Tuesday, November 16, 2004

Yucca Mountain vs. Buying Time
The proposed long-term nuclear waste storage site at Yucca Mountain, Nevada has been delayed by a combination of technical problems and localized opposition affecting both the site itself and the transportation of waste from hundreds of reactors and other locations to the site. (See my blog of August 12.) With the distortions of election-year rhetoric behind us, it's worth pondering the questions posed in a fascinating article in MIT's Technology Review, which suggests that delay might actually be the best strategy for dealing with our nuclear waste.

Waiting is always an alternative in any project, but it's often the least preferred, particularly when net-present-value economics are driving the decision, and the value of distant cash-flows is thus heavily discounted. NPV doesn't account for the value of information gained by waiting, nor does it consider the possibility that a much more valuable option may emerge after a few years. The best way of approaching this sort of decision is using the techniques of "real options", which explicitly value all possible future outcomes.

As I read the MIT article, it seemed to me that the author was describing a real-options approach to nuclear waste. Future "branchings" include not just the proposed facility in Nevada, but also the potential of new waste-disposal alternatives, better technology for reprocessing waste, and ways to improve the safety of sites such as Yucca. Including their potential in the calculation just might alter our choice today. Another key consideration is that deferring a permanent decision by 50 or 100 years will reduce the radioactivity--and thus both the hazards and storage challenges--of current waste.

The article didn't delve very far into any mitigating or offsetting concerns related to delay, beyond having to secure 60 temporary storage sites in lieu of one permanent site. However, delay adds to the scale of the subsequent problem, as existing reactors continue to generate waste. It also provides many more opportunities over time for disastrous security problems, including some that we simply cannot imagine today, because they would arise from new technology and techniques that develop in the interim.

Finally, and perhaps most insidiously, the absence of a permanent nuclear waste storage option would weigh heavily on any debate about the viability of new-generation nuclear plants as a high-capacity, zero-greenhouse-gas emission energy option. Without a plan for waste, new nukes are dead on arrival.

So when is delay not merely procrastination? Only if it is the result of considering all the benefits and costs of waiting and determining that time is truly on our side, something that has appeared counter-intuitive until now.

No comments: