Credit deflation and the reflation cycle to come (part 2)

[planit]

1 minute ago, SpectrumFX said:

I don't understand why we haven't gone the molten salt route.

On the face of it, it would seem to be nuclear power without all the risks and waste.

https://en.m.wikipedia.org/wiki/Molten_salt_reactor

 

Agreed, if the huge resources put into renewable energy over the last 5 years had been directed towards this we would be close to having Thorium reactors producing very little nuclear waste by now.

 

Unfortunately the Green pressure groups have been working with the fossil fuel advocates to suppress progress over the last 20 years.

 

As I have posted on here before, if we truly are in a climate crisis then the only answer to quickly reduce the CO2 emissions we currently have is nuclear (and as Cattle Prod mentions, this will need to be Thorium powered)

[DurhamBorn]

3 hours ago, wherebee said:

I'm not so sure about 1 being unreachable.  Think about it.  If you cut holiday travel, food miles, personal cars, commuter miles, and waste out of the modern life, 1950's style living wouldn't be that impossible.  Energy efficiency has grown massively in terms of housing and electric items (if houses are built properly).  

The key challenges would be getting the british public used to no holidays and no eating out.

 

HANG ON!

LNG prices will be up 100%+ if every family in India get a fridge/freezer.Fridge/Freezers are more important on my roadmap than Dems in the white house.Nothing else.Just a fridge.

 

[Transistor Man]

1 hour ago, planit said:

Completely agree that number 4 nuclear fission was missing. Fusion still produces nuclear waste in it's current experiments so it's no different in that respect.

You are right, but a small advantage is that Fusion wouldn’t produce long-lived waste.

The sort of stuff which requires geological storage. It’s not massive, but there would be an advantage there. 

(Fusion is still nowhere near being an economic, usable source of clean electricity imo.) 

[Transistor Man]

1 hour ago, Cattle Prod said:

Depends on the nuclear, fusion was option 3. Thorium could work. But fission is limited by uranium supply and lead time to build out. Going full fission nuclear, like France, isn't going to work for the whole world.

The old plan: thermal fission reactors and breeder reactors, could, I guess, have covered everyone using known uranium resources.

There’s the “Energy Amplifier”, which would work. But is a paper design.

Thorium cycle would work, but it’s basically a breeder.

In a thorium reactor, the fissile material is still uranium (233)! It’s just bred from thorium.

All of this stuff is possible, but messy. It’s not going to happen (soon), imo.

[Transistor Man]

55 minutes ago, SpectrumFX said:

I don't understand why we haven't gone the molten salt route.

On the face of it, it would seem to be nuclear power without all the risks and waste.

https://en.m.wikipedia.org/wiki/Molten_salt_reactor

 

It’s a complex design. You end up with a combined nuclear and chemical plant! 

Lots of advantages in theory. The reality is..... probably difficult to do.

[Harley]

I just ran screens for Precious Metal value stocks as it looks like a monthly turn might be on the cards. 

PM stocks as value stocks!  Why not, some relatively stonking good fundamentals!

Parameters:

. In the Precious Metals Industry per TradingView

. Yield over 2% (before WHT)

. Market cap over 1B in local currency(!)

. Debt to Equity ratio of 75% or below

. Current Ratio of 0.9 or above

. Price to Book ratio of 3 or below

Results (any surprises?):

. Kirkland Lake Gold (NYE, TSX)

. B2Gold (NYSE, TSX)

. Yamana Gold (NYSE, LSE, TSX)

. St Barbara (ASX)

. Centamin (LSE, TSX)

. Royal Bafokeng (JSE)

. Fresnillo (LSE)

. Newmont (NYSE, TSX)

. Agnico Eagle Mines (NYSE, TSX)

. Evolution Mining (ASX)

. Gold Fields (JSE)

. Anglogold Ashanti (JSE)

. Sibanye Stillwater (JSE)

[sancho panza]

On 05/04/2021 at 10:26, Cattle Prod said:

Globally its a bit murky, as the physical market has been a bit weak (reluctant to pay above these prices due to perception of supply and spare capacity, India being the example) though recent moves by the saudis suggest that is passing. A price aqueeze this year was dependent on demamd getting back to 2019 levles of around 100mbpd. In Asia it has, but I never thought Western governments would be this totalitarian or screw up vaccines so badly in the case of Europe. So I think we might get to 98 or 99 this year. The US might make up for it though, going crazy this summer.

US production never recovered, it is still flat at 2mbpd down from peak, as marginal wells were abandoned, most of them in shale. The wells drilled to Feb 2020 are now declining, and there is not enough activity to offset, so will show up in the numbers soon enough (is probably happening now but reporting lags) . Another 1.5 or 2m maybe. It's the trajectory that is important though as the market believes us shale is the marginal supplier, and won't pay more than ~$65 for it. I think if you have a declining rather than increasing trajectory, that perception of supply gets shaken, and market could panic. Investment is still below replacement, they are not chucking money down holes this year. The big shale companies have not budgeted for growth in 2021 so it won't happen. They can't hedge either with the backwardation. I still think $80 brent will be tested, glad to see DBs cross market work isnt too far away.

Edit:

A comment on inventory. It's the most visible data, and drives price. Novak said this week that world is currently undersupplied by 2mbpd. This tallies with other sources. Spare capacity to come back from OPEC is about 5.5m (not the 7.1 reported). They are releasing 2.5m back by July, leaving three. Canada is fully producing. The US is still thought of spare capacity, but it has permanently lost two and will lose at least another 1. So it's very likely that by July the world will be at the same spare capacity level as 2019 (3 still held off market offset by 3 lost in the US). But the net supply level be at least 3mbpd lower than 2019. So if demand ramps up over the summer, inventories are going to be hit hard. 

Thanks for the update.It's strange how on thsi thread the conversation is so lively that we sometimes don't catch our breath and jsut establish where we are.

Seems like your -3 or 4 mbpd call from mid summer last year hasn't aged too badly at all CP.I do wonder how much worse the problem will get as the current wells age and decline.

I think your assessmetn about demand is true too.I'm surprised at how subdued the West has been coming out of lockdown.My more robust hopes of $80++ look off but the more realsitic $80 peak for the summer doesn't from where I'm sat.Saudi's and Russians will love $80 oil,Chinese/Indians won't but will have to pay it.But I'm jsut using basic charts.

That supply/inventory squeeze does looked primed for the US driving season.

On 05/04/2021 at 00:54, DurhamBorn said:

I see dollar down sharp from here to 87 again,i know thats opposite to what almost everyone expects.It will send oil over $70 i think,roadmap cross market from the dollar is actually saying $73/74 Brent.It could be we get $70+ oil at the same time as 87 DXY bang on,if so its highly likely il sell a lot in that area.

Im trying to work out how to play this as running through my portfolio its reflation defensive and im not prepared to be out of equity BK or not,so im thinking maybe 40% cash and Treasuries if those dollar/oil targets hit.

One worry i have is derivative exposure from the debts of big blue chips.Massive interest rate and currency swings could hole a lot of balance sheets if counterparties fail.

Its the most difficult call i can remember on if its a BK or straight to inflation.Im trying to see through the fog.What if its both a BK and inflation etc.

It's interesting to see your USD rroadmap coinciding with CP's anticpated supply/inventory squeeze this summer.

Sometimes I think we're that busy chatting,we don't jsut take a breath, stand back and reassess where we are.kudos to you for that dollar call,as I remember DXY was over 100 when you made it.

We'll be selling top ladders and retaining some core equities or we may sell the lot and hedge with options to retian capital(although where you keep it is an issue.UST's msot likely.

The debt profile of a lot of companies is a worry as per hancock;s point below.UK banks are primed to blow imho.Hence I'd say that even if we go straight to pricve inflation,we could see a seismic debt deflation running alongside it.That would be the worst of both worlds for places like the UK ,overfed as the public has been on a fat currency.

On 05/04/2021 at 12:51, Hancock said:

https://www.telegraph.co.uk/business/2021/04/04/default-rate-corporate-loans-has-doubled/

A wave of companies across the UK and the rest of Europe are at risk of going under with new figures showing that the default rate on corporate loans has doubled.

Businesses across Europe, including the UK, face a €1.8 trillion (£1.5  trillion) wall of debt maturing in the next four years, including €290bn in 2021, according to S&P Global Ratings data provided to The Daily Telegraph. The threat of more corporate distress looms as state support winds down and bond yields rise.

S&P revealed that the default rate in the UK and Europe was at 5.4pc in February, more than double the levels seen a year earlier shortly before lockdowns became widespread across the region.

UK corporate defaults last year were also twice as high with department stores, cinemas and restaurants suffering the most pressure, S&P revealed.

Companies have looked to take advantage of ultra-low interest rates and government loan schemes to push out the risk of debt. But City analysts warned that high indebtedness could weigh on the economy’s recovery and predicted a pick-up in defaults if government support is withdrawn prematurely.

S&P said the amount of debt maturing in the UK this year was lower than usual as businesses have sought to refinance during the pandemic.

“Financing conditions have been so favourable that most companies have opportunistically termed out a lot of their debt at fixed rate,” it said.

Daniel Grosvenor, director of equity strategy at Oxford Economics, said there is “limited near-term risk” but warned that “many companies are likely to struggle if policy support is withdrawn too quickly”. “This issuance has added to already high debt levels, and is likely to have increased underlying vulnerabilities.” He said that corporate indebtedness is “well above historical averages in every region and solvency ratios are extremely weak”.

Business indebtedness could hold back the recovery if firms are forced to pay down their debt piles rather than invest and hire new staff.

While low interest rates have helped to prop up firms during the pandemic, the recent rise in bond yields also risks exposing debt woes.

“Vulnerabilities could come to the fore if corporate bond yields spike higher or credit conditions tighten,” said Mr Grosvenor.

He added that a high level of “zombie” firms could “weigh on economic growth because they tend to be less productive and invest less than their healthier counterparts”.

The rise of so-called zombie companies, usually defined by their ability to pay the interest bills on their debt pile, have been a major concern during the pandemic as global corporate debt swells.

Nick Hood, an insolvency veteran of 50 years, said these firms’ liabilities typically exceed their assets by at least £10,000 in their latest accounts.

Britain’s debt pile has soared during the pandemic. Public debt was at 97.5pc of GDP in February, the highest level since the early 1960s, while borrowing that month hit a record £19bn.

That’s a £17.6bn increase on the same period last year, with £4bn spent on propping up jobs alone.

A second year of heavy borrowing is expected in 2021-22 with restrictions not due to fully lift until June 21.

I think CRE will eb 2021's sub prime.Some of the loans being marked at par on loan books are below junk.

On 05/04/2021 at 15:08, Fully Detached said:

Interesting comment from him as well on this point (last couple of minutes of the video), that this economic activity which removes money from stocks will include people wanting to borrow money to buy a house.

I'm not quite sure what to make of that in relation to house prices in a BK scenario. Maybe it means higher house prices, maybe it means demand for mortgages but at higher rates, and perhaps lower loan to value. But if money is leaving stocks to fuel a revival in the real economy, then surely it would suggest high(er) employment, probably wage inflation, and resulting increased appetite for credit?

I think mortgage demand will adjsut down as mortgage rates rise and I think mortgage rates will rise even if CB's run easy policy

[sancho panza]

On 05/04/2021 at 18:23, Cattle Prod said:

Anyone know the leads and lags on copper and oil? From what I can see, copper seems to lead oil by about 3-5 weeks. Has anyone ever seen a reference to this?

Here's a St Louis chart,Copper does seem to turn and lead oil since 2000 jsut looking at turning points.Correltaion is tight.

https://fred.stlouisfed.org/series/PCOPPUSDM

obviously this %age change chart depends where yuou start,this is roughly the 01 low for copper.key thing is copper peaks and bottoms before oil as you say.

A key part of anyone's check lsit here imho.

[JMD]

2 hours ago, Cattle Prod said:

Yes point 3 needs to be effectively free because the fossil fuels they would replace are.

Nuclear fusion is not part of the energy mix currently, as you say it is still experimental. If it can be 'tamed', as I said, you could make unlimited amounts of energy from seawater. That'd do it. Long shot though, as stated. Nuclear fission might as well be a totally different form of energy - the fuel is limited. I've no issue with it, and am well invested in uranium, but it's not going to add 150k twh of energy, ever.

CP, I know it wasn't your main point (great energy graph btw), but you mentioned that you are invested in some nuclear/uranium, as am I (approx 1% of my portfolio) - so I do find the nuclear topic intriguing. Anyway as you say above uranium fuel is limited, but even if world had only 100 year's supply left (estimate at current use rate), 'energy security' and the fact that nuclear is kinda carbon neutral will I think totally swing the argument. What I mean is I don't think there will be any political appology required for embarking upon a new nuclear future - after all the lead environmentalists themselves know the score (even James 'Gaia' Lovelock in later life said it was immoral not to utilise nuclear; he thought it a distraction, when the plight of the world's poor should always be the focus) - it's a mere bargaining chip for the environmental lobby, whilst they hold out for the bigger prize of a 'carbon free world'. I think the limited uranium supply will actually be sold to the public as a 'benefit', ie we have only a 100 year window, during which we will continue to store our shameful dirty nuclear waste... but when it's gone, it gone.                                                                                                                           In terms of the (impending!?) increasingly important energy security debate, It's also interesting that the (by far) biggest producer counties are also the same countries holding the (by far) biggest reserves, yes we have an old fashioned east/west face off between Kazakhstan/Russia and Canada/Australia, couldn't make it up!!

[Harley]

I'm looking to further add to my Oil & Gas holdings.  Apart from a few exceptions, the Oil & Gas industry value stocks I'm looking at are approaching overbought on their monthlies following thier move from oversold last November.  This is usually the best part of the price action, although further upside price action is quite common even at overbought levels and can last for several months.  It's just that the probability is reduced and/or volatility increased.  The one positive for such an outcome is that the MACDs have only recently crossed and it is somewhat unusal for a turn on price so soon.  OK, maybe a short term pullback as seems to be the theme month to date, but are people overall postive or are they not putting any more money in until a further pullback or BK?

A typical chart:

 

Look at 2010 onwards to see what I mean.

PS: Just noticed - see how the momentum and MACD were weakening on Chevron since 2018, but the price action was contrary to this until....Covid - i.e. one could argue a reasonably violent correction was overdue anyway given the divergence between price and the underlying technicals!  Have we now had a rebalancing purge!  Was this dynamic at play elsewhere?

[JMD]

4 hours ago, janch said:

Perhaps we'll overcome our hatred of nuclear and that will be the game-changer in the west.  I don't think it'll work while "woke" is the western mindset unless it can be done behind the scenes without any fanfare.  Boris might have to ditch Carrie first

If James Lovelock can change his mind over such issues, I'm sure Princess (Carrie) nut-nut can also!

[JMD]

55 minutes ago, Harley said:

I just ran screens for Precious Metal value stocks as it looks like a monthly turn might be on the cards. 

PM stocks as value stocks!  Why not, some relatively stonking good fundamentals!

Parameters:

. In the Precious Metals Industry per TradingView

. Yield over 2% (before WHT)

. Market cap over 1B in local currency(!)

. Debt to Equity ratio of 75% or below

. Current Ratio of 0.9 or above

. Price to Book ratio of 3 or below

Results (any surprises?):

. Kirkland Lake Gold (NYE, TSX)

. B2Gold (NYSE, TSX)

. Yamana Gold (NYSE, LSE, TSX)

. St Barbara (ASX)

. Centamin (LSE, TSX)

. Royal Bafokeng (JSE)

. Fresnillo (LSE)

. Newmont (NYSE, TSX)

. Agnico Eagle Mines (NYSE, TSX)

. Evolution Mining (ASX)

. Gold Fields (JSE)

. Anglogold Ashanti (JSE)

. Sibanye Stillwater (JSE)

Very interesting Harley, are you tempted to buy any of those South Africans? Their charts make them look expensive to my simple uninformed eyes... but would be very happy to be corrected as I am underweight the South African miners, so could be my last chance to get me some! (am not of course seeking investment advise)

[Harley]

9 minutes ago, JMD said:

Very interesting Harley, are you tempted to buy any of those South Africans? Their charts make them look expensive to my simple uninformed eyes... but would be very happy to be corrected as I am underweight the South African miners, so could be my last chance to get me some! (am not of course seeking investment advise)

I agree.  Several on the list seem overbought atm plus some have yields below my likee 3% (but above 2%) which makes them a tough call.  But maybe these stocks have to start shedding more cash soon.  B2Gold, St Barbara, Centamin, Evolution, and Gold Fields are above 3% (before WHT) but I haven't looked at them more closely yet.  I was interested to see if the list surprised anyone, especially as some stocks (e.g. Royalties) may be classified under say "Financials".

[nirvana]

13 minutes ago, JMD said:

Very interesting Harley, are you tempted to buy any of those South Africans?

that'll be the ETF with humans in it then?

[MrXxxx]

3 hours ago, Harley said:

I just ran screens for Precious Metal value stocks as it looks like a monthly turn might be on the cards. 

PM stocks as value stocks!  Why not, some relatively stonking good fundamentals!

Parameters:

. In the Precious Metals Industry per TradingView

. Yield over 2% (before WHT)

. Market cap over 1B in local currency(!)

. Debt to Equity ratio of 75% or below

. Current Ratio of 0.9 or above

. Price to Book ratio of 3 or below

Results (any surprises?):

. Kirkland Lake Gold (NYE, TSX)

. B2Gold (NYSE, TSX)

. Yamana Gold (NYSE, LSE, TSX)

. St Barbara (ASX)

. Centamin (LSE, TSX)

. Royal Bafokeng (JSE)

. Fresnillo (LSE)

. Newmont (NYSE, TSX)

. Agnico Eagle Mines (NYSE, TSX)

. Evolution Mining (ASX)

. Gold Fields (JSE)

. Anglogold Ashanti (JSE)

. Sibanye Stillwater (JSE)

Quick question on this and WHT. It the shares are only on LSE then I assume tax is paid in UK so no WHT, but if they are on several markets including LSE is this still the case? I.e Yamana above or Wharton?

[Yadda yadda yadda]

4 hours ago, DurhamBorn said:

LNG prices will be up 100%+ if every family in India get a fridge/freezer.Fridge/Freezers are more important on my roadmap than Dems in the white house.Nothing else.Just a fridge.

 

I imagine your roadmap to be drawn on tatty A0 paper. Possibly 16 pieces of A4 taped together.

[DurhamBorn]

53 minutes ago, Yadda yadda yadda said:

I imagine your roadmap to be drawn on tatty A0 paper. Possibly 16 pieces of A4 taped together.

Its not far off.Its in a lined A4 sized book from Boyes.I need lined paper .Iv also got a large cork board that used to have a model railway on that i got from a jumble sale.High tech stuff.

[Transistor Man]

4 hours ago, JMD said:

 I think the limited uranium supply will actually be sold to the public as a 'benefit', ie we have only a 100 year window, during which we will continue to store our shameful dirty nuclear waste... but when it's gone, it gone.                                                                                                                           

I can tell you a story about a now forgotten technology, which was once going to change the world. And still might, in 100 years time. 

Uranium out of the ground comes mixed together as two types: U235 & U238.

The fraction of each being: 0.72% U235, 99.3% U238. 

The small, less than 1% U235 component is fissile, and is the actual nuclear fuel. 

The rest of the uranium, basically, creates no heat in a reactor. 

In the 50s and 60s, there were several of programmes to produce Fast Breeder Reactors. E.g.: Dounreay in Scotland.

These reactors are more efficient in terms of neutron generation/ absorption, and could convert all the non-fissile U238 (99% of natural uranium) into fuel.

Using a combination of Breeder Reactors, and standard reactors, it’s said that there are many millions of years of fuel available. 

A thorium reactor would be of this type, and could be a molten-salt design.

What happened to this technology?

I think they just found more uranium and the whole thing became massively uneconomic. The reactors were a pain to develop too, leaks of sodium and the like. They are probably far more dangerous too. And a non-proliferation risk. 

None of the technology really exists today. France built a large reactor of this type: Superphenix. I think it was so much political hassle that they turned it off.  

Still, there’s millions of years of zero carbon, high energy density fuel, just ready and waiting.

 

[JMD]

2 hours ago, Transistor Man said:

I can tell you a story about a now forgotten technology, which was once going to change the world. And still might, in 100 years time. 

Uranium out of the ground comes mixed together as two types: U235 & U238.

The fraction of each being: 0.72% U235, 99.3% U238. 

The small, less than 1% U235 component is fissile, and is the actual nuclear fuel. 

The rest of the uranium, basically, creates no heat in a reactor. 

In the 50s and 60s, there were several of programmes to produce Fast Breeder Reactors. E.g.: Dounreay in Scotland.

These reactors are more efficient in terms of neutron generation/ absorption, and could convert all the non-fissile U238 (99% of natural uranium) into fuel.

Using a combination of Breeder Reactors, and standard reactors, it’s said that there are many millions of years of fuel available. 

A thorium reactor would be of this type, and could be a molten-salt design.

What happened to this technology?

I think they just found more uranium and the whole thing became massively uneconomic. The reactors were a pain to develop too, leaks of sodium and the like. They are probably far more dangerous too. And a non-proliferation risk. 

None of the technology really exists today. France built a large reactor of this type: Superphenix. I think it was so much political hassle that they turned it off.  

Still, there’s millions of years of zero carbon, high energy density fuel, just ready and waiting.

 

Yes, but that's why I put 'benefit' in quotes. The politicians will be looking to sell any controversial continuance of the nuclear industry as a temporary emergency necessity... Just like they did with the covid lockdown which we were originally told might last for only 3 weeks! Something tells me that we should get used to these 'tempoary but necessary emergencies'.                                                                                                           ( Please feel free to skip my following tangential 'rant!'... So Pandemic or plandemic or panicdemic? Personally I think all three, but shall leave others to weight their own ratios for each. Today I also note that Amnesty International - I am not their biggest fan - but from day one, and regularly since, they have been highly sceptical of even Western government's cynical and authoritarian, highly political response to the covid health crises. Their latest report was mentioned in news bulletins today, but it is very strange (not really) how they have not been invited by any national broadcasters during the last year to discuss their fears of how Western freedoms are slowly being stealthily withdrawn all across Europe, as we trade in our ancient freedoms for so called safety and security)

[nirvana]

9 hours ago, Transistor Man said:

A thorium reactor would be of this type, and could be a molten-salt design

isn't that what the chinkies are now using? I'm sure I read about it donkies years ago....

[Lightscribe]

9 hours ago, Transistor Man said:

I can tell you a story about a now forgotten technology, which was once going to change the world. And still might, in 100 years time. 

Uranium out of the ground comes mixed together as two types: U235 & U238.

The fraction of each being: 0.72% U235, 99.3% U238. 

The small, less than 1% U235 component is fissile, and is the actual nuclear fuel. 

The rest of the uranium, basically, creates no heat in a reactor. 

In the 50s and 60s, there were several of programmes to produce Fast Breeder Reactors. E.g.: Dounreay in Scotland.

These reactors are more efficient in terms of neutron generation/ absorption, and could convert all the non-fissile U238 (99% of natural uranium) into fuel.

Using a combination of Breeder Reactors, and standard reactors, it’s said that there are many millions of years of fuel available. 

A thorium reactor would be of this type, and could be a molten-salt design.

What happened to this technology?

I think they just found more uranium and the whole thing became massively uneconomic. The reactors were a pain to develop too, leaks of sodium and the like. They are probably far more dangerous too. And a non-proliferation risk. 

None of the technology really exists today. France built a large reactor of this type: Superphenix. I think it was so much political hassle that they turned it off.  

Still, there’s millions of years of zero carbon, high energy density fuel, just ready and waiting.

 

India have been plagued with decades of delays with their own development of Fast Breeder Reactors until around 2050. Similarly they envisage they will get 30% of their power by Thorium reactors by 2050 as the most of the planets deposits are located in India. 

https://www.ideasforindia.in/topics/governance/fast-breeder-reactors-and-the-slow-progress-of-indias-nuclear-programme.html

This is a report by The International Panel on Fissile Materials  into why Fast Breeder reactors have been so far unsuccessful.

“REPORT: UNSUCCESSFUL "FAST BREEDER" IS NO SOLUTION FOR LONGTERM REACTOR WASTE DISPOSAL ISSUES

After Over $50 Billion Spent by US, Japan, Russia, UK, India and France, No Commercial Model Found; High Cost, Unreliability, Major Safety Problems and Proliferation Risks All Seen as Major Barriers to Use.

PRINCETON, N.J. - February 17, 2010 - Hopes that the "fast breeder"- a plutonium-fueled nuclear reactor designed to produce more fuel than it consumed -- might serve as a major part of the long-term nuclear waste disposal solution are not merited by the dismal track record to date of such sodium-cooled reactors in France, India, Japan, the Soviet Union/Russia, the United Kingdom and the United States, according to a major new study from the International Panel on Fissile Materials (IPFM).

Titled "Fast Breeder Reactor Programs: History and Status," the IPFM report concludes: "The problems (with fast breeder reactors) ... make it hard to dispute Admiral Hyman Rickover's summation in 1956, based on his experience with a sodium-cooled reactor developed to power an early U.S. nuclear submarine, that such reactors are 'expensive to build, complex to operate, susceptible to prolonged shutdown as a result of even minor malfunctions, and difficult and time-consuming to repair.'"

Plagued by high costs, often multi-year downtime for repairs (including a 15-year reactor restart delay in Japan), multiple safety problems (among them often catastrophic sodium fires triggered simply by contact with oxygen), and unresolved proliferation risks, "fast breeder" reactors already have been the focus of more than $50 billion in development spending, including more than $10 billion each by the U.S., Japan and Russia. As the IPFM report notes: "Yet none of these efforts has produced a reactor that is anywhere near economically competitive with light-water reactors ... After six decades and the expenditure of the equivalent of tens of billions of dollars, the promise of breeder reactors remains largely unfulfilled and efforts to commercialize them have been steadily cut back in most countries."

The new IPFM report is a timely and important addition to the understanding about reactor technology. Today, with increased attention being paid both to so-called "Generation IV" reactors, some of which are based on the fast reactor technology, and a new Obama Administration panel focusing on reprocessing and other waste issues, interest in some quarters has shifted back to fast reactors as a possible means by which to bypass concerns about the longterm storage of nuclear waste.

