As an aide to Governor Blabla, you are given the task of recommending whether th
ID: 1216793 • Letter: A
Question
As an aide to Governor Blabla, you are given the task of recommending whether the state should locate a low-level nuclear waste facility in a rural county. The nuclear industry provides you with a cost-benefit study it has conducted, and it contains the following information: COST-BENEFIT SUMMARY FOR PROPOSED WASTE FACILITY Prepared by the Center for the Objective Study of Nuclear Issues Conclusion: The project will result in net benefits of $3 billion, with a benefit-cost ratio of 13. While these figures, of course, depend on the assumptions of the study, the very large net benefit figure, along with the extraordinarily high benefit-cost ratio, both indicate that the project will remain attractive under most plausible assumptions. We therefore strongly recommend initiating the proposal. Assumptions: 1. Discount rate of 10% 2. Principal costs: a. Worker exposure b. Risk of accidental exposure during transport c. Reduction to zero of the land value at the storage site d. Construction and maintenance 3. Principal benefits: a. Reduced exposure at current temporary storage sites b. Job creation – 1,000 temporary, 200 permanent jobs c. Extends life of existing nuclear power plants by ten years i. Lower electricity costs for consumers ii. Saves 7,000 jobs d. Increased profits for local service industries 4. Risk assessment: a. Exposure/fatality assumptions from the U.S. Department of Energy b. Probability of fatal exposure due to transport accident: 1/100,000,000 miles (Source: U.S. Department of Energy) c. Value of a statistical life: $1 million 1. Do you believe the report? 2. Find and explain six separate concerns you have with the study.Explanation / Answer
First the cost to benefit ratio given by nuclear energy company is 1:13. There is 13 times more benefit for having a nuclear power plant in the region.
The costs involved ofcourse are more human in nature, Nuclear reactors do displace a large amount of people from the land, This is particularly disastrous when it comes to populated areas
The other problem is ofcourse contamination of water resources which could cost millions of dollars to clean up, Further deteorating health of locals
The total amount of jobs created is 200 and in long run cost advantage would save more than 7000 jobs which is very good, but there is an immediate loss of 1000 temporary jobs.
1) The report did not highlight negative consequences of nuclear power plant, It has no liability clause which means in event of disaster the state has no choice but to bear the costs
2) The jobs saved due to lower energy costs cannot be added as benefit to state, If power demand drops in future along with energy prices we get cheaper energy anyway we would not need this plant
3) There is no supply aggrement which states that there is savings for the state, It is just showing calculation based on assumptions.
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