Nuclear power roadblock: Natural gas

Steam billows from the cooling towers at Exelon's nuclear power generating station in Byron, Ill.


Kai Ryssdal: Three years ago, Marketplace's Sarah Gardner did a story about American nuclear power, about how that industry was gearing up for a big comeback. There were new tax credits, building permits and regulatory changes in the air. Suffice it to say, a lot has changed.

Sarah Gardner: It's always instructive and humbling to go back to stories I've reported and see how things turned out. It's like playing "Where Are They Now?" but with news events, not celebrities.

So I dug up that 2007 "nuclear renaissance" piece from the Marketplace archives. It opens with a sound bite from David Crane, the CEO of NRG Energy. His company had just filed the first petition to build a nuclear power plant in the U.S. in nearly 30 years.

David Crane: It's important for all of us to recognize that that was then, and this is now. The nuclear industry today is not the nuclear industry of the 1970s.

When I interviewed Crane in 2007, he was jazzed about safety advances in nuclear technology and new federal loan guarantees. Other utility execs were too. By 2008, they'd drawn up plans to build at least two dozen new reactors here. Fast forward to 2011...

Crane: All I would say is that the process has taken a very long time.

Crane still hasn't gotten a desperately needed loan guarantee. And his company's already shelled out half a billion on this nuclear venture, and they haven't broken ground yet.

Paul Patterson: I think the reality caught up with the hype, so to speak.

Energy analyst Paul Patterson says it's not just NRG's nuclear power dreams that are on hold. In fact, most of a few dozen proposed reactors are in limbo. Congress never did pass a cap on greenhouse gases emitted by coal burning power plants, which would have made fossil fuels more expensive and nuclear power more competitive. And federal subsidies never reached the levels nuclear lobbyists hoped for. But the biggest, baddest enemy of that "nuclear revival"? Cheap natural gas.

Again, CEO David Crane.

David Crane: It was absolutely not predicted by anybody, expert or soothsayer.

A glut of natural gas has driven down prices and now makes nuclear look wildly expensive. Natural gas is a fossil fuel, but emits half the greenhouse gases of coal. Energy companies have discovered and tapped into huge reserves of shale gas in the U.S.

Bernard Weinstein is associate director of the Maguire Energy Institute in Dallas.

Bernard Weinstein: We've got at least a 200-year supply of natural gas in the United States. So if you're a utility executive and you're scratching your head, maybe I don't want to commit to a nuclear plant right now.

Peter Bradford, a former nuclear regulator, says nuclear power's always been a hard sell. Its history of cost overruns and plant cancellations means Wall Street won't touch it. And the feds are cautious too. Last fall, Constellation Energy walked away from a promising nuclear project in Maryland.

Bradford said the Department of Energy demanded what Constellation called a "shockingly high" fee for a government loan guarantee.

Peter Bradford: And the nuclear industry's position now is "We can't go forward in the face of a fee like that. We need something that's more like a gift."

And right now, any gifts from the feds are unlikely. So, what happens another three years from now? Well, if the experts are right this time, the industry will be lucky to have a few nuclear reactors under construction. Of course, as this story's taught me, things can change.

I'm Sarah Gardner for Marketplace.

About the author

Sarah Gardner is a reporter on the Marketplace sustainability desk covering sustainability news spots and features.
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NRG Energy is desperately seeking investors to prop up their proposed reactor project in Texas. San Antonio reduced their 50% share down to only 7.6%. Now NRG is trying to get Austin to agree to a power purchase. The majority of people in Austin want nothing to do with nuclear power but the NRG camp released a push poll to try to portray support. Their lobbyists are working hard to twist the arms of the Austin mayor and City Council. Austin Energy had two reports recommending staying out of the nuclear expansion and twice City Council voted to stay out. But NRG Is desperate for loan guarantees and pushing hard. The federal loans are US taxpayer dollars. It is incredibly stupid to consider expensive nuclear power, especially since clean affordable, more flexible energy solutions are available today. We can't afford the vast consumption of water, the risk if terrorist attacks or radioactive accidents or the problem of radioactive waste. NRG just got a loan guarantee for a solar plant in Arizona. Many people oppose their nuclear reactor project but would be happy to see NRG build solar plants here, which could create local jobs and build our economy here instead of jobs in Japan.

Glad to hear it! The nuclear industry has had more than enough gifts from us already. In fact, in wouldn't even exist if not for the Price-Anderson act which kicked off the whole show in 1957.

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