Around the world, nuclear energy faces price and market share competition from the natural gas revolution. However, it is still the lowest cost source of power when considering energy security for island nations. More than 30 years of high tech research on improvements to nuclear technologies — such as the advent of new types of small modular reactors — has put this industry on the cusp of a similarly game-changing revolution,
Writing for the Forum on Energy, Ambassador C. Paul Robinson, President Emeritus and former Laboratories Director, Sandia National Laboratories, as well as U.S. Ambassador and former Chief Negotiator, Nuclear Testing Talks, looked at what could be ahead for nuclear energy.
Can the natural gas revolution permanently change the outlook for nuclear energy? Perhaps for some countries, but not for Japan, the United Kingdom and other island nations.
Let me set the stage with some background about the “shale gas revolution.” It has been known for many decades that there existed enormous resources of natural gas, as well as oil, trapped within shale rock formations just below the land surface across much of the United States. In past resource assessments, these “shale fields” were always included in the estimates of proven U.S. reserves, even though the costs of extracting them were thought to be quite high. Calling the present high level of activity “a revolution” is appropriate and was driven by major technology developments that are crucial to economically find and extract these resources.
Technology breakthroughs, led by American scientific labs, brought us the shale revolution. Sandia National Laboratories, with help from some of its sister labs, developed several technologies that contributed to the national gas revolution, including key underground visualization and modeling techniques using our joint Supercomputing Initiative. These techniques not only allowed clear pictures of the location and shapes of oil and gas deposits, but allowed directional drills to be guided in real time and micro-seismic tools, originally developed and used in coal mines, but proved to be instrumental for monitoring the continuing growth of underground fractures.
While the great success in the U.S. for fracking is still in its early stages, it has already caught the eye of petroleum engineers and companies throughout the world. Petroleum geologists had already speculated that the many shale deposits near the surface in the United States were not a singularity, but could be a global formation. Recently data has emerged that is consistent with those optimistic expectations, particularly as large shale deposits have been found in Australia, Argentina and China.
Whether cheap gas will prove to strongly compete with nuclear power for a new generation is still unknown. It seems likely that natural gas will change the energy market’ in Europe. The current pessimism in France —that Europe will not be as blessed with shale as are other parts of the world — will prove to be untrue. And Russia, which occupies the largest landmass in the world, has been critical of fracking gas from shale, believing it might undercut the prices they charge for current natural gas exports — now their primary source of hard currency. In time, I believe they will adopt fracking practices, as they may have extensive shale deposits across their own large, undeveloped landmasses. Also we can make certain assumptions. Specifically, those major nations with the smallest landmasses — Japan and the United Kingdom, in particular — can certainly not depend on domestic shale to be a major source for their future energy needs, nor can the many other “small land area” nations around the world
If natural gas changes the balance of who has the most fuels, and therefore the strongest energy economies, then states without natural gas can lose a great deal of political influence. What options do states such as Japan and the United Kingdom have?
What are the worldwide prospects for the nuclear industry to successfully compete against the “shale gas revolution”?I strongly believe that the application of advanced technologies — which are now readily available — can make our nuclear power industries even more successful to compete and win against natural gas, or oil, or coal, or the past generations of nuclear plants. These technologies, used in small modular reactors, could indeed prove to be game changers for the nuclear energy industry.
But the speculation over natural gas’s contributions worldwide may be overstated. One of the problems with natural gas is that its price has always been subject to wide fluctuations. A variety of reasons have been given for this, from better pipelines and distribution systems, to better technologies for compacting it into liquefied natural gas (LNG) so that ships could transport it internationally. It is certainly fair to say that at the beginning of 2012, the term “shale gas revolution” began to be widely used as the price of gas dropped below $2 /Mbtu. Since then it has slowly climbed back up to $4.70 /Mbtu as of January 2014, which has raised the old specter of price volatility as a chronic disease for gas markets.
