Natural gas could spell doom for nuke power

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OAK HARBOR, Ohio -- If today's global fracking frenzy had kicked into high gear a decade ago, thousands of jobs at FirstEnergy Corp.'s Davis-Besse, Perry and Beaver Valley 1 and 2 nuclear plants in northern Ohio and Western Pennsylvania could have been imperiled by now.

"That's fair to say," Jennifer Young, FirstEnergy spokeswoman, said.

But while job security at those massive power-generation stations is never strong enough to put workers at ease -- especially with economic pressures brought on by the natural gas boom jolting the nuclear industry -- Ms. Young said the situation appears more stable for FirstEnergy's holdings than it does for nuclear plants in other parts of the country.

The era of hydraulic fracturing, or "fracking," of shale bedrock has caused a drop in natural gas prices, which has caused energy markets to react.

Much of the hype is based on the anticipated fracking over the next 25 to 30 years in the Marcellus and Utica shale regions of eastern Ohio and Pennsylvania, where vast amounts of previously trapped natural gas and oil are expected to be recovered. But, according to the International Energy Agency, a fracking boom is expected to go well beyond North America and include Europe, China and other parts of the world.

Fracking itself isn't new; it has existed for decades. What's new is a horizontal drilling technique that allows oil and gas companies to gain significantly more access.

The Nuclear Energy Institute, the industry's Washington-based lobbying group, has expressed concerns about what the fracking frenzy and falling natural gas prices are doing to the industry globally.

In a Sept. 12 speech at the World Nuclear Association annual symposium in London, Richard Myers, the institute's vice president for policy development, told attendees the closing of the Kewaunee nuclear plant in Wisconsin and the planned closing of the Vermont Yankee nuclear plant in Vermont next year "raise legitimate questions" about whether the natural gas boom is having a chilling effect on the nuclear industry.

Kewaunee and Vermont Yankee are two plants that the nuclear institute believes are closing almost exclusively because of economics, not operations. Those announcements came this year with the closings of the Crystal River nuclear plant in Florida and the twin-reactor San Onofre complex in California -- the largest number of U.S. nuclear plants taken out of production in years.

Looking ahead

FirstEnergy nuclear power plants are expected to remain online:

* At Davis-Besse, east of Toledo, FirstEnergy Corp. is following through on its commitment to replace the plant's original pair of steam generators with two new ones next spring.

Having those parts made, delivered and installed requires a $600 million investment, a sign that FirstEnergy is putting money into Davis-Besse for the long haul, Ms. Young said.

"You look at that investment, you know it's going to be around," Todd Schneider, FirstEnergy's director of external communications, said.

The U.S. Nuclear Regulatory Commission is now deciding whether to grant a 20-year extension to Davis-Besse, which is licensed through April 22, 2017.

* At Perry, east of Cleveland, FirstEnergy is moving forward with plans to apply for a 20-year license extension in 2015. Perry's license expires March 18, 2026.

* At Beaver Valley 1 and 2, west of Pittsburgh, operating licenses were extended for 20 years in 2009. Beaver Valley 1 is now licensed through Jan. 29, 2036. Beaver Valley 2 is licensed through May 27, 2047.

FirstEnergy replaced Beaver Valley 1's steam generator and reactor head in 2006. It is making plans to replace Beaver Valley 2's steam generator and reactor head in 2017.

Steam generator replacement is typically the most expensive project utilities will do at nuclear plants with pressurized water reactors -- about two-thirds of American plants. The remaining plants have reactors with a boiling-water design, which do not use steam generators.

FirstEnergy's $600 million investment for new Davis-Besse steam generators is exceeded only by what the utility spent to put the plant's issue of once-faulty reactor heads behind it.

Davis-Besse's original reactor head nearly burst in 2002 because of acid leakage. And one that was brought in from a mothballed Michigan plant wore out faster than expected.

A new reactor head made from the nuclear industry's premier alloy, Alloy 690, was installed in fall 2011. That type of alloy was not the industry standard when the other two reactor heads were built.

