Will COSCO Save the Planet - With Nuclear Merchant Ships?

Looking for something interesting to talk/think about on Christmas Eve? I look forward to reading what people have to say about this. Be very careful not to dismiss this without thoughtful consideration, because while there are several good reasons to dismiss, and while hard to believe, this could really happen.

The head of Chinese shipping giant Cosco has suggested that container ships should be powered by nuclear reactors in order to reduce greenhouse gas emissions from shipping, said to account for 4% of the global total. Shipping companies have gradually been introducing 'super slow steaming', a measure designed to cut fuel consumption and substantially reduce emissions by running engines at very low speed. However, Wei Jiafu, Cosco's president and CEO, speaking at the Senior Maritime Forum of the China International Maritime Exhibition (Marintec China) in Shanghai, said that introducing nuclear-powered ships could be an even cleaner solution. He said, "As they are already onboard submarines, why not cargo ships?" He said that Cosco is in talks with China's nuclear authority to develop nuclear powered freight vessels.

How many different angles pro and con can you come up with? Obviously, there are many.

Let’s begin by noting that a merchant vessel with nuclear power is likely going to be gigantic and will require a highly specialized crew. The costs of operating such a ship will be very high, but with its great size, potential speed, endurance, and cost tradeoffs there may in fact be a lucrative profit margin behind such a vessel. It is also important to note that the vast majority of trained nuclear propulsion experts today are American, so to expect American business interests to immediately dismiss this would be to misunderstand the size, scope, and depth of the discussion.

China has never built nuclear powered surface ships of any kind that I am aware of, and the US would immediately be ready to compete in this market if it emerged. Would COSCO buy the ships from a US shipyard? Would their competitors? That would create all kinds of interesting trade regulation dynamics when discussing foreign companies. More likely, COSCO would buy from China with the intent to build a nuclear powered shipbuilding industry in China.

What about accidents and piracy? The seas are not immune to Murphy's Law. What happens when a nuclear powered COSCO ship hits a bridge in San Francisco?

Consider that Russian nuclear powered Icebreakers have been around a long time, and massive nuclear powered ships with reinforced hulls designed for ice travel may be the most cost effective way to move large quantities through the Northwest Passage from Europe to Asia during all seasons. The Canadians are going to love that.

These reactors can be built to support replacement and life span, meaning one can calculate costs at construction with nuclear power. The Shipping Industry today cannot due to price uncertainty for energy.

The political ramifications will be enormous, from national security to environment; the range of policy issues will be quite large. Many countries do not allow nuclear powered ships in port, although with ships as large as the ones likely envisioned by COSCO, most countries who object may not have the facilities or the demand to support such large ships. For example, Canada may reject allowing such a ship into their country, but the US may allow nuclear merchant vessels into specific ports. It would be interesting if it ever became more efficient for China to ship into the US on large nuclear ships, then rail cargo into Canada instead of shipping directly to Canada. That is just an example, because I can envision a scenario where Mexico allows huge nuclear ships, and California, Washington, and Oregon did not.

Obviously this is a huge discussion and I am barely touching the possibilities for discussion. With that said, be careful not to dismiss the possibility that China would do this, particularly when one considers how many ports globally China, in particular COSCO, is heavily invested in globally.