Comments on LMFBR Cost-Benefit Analysis.

by Arthur J. Alexander, Donald B. Rice


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In March 1975, Robert C. Seamans, Jr., administrator of the Energy Research and Development Administration, requested Donald Rice, president of RAND, to provide a review of the cost-benefit analysis contained in the Proposed Final Environmental Impact Statement (PFEIS) on the liquid metal fast breeder reactor (LMFBR) program. The three-part response, in letter form, reviews important assumptions and projections, examines the role of cost-benefit analysis as a decisionmaking tool, and gives guides for future policy. Among the findings: (1) Capital cost differentials between LMFBR and light water reactors are likely to be substantially higher than $100/kW. (2) R&D costs may go much higher than the $5 billion PFEIS estimate. (3) The growth of demand for electrical energy over 10 to 15 years will almost certainly be slower than PFEIS assumes. (4) The great uncertainties that characterize both the program and its economic environment can be effectively met only with an austere, incremental, sequential development program. .

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