Nobody knows whether nuclear energy is rewarding or not. There is no scientific or professional evidence that the energy prices would fall in some countries or regions, if the role nuclear energy was increased, says Professor Paul Stevens, who is Distinguished Fellow for Energy, Environment and Resources Program at Chatham House. In his interview to alapblog.hu, he indicates that the inevitable price changes in the energy industry – due to the American shale gas revolution – will adversely affect Russia and other major energy exporters.
As a result, these countries are expected to try to stop the dramatic process. The British interviewee seriously doubts that the American shale gas revolution will spread to Europe in the foreseeable future.
Zentai Péter: I reached you in Moscow on same the day as the Hungarian prime minister signed an agreement on the nuclear power plant expansion with Putyin. They say that producing more nuclear energy and primarily relying on it will ensure cheaper energy prices in the long-term. What is your opinion about this?
Paul Stevens: I think this is a very optimistic view; I can just regard it with a great deal of skepticism. Personally, I gave up dealing with nuclear energy in the 1980s because it impossible to get any hard data on what costs are actually involved. Talking about nuclear electricity became like a philological debate. Several studies have been published about how cheap this kind of energy is, while others discussed why it is just a waste of time and how absurdly expensive it is.
Let’s just say that there is lack of information to show that the energy supply would become cheaper in some countries or internationally, if we focused more on nuclear energy.
We simply have no good data as hardly anybody has built a nuclear plant in the last 20 years and very few of them have been expanded.
Russia will provide Hungary with a loan to finance the construction of new power plant units. This huge amount of electricity generated through nuclear power will play a decisive role in the energy supply of Hungary and perhaps of the whole region. Do you have any comment on this, especially, in the light of your experiences?
I would not be happy to being overly dependent upon any particular single source – whether it is a country, a technology, or a source of energy. I do not have any great problem with Russia. If we look at the record of Russian gas supply into Western Europe of the last decades, the Russians have always adhered to the arrangements and the exports have arrived steadily and predictably. There have been a couple of occasions when there was a problem but it was really to do with the conflicts between Ukraine and Russia rather than Russia and Western Europe. I understand that in Eastern Europe, people have a very different view of Russia due to historical reasons. But neither here, nor in Western Europe, should any energy importer become overly dependent on any other country or on any particular source of energy.
Out of the European scientists, probably, you are dealing the most with the American shale gas revolution and its impact on Europe. New fields of classical crude oil and gas are discovered, which implies a global decrease in energy prices. Is it possible that nuclear energy will not matter because everything will become cheaper anyway? The price drop is, however, not in the interest of the large producers, especially, of Russia…
Firstly, despite the legends that can be heard circulating, we have known for decades that plenty of energy resources are available for mankind. So much that is will be enough for the next generation, as well. The only question is how much hydrocarbon we are going to burn. If we rely solely on hydrocarbons, we are in serious trouble because of climate change and other environmental impacts. At the same time, there has a lot of work done in improving energy efficiency, carbon capture, and carbon storage. Due to technological developments, industries, production, and transportation also need less energy and fuel than ever before.
Moreover, the shale gas revolution matures, however, just in the United States. Gas and oil prices are falling, as well as other energy prices. I can foresee a huge price collapse. There are a lot of similarities to the period in 1980 to 1986, when prices decreased to one eighth of its original amount in ten years!
The forthcoming changes of the prices on the global market may hurt Russia and other oil exporters. Thus, these countries will try to stop prices from falling. This will be particularly important in the Middle East, where governments depend on the revenue coming from the oil sales to pacify their population and keep them from rising.
Then again, energy supply is also increasing, especially, due to improving renewable energy sources – such as solar energy, wind power, and biomass energy. In the light of these developments, investing in nuclear energy seems to be a rather costly procedure…
National economies need to diversity their energy supply. This may include nuclear energy but market and technological trends need to be taken into account, as well. As I mentioned, in the next decades, countries have to be realistic about how much they depend on nuclear energy that requires expensive investments.
We consumers will be the winners, right?
Not necessarily at all. Governments, particularly in Europe, impose very high sale taxes. So any fall in the price of crude oil is quite likely to be absorbed by the government by further increasing their sales taxes. They will not let market tendencies prevail in their sphere of interest.
Still, in the United States, prices are plummeting…
The United States is a whole different story. As I have written in my article in the New York Times, no kind of shale gas revolution is expected to occur in Europe – neither in my more liberal home country Great-Britain. Hundreds and hundreds of characteristics of the United States made it possible to extract a large amount of shale gas; however, these are not present in Europe and are not going to be present in the foreseeable future. Let me give you a simple example. The property rights in the U.S. imply that the extracted shale gas is the property of the landowner. In Europe, the subsoil gas will belong to the government, not of the private individual.
At the moment, the European Union is not dealing with this issue. Even if they did, there would be decades of debates about it. But such major political change is not realistic. The EU does not even understand the importance of scientific research. Unlike the United States that puts millions and millions of dollars into basic scientific research, the European Union is not investing in research and development. Without R&D, without continuous financial support, there would not have been any technological revolution in U.S. that the people currently benefit from.
In short, the energy market of Europe and its technological development falls behind the United States in all aspects. This is why European countries may become vulnerable and dependent on others.