Remarks to 40th Annual World Nuclear Association Symposium
By Daniel Poneman
President & CEO, Centrus Energy Corp.
September 11, 2015
Good morning. I am delighted to be back here at the World Nuclear Association Symposium, for the first time in almost 20 years. I am honored to join my distinguished colleagues this morning, and want to add my thanks to the leadership of the WNA, and to Director General Agneta Rising, for the great work that they have done here and do every day to promote the safe use of carbon-free nuclear power, for the benefit of all humanity.
I have been working in this area for 40 years now, and I believe that this is a good time to focus on the things that are most important to us all. And having thought a lot about it, I have concluded that, as a species, we only face two threats that I would characterize as existential: nuclear annihilation and climate change.
By implication, that means that, collectively, we are not doing enough to reduce those threats. If we had, they would no longer be existential.
But here’s the kicker: the people in this room have a unique role to play in tackling BOTH of these threats. Indeed, I would say that each of us has both the opportunity, and the responsibility, to do so.
We live in momentous times. History will record 2015 as a pivotal year for both of these existential issues. First, when it comes to the most pressing global nonproliferation threat – the possibility of Iran acquiring nuclear weapons — the P-5 plus one and Iran concluded a Joint Comprehensive Plan of Action, which will constrain Iran’s worrisome nuclear program and subject it to enhanced international monitoring.
Second, three months from now, negotiators from 190 nations will meet in Paris for historic climate talks, aimed at finding a way to limit global warming to 2 degrees centigrade – an ambitious target that many scientists say is necessary to avert the worst consequences of a changing climate. The International Energy Agency has urged with growing insistence that the window available to take actions to confront this threat effectively is closing rapidly.
So, as Vladimir Illyich Lenin said in 1901: “What is to be done”?
Friederich Nietschze said the most fundamental form of human stupidity is forgetting what we were trying to do in the first place.
If our goal is to address climate change and reduce the threat of proliferation, then we must have a strong, focused nuclear policy that supports both aims.
What does that mean? In practical terms, it means that Agneta Rising was correct in her remarks yesterday – nuclear energy DOES need a level playing field, an effective safety paradigm, and harmonized regulatory processes.
And, for example, that means that we should define a “level playing field” in terms of dealing with the existential threat: carbon. That means that laws, regulations, and public policies should not pit one carbon-free energy source against another. Unfortunately, because of a variety of familiar concerns about nuclear power, it sometimes receives less favorable treatment than, say, wind or solar power. That is not to say we should not tackle nonproliferation and nuclear waste concerns seriously. It IS to argue that CARBON-DRIVEN policies should give full credit to the contributions nuclear energy can make to lowering carbon.
By the same logic, this means that, given the reality of how much coal is going to be used over the next several decades, regardless of whose projections you use, we must continue to do all that we can to promote cost-effective carbon capture and sequestration. And, since natural gas produces only half the CO2 that coal-fired plants produce, it should get proportionally favorable treatment for its impact in lowering global CO2 levels.
So we should walk away from misguided policies and programs that pitted nuclear power against other low-carbon solutions. We need them all and should not tolerate zero-sum policies that idle some carbon-saving units while promoting others.
Why is that? Because we all know that Climate change is no longer a distant threat. It is here today.
You can’t turn on the news in the US without hearing about the wildfires raging in the western United States. Last September, a single wildfire in California consumed more than 135,000 acres – almost 10 times the size of Manhattan. The total area burned in 2012 was larger than the land mass of Belgium.
The number of acres burned varies from year to year, but the trend line is unmistakable.
Across the planet, the impact of climate change is found in droughts and empty reservoirs…flooded homes…levees breached by ever more powerful hurricanes.
Just this week, 100,000 people were forced from their homes in Japan after two feet of rain fell in 48 hours. We’ve see stronger typhoons and hurricanes affecting tens of millions of people. We’ve seen icebergs the size of Connecticut breaking off the ice shelf in Antarctica. This is the new normal.
That is why the time has come to move past the old debates about which energy source will power the future.
For me, the turning point came when I read the MIT Future of the Nuclear Fuel Cycle. That study asked the traditional question of whether the answer to our future power needs would come from fossil fuel, nuclear, renewables, or efficiency. The answer was: “Yes”. Or, as President Obama says: “All of the above”.
Today, it is no longer a question of either/or. We need a robust portfolio of energy solutions that includes traditional hydrocarbons …as well as nuclear, energy efficiency, and renewables like wind and solar power. Each of these technologies has a role to play.
Here is the track the world is on right now – to a global temperature increase of 6 degrees centigrade within the lifetime of a child born today.
Here is what the International Energy Agency says is needed to achieve the 2 degree scenario, and that contributions of from a portfolio of technologies to meet that aggressive goal.
A big slice from efficiency…renewables…end use fuel switching – as more and more of our busses, cars and factories shift to lower carbon fuels like natural gas or electricity…CCS…and nuclear power closes the gap.
Nuclear is not the biggest piece of the puzzle. But the puzzle doesn’t fit together without it.
So where do we stand today?