Nuclear power industry and obstacles to new generation
Nuclear energy is a viable long term energy solution that will remain cost competitive to its alternatives. Although the U.S. nuclear industry once grew to more than 110 U.S. nuclear plants, after both a long stall and a slight retrenchment we now have 100 plants operating at approximately 60 sites. Throughout the 1990s and into the new century we have successfully grown our capacity factors for almost all U.S. nuclear plants to 90 percent. Throughout that same period we generated 20 percent of the electricity in the United States, delivering it more reliably and at prices of one half of the per kilowatt-hour than from either gas or oil generating plants. Only coal plants are the next closest for the lowest price of electricity, but that will soon change, as new regulations imposed on coal plants will push its prices upward. Nuclear has stayed consistently low and level, but I have reason to believe nuclear electricity can go much lower.
The nuclear industry should expect to compete against natural gas for new generating capacity. Today natural gas occupies 20 percent of the energy market in both Japan and the United States. As older nuclear plants reach their age limitations, it becomes necessary to consider their replacements or find other energy sources. But there are some fundamental problems keeping the nuclear industry from growing, with the result that nuclear might lose market share within the United States.
In comparison to oil and gas, the large up-front costs to construct nuclear plants intimidates the U.S. investment communities. Many of these investors, who were shocked by the blood-bath they took on nuclear during the 70s, are reluctant to take even small steps toward financing large nuclear constructions.
The regulatory difficulties remain highly uncertain for licensing new nuclear plants. Nuclear suppliers and utilities have also suffered from the uncertainties and the longer times to obtain licenses. Even though there is a new U.S. procedure for Combined Construction and Operating Licensing, it still remains untested. Today, the highly-politicized regulatory atmosphere, with separate environmental and nuclear regulatory authorities, delays or stops a variety of large energy projects today. The good news is that of the 100 U.S. nuclear power reactors, 72 have so far been licensed for extended operations of 40 to 60 years, with 18 more being examined. At the end of the past year, only 20 of the operating reactors have entered the period of operation beyond 40 years.
One major barrier that has always plagued the U.S. nuclear industry has been what to do with the spent fuel and their nuclear wastes. We are clearly worse off with the apparent denial of a license for the Yucca Mountain Geologic Repository in the U.S. in which so much money (public and private) had been spent.
The Great Tohoku Earthquake of 2011 and the subsequent events at Fukushima Daiichi will most certainly require more careful and extensive examinations of whether any of those safety issues should be a cause of heightened concern for future nuclear plants, as was the case following the fuel melting incident at the Three Mile Island plant in the United States and the Chernobyl disaster in the former Soviet Union, which both sparked wide-spread public and governmental concerns over safety. “Caution” has once again become the word of the day.
Against that daunting array of challenges, let me suggest to you thatthe answer for both the United States and Japan is to note how it was new developments in technologythat brought the competing oil and natural gas technologies to the brighter futures they now enjoy. Only when the greatly improved technologies for extraction were implemented did “fracking” get propelled to its current level of excitement for the future of natural gas. We have created an impressive list of major nuclear research and development achievements, but very few of these have yet been brought to bear in our industry. After the long pause in constructing new nuclear reactor power stations, it is time that we strongly innovate in all phases of our operations.
There are now a number of design efforts in the United States and elsewhere to examine the full spectrum of possibilities for new reactor generating stations. Some of the teams still remain focused on very large central power stations of several thousand Megawatt output that are little changed from the past, while others have examined smaller plants with modular components, but are still locked in to the use of only light water reactors, as mixed oxide fuels have also remained predominant. Still others have taken on the challenges to take wider advantage of new technologies and to employ fast reactors, which can breed new fission fuel.
Most of all, I think it is crucial that we also examine the past structural roadblocks to building and operating nuclear power plants that I outlined above: The regulatory barriers and its unpredictable times; the long construction times, and the financial barriers of high up-front, and total capital costs, ahead of any income; the high fuel costs; the so-far intractable problem hanging over what to do with the wastes; and lastly the real “elephant in the room” — the need to greatly improve the inherent safety and operational safety performances, because while polls show the public is still tolerant of the nuclear safety record, it is time to make it very much better.
— Ambassador C. Paul Robinson, President Emeritus and former Laboratories Director, Sandia National Laboratories & U.S. Ambassador and former Chief Negotiator, Nuclear Testing Talks