I am in a snarky mood this morning. Please forgive me while I try to explain the sources of my wry amusement – and my continuing worries that keep me from getting a good night’s sleep.
Yesterday, I was in a conversation with a man who was explaining the recent changes in Nuclear Regulatory Commission written and unwritten rules regarding something called SGI – Safeguards Information. As near as I can tell, nearly every detail about a nuclear power plant design is now subject to being considered useful for planning an attack and must be kept in secure storage, released only to people with clearances and a need to know. That is certainly not going to lower anyone’s costs, improve schedule predictability, or make plants any safer.
A few minutes later, I happened to come across a brief story about a terrorist attack against an important natural gas pipeline terminal that handles gas supplied from Egypt to both Israel and Jordan. During my morning reading, I found a more detailed report of the massive explosion and fire that resulted from that attack. The fire will most likely continue to rage for a few more days, and both customer countries will have to burn additional quantities of diesel fuel and coal for many months into the future while the terminal is repaired – if it will be repaired at all.
For me, the contrast between the effort and expense invested in protecting nuclear energy plants against the perceived threats of terrorism and the effort and expense invested in protecting other vital infrastructure components with a history of being successfully attacked is incredible and illogical.
One of the things I learned from Fukushima is that nuclear plants can be vulnerable to outside influences – if the attacker can marshal forces large enough to conduct simultaneous attacks on emergency generators, power lines, roads, bridges, and switchyards. I saw a story yesterday that compared the force unleashed by the Japanese earthquake and tsunami to the combined strength of several thousand Hiroshima sized bombs. This is not the one that caught my attention, but it says that the force of the Japan quake was the equivalent of 17,000 atomic bombs.
There is a report in the New York Times about the release of the biannual report of the Potential Gas Committee. The headline says it all: Potential U.S. Natural Gas Supplies Have Jumped 3%, Industry Experts Say. Forgive my skepticism, but a 3% increase is equivalent to a six foot tall person being able to elevate 2.2 inches off of the ground. That is not much of a “jump”; it is probably in the noise of measurement variation considering the precision with which gas resources can be measured.
Digging deeper into the numbers, I computed that the increased resource identified during the period since the last Potential Gas Committee report would last 31 months longer than expected. That is a valid computation only if natural gas marketers fail in their current effort to increase the use of gas. If usage increases, the extra time would be even shorter.
Some good news, at least from my point of view, is that I am no longer a Maryland resident, so I will not be paying the increased electrical power rates that are sure to result if Exelon is successful in its recently announced bid to purchase Constellation Energy. Exelon is a master at slowly manipulating markets by gradually reducing electricity supply sources using politically correct language as cover. They have been practicing this technique for at least a dozen years – since they first shut down the 2200 MWe Zion Nuclear Power Station.
Exelon’s most recent technique for limiting supply is to talk down the importance of planning for the future and building new capacity. Their strategy does not take advantage of the lower construction costs available today as a result of low interest rates, high rates of unemployment and relatively low commodity prices enabled by temporarily low natural gas prices.
Using the short term price of gas as an excuse, they say that low prices means that they cannot justify new investment – even though a nuclear plant started today would not enter the market for about 10 years. Anyone who thinks that they have a clue what natural gas prices will be in ten years should look at the following chart.
The people who are most likely to be knowledgeable about the future price of gas are investing tens to hundreds of billions of dollars into projects and companies that will produce gas in the future. ExxonMobil is unlikely to have spent $41 billion for XTO based on a prediction from its analysts that gas prices will remain low.
Along those same lines, I found an article titled Will natural gas surge mean lights out for nuclear? that is full of smoking gun quotes as long as you have been trained to read between the lines. Here is an example:
“Natural gas is the only available fuel source that can fill the gap of retiring coal,” said Brian Habacivch, senior vice president of Fellon-McCord & Associates LLC, an energy management firm based in Louisville, Ky.
Habacivch doesn’t view nuclear and renewable energy sources as fuels of the future.
“It looks like the nuclear revolution is falling apart pretty quickly,” said Habacivch. “Constellation [Energy] pulled their plug, so did NRG.”
“If we’re not building more nuclear and we’re going to retire coal, the only thing that can fill that gap in the next five to 10 years is natural gas, but coal will play a part, too,” he said.
This one is also pretty telling:
“Natural gas will be the fuel of the future. Everyone predicts that, and I believe they are 100 percent correct,” said Burnett.
Though he expects the natural gas rush will cause nuclear to falter by 2025, Burnett said that in the long run nuclear could re-emerge.
The last part of that quote is what I call “damning with faint praise”. It is a familiar tune in the establishment energy business. The refrain is that nuclear is okay, sometime in the distant future after fossil fuel pushers have captured more of the world’s wealth by selling as much product as possible at as high of a price as the market will bear. A recent article in the Financial Times captured ExxonMobil’s CEO singing the same song.
Rex Tillerson, who has led the world’s biggest publicly quoted company since 2006, said nuclear power’s importance was so great that policymakers would not allow any decline. As a supplier of fossil fuels, Exxon would stand to benefit if governments chose to reduce nuclear power’s contribution to future energy supplies.
But Mr Tillerson said in an interview that the disaster at the Fukushima plant in Japan would impose nothing more than a “delay in the timeline of nuclear’s role”.
He added: “Ultimately, my expectation is the component of nuclear energy that will be in the future mix 25 years from now, or 30 years from now, is probably not changed.”
However, governments would have to persuade their populations of the safety of nuclear power, he said. Technological advances had allowed “intrinsically safe reactors”, but he added: “There is a big educational process that’s going to have to be undertaken by the industry and policymakers if policymakers seriously believe nuclear energy has to be part of their future energy policy, and I personally believe it has to be. It’s too important in terms of all the benefits it brings.”
To a casual reader, that sounds pretty positive about the future of nuclear energy. For me, the key piece to understand is that it is easy for a fossil fuel supplier to cheer about nuclear being important in the distant future. Future projects that are not producing energy or affecting the supply-deman balance do not affect their current profitability.
The Financial Times article goes on to describe how ExxonMobil is planning to invest between $33 and $37 BILLION dollars per year for the next five years in its core oil and gas business and how it has recently invested $16,000,000,000 in liquified natural gas projects in Qatar.
Can you see why I am both wryly amused and deeply worried about the future prosperity of America and the rest of the world? I do not want my grandchildren to continue to fork over increasing portions of their income to companies that capture hundreds of billions per year in revenue selling useful, but polluting and dangerous products sourced from some of the most corrupt regimes in the world.