What’s Behind the US-Saudi Nuclear Mega-Deal?
Up to 16 nuclear power plants for civilian purposes? Really?
Last week, the NY Times ran a front-page story on Saudi Arabia’s efforts to purchase nuclear fuel enrichment capabilities and as many as 16 nuclear power generating plants from the US. The principal concern expressed here was the Saudi’s insistence on ownership of nuclear fuel-enrichment technologies.
Typically, when the US has exported its reactor technology, it is accompanied by a fuel purchase agreement. We sell the fuel more or less as finished product. In the past, reluctance to export fuel-processing technology stemmed from concerns regarding proliferation of nuclear weapons. Saudi Arabia does have domestic sources of uranium they could mine but they have also expressed the need to respond to a potential nuclear arms rivalry with Iran.
But this article omitted the most important point. The key question is what are the Saudi’s motives regarding construction of a vast number of nuclear power plants for supposedly civilian purposes? The answer is obvious. There is no earthly commercial or economic reason for them to produce those quantities of electricity in the proposed nuclear fashion.
We should also point out that the seemingly large number cited for these nuclear power plants, $80 billion, is understated by a factor of almost five. Sixteen Westinghouse-designed nuclear stations with two reactors apiece would cost roughly $30 billion apiece! And 16 such plants would cost $480 billion – not $80 billion.
This sounds to us more like a bribe. Sell us nuclear fuel-processing technology (which it appears they really want), and we promise to purchase a large number of extremely expensive power plants from the US (the need for which is presently unclear).
Major nuclear construction projects currently underway in the West, V.C. Summer in South Carolina, Plant Vogtle in Georgia, Hinkley Point in the UK, Flamanville in France and lastly Olkiluoto in Finland all have two things in common: They are all vastly over-budget as well as years behind schedule.
- The V.C. Summer project in South Carolina was recently canceled in mid-construction due to its lack of economic viability (used the Westinghouse reactor design under discussion in the article).
- The Plant Vogtle in Georgia (also using the Westinghouse reactor design under discussion in the article) has turned into an economic albatross for Southern Company’s Georgia Power subsidiary.
- Hinkley Point in the UK has required huge government subsidies to continue and if completed will produce overly expensive power for decades.
- The Moorside nuclear project in the UK was recently abandoned by its developer after incurring almost a half a billion dollars in costs.
- The UK government is also negotiating a major subsidy-disguised-as-investment in the Wylfa nuclear plant to keep that project afloat.
There are cheaper and cleaner ways to produce electricity other than from nuclear energy. The sun shines and the wind blows even in oil-rich Saudi Arabia, does it not? The Times’ story states that nuclear arms competition with Iran is a Saudi concern. As a result, they are eager to also obtain nuclear fuel enrichment technology.
This article leaves us with two possibilities:
Either, that the electricity-needy Saudi kingdom is truly embarking on a nearly half-trillion-dollar endeavor to bring reliable, carbon free energy to its people and perhaps the region as well.
Or, that this is merely a cynical ploy to dangle an enormous contract in front of gullible Americans in order to obtain nuclear fuel enrichment technology. And we would bet that following the technology transfer currently under discussion, the actual number of US reactors eventually purchased will total one or two at most, not 16. Not that we’re cynical or anything.
In March of last year, Westinghouse’s corporate parent Toshiba filed Westinghouse into bankruptcy in the US. Westinghouse is now a subsidiary of Toronto-based Brookfield Asset Management who, as corporate strategy, has been a purchaser of distressed utility and infrastructure properties. Perhaps the AP1000 reactor design will be a winner for them.
Although Westinghouse still retains a presence in Cranberry Township, PA, we wonder what President Trump will say when he learns Westinghouse is now owned by a Canadian company? By Leonard Hyman and Bill Tilles for WOLF STREET
For investors there is little clarity through the smoke and haze. Read… Will PG&E Have to File for Bankruptcy Protection?
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