Some Thoughts on the Wall Street Journal Story on Natural Gas and Nuclear Energy

Cheap gas? Not last week in the Northeast.

Yesterday evening, the Wall Street Journal published a story by Rebecca Smith that asked the question, "Can Gas Undo Nuclear Power?" It's a question that's been asked often, especially in the wake of the announced closing of the Kewaunee Power Station in Wisconsin by Dominion last October. Here's what NEI's Richard Myers had to say about it at the time:

In 2005, when Dominion bought the plant: (1) power prices in the Midwest were in the $40-50/MWhr range; wellhead gas prices were in the $6-10 per million Btu range; and U.S. electricity demand was growing.

Today: (1) power prices in the Midwest are in the $30/MWhr range: gas prices are in the $2-3 per million Btu range; and (3) the U.S. has had 5 years of no growth in electricity demand, thanks to the worst recession in 80 years.

Near the close of 2012, NEI's President and CEO, Marv Fertel addressed the natural gas issue head on when it came to building new nuclear energy facilities. The following exchange with Steve Dolley of Platts came during an NEI-sponsored press briefing that took place in December (page 12):

Steve Dolley, Platts: Thanks Marvin, thanks for taking the time today. If you’re not expecting any new plants to be built over the next five or ten years, what are the industries other priorities with the nuclear regulatory commission? I know obviously plant safety is the number one priority for the industry and for NRC, but specific things that you’re hoping to accomplish with the commission over the next year?

Marv Fertel: Well first of all, news flash, we are building four. And we’re finishing Watts Bar, so there’s five new plants both in the pipeline being build. And one of the reasons on new plants, I don’t see us completing any beyond those five in the next - the rest of this decade. [A]s a nation we have not gotten back to 2007 electricity demand rates yet. So our demand is still down. We’re still in this recession. If you go over to financial whatever, we’ve probably increased the recession duration for a while.

So we need demand to come back. And as you all know because of the shale gas game changer (type) situation, we’re seeing low gas prices and low electricity prices right now. So everybody is looking to gas.

I would expect late this decade like into 2020 after we finish Vogtle and Summer that you could see new plants get started in our country. They just won’t be completed this decade. I expect demand will go up and there’s no question the price for natural gas will go up. I don’t expect it’s going to go to $12 or $14, but it will go up. It’s not going to stay at $2 or $3, it’s not even in the futures right now it’s almost $4 next year.

So we’ll see gas go up.

The message here ought to be pretty clear: while natural gas prices are at historic lows today, that can't last forever, especially if, as projected, America begins to export shale gas to international markets. In addition, we're already seeing evidence that industries that rely on natural gas as a feedstock that fled the U.S. during periods of high prices are now returning, driving additional new demand.

Finally, we need to remember that even in times of plenty, the price of natural gas can be awfully volatile. Just a few days ago during a cold snap in the Northeast, day ahead spot prices for natural gas reached $34.25 per MMBtu in New England and $36.00 in New York City.

A Design Team Pictures the Future of Nuclear Energy

For more than 100 years, the shape and location of human settlements has been defined in large part by energy and water. Cities grew up near natural resources like hydropower, and near water for agricultural, industrial and household use.

So what would the world look like with a new generation of small nuclear reactors that could provide abundant, clean energy for electricity, water pumping and desalination and industrial processes?

Hard to say with precision, but Third Way, the non-partisan think tank, asked the design team at the Washington, D.C. office of Gensler & Associates, an architecture and interior design firm that specializes in sustainable projects like a complex that houses the NFL’s Dallas Cowboys. The talented designers saw a blooming desert and a cozy arctic village, an old urban mill re-purposed as an energy producer, a data center that integrates solar panels on its sprawling flat roofs, a naval base and a humming transit hub.

In the converted mill, high temperat…

Sneak Peek

There's an invisible force powering and propelling our way of life.
It's all around us. You can't feel it. Smell it. Or taste it.
But it's there all the same. And if you look close enough, you can see all the amazing and wondrous things it does.
It not only powers our cities and towns.
And all the high-tech things we love.
It gives us the power to invent.
To explore.
To discover.
To create advanced technologies.
This invisible force creates jobs out of thin air.
It adds billions to our economy.
It's on even when we're not.
And stays on no matter what Mother Nature throws at it.
This invisible force takes us to the outer reaches of outer space.
And to the very depths of our oceans.
It brings us together. And it makes us better.
And most importantly, it has the power to do all this in our lifetime while barely leaving a trace.
Some people might say it's kind of unbelievable.
They wonder, what is this new power that does all these extraordinary things?

Seeing the Light on Nuclear Energy

If you think that there is plenty of electricity, that the air is clean enough and that nuclear power is a just one among many options for meeting human needs, then you are probably over-focused on the United States or Western Europe. Even then, you’d be wrong.

That’s the idea at the heart of a new book, “Seeing the Light: The Case for Nuclear Power in the 21st Century,” by Scott L. Montgomery, a geoscientist and energy expert, and Thomas Graham Jr., a retired ambassador and arms control expert.

Billions of people live in energy poverty, they write, and even those who don’t, those who live in places where there is always an electric outlet or a light switch handy, we need to unmake the last 200 years of energy history, and move to non-carbon sources. Energy is integral to our lives but the authors cite a World Health Organization estimate that more than 6.5 million people die each year from air pollution. In addition, they say, the global climate is heading for ruinous instability. E…

NEI Nuclear Notes

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