Once the new steam generators are installed, FirstEnergy will have put what it believes will be Davis-Besse's most expensive improvements behind it -- assuming more issues do not arise elsewhere, such as with the cracks found in the exterior of the plant's containment building in 2011. U.S. Nuclear Regulatory Commission engineers have said those cracks do not compromise that building's structural integrity.

"We are in a good position when it comes to looking ahead," Ms. Young said.

The biggest obstacle standing in the way of FirstEnergy's attempt to have Davis-Besse's license extended into 2037 appears to be a national issue, the continued uncertainty over what to do with the industry's buildup of spent reactor fuel.

Congress passed a law more than 30 years ago requiring a single repository, but none has been built.

Nevada's Yucca Mountain is no longer likely to be the site for long-term storage, although it had been the sole location under consideration for years. Therefore, the NRC is hosting a series of meetings to hear from the public on potential environmental impacts if the nation allows for more extended storage of spent nuclear fuel beyond the licensed operating life of commercial reactors.

One culprit: tougher regs

Perry's 1,275 megawatts is the highest capacity in FirstEnergy's fleet, Ms. Young said.

At full power, that's roughly enough electricity for 1.3 million homes.

The standard rule of thumb is that every megawatt produces roughly enough electricity for 1,000 homes, although that ratio tends to be less during peak demand periods, such as summer heat waves when air-conditioner use is high.

Beaver Valley 2 has a capacity of 918 megawatts, followed by Beaver Valley 1's 911 megawatts, and Davis-Besse's 900 megawatts, Ms. Young said.

FirstEnergy's energy portfolio is comprised of electricity generated by coal-fired power plants, followed by nuclear.

Competition from natural gas is one reason it has shut down some of its older coal-fired power plants.

But Mr. Schneider said the larger reason is tougher government regulation of carbon dioxide and other greenhouse gases associated with climate change. Coal-fired power is the nation's No. 1 source of those pollutants.

Nuclear plants do not emit greenhouse gases, but significant amounts of carbon dioxide and other pollutants are released by the mining operations and energy used to create nuclear fuel for reactor cores. There are other ways nuclear plants contribute indirectly, such as in the massive production of concrete and steel used in the facilities, the transportation of parts and eventual disposal of waste.

"We're not looking to build any new power generation facilities now," Mr. Schneider said, explaining that FirstEnergy continues to have enough power despite shutting down some coal-fired plants.

He agreed, though, that the utility would have to take a hard look at natural gas if it sees a need for new construction. Natural gas would be one of the many options FirstEnergy would weigh.

It does not have an application in with the NRC for a new nuclear plant.

"You look at the economics, and gas is favorable right now. But we certainly don't know how long that's going to last," Mr. Schneider said.

Reaction to the 2011 Fukushima disaster in Japan, with more news emerging about radioactivity in the Pacific Ocean, apparently hasn't had the same effect on America energy markets as natural gas prices have: The nuclear institute said polling by an outside contractor this fall showed 82 percent of Americans still believe nuclear power has a future in this country. Sixty-nine percent said they favor it.

But Mark Cooper, senior fellow for economic analysis at Vermont Law School's Institute for Energy and the Environment, said last week the nuclear industry faces a rough road ahead, not just because of natural gas.

He said utilities, especially in the wind-rich Midwest, are turning more to wind power and other renewables.

That is in part because of state laws requiring more energy diversification. Ohio and Michigan are among many states that now have them.

But it is also partially because of advances in energy efficiency and energy storage, anything from more energy-efficient appliances and light bulbs that use less power to advances in batteries that can store more of the power generated by wind and solar -- what Mr. Cooper described as an upcoming "revolution in [energy] storage."

"The nuclear industry is in collapse mode," he said.

The Block News Alliance consists of the Pittsburgh Post-Gazette and The Blade of Toledo, Ohio. Tom Henry is a reporter for The Blade.

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