Frank von Hippel, Ph.D., co-chair of the International Panel on Fissile Materials, and professor of Public and International Affairs, Woodrow Wilson School, Princeton University, said: "The breeder reactor dream is not dead but it has receded far into the future. In the 1970s, breeder advocates were predicting that the world would have thousands of breeder reactors operating by now. Today, they are predicting commercialization by approximately 2050. In the meantime, the world has to deal with the legacy of the dream; approximately 250 tons of separated weapon-usable plutonium and ongoing -- although, in most cases struggling -- reprocessing programs in France, India, Japan, Russia and the United Kingdom."

Mycle Schneider, Paris, international consultant on energy and nuclear policy, said: "France built with Superphenix, the only commercial-size plutonium fueled breeder reactor in nuclear history. After an endless series of very costly technical, legal and safety problems it was shut down in 1998 with one of the worst operating records in nuclear history."

Thomas B. Cochran, nuclear physicist and senior scientist in the Nuclear Program at the Natural Resources Defense Council, said: "Fast reactor development programs failed in the: 1) United States; 2) France; 3) United Kingdom; 4) Germany; 5) Japan; 6) Italy; 7) Soviet Union/Russia 8) U.S. Navy and 9) the Soviet Navy. The program in India is showing no signs of success and the program in China is only at a very early stage of development. Despite the fact that fast breeder development began in 1944, now some 65 year later, of the 438 operational nuclear power reactors worldwide, only one of these, the BN-600 in Russia, is a commercial-size fast reactor and it hardly qualifies as a successful breeder. The Soviet Union/Russia never closed the fuel cycle and has yet to fuel BN-600 with plutonium."

M.V. Ramana, Ph.D., visiting research scholar, Woodrow Wilson School and the Program in Science, Technology, and Environmental Policy, Princeton University, said: "Along with Russia, India is one of only two countries that are currently constructing commercial scale breeder reactors. Both the history of the program and the economic and safety features of the reactor suggest, however, that the program will not fulfill the promises with which it was begun and is being pursued. Breeder reactors have always underpinned the DAE's claims about generating large quantities of cheap electricity necessary for development. Today, more than five decades after those plans were announced, that promise is yet to be fulfilled. As elsewhere, breeder reactors are likely to be unsafe and costly, and their contribution to overall electricity generation will be modest at best."

OTHER KEY FINDINGS

The IPFM report also found:

 

• The rationale for breeder reactors is no longer sound. "The rationale for pursuing breeder reactors -- sometimes explicit and sometimes implicit -- was based on the following key assumptions: 1. Uranium is scarce and high-grade deposits would quickly become depleted if fission power were deployed on a large scale; 2. Breeder reactors would quickly become economically competitive with the light-water reactors that dominate nuclear power today; 3. Breeder reactors could be as safe and reliable as light-water reactors; and, 4. The proliferation risks posed by breeders and their 'closed' fuel cycle, in which plutonium would be recycled, could be managed. Each of these assumptions has proven to be wrong."
  
• Significant safety issues are unresolved. "Sodium's major disadvantage is that it reacts violently with water and burns if exposed to air. The steam generators, in which moltensodium and high-pressure water are separated by thin metal, have proved to be one of the most troublesome features of breeder reactors. Any leak results in a reaction that can rupture the tubes and lead to a major sodium-water fire. .... a large fraction of the liquid-sodiumcooled reactors that have been built have been shut down for long periods by sodium fires. Russia's BN-350 had a huge sodium fire. The follow-on BN-600 reactor was designed with its steam generators in separate bunkers to contain sodium-water fires and with an extra steam generator so a fire-damaged steam generator can be repaired while the reactor continues to operate using the extra steam generator. Between 1980 and 1997, the BN-600 had 27 sodium leaks, 14 of which resulted in sodium fires ... Leaks from pipes into the air have also resulted in serious fires. In 1995, Japan's prototype fast reactor, Monju, experienced a major sodium-air fire. Restart has been repeatedly delayed, and, as of the end of 2009, the reactor was still shut down. France's Rapsodie, Phenix and Superphenix breeder reactors and the UK's Dounreay Fast Reactor (DFR) and Prototype Fast Reactor (PFR) all suffered significant sodium leaks, some of which resulted in serious fires."
  
