Cheap natural gas, caution curb nuclear energy
U.S. energy companies treading lightly toward new reactors.
Ernie Garrison rakes his son's front yard across from the Three Mile Island nuclear power plant, where the U.S. suffered its most serious commercial nuclear accident in 1979. (JONATHAN ERNST, Reuters Photo)
That may well be true, but for now, the race to that future has slowed to a cautious crawl as regulators have become increasingly guarded since the accident last year at the Fukushima Daiichi nuclear plant in Japan, while the emergence of cheap natural gas is preventing investors from pumping billions of dollars into new reactor projects.
While European countries have a reputation for being more accepting of nuclear energy, and China is building reactors faster than anyone, the United States actually has the largest fleet of nuclear reactors, at 104. U.S. electricity produced by nuclear plants has increased from 5 percent in 1973 to 20 percent today.
Advocates pushing to reduce carbon emissions thought the percentage would continue to climb, but now they're wondering if nuclear energy can even hold its current share of the U.S. energy pie.
"The push for new reactors has slowed for sure," said Paul Elsberg, spokesman for Exelon, the nation's largest nuclear energy company, with 17 reactors nationwide, including three in Pennsylvania. "We certainly have no intentions to build any new plants. The investment is hard to justify right now."
The benefits of nuclear energy are undeniable. Though reactors are expensive to build, they're relatively cheap to run, they give off almost no harmful emissions, and a single reactor can typically create enough electricity to power more than 1 million homes.
Though the spent fuel rods used to power the plants remain dangerously radioactive for thousands of years, the rods that have to be disposed of annually from a typical plant amount only to a block the size of a minivan. And they're almost always disposed of on the plant site, eliminating any need to transport them.
Still, there's no glut of new applications to build reactors. A small part of that can be blamed on the fear created by nuclear accidents at Three Mile Island — now owned by Exelon — Chernobyl and last year at Fukushima. Each accident has brought a raft of new regulations that have caused industrywide changes.
After an earthquake followed by a tsunami doused power at Fukushima in March 2011, three reactors went into meltdown, forcing the evacuation of people within a 12-mile radius and projections that the radiation release could bring additional cancer deaths in residents for years to come.
The U.S. Nuclear Regulatory Commission has studied the meltdown and made more than 100 recommendations designed to help nuclear plants be better prepared for earthquakes, flooding and unexpected, lengthy power outages. The new rules would require U.S. plants to provide better venting systems and more reliable backup power systems.
PPL Corp. Chief Executive Officer William Spence, in February, said the added expense of the new regulations could force single-reactor owners to sell them to companies with multiple reactors.
And much like the accidents in 1979 at Three Mile Island and 1986 in Chernobyl, Fukushima has brought new fears about safety, making communities less welcoming to new reactor proposals. In the aftermath, Germany, which has seven operating plants, announced it was suspending its nuclear energy program.
"There is a great fear of accidents and real issues of how to dispose of nuclear waste," said Dr. Javad Tavakoli, an energy expert and professor of chemical engineering at Lafayette College in Easton. "As long as other energies such as wind, solar and biofuels are being promoted, I don't see a fast rise for nuclear."
But fears and new regulations are nothing new for the nuclear energy industry. Its biggest hurdle now is market forces that make it difficult to compete. The biggest of those is a runaway trend toward natural gas, which is plentiful, in demand and shockingly cheap.
Because gas is so plentiful, and energy consumption is in decline since the Great Recession, the wholesale natural gas price was at $3.35 per thousand cubic feet during the last rating period in November.
That's less than a third of the price at the same period in 2005, and there's no indication the natural gas supply will dry up any time soon. The latest Department of Energy report estimates that the U.S. has at least a 100-year supply of natural gas.
That makes it difficult for a nuclear power company to justify putting $15 billion into a new plant, and taking more than a decade to get through regulatory approvals, when the power it creates can't be sold for enough to pay back the investment, said Joe Scopelliti, spokesman for PPL's Susquehanna nuclear power plant, near Berwick.
In fact, PPL in 2008 applied to build a reactor, but Scopelliti said the company is in no rush. Approvals won't likely come before 2014, and even then PPL will have to decide when it wants to spend the $15 billion the reactor would cost to build. Theoretically, Scopelliti said, it could delay the start of the project as much as 20 years, to wait for market conditions to change.
"Nobody saw Fukushima or the changes in the economy coming, but in this business you plan 10 or 20 years ahead," Scopelliti said. "Once we get approval, we'll look at all the factors. These are massive, expensive structures. You don't start building until the conditions are right."