Nuclear Blue Ribbon Appears before House Energy Committee, Cheap Natural Gas a Threat to Renewables and Nuclear and Coal

Last week the so-called Blue Ribbon Commission on America’s Nuclear Future released a report calling for a new approach to finding a site, based on local consent rather than Congressional dictate. The two chairmen,  Lee H. Hamilton, a former congressman from Indiana, and  Brent Scowcroft, a former national security adviser under Presidents Gerald Ford and George H.W. Bush appeared before the Energy and Commerce committee’s subcommittee on environment and the economy,  But the committee chairman, John Shimkus of Illinois, did not mince words in complaining about the Obama administration, denouncing its “interference’ with an evaluation of the merits of the proposed repository at Yucca Mountain in the Nevada desert. Campaigning in 2008, President Obama promised to halt the project if elected, and the Senate majority leader, Harry Reid, of Nevada, worked hard to cut off funds for it.

U.S. natural gas prices, are at an incredible low of about $2.50 per thousand cubic feet. Rapidly rising production of shale gas and a warm winter have created a glut and pushed supplies in storage to 21 percent above the average of the past five years.  Good news for consumers, whose gas and electric bills have declined slightly. And it is a hopeful sign for the chemical industry, which uses gas as a raw material, and for the makers of electric vehicles.

But cheap gas has also thrown energy markets into turmoil. It is impossible for almost any other source of electric power to compete, especially coal and nuclear. By trimming fuel bills, cheap gas has reduced incentives for energy conservation and efficiency thereby putting solar and wind, in spite of their own falling costs, heavily dependent on government mandates.

In fact, the EIA predicts that the United States will become a net exporter of liquefied natural gas by 2016.  But exports and gas-fueled trucks are bad news for utilities and chemical companies that prefer to keep natural gas supplies in the United States — and to keep domestic gas prices low.   Some utility executives remember back in 1992 when gas prices were at an all time low .  “We’re living through an era that we’d call the tyranny of natural gas,” said David Crane, chief executive of NRG, a major electric power company. “With all the enthusiasm for unconventional gas and low prices, the one group of people you don’t see rushing to embrace it . . . are the utility execs. We remember 1992, when everyone thought gas would be $2 forever.”