Quotes from TheStreet.com – Pricey Gas Is Good For Nuclear
I have been trying for years to help nuclear technologists understand the economics of power generation and the financial motivations of the people who make the investment decisions on the types of power plants to build. Sometimes, I have felt like a lonely voice and other times I believe that some of the people who trust my judgement on other issues simply dismiss my economic discussions, perhaps because they wonder about my business/financial background. (I have no MBA, just an MBWA – Management By Walking Around a small company as the GM for about three years plus about 18 years of building failed business plans to develop small nuclear power plants.)
There is a terrific article currently running on TheStreet.com titled Pricey Gas Is Good For Nuclear that I highly recommend. (Disclosure: I think that the article is terrific and I highly recommend it because it agrees with what I have been trying to say for years. It is human nature to like those pieces with which you already agree.) Here is a key quote that I hope will encourage you to go and read the whole article.
The merit order reveals some interesting opportunities. First, the most profitable plants, from a gross-margin perspective, will almost always be nuclear power, particularly existing nuclear power facilities. Second, efficient coal-power plants also provide profitable margins, albeit less margin than nuclear power (assuming the coal plants are reasonably efficient). Third, natural-gas power plants generally earn the lowest gross margins, because their cost structure is higher than nuclear or coal and their revenue is equal. Fourth, as long as natural gas is more expensive than nuclear power or coal, natural-gas power plants has lost any possibility of cost leadership; they must compete among themselves to secure the best position in the stack after nuclear and coal-plant power is dispatched.
If it turns out that the net greenhouse gas emissions caused by extracting, transporting and using “fracked” US gas are greater than coal, there will be something else about gas that is good for nuclear.
There is a Cornell prof, who has served on NAS climate change panels in the past, saying exactly this. http://www.reuters.com/article/idUSTRE62U2UY20100331
Because a lot of enviros jumped on the fracked gas bandwagon calling gas a “bridging” fuel that could replace coal while they talk the rest of us into building their solar/wind/we don’t need no steenking baseload dream, it comes as a blow to them that the topic has come up that using their cherished “fracked” gas may cause more climate change than if we just stayed with coal.
The problem is that methane, which is what natural gas is. has far more global warming potential (GWP) if it gets into the atmosphere than CO2. Each different greenhouse gas absorbs infrared energy that would otherwise be leaving the planetary system at a different wavelength, and depending how much gas is already in the atmosphere trying to absorb that frequency, and depending how long each gas can be expected to be resident in the atmosphere, the GWP varies. One molecule of methane emitted has 72 times the power of one CO2 molecule, on average, for the first 20 years, 25 times as great over 100 years.
This poor clown at the WorldWatch Institute – http://blogs.worldwatch.org/revolt/natural-gas-versus-coal-clearing-the-air-on-methane-leakage/comment-page-1/#comment-415 – had to argue that methane emitted while coal is mined hasn’t been counted in the past, and if you add that in, and shuffle the figures in the right way why by god gas is still “the cleanest pathway” to a “renewable-based economy”.
Thanks David Lewis for yet another fine comment (great knowledge – fine insights).
One area you did not mention is the Green House Gases and pollutants that are separated near the natural gas wells. EPA reports that methane and CO2 lost in production is only a couple of percent of production although there are problem wells and areas where the percentage is higher. Some of the regions that produce the highest amounts of CO2 in the gas are Exxon’s La Barge, Wyo. plant and processing plants in the Permian Basin of western Texas and eastern New Mexico which have very high levels of CO2 in the raw gas. Traditionally, most of the CO2 that came up hole with raw natural gas was released into the atmosphere close to the well head. The amount of CO2 released into the air by natural gas processing of these problem wells is significant. EPAs estimate that when looked at a nationwide scale the problem gases produced in production of natural gas constitute less than 2% of all gas production.
Robert – I recall seeing a couple of ExxonMobil television commercials about their efforts to remove and sequester this associated CO2. According to the commercial, ExxonMobil is spending $100 million on a facility that will remove the entrained CO2 and sequester it.
I would imagine that the vast majority of people watching the commercial did not understand that it was talking about the CO2 that comes up in the well with the gas, not the CO2 that is produced when you burn methane gas.
Cool – I just found the link to a web hosted version of the commercial – http://www.exxonmobil.com/corporate/news_ad_corpus_capturingco2.aspx
Google is an amazing tool!
Google doesn’t show anything other than the May 2008 announcement by Exxon that it is either about to or is building this pilot plant to test its new process. According to the press release, the plant should have been in operation late 2009.
Now I wonder why there is no press release announcing the big opening. Could it be that they didn’t even bother to build it? James Hansen once said he expects to be called to testify at the trials, for crimes against humanity, of the CEOs of some of the fossil fuel companies because of their twenty year disinformation campaign conducted to confuse the public about what is known about climate change. I believe all the CEOs Exxon has ever had are at the top of Hansen’s list of “suspects”.
Norway enacted a CO2 tax of $55 a tonne in the early 1990s which caused Statoil to develop the Sleipner project which uses a solvent process to remove CO2 from natural gas in the North Sea. The 1 million tonnes of CO2 captured per year is piped 300 meters below the sea floor into a saline aquifer, where, all monitoring shows, it stays there. This has been the poster project for CO2 sequestration worldwide and it still is the largest.
This Exxon possibly just PR announcement/project is supposed to process around, I calculate, 0.78 ounce/cu ft 14M cu ft/day = 125,000 tonnes of natural gas a year. Depending on how much CO2 is in it, say 50%, its about 1/20th the size of Sleipner.
What I was talking about, re fracked gas might be worse than coal in its climate impact, is the combined effect of everything in its life cycle – the emissions of all GHG, especially methane because it has so much GWP, that occur when the gas is produced, the leaks as it is transported, the emissions caused by all activities of the industry that produces it as it produces it, plus the CO2 that results when it is consumed. There are people who calculate the climate impact of just about everything civilization does, in case anyone decides to care one day. Leakage of methane into the atmosphere as a result of regular old natural gas production has been under scrutiny for a long time, and serious efforts have gone into mitigation.
The Cornell prof is saying he thinks that “fracked” gas is different, hence the calcuations have to be redone. All the political stands in favor of gas vrs coal are based on the old numbers.
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