Wednesday, March 29, 2017

Westinghouse Electric in Bankruptcy

Westinghouse Electric, the subsidiary of Toshiba, is in bankruptcy this morning after board approval of the move yesterday. Background from Greenpeace:

It is important to note that this is a reflection of the fundamentals of the nuclear power industry rather than any mismanagement or miscalculation on the company’s part. The costs of nuclear-generated electricity have always been higher than competing sources and nuclear projects were able to go forward only with large government subsidies, funding that came in a wide range of forms to obscure its magnitude in total. Prices and shortages of uranium are serious issues, but the nuclear sector’s decline is more directly a result of public budget pressures eroding the nuclear subsidies.

As of today, nuclear power is a legacy technology. No one will rescue Westinghouse Electric in bankruptcy. It is, by some measures, half of the global nuclear sector. It has not been profitable across its history and the bankruptcy filing estimates a $9 billion dollar loss for the year. Few pockets are deep enough to take on a project on that scale, even if it were not in a declining technology. Competitors will not be eager to bid on more than a few of the facilities. Many of the construction projects will be suspended for years, then abandoned. Nuclear reactors will have to keep operating until the current fuel is exhausted, but some will surely be retired when that point is reached because of the high operating costs.

Monday, March 13, 2017

Snow Deniers

I have been seeing an unusual degree of denial about the snowstorm that reached Downingtown a few minutes ago. One coworker looking at the snow forecast map said, “We’re on the line between 6 to 12 inches and 12 to 24 inches, so we’ll get about 6 inches.” That is not only mathematically wrong, but isn’t the right way to plan for a potential disaster. The local forecast for this storm hasn’t changed much in the last five days, so the arrival of snow shouldn’t take anyone by surprise. Nor should it be too surprising that the blizzard warning already in effect for points east has been stretched west to cover Downingtown along with much of eastern Pennsylvania. There is a blizzard warning because, along with the heavy snow, there will be wind gusts creating occasional whiteout conditions.

In a way I guess I understand the skepticism. It is the middle of March, after all. When I got home late this afternoon, it looked like an early spring day, not like a setup for a blizzard three hours later. But part of the skepticism comes from the political conversation in which science, evidence, and caution are all treated dismissively. The budget proposal drastically cuts spending on infectious diseases, economic statistics, and weather forecasting alike, as if flu, unemployment, and snow were problems we could just wish away. Positive thinking has its place, but the snow deniers who turn a blind eye to a blizzard are putting themselves and others needlessly at risk.

In a severe winter storm two years ago a church near here saw a huge hole in its domed roof. The flat area at the top of the roof had too great a tendency to accumulate snow in a heavy snowstorm, and the dome was not strong enough to support the weight of that much snow. That church raised the money to rebuild its entire roof, and it is not a dome this time, but a structured roof with sufficient slope to shed the bulk of the snow that will be falling tonight and tomorrow. Having seen the damage that a disaster can bring, you take the risks more seriously. I hope today’s episode of weather denial is a passing whim, with some of the same people saying tomorrow, “What do you know? The forecasters said there would be snow, and we have snow!”

Saturday, March 11, 2017

Bankruptcy Plans Cast Shadow Over Nuclear Power

The potential bankruptcy of Westinghouse Electric Company LLC is the most dramatic sign yet of the financial troubles of the global nuclear sector. Westinghouse Electric Co., in recent years a subsidiary of troubled Japanese manufacturing giant Toshiba, is involved in one way or another in close to half of the world’s nuclear power stations. According to Reuters, the company has retained bankruptcy lawyers and is seriously looking at the option of bankruptcy among other options.

Nuclear power has historically relied on complicated business arrangements based on government subsidies and private investment, and with few exceptions, both sides have taken losses on every nuclear power station. Adding to the financial pressure, uranium is in short supply as the world’s mines and military surplus are depleted. With the high cost of fuel, some reactors in recent years have opted to close as their fuel is exhausted. The lower cost of solar-generated electricity makes it highly unlikely that new nuclear plants will be launched beyond a subset of those already on the drawing board.

If Westinghouse Electric Co. goes into bankruptcy, though, that casts a shadow of the whole sector. It could turn nuclear power into a legacy technology almost overnight. One scenario to consider is that military operations take over nuclear power stations country by country to keep them operating safely, and ultimately to decommission them safely.

Thursday, March 9, 2017

Radio Shack Closes 200 Stores in Bankruptcy

Radio Shack is in bankruptcy again. It will close 200 stores, convert a larger number to Sprint stores, then try to weave together a plan for the roughly 1,000 stores that remain. Stories at Reuters: Bloomberg:

Friday, March 3, 2017

Bank Failure: Proficio Bank

The FDIC tonight shut down Utah’s Proficio Bank. This bank’s troubles stretch back at least 10 years, and after a particularly disastrous examination of the bank in 2010 the FDIC ordered the bank to raise capital and stop keeping phantom assets on its books.