionally, the “critical” part of the term “critical thinking” has referred not to the act of criticizing, or finding fault, but rather to the ability to be objective. “Critical,” in this context, means “open-minded,” seeking out, evaluating and weighing all the available evidence. It means being “analytical,” breaking an issue down into its component parts and examining each in relation to the whole.  Above all, it means “dispassionate,” recognizing when and how emotions influence judgment and having the mental discipline to distinguish between subjective feelings and objective reason—then prioritizing the latter over the former…I assumed that virtually all the readers (of a post on a higher-education website) would agree with this definition of critical thinking—the definition I was taught as a student in the 1980s and which I continue to use with my own students.

To my surprise, that turned out not to be the case. Several readers took me to task for being “cold” and “emotionless,” suggesting that my understanding of critical thinking, which I had always taken to be almost universal, was mistaken.

Some great pictures of villages around the world.  (via Craig Newmark)

Mid-Life Crisis and Alternate Universes

by

One of my favorite Onion jokes of all time is “Alternate-Universe James Hetfield Named Taco Bell Employee of the Month“. This genius post encapsulates the randomness of the world we live in, since the likelihood of James Hetfield being a guy who does odd jobs, plays guitar in a basement, and loves metal is so much infinitely higher than the odds are that he becomes a rich superstar as the singer of Metallica.

This philosophical view is somewhat similar to Taleb’s theories in “The Black Swan” and his other books where, if you did your life over and over, you would get vastly different results and individuals attribute too much of their luck and good fortune to their specific actions and experience. We are all dealing with the “Survivor’s paradox”, where those who did well get to tell their tale and those who didn’t fare so well are essentially erased from the common consciousness.

I saw this car down in my garage in Portland and thought to myself “This is the alternate universe for Carl” which is to just keep my prior job and old way of life and buy a shiny new expensive car (this is a Bentley, I would have bought a new BWM 7 Series, but who’s counting) as a distraction. That would have been a fine life, a life I understood, and the car purchase would have been a modest but visible change and distraction from what was otherwise a quite predictable path.

Instead, however, I changed everything, by moving jobs and careers and physically relocating away from my entire ecosystem of family and friends to the Pacific Northwest. This was a vast change, much larger than cosmetically purchasing a new conspicuous automobile. Starting a new job forced me to change everything, from the way I listened and studied, to the way I interacted with the environment around me. I went from walking to work to commuting by car (like 90% of the world) which is a primary negative, although at least I have been listening to podcasts which turn that driving time which was initially pure frustration into at least a positive learning experience.

Read more

The state of state surveillance technology

by

All the discussion of the Trump “wiretapping” seems to assume that there are targets of surveillance. I thought that had passed away years ago and that NSA was simply capturing all transmissions in the ether, converting them from voice to text and storing both in a searchable data base. While additional land lines may be intercepted, the vast majority of signals are now airborne at some point so the NSA has access to virtually all electronic communication, foreign and domestic. Likewise, they do not, except in extraordinary circumstances, have acres of analysts sitting in cubes listening to conversations in real time. Instead, software constantly crawls the text database for terms of interest or manually input searches, such as the names of everyone on the Trump transition team. This is how team 0bama got the dirt that has been leaked to the press.

Politics is now under the influence of those at NSA with search authorization much more than the Kremlin, except to the extent they have comparable capabilities. I suspect the Kremlin has comparable intellectual capabilities but less access to transmissions and even less processing bandwidth. Given the acceptance of the loss of privacy by the facebook generation, this can only expand. And to think that only 80 years ago a Secretary of State could opine that “Gentlemen do not read each others mail.” Things have changed, and once again, not for the better.

Got that off my chest. Now if only the tin foil would stop irritating my scalp.