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Bad uranium economics

Brian Toohey in the Weekend Australian Financial Review (subscription required) states that:

‘Nuclear energy is more financially viable in countries without Australia’s low cost coal and natural gas reserves’.

This argument seems fallacious. As Australia sells coal and gas in international markets they – as with the U3O8 they export – have an opportunity cost that equals their value in these markets less transport costs incurred exporting them.

The same fallacy arises when people say that Iran has no economic reasons to develop nuclear power because of its abundant oil reserves. Again the proximity of such reserves has nothing to do with the case for or against nuclear power since Iran is a major oil exporter.

There are non-economic reasons for me opposing Iran’s shift to nuclear technologies that I have discussed on this blog. There are also reasons that I think Australia should keep an open mind about the nuclear option (here and here). But these are independent of the fallacious reasoning adopted by Toohey.

Toohey’s also opposes nuclear power on grounds that:

‘If advances in ‘clean’ coal technology for removing the problem of greenhouse gas emissions prove cost effective – which seems likely – there will be no compelling commercial or environmental reason to switch to nuclear’.

This argument is not supported with evidence but it is at least helpful in clarifying the debate. We need to try to understand whether such technologies will become commercially viable. This debate has a long way to run.

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