A Day for Gas Pipeline Discussions – Nabucco, IPI, Russia-Ukraine

While catching up on today’s UPI news feed, I realized that there were a number of articles about intense negotiations on various aspects of at least three different natural gas pipeline systems. Budapest is hosting a gathering that includes representatives from financial organizations, Caspian area gas suppliers and European host nations. There is an article out of Islamabad about term pricing mechanisms for the long discussed Iran-Pakistan-India pipeline (IPI) and there is another follow-up article about the long running Russian-Ukraine pipelines and the prices for gas flowing through them.

It reminded me that I have long wanted to compare and contrast international natural gas pipeline projects with nuclear reactor projects. Here is where reactors and gas pipelines are similar – they are both hugely capital intensive and they both enable the use of a raw material for heat that might otherwise have little inherent value. In the case of reactors, there are few industrial uses for uranium, thorium or plutonium. If they are not processed for use in reactors to produce heat, they are generally either left in the ground or quite expensive and troublesome to have around. A similar statement can be made about natural gas; without pipelines to move the material from the point of origin to a market, it is either left in the ground or flared to prevent it from being an explosive nuisance.

When it comes to the scale of effort required to build the infrastructure that enables useful heat to be captured from either heavy metals or methane, international natural gas pipelines often turn out to be bigger, more time consuming and more expensive since they often require coordination among dozens of competing interests and tens of billions of dollars of invested capital before the first customer is actually served.

One final similarity – once the infrastructure is in place, the marginal cost of operation is low enough so that nearly all of the money that customers pay goes either to paying off the capital investment or providing a return on that capital investment. Only a small share goes into continuing labor or into actually paying for the continued injections of raw material.

(Aside: I am making a distinction here with regard to pipelines and assuming that there is a very close relationship between the pipeline builder and the entity that controls the supply of gas. Some projects that do not cross borders have a different type of financial structure where the pipe owner is a completely different entity from the gas suppliers. End Aside)

The areas where pipes and reactors differ are also important. Once built, reactors have very little impact on the environment since their fuel supply is concentrated and rarely replaced and since fission does not require the release of any waste products to the environment. Gas, on the other hand, requires continued drilling efforts and every cubic meter consumed results in the release of about 3 cubic meters of CO2. If any gas leaks during production or distribution, the methane itself is about 20 times more effective than CO2 per unit volume in trapping heat via a greenhouse effect.

(Update – 28 Jan 2009 at 1833 : A commenter pointed out that the above statement was factually incorrect. Here is his correction: “1 cubic meter of CH4 burned makes 1 cubic meter of CO2 and 2 cubic meters of H2O. I think you mean that a ton of natural gas, burned makes about 3 tons of CO2 as the volume is irrelevant compared to the number of CO2 molecules absorbing infrared radiation thus keeping our planet too warm.” End Update)

Reactors can also be built almost anywhere – subject to human rules. They do not have to be built from a place where there is gas to a place where there are people that need to burn gas, so the beneficiaries are not determined by geography or political domination of resources. Finally, there appears to be far more ultimately recoverable heat available from uranium, thorium and plutonium than from gas. Pipelines built today will probably be able to find enough gas to keep them filled for their design life, but that is not necessarily a given. Whether or not there will be enough gas in a generation for another set of pipes is much more uncertain. With reactors, there is no doubt at all – there is plenty of heavy metal fuel to last for several thousand years of steadily increasing use.

The choice between reactors and pipelines is not a slam dunk, but it is clear which heat source provides the greatest good for the greatest number of people. Since successful reactors can deliver almost the same ultimate product as gas pipelines, there is little doubt that the much smaller number of handsomely compensated direct beneficiaries from pipeline construction and operation have a real motive for trying to handicap nuclear power development.

Did I mention that Austria expects to be the European delivery point from the Nabucco pipeline and that its leaders have been pressing for this project at the highest levels in international organizations for several years already? Could that have any impact on Austria’s position as one of the most vociferously anti-nuclear countries in Europe?

“Austria is so anti-nuclear that it has a fully constructed nuclear power plant in Zwentendorf that is lying idle and it has frequent quarrels with its neighbours, the Czechs and the Slovaks, over their nuclear power units.”
(Source: “How the nuke wall was scaled in Vienna – Moves that softened China, Austria & New Zealand”

That quote came from a source that is worth reading if you want to know a bit more about the personal relationships that underly some very important international decision making.