Fukushima And Our Inability To Gauge Risk: The Future Of Fuel

Perhaps the most important energy story on the planet right now is the precarious situation for fuel rods stored in a damaged building at the Fukushima nuclear power station in Japan, site of the worst nuclear power plant disaster in history.

It's a story that has actually been important for a while because an earthquake--in a place prone to earthquakes--or a severe storm or perhaps another tsunami has the potential to dislodge these rods, expose them to air and begin a reaction that might release a radioactive cloud that would reach around the globe. Figuring out how to get the rods out of harm's way, however, has proven exceedingly difficult. But shortly, the plant's owner, Tokyo Electric Power Company, is going to try, and any mistake in moving the rods could be very, very been dropping for decades .

We think we know the future of these fuels. But only a decade ago, the same people who are trumpeting fossil fuel abundance today were telling us how prices would stay low for decades and supply would keep on increasing at a steady pace. For example, long-term forecasts for oil production made in the year 2000 were far too optimistic. In fact, the optimists have been wrong every step of the way as oil's price has increased 10-fold since 1998.

Coal prices leapt upward in the last decade though they have come down from their peaks. World natural gas prices remain high, though a local glut in the United States has lowered prices there--but only to levels that remain 70 percent higher than the average price in the 1990s. Why should we accept optimistic pronouncements about supply now?

We shouldn't because the perennial optimists don't know the future, and neither does anyone else. And, that should tell us right there that we cannot gauge the risks to fossil fuel supplies with any degree of certainty. Projections and forecasts that go out decades are guesses and little more. They have no force as probabilistic predictions because the probabilities of such forecasts cannot be calculated. And yet, most are presented as fact rather than the fiction that they are.

The fact is, we don't know what we don't know. In our energy policy and planning across the world, we act as if we know future fossil fuel supplies precisely--just as we acted as if we knew the risks of nuclear power rather precisely--that is, close to zero.

All this suggests that we ought to have a bias toward energy supplies that cannot decline in the long run, namely renewables--and that cannot create environmental havoc with just one accident. Strangely, this is a surprisingly tough sell in a world that has already been sold on the idea that we have precise knowledge of our energy future--when, in reality, all we have are risks, many of which cannot be even be remotely quantified.

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Written By: Kurt Cobb