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.

Activists' Claims Distort Facts about Advanced Reactor Design

Below is from our rapid response team . Yesterday, regional anti-nuclear organizations asked federal nuclear energy regulators to launch an investigation into what it claims are “newly identified flaws” in Westinghouse’s advanced reactor design, the AP1000. During a teleconference releasing a report on the subject, participants urged the Nuclear Regulatory Commission to suspend license reviews of proposed AP1000 reactors. In its news release, even the groups making these allegations provide conflicting information on its findings. In one instance, the groups cite “dozens of corrosion holes” at reactor vessels and in another says that eight holes have been documented. In all cases, there is another containment mechanism that would provide a barrier to radiation release. Below, we examine why these claims are unwarranted and why the AP1000 design certification process should continue as designated by the NRC. Myth: In the AP1000 reactor design, the gap between the shield bu...

How many nuclear plants does it take to meet the world's energy needs?

Several weeks ago Joshua Pearce at Clarion University in Pennsylvania released a study titled “ Thermodynamic limitations to nuclear energy deployment as a greenhouse gas mitigation technology .” In the study he stated... nuclear energy production would have to increase by 10.5% per year from 2010 to 2050 to both replace fossil-fuel-energy use and meet the future energy demands. This line, of course, made the headlines and has been picked up by several outlets and blogs . When looking into his calculations for this statement, he made one assumption error that overstated the above sentence by nearly a factor of three. Page 121, Section 4.1 of the study states: Richard Smalley pointed out that in 2004, the global economy consumed the equivalent of 220 million barrels of oil per day, which converted into electricity terms is the equivalent of 14.5 TeraWatts (TW), or 14,500,000 MegaWatts (MW) (2005). … With a nuclear plant having about 1000 MW (1 GW) of capacity, we would need 14,500...

What Happens During a Refueling Outage?

You may have noticed over the past few weeks that a number of nuclear plants are shut down for refueling outages or are resuming operations after just returning from one. This type of routine outage usually occurs in the spring or fall when electricity demand is low so that nuclear reactors can replace about one-third of the spent fuel rods with new fuel and conduct other routine maintenance and repairs at the plant. To get a better sense of how refueling works at a nuclear energy facility, I spoke with Marcus Nichol, NEI’s senior project manager for used fuel storage and transportation, and asked him to explain the basics. Why does a nuclear plant need to replace one-third of its fuel? Nichol: The main purpose of a refueling outage is to replace older fuel that is depleted—meaning it can no longer efficiently produce energy from nuclear fission reactions—with new fuel. This “used fuel” has typically been used in the reactor for four-and-a-half to six years before it is pe...

NEI Nuclear Notes

Search This Blog