Editor's Note: Reason columnist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.
Myth 1: Nuclear power is a cheap alternative to fossil fuels.
Fact 1: It isn't.
As Jerry Taylor of the Cato Institute wrote in Reason magazine in 2009, "Nuclear energy is to the Right what solar energy is to the Left: Religious devotion in practice, a wonderful technology in theory, but an economic white elephant in fact (some crossovers on both sides notwithstanding). When the day comes that the electricity from solar or nuclear power plants is worth more than the costs associated with generating it, I will be as happy as the next Greenpeace member (in the case of the former) or MIT graduate (in the case of the latter) to support either technology."
Until that time comes, producing nuclear energy remains a very costly business.
The chart above uses data from a 2009 interdisciplinary study at the Massachusetts Institute of Technology to compare the costs of generating a kilowatt hour of electricity using nuclear, coal, and gas power. Looking at this data, the cost differential is clear-nuclear-powered energy costs 14 percent more than gas to produce a unit of electricity, and it costs 30 percent more than coal. Furthermore, according to Gilbert Metcaf's recent National Bureau of Economic Research paper on energy, this increased cost of nuclear energy includes a baked-in taxpayer subsidy of nearly 50 percent of nuclear power's operating costs.
While the nuclear industry in the United States has seen continued improvements in operating performance over time, it remains uncompetitive with coal and natural gas on the basis of price. This cost differential is primarily the result of high capital costs and long construction times. Indeed, building a nuclear power plant in the United States has cost, on average, three times as was originally estimated.
The United States Energy Information Administration estimates that these cost trends will continue for the near future.
This chart compares the projected costs of generating electricity in the year 2016 using various sources. As you can see, nuclear power remains more expensive than other conventional forms of power.
As Taylor notes, this is why nuclear power has only flourished in countries where the government has intervened on its behalf.
Myth 2: Risk is the main problem with nuclear power.
Fact 2: Cost is the main problem, not risk.
Radiation is terrifying to most people. And like most things, the less you actually know about it, the more frightening it can be.
Safety is certainly a critical issue, as the tragedy in Japan makes clear. However, so far the death toll from the current nuclear crisis in Japan is zero.
The chart above uses data compiled from various sources to compare the deaths per terawatt of energy produced. Deaths resulting from the production of nuclear power are over 4000 times less than the rate of death resulting from the production of energy from coal.