Last week I attended the winter meeting of the American Nuclear Society (ANS) in Washington, D.C. It was a time to catch-up with friends and colleagues; let folks know that though I've "retired" from ORNL, I have not retired; and hear the latest technical and business updates from the nuclear energy community.
I must admit I left the meeting with a touch of the "blahs". The tone of the meeting, from beginning to the end, was "haunted" (Halloween occurred during the meeting) by three underlying thoughts: (1) the overall US and global economic malaise, (2) real and potential repercussions from the Fukushima Dai-ichi incident, and (3) the blessing/curse of cheap natural gas. These realities directly and indirectly resurfaced multiple times while I was there.
I'm reminded of the famous TV commercial from several years ago involving an elderly lady who's laying in her kitchen floor calling out, "Help! I've fallen and I can't get up!". I couldn't help but wonder, "Is this dear lady's exclamation a metaphor for nuclear energy?"
It seems every time during the past 25 years we were on the verge of a "nuclear renaissance", a major setback occurred... Is this "deja vu all over again" as Yogi Berra famously quipped? Sure looks like it - in the U.S. and Europe at any rate...
The continuing domestic and global economic malaise has two major short-term impacts on nuclear power: (1) it decreases electric load growth rates, and (2) it creates a risk aversion paranoia in the financial sector. The first factor enables utility planners to delay capacity additions needed to meet load growth. The second factor makes it more difficult for companies to proceed with capital-intensive endeavors. Small Modular Reactors (SMRs) have the potential to help in the second case, by reducing both the lump sums of capital to be borrowed, and providing earlier revenue generation from the capital that is borrowed. (More about SMRs later...)
I'm happy that natural gas prices are as low as they are. I cook with natural gas, dry my cloths with it, and heat my house with it. But I wonder... what if fracking turns out NOT to be the panacea it is currently believed to be by many in the gas industry? The future for domestic gas production would be severely impacted if fracking were to become an unacceptable practice. What might lead to this outcome? An "accident" in which a major aquifer becomes contaminated and unusable for human consumption. That could be a Black Swan for fracking. I hope it never occurs, but I shared here before my concern about the potential environment impacts of widespread fracking.
The echos of the Fukushima accident still ring loudly in the nuclear industry and will continue to do so for years to come. One of the immediate impacts of the Fukushima accident was a major scaling-back of business expansion and staffing plans by major nuclear vendors and suppliers.... a "hunkering-down" so to speak - in anticipation of a major knee-jerk response from governments and customers around the world who had new nuclear power construction plans on the table. And we have seen quite a bit of this response in Europe to be sure.
As I write this, futures prices for natural gas are sitting around $4 per million BTU. That's certainly not "too cheap to meter", but it's cheap. This reality is dominating the near-term behavior of energy suppliers in our country (and in many - but not all - other countries). One of the presentations I saw at the embedded ANS 2011 SMR Conference concluded that at natural gas prices of $6 per million BTU, virtually no other electrical generating technology (coal, SMRs, etc) will be competitive – unless carbon emissions are penalized. That means free market forces are unlikely to result in much new generating capacity other than gas-fired units for the foreseeable future.
So, am I bullish on nuclear energy? YES - in the mid-to-longterm! Friedman has said the world is "Flat, Hot, and Crowded". In my view, all three factors create a demand for safe, affordable, sustainable nuclear energy. Flat: the nuclear industry is global. Hot: Nuclear is among the lowest carbon emitting energy technologies on the planet. Crowded: Four billion people need energy – now. Nuclear energy is the only technology within our reach that can address a major portion of this need.
The middle-east appears poised to move ahead with nuclear energy. China and other parts of the Pacific Rim outside of Japan are moving. There are serious rumblings on the African and South American continents.
Where's the U.S. leadership?