On June 22, 2008, Gordon Brown, the UK Prime Minister, spoke to a crowd that included the representatives of 27 oil producing countries. His primary message was that the current price of oil was not sustainable since it was high enough to cause economic hardships and a move to alternative energy sources. He was careful to point out that the alternatives to oil included nuclear power and that his country was making preparations to enable a large scale nuclear development program.
He also mentioned that at least 15 of his fellow European Union states were considering new nuclear power developments.
“Our commitment to the biggest expansion of nuclear power in Europe is now clear and definitive,” Brown said in his speech. “Fifteen of 27 European countries are now engaged in nuclear power.”
Oil ministers have a longer and deeper memory of energy related history than most casual observers; it is in their professional interest. During the 1970s, a number of nations, including France, Taiwan, Japan, and South Korea made a strategic decision to replace oil burning power plants with nuclear fission reactors.
Several large U. S. electric utilities made the same decision. By the mid 1980s, oil consumption in electrical power plants around the world had dropped by several million barrels of oil per day. Though there were other new supplies entering the market, the nuclear power contribution played an important role in shifting the supply-demand balance in the oil market to favor customers. That balance remained in the customer favor until about 2000 and brought a sustained period of low prices. Coincidentally that period ended about the time that the nuclear power industry’s production around the world leveled off at approximately 12 million barrels of oil equivalent (BOE) per day.
Brown was smart enough to realize that any threat to go nuclear needed to be delivered in such a way as to allow the assembled ministers to recognize a potential win-win situation. After all, they currently hold a strong negotiating position since the new UK nuclear plants are still just paper designs that will take 5-15 years to begin operating. (I know, that is quite a range of time, but there are a lot of details to be worked out.)
His interesting solution to the dilemma was to offer oil producers the opportunity to participate financially in the nuclear building program. By Brown’s computations, they have amassed about $3 trillion dollars during the last 7 years of oil price escalation. He apparently believes that they need a good place to invest and that they will recognize that such an investment will allow them to be strong energy suppliers for the foreseeable future. Not a bad idea, especially if you are someone who believes that annual oil production rates have either peaked or will sometime soon.
After all, the prospect of owing a lot of oil in a world full of people that can no longer afford it and blame you for their poverty cannot be a pleasant vision.
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Exactly how is building nuclear power plants help a liquid fuel crisis?
@ Carvasarus:
Oil is used in a number of places for electricity production. Specifically, it is widely used inside oil exporting nations, thus limiting the amount that they can sell to outside customers.
Natural gas is also a widely used source of fuel in power plants that has a great deal of potential as a clean burning vehicle fuel. See, for example Natural Gas Can Power Vehicles OR Electric Power Plants
Nuclear power also has a 50 year record of applicability as a ship propulsion source, directly replacing oil in that application.
My final suggestion right now is to use nuclear power as a process heat source for enhanced recovery of fuels like the tar sands in Alberta and for synthetic fuel production using coal and water to create liquid hydrocarbons.
None of those by itself will solve the problem, but together they can make a significant impact on the balance between liquid fuel supply and liquid fuel demand.