According to the Urban Dictionary, Liar’s Poker is an American bar game played with one-dollar bills. Each player picks from a pile of face-down bills, and uses the eight-digit serial number on the face of the bill (kept private) to shape a playing strategy.
This is a consecutive bidding game where players “bet” on the total number of occurrences of digits on all bills involved in the hand. The winner of each hand is decided when a bid is challenged by all the other players. If the bid is successful the bidder wins all the one-dollar bills. If he loses the bid he pays everybody a dollar.
Why am I writing this month’s column on Liar’s Poker? Because it is (1) a game of statistics and combinations, and (2) makes a point about bluffing versus knowledge.
How this relates to the energy industry in general and nuclear industry in particular in this brave new “carbon free” world is very simple: regardless of generation type the cost of construction, operation, fuel and electricity produced is a game of Liar’s Poker.
With respect to nuclear, different reactors will cost different amounts in different countries with different economic and regulatory structures. In other words, the costs of building reactor X in China won’t be the costs of building it in the United States.
The capital costs of new nuclear power plants in the U.S. are far from well known.Large light water reactors have not been built for many decades, and the current Westinghouse designs under construction in Georgia and South Carolina haven’t been built more than a few times anywhere in the world.Frankly, anybody that claims to know is playing Liar’s Poker.
Predictions about the cost of building small modular reactors are clearly Liar’s Poker, and the way things are going lately some of the bids by the players in the SMR world might be challenged. How many 1’s are on your dollar bill?
Wind and solar installations are also beginning to run into a NIMBY enthralled public that wants energy, as well as goods and services, but doesn’t want any of the messy bits to be located too close to their homes. As the local populations become more sophisticated in how to use government red-tape against ANY industrial facility, the cost of electricity will continue to climb. How many 2’s on your dollar bill?
Throw renewable portfolio standards, production tax credits and increased environmental regulation into the mix, and the bluffing and betting that goes on begins to boggle the mind. How many 3’s on that dollar bill?
The coal industry is trying to bluff its way through the entire issue by convincing the world that their product is really clean, and that coal ash spills are not really their fault. Oh, and did we mention the number of jobs coal provides around the country? How many 4’s on that dollar bill?
Then methane comes riding in to the rescue with its claims of being a great back-up for renewables, how much lower carbon it is than coal, how low cost it is and how wonderfully safe it is— until a major winter storm smacks the Northeast or a pipeline blows up under a building.
Let’s not even talk about the international issues related to methane. Russia’s current stranglehold on some countries in Europe could be an entirely separate discussion. How many 5’s do you have?
On and on it goes. 6’s? 7’s? 8’s? 9’s?
All of these costs, risks, and benefits are almost impossible for the average citizen to comprehend. Is it any wonder that we have no well thought out long-term energy policy that might result in reliable energy available at reasonable costs both to the environment and to our economy?
We have to challenge the bid and start to move forward with the BEST options available to our country. The “all of the above” strategy we are currently playing is, in the end, NONE OF THE ABOVE.
What really matters is how many 0’s are on the bill. Too many of those and there will be no winner, only losers in this game of Energy Liar’s Poker. •
This article was originally published in Fuel Cycle Week Vol 13 #566, 04.24.2014 where Margaret is a regular columnist. To become a subscriber, go to FuelCycleWeek.com or contact the publication at info@fuelcycleweek.com.