Gas Interests Opposing U.S. Nuke Industry’s State-by-State Strategy

The nuclear industry’s strategy of working in individual U.S. states to obtain support for financially stressed plants has stalled.

Despite successfully implemented efforts in New York and Illinois to provide assistance that is narrowly targeted at a handful of especially vulnerable units, no other state has been able to get a support measure out of the discussion phase.

Ohio and Pennsylvania illustrate the difficult lobbying challenge posed by the state-by-state strategy to save existing reactors.

Both states have a solid nuclear plant fleet that produces a significant portion of their generated electricity. There are several thousand nuclear plant employees in each state and both have shown undisputed public support for nuclear energy for decades.

Neither is famous for restrictive environmental rules and each favors industrial development.

Beneficiaries of Gas Boom

But Ohio and Pennsylvania are enjoying the widely spread economic benefits associated with developing large natural gas resources that had been previously thought to be inaccessible.

Pennsylvania sits on top of some of the sweetest spots of the multi-state Marcellus shale formation and recently passed Louisiana as the state with the second highest production of natural gas.

The eastern part of Ohio is home to the highly productive, but deeply underground, Utica shale formation; it recently passed West Virginia to move into seventh place among natural gas producing states.

Developing those ancient reservoirs has resulted in economic benefits for landowners, often moderately-sized family farms that had been having difficulty remaining as viable entities on agricultural income alone.

Benefits have not stopped there. Natural gas production requires drilling teams, specialized drilling equipment, consumables trucking, processing plants, new pipelines and new compressor stations. The increased economic activity has been a boon to retailers, hospitality suppliers, real estate developers and restaurants.

Protecting Newly Captured Markets

The gas industry is an effective public promoter. It’s invested diligently to make sure that people know that the more obvious burdens of increased industrial activity are mitigated or completely offset by the positive aspects of those developments.

Gas production has increased more rapidly than pipeline takeaway capacity, resulting in local gas prices that are often 50% or more lower than the benchmark prices quoted for Henry Hub.

That provides the opportunity for independent power producers to site their affordable gas turbines in places where fuel costs are below average while selling power at prices driven by the higher cost suppliers.

Before the nuclear industry began approaching state legislators for assistance, coalitions of companies and individuals that were already reaping the benefits of the recently refined techniques for extracting natural gas from Utica and Marcellus formed their own lobbying and pressure groups to defend their interests.

Challenge for Nuclear = Opportunity for Gas

Gas interests recognize that nuclear plant nancial weakness is an opportunity for them to capture addition market share. Every additional 1,000 MWe produced by natural gas represents an additional sale of about 0.18 billion cubic feet of gas every day (Bcf/day).

Leaders of the pro-gas coalition saw what was happening in Illinois and New York and began communicating their position to their elected representatives.

Partially as a result of this preemptive effort, the most frequently used talking points in support of nuclear energy subsidies have been “checked” by similar arguments. Legislators that focus on constituent employment challenges hear that jobs at nuclear plants might come at the expense of jobs in the natural gas industry.

Though nuclear work might have higher hourly wages, natural gas work is reasonably well compensated, carries the opportunity for substantial overtime and often employs politically engaged people that might have been out of work or underpaid before the gas boom arrived.

Most nuclear plant workers have been comfortably and steadily employed for many years and are not well known for their political involvement.

When legislators in Ohio hear First Energy lobbyists seeking assistance because their nuclear plants help meet CO2 reduction targets, they remember the company’s strong resistance any new air pollution rules or restrictions on CO2 from its more numerous coal stations.

Are Nuclear Supporters Fighting Back?

After a delay that lasted at least four months, interests involved with the legislative lobbying fight in Ohio started providing support for a grass-roots effort built on a door-knocking campaign assisted by a recently developed mobile phone application.

The organization leading the grass-roots effort is an exciting startup called Generation Atomic. It’s led by Eric Meyer and Tay Stevenson, a dynamic duo of trained activists who’ve chosen to advocate for nuclear energy as the most important thing they can think of doing.

The initial funding for that effort did not break six figures. It’s small in comparison to the resources invested in blocking new nuclear support programs in Ohio and Pennsylvania.

Disclosure: Atomic Insights is a Generation Atomic supporter. I serve as a member of the Board of Directors. End Disclosure.

Generation Atomic is not alone in seeking to help people in Ohio and Pennsylvania understand the importance of existing nuclear plants, but the supportive organizations are currently small and under-resourced compared to the opponents.

The state-by-state campaign to support stressed nuclear plants is also being challenged by established market players who understand that there are no final answers in politics.

According to recent observations, there is a multi-vector advertising campaign being run in New York to overturn the previously awarded zero emission credit program. It’s worth remembering that New York is one of the most influential and expensive media markets in the United States.

Environmental Progress has documented the dark money behind the reappearance of a mole that had been considered whacked already.

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Note: A version of the above was first published in the June 23, 2017 edition of Fuel Cycle Week. It is republished here with permission.