According to the World Nuclear Association, there are at least 60 reactors under construction and at least 500 more than are planned or proposed around the world.
At the same time, however, we are constrained by competition from alternatives, and issues surrounding cost, safety, environmental factors, and non-proliferation.
Yesterday Agneta talked about adding 1000GW of new nuclear power by 2050. Interestingly, the IEA view is largely consistent, telling us we need 930 GW of nuclear by 2050 if we are going to do our part toward meeting the 2 degree scenario.
As Agneta also told us yesterday: that is not the trajectory we are on today. But the green line shows you what is possible, according to the IAEA, if the world adopts effective carbon policies. The message is straightforward: we must change our trajectory …and with the right policies, we can do that.
Each of us here, in this room, has a role in creating this future.
Let’s take Centrus, the nuclear fuel service company I now lead, as an example. To be sure, a robust nuclear growth scenario will require many things. But one of them will surely be a reliable fuel supply… and robust competition with multiple suppliers capable of meeting a plant operator’s needs.
Centrus has a role to play on both counts. That is why I took this job.
As CEO, my mission is to ensure Centrus can thrive and ultimately grow as a long term supplier to our customers around the world. While we view ourselves as an important partner in supporting the U.S. national security mission, we are also keenly focused on providing our LEU customers with reliable, on time deliveries on commercially attractive terms. And those customers are telling us that they want us to stay in the business, to assure secure, diverse, competitive fuel supplies.
At the same time, while current enrichment prices will not support investment in building new capacity, we are ALSO keenly focused on ensuring that our own suppliers can count on us to be reliable counterparties in a mutually- beneficial relationship that provides our customers with the diverse, secure, competitive supplies that they are looking for.
In short, today’s market has too much supply, but not too many suppliers. Centrus is well-positioned to address this problem.
That said, we are optimistic about the long term. Eventually, the market will need new enrichment capacity. If the world commits to that 2 degree scenario, we will need to more than double our enrichment capacity by 2050. But even under more modest expectations, there is room for growth in future decades.
Some may think that the climate challenge, or the nuclear challenge, are just too big to overcome. But the nations of the world have actually shown the ability to work together to tackle big problems effectively.
Take the issue of CFCs. President Reagan and other world leaders of that era proved that effective multinational action is possible with the Montreal Protocol – widely regarded as the most successful global environmental initiative ever.
Obviously, climate change represents a much more significant threat and is vastly more complex. And there are no easy answers to the challenges facing the nuclear industry – costs, safety, non-proliferation, or used fuel storage and disposal.
So we should just take them on, one by one, in a pragmatic, problem-solving way. Take the issue of storage.
The United States has struggled for decades on this issue. Meanwhile, Finland is moving ahead with a repository that enjoys broad popular support, because it was arrived at through a consensus based process. As difficult as the issue is, it’s not insurmountable.
At the outset, we spoke of the other existential threat – that posed by the possible acquisition and use of nuclear weapons. And no country has consumed more global concern on this score in recent years than has Iran. This issue has riveted the world’s attention, and has great relevance to our industry.
Iran has justified its program, and its activities, under color of the NPT. But the international community and the IAEA have responded consistently, and forcefully, that their program raised serious proliferation concerns.
Now that the deal has been reached, the hard work will continue. Both the supporters and opponents of the deal are intently focused on the need for enforcement and verification of compliance. Much of the burden of that will fall to the IAEA.
But there is one aspect where our industry can play a useful role: shaping the environment surrounding the reliable supply of nuclear fuel services in the years ahead.
Some are concerned that Iran will move directly to build an industrial scale enrichment plant after 15 years. If Iran were to scale up its enrichment program, the international community would want to know the justification for building such capacity, and what it will be used for.
It might be argued that the multibillion dollar investment would be justified to assure a reliable supply of uranium enrichment for its reactors.
But what if an international consortium were to be created between now and that time? And this consortium provided a set of guarantees that Iran or, indeed, any NPT-compliant nuclear energy program, would have assured access to civilian nuclear fuel.
Could such a set of assurances be relied upon? I submit to you that they could, if the following conditions were met:
As I said: we are living in pivotal times.
Back in the 1940s, Albert Einstein wrote a letter to fellow scientists, calling atomic energy “the most revolutionary force since prehistoric man’s discovery of fire.”
He warned that “this basic power of the universe cannot be fitted into the outmoded concept of narrow nationalisms…there is no possibility of control except through the aroused understanding and insistence of the peoples of the world.”
Almost 70 years later, his words are poignant reminder of our shared responsibility to unleash this power for constructive rather than destructive ends. Instead of threatening our planet, nuclear can play a major role in saving it.
I may be new to Centrus, but – as I said – I have been working on these issues for 40 years. Like you, I feel the weight of that responsibility, and the history of all those who have worked so hard to bring the benefits of the peaceful use of nuclear energy to the people of the world.
And it is precisely the people in this room who have the understanding, the capabilities, and the resources to execute this critical mission, for the benefit of our citizens, our customers, our stakeholders, and the world.
We at Centrus look forward to working closely with you to build that sustainable energy future and a safer world. Thank you.