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The coming electrical storm

Several trends in America’s electrical energy future threaten to converge in a harmful way.  These are the dearth of new coal-fired or nuclear power plants, the shift from these sources to natural gas-fired power plants for baseload service, the unpredictable course of the ongoing economic recession, and the influence of environmental extremists on renewable energy supplies.

Killing off King Coal

An internet search using a phrase such as “coal power plant cancel” usually turns up a lot of hits.  Any developer with the chutzpah to try and build a coal fired plant will need a lot of lawyers.  For example, plants in Kansas, New Mexico, Arkansas, and Georgia have stayed tied up in court proceedings for years.

Energy Luddites have concluded that they don’t have to win the suits in order to win the battle.  Big capital projects of any kind — ports, harbors, highways, bridges, power plants — require an enormously long time for planning, engineering, getting environmental studies and government permits, training the future staff, developing operating procedures, and so on.  As a result, a coal-fired or nuclear power plant can easily have a billion dollars invested in it before the first shovel ever breaks the ground.  All you have to do to kill off a  project is lengthen the investment phase until the costs become unrecoverable.  That seems to be the game:  Exploit the court system to delay, delay, delay, and let the cost of money do the dirty work.  As a result, very few coal plants are being proposed or built in the United States.  The environmentalists are winning this part of the battle.

The Faltering Nuclear Renaissance

There is little need to remind you that no new nuclear plant has been begun in the United States in decades.  The existing fleet is aging.  Many plants have managed to get their licenses extended, but that provides no new power source.  The nuclear industry is struggling mightily to build a handful of new reactors in Florida, Georgia, Texas, and a couple of other places.  Some of these will probably succeed, but the price of the first new plants threatens to be enormous.  Once a nuclear plant is in production, it provides the cheapest electricity you can buy.  But nuclear power is particularly vulnerable to the delay-of-game strategy of environmental radicals.  Progress Energy of Florida has already slowed down its efforts on the two proposed plants in Florida’s Levy County.  Look for more of this to follow as utilities try to manage the costs of delay by slowing the spending rate to match the litigation rate.

Shifting to gas

The only politically viable energy source for baseload-sized electrical generation is natural gas.  The new extraction methods have increased supplies while the economic recession has actually reduced total gas consumption.

In addition, natural gas fired power plants are easier and faster to build than either coal or nuclear, and the environmental footprint is much smaller.  Litigation is reduced, and this combination of factors makes gas the obvious choice for utilities needing to add baseload capacity.  The problem is that if this trend continues for a long time, the energy mix will shift too heavily to a single kind of fuel.  A power grid too heavily dependent on that one fuel, natural gas, becomes highly vulnerable to any sort of disruption in supply.

And disruptions of supply are planned.  Environmental radicals and ordinary citizens are already in court challenging the new methods of gas extraction, charging that these methods contaminate ground water supplies.  If their efforts result in restricting supplies, gas prices will spike and electricity prices will spike along with them because the grid is too heavily dependent on gas for baseload generation.  In the most extreme case, one can imagine a scenario where there might not be enough gas to meet seasonal peaks.  Older readers will recall that this actually happened in the early 1980s, leading to a temporary ban on construction of plants that use natural gas for electric generation.

Environmental Cannibalism

Nowhere is the demented influence of environmental extremism more on display than in their reactions to the energy supplies they formerly advocated as replacements for fossil fuels.  Solar projects and wind projects are getting tied up in court just as if they were coal-fired plants!  When I refer to this group of people as energy Luddites, it’s not just idle blogger name-calling.  The “banana” acronym really does fit, “Build Absolutely Nothing Anywhere Near Anything.”

What’s Needed

Let us hope that America will eventually emerge from its current recession.  If and when it does, electric demand will rise steeply along with it.  If electric cars become popular, the demand on the electric grid will rise even more steeply.  The grid is already strained to its maximum capacity on the days of highest peak demand.  It’s conceivable that a robust recovery coupled with a large uptick in the use of electric transportation could push things past the critical point.

So America needs new power plant construction, and we need it now.  Not only would plant construction projects provide a genuine boost to the economy, but they could help sustain a future recovery by providing low cost energy and permanent employment for the people who operate the plants.

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