Southern Maryland Newspapers Online has published a article titled Reactor under microscope that provides some interesting details about Constellation Energy’s offer to sell its stake in Unistar to EDF. It describes a letter from Constellation’s Mike Wallace expressing a strong desire on the part of Constellation’s management to encourage and assist with the project, even as they unwind their financial participation.
In addition, Constellation pledged its full support and cooperation in seeing through the transfer’s terms and assisting EDF however it can in bringing the reactor to Calvert.
“Having invested considerable time and resources into our partnership, we agree with you that there is significant market value in UniStar,” Wallace’s letter states. “Our proposal provides a solution by which our companies can quickly resolve UniStar’s ownership structure, so that EDF can preserve and maximize UniStar’s value and advance the prospects of CC3 with confidence.”
Though some observers might be skeptical, there is some reason to believe the sincerity of those comments. I have met and spoken with Mike Wallace on several occasions at gatherings of nuclear professionals; he strongly believes that nuclear energy is an excellent source of power. He has done what he could over the years to help it advance. Like me, he is not a recent convert – he started his professional career as a nuclear trained naval officer, so he has always been in favor of the technology.
There are also purely practical reasons for Constellation to support Unistar’s success with Calvert Cliffs Unit 3. As described in the article, the project has strong, bipartisan political support in Maryland. Constellation has a strong interest in keeping as many political friends as possible. It is not the most popular corporation with headquarters in the state, but improving its image and reputation can have a positive impact on its profitability.
Among the positive information about both Constellation’s support and the political interest in trying to breathe life back into the project, the article’s author provided some quotes from the reliable opposition. Both Peter Bradford, the former NRC commissioner who has been fighting nuclear energy professionally for thirty years, and Michael Marriotte of NIRS, which has its headquarters in Takoma Park, Maryland, use the opportunity to gloat about the seeming demise of the project.
Aside: Peter Bradford has also published a triumphant piece on Electricity Policy titled Honey, I Shrunk the Renaissance: Nuclear Revival, Climate Change, and Reality. Though he does not take personal credit in the article, it is pretty clear from the title that he probably feels like he made a contribution to pushing the revival of nuclear energy out into the future. Notice, the title of his article is not “Honey, the Renaissance shrunk itself.” End Aside.
Southern Maryland Newspapers Online does not have a commenting field, but it does share the email addresses of its writers. I decided that it was time to write another of my personal letters to a journalist in hopes of helping her to look at the sources of her information from a different point of view. Since I like reusing and repurposing creative work, I thought I would share that letter with you.
I read with interest your recent article about the Calvert Cliffs Unit 3 project. I have been following that effort for a number of years and have visited Calvert County several times to participate in public meetings. Until just a month ago, I lived in Annapolis, but have recently moved to Lynchburg, VA. Though this is a nice place, it is not southern Maryland and it is a long way from the Bay and ocean that I love.
When I decided to retire from the Navy, I investigated opportunities for employment at Calvert Cliffs, but all of the companies involved entered into a hiring freeze before I reached my planned retirement date. (During my time in the Navy, I served as an Engineer Officer on a nuclear powered submarine. For the 6 years before retirement I served as an analyst determining the financial resources needed for training operators and for maintaining nuclear powered ships and submarines.)
In your article, you quoted Michael Mariotte of NIRS, who was almost gloating about the demise of the project. He mentioned the aggressive competition, implying that it is coming from unreliable sources like the wind and sun. The statistics are pretty clear – Maryland gets almost none of its power from those sources. Almost in passing he did mention the real source of competition – cheap natural gas. Here is a comment about that competitor that might interest you.
“Mariotte is correct about some things. The competitors to nuclear energy have been quite aggressive in working as hard as possible to add roadblocks to new plant construction. Not only have they been actively reducing the sales price of their competitive products, but they have also been working the political system to ensure that the hand up promised by the Congress in the Energy Policy Act of 2005 has been tied up in bureaucratic knots.
Later in his comment, Mariotte even identified those competitors for those people who care enough to read closely. As he said, “natural gas remains dirt cheap” – the rest of his comment is actually a distraction and not even true.
The real competition to nuclear energy is coming from natural gas, whose pushers have done a good job in convincing their addicts to remain addicted. They seductively promise low prices off into the distant future, but none of them are willing to actually sign binding contracts for delivery at current prices.
If they can just hold out with below cost prices long enough, they will cause less secure companies like Constellation to give up on the hard and expensive work of building a new generation of nuclear plants. Of course, with nuclear energy, much of the hard work and expense comes before the plants start operating.
Once they begin to run, the ongoing cost of fuel and operators is quite low compared to other alternatives. Each new 1600 MWe EPR displaces a need to burn about 300 million cubic feet of natural gas each day. At today’s “cheap” natural gas prices, that amount of gas would cost $1.2 million per day, but once gas prices return to the levels that existed in 2008, that amount of gas will cost almost $5 million per day. In comparison, the nuclear fuel for an EPR costs about $190,000 per day. Power companies can lock in nuclear fuel prices for many years into the future if desired. (Remember, a cost to utilities for fuel is REVENUE for gas extraction companies like Chevron, Shell, and Chesapeake Energy.)
What do you want to bet that natural gas prices rise if nuclear plant builders give up and allow the demand for electricity to be supplied by burning gas?
Gas suppliers can afford to be patient, after all, they are some of the richest companies in the world.
One of the largest gas suppliers with headquarters in the US – ExxonMobil – had monthly revenues in 2009 that were higher than the total market capitalization of the largest nuclear power plant operator in the United States. (ExxonMobile’s 2009 revenue of $440 billion works out to $37 billion per month. Exelon, the operator of 17 nuclear power plants, has a market capitalization of just $26 billion.) Maybe donations from people associated with the enormous revenue stream from fossil fuel sales is the reason why “non-profit” groups like NIRS can af
ford to pay people like Mariotte for decades worth of non productive work fighting the development of a competitive and emission free energy source.”
Publisher, Atomic Insights
Note: After rereading my letter to Meghan, I made a couple of editorial changes, so it reads a bit more smoothly than the one that I sent to her. Writers never get tired of fiddling with words.