Matt Wald of the New York Times has finally figured out why there is such a strong push from well connected political types to close the Indian Point Nuclear Power Station. Unfortunately, he and his editor have chosen to put that answer at the very bottom of his recent article titled If Indian Point Closes, Plenty of Challenges.
When the demand for natural gas increases, the balance between supply and demand shifts in favor of the sellers, so price inexorably increases.
Here is the closing paragraph of that article. It should raise alarm bells for anyone who is a power purchaser instead of a power seller. That description applies to the vast majority of us; part of the challenge is that it only costs each of us a little while concentrating the spoils in the hands of a few victors.
Closing the Indian Point reactors would, however, hardly be gloom and doom for everyone. Any company that runs a generator in downstate New York ends up selling its output at a higher price, and would share in the $1.4 billion a year that Con Edison says its customers will pay if the nuclear plant closes.
Actually, Matt only mentioned a minor segment of the potential beneficiaries and also probably underestimated the windfall that the beneficiaries of the closure will share. That is because he neglected to mention that nearly all of the generators that would run to replace the output of Indian Point will be fueled with natural gas.
When a generator runs on natural gas, 80-95% of the levelized cost of electricity from that generator comes from purchasing fuel. Stated another way, 80-95% of the money paid out by the generating company shows up as REVENUE on the ledgers of the multinational oil&gas companies that sell fuel to the power stations.
When the demand for natural gas increases, the balance between supply and demand shifts in favor of the sellers, so price inexorably increases. In other words, the estimated cost to electricity customers might be $1.3 billion, but what is the cost to natural gas customers who use the fuel for home heating, commercial heating, fertilizer and chemical manufacturing and industrial production?
Just three short years ago, the US Department of Energy’s National Energy Technology Laboratory issued a white paper titled Natural Gas and Electricity Costs and Impacts on Industry that did a good job of highlighting some of the risks to the entire economy of an excessive dependence on natural gas.
Within months after that report was issued, the economy tanked, demand fell by about 5-10% and natural gas prices dropped by a factor of 3 – from $12 per million BTU to $4 per million BTU. They drifted down to just a bit below $3 per million BTU before rising back to their present level at about $4 to $5 per million BTU. The oil&gas suppliers are not happy with that level; they want to return to the “good old days” when they were pocketing a much larger share of everyone’s income.
Cuomo’s pressure against Indian Point, Shumlin’s pressure against Vermont Yankee, and Patrick’s pressure against Pilgrim are all aimed at the same goal – enriching their supporters who love the profits from expensive natural gas and expensive, taxpayer-supported alternative energy developments.
“The steps we can take are the steps we have taken in that we are very involved in commenting in the re-commissioning process at the federal level, in both the facility down in Plymouth and the one up on the Vermont line,” Patrick said.
But activists want the governor to take a firmer stand because of the dangers of nuclear power.
“I absolutely think we should be shutting down every nuclear power plant in the United States,” said John Rosenthal, an anti-nuclear activist who fought construction of the Seabook Power Plant in New Hampshire in the 1970s.
When I saw that John Rosenthal was one of the antinuclear activists pushing Governor Patrick to question the continued operation of the Pilgrim nuclear plant, I dredged up a video that I produced over a year ago to share some information about who he is. I think it supports my contention that the battle against nuclear energy is often led by the very wealthy “Establishment” whose wealth is often built on a complex foundation that rests on fossil fuel money. We have, after all, spent the past 150 years in the Hydrocarbon Age.