EPA Moves to Effectively Ban all New Coal Power Plants

Great Debates
41

I’m fine with it as long as people understand that limiting or even reducing the number of power plants will result in energy shortages in the long term without adequate replacement and/or adequate substitutions, and they need to understand that energy is not something that magically comes out of a wall outlet. Inevitably we’ll see the reports of rolling blackouts and outrage over how the greedy power companies are milking people dry and won’t give them the power they demand.

TANSTAAFL. It’s really that simple. Either accept that some amount of pollution is necessary for you to maintain your lifestyle or adjust to a new one.

42

This is one of he best and most concise answers I’ve ever received. Thank you. I still have concerns about where hyper regulation of CO2 could possibly lead but that is another question for another thread and I won’t hijack this one further.

43

In that case the question to him remains with even more interest in reading the answer.

Longhorn Dave,

How long, in your vouched for highly informed opinion, at rates of significantly increased demand, until supplies start to be become tight and prices do start to become higher?

I’ve previously heard WAGs of a few decades tops. Trying to research I can find this which claims that at “the rate of U.S. natural gas consumption in 2010 of about 24 Tcf per year, 2,214 Tcf of natural gas is enough to last about 92 years.” Under the scenarios envisioned what would be the expected annual demand? And will annual production be able to keep up with that demand as smaller amounts are recoverable? And how reliable are those predictions thought to be? How inadequate is our current infrastructure (pipelines and storage) to handle that demand? How much will it cost to upgrade it?

I’m not sure that too many of us, other than perhaps the two of you, have access to enough information to have an informed opinion about those predictions. And realistic predictions are the basis of having a position in this debate.

I do have another question however. If the United States does switch to being more NG predominant in short order will it make the US less resistant to participating in new global CO2 accords since our meeting the CO2 guidelines will not be as difficult to accomplish?

44

Well I found this:

Boy, so reassuring. Fine into the next decade, well until 2015 anyway. With predicted technically recoverable reserves that can be decreased by 42% with a few months of additional data.

IF this does represent accurate information then being diversified (nuclear, renewables, less dirty coal, biomass cofired with coal, so on) seems in the national interest. IMHO.

45

They don’t make economic sense right now because of two factors: the purely political regulations in involved in construction and the stated aim of environmental groups to utilise the court system to delay construction as long as possible with endless challenges, appeals and restraining orders.

If the regulations on nuclear plants were reduced to a level that made them produce only 1/100th the number and severity of health and environmental problems as coal or hydro, rather than the 1/1, 000, 000th that current regulation requires, then they would be directly economically competitive with coal.

If legislation were introduced outlining clearly what requirements needed to be met for the production of a nuclear power plant and pre-empting legistalation, akin to the legislation introduced for the medical industry, the food industry, the eduction industry and every other industry which has been subject to deliberate stalling through the legal system, if that was introduced then nuclear power would be considerably cheaper than coal.

There is no physical or logical reason why nuclear power is as expensive as it is. It is expensive purely because people have an irrational fear of nuclear power and demand that it be entirely risk free, a standard that they do not apply to any the industry (except for GM food, which is also a Green boogieman.).

Chronos’ point is that if we set an realistic safety limit for nuclear (or alternatively increased the safety limit for coal or hydro to the same level), then nuclear would be perfectly economically viable. It’s stupid waving around a big stick to prevent fossil fuel usage, while at the same time waving an even bigger stick to prevent the usage of non-fossil fuel energy sources. You are giving people the option of getting a flogging either way, rather than encouraging them to engage in the behavior that you want.

46

DSeid: Reasonable questions. I haven’t a clue.

The Economist had a pessimistic survey of nuclear power a few weeks ago. I’ve read about half of it. The barriers are really economic: if global warming were not an issue, the US would be better off not building any new nukes.

Even now, there are probably cheaper ways of meeting goals, but since we’re not using a price driven mechanism, additional nuclear plants would probably be advisable IMHO. I predict that we’ll get a couple of units in the regulated energy markets of the southeastern US, but that is all.

Resources for the Future is an environmental think tank with a reputation for rigorous technical analysis. Here’s one of their analyst’s first pass on the EPA’s proposed regs: http://www.rff.org/News/Features/Pages/Reactions-to-EPAs-Proposed-Power-Plant-Standards.aspx

Also relevant: simulation work by members of their team suggests: …recent downward adjustments in natural gas prices and electricity demand have a substantially larger impact on electricity prices and the generation mix than do the new environmental rules. Moreover, write the authors, “The one area where regulations matter more than secular trends is emissions…Regulation does affect emissions from regulated sources