• Downtime makes the breeder reactor unreliable. "... a large fraction of sodium-cooled demonstration reactors have been shut down most of the time that they should have been generating electric power. A significant part of the problem has been the difficulty of maintaining and repairing the reactor hardware that is immersed in sodium. The requirement to keep air from coming into contact with sodium makes refueling and repairs inside the reactor vessel more complicated and lengthy than for water-cooled reactors. During repairs, the fuel has to be removed, the sodium drained and the entire system flushed carefully to remove residual sodium without causing an explosion. Such preparations can take months or years.
  
• Proliferation risks have not been addressed. "All reactors produce plutonium in their fuel but breeder reactors require plutonium recycle, the separation of plutonium from the ferociously radioactive fission products in the spent fuel. This makes the plutonium more accessible to would-be nuclear-weapon makers. Breeder reactors -- and separation of plutonium from the spent fuel of ordinary reactors to provide startup fuel for breeder reactors -- therefore create proliferation problems. This fact became dramatically clear in 1974, when India used the first plutonium separated for its breeder reactor program to make a 'peaceful nuclear explosion.' Breeders themselves have also been used to produce plutonium for weapons. France used its Phenix breeder reactor to make weapon-grade plutonium in its blanket. India, by refusing to place its breeder reactors under international safeguards as part of the U.S.-India nuclear deal, has raised concerns that it might do the same."
  
• Most breeder reactors are being shut down. "Germany, the United Kingdom and the United States have abandoned their breeder reactor development programs. Despite the arguments by France's nuclear conglomerate Areva, that fast-neutron reactors will ultimately fission all the plutonium building up in France's light-water reactor spent fuel, France's only operating fast-neutron reactor, Phenix, was disconnected from the grid in March 2009 and scheduled for permanent shutdown by the end of that year. The Superphenix, the world's first commercial-sized breeder reactor, was abandoned in 1998 and is being decommissioned. There is no follow-on breeder reactor planned in France for at least a decade." For the full text of the IPFM study, go to http://www.fissilematerials.org on the Web.

[planit]

Lightscribe, that has a lot of good information in it but I notice a tone of trying to advocate against this technology. As if the authors have a vested interest in stopping them being developed, perhaps they are already invested in current French reactors or something.

It really pisses me off how much politics is in energy and environmental science. In fact  a lot of the time it is all politics and no science.

The Thorium breeder reactors produce less long term waste than current reactions and can be designed in the future to consume previous waste. Long term they are the only current option we have for future energy/CO2 requirements so we should be getting on with overcoming the problems.

Transistor man, everything I have read on gen IV molten salt reactors promotes them as safer than the existing plants, mainly because there is no water kept at high pressures. Although this water won't attack its containment metal as much as molten salt would, if there is depressurisation it is catastrophic hence the need for all the concrete containment and other safeguards.

 

We need to solve the proliferation worries, I like the proposed design that floats the reactors to where they are needed and swaps them out when the fuel is spent.

https://thorconpower.com/

its "walkaway safe" so it doesn't need active cooling if it shuts down/overheats for any reason 

[Hancock]

1 hour ago, Cattle Prod said:

As discussed here. The US has woken up to the fact it's going to have to go back to the Middle East for oil. They wouldn't be signalling this if they thought they could produce it domestically. 

 

https://www.ft.com/content/53580ff1-670b-43ba-b7a6-b7bccc6c191f

US signals it still depends on cheap oil from abroad

 

Lots of oil off the Florida coast, but due to NIMBYS its akin to to sticking oil rigs off the south coast of England.  Much better to gift trillions to Muslims than be self sufficient.

[MrXxxx]

12 hours ago, DurhamBorn said:

Its not far off.Its in a lined A4 sized book from Boyes.I need lined paper .Iv also got a large cork board that used to have a model railway on that i got from a jumble sale.High tech stuff.

Think its about time to go long on Eli:Cor before the rest of Dosbods does.

[Hancock]

16 minutes ago, Cattle Prod said:

Not really much, but I take your point. It all helps. What the USA really needs was more pipelines from Alberta, that place has the scale. And funny enough there are lots of oil rigs on the south coast of England, you just wouldn't notice as they supress the noise and hide the derricks with trees. The biggest on shore oil field in Europe, Wytch Farm, runs under the millionaire houses at Sandbanks.

I've been there, but you can't hide an oil rig in the middle of the sea. (well you can just put it 30 miles out)
https://www.bournemouthecho.co.uk/news/17874321.pilgrimage-protest-oil-drilling-dorset/

I'd imagine Wytch Farm wouldn't have got the go ahead in C21, same with Fawley (edge of New Forest) where @Popuplights worked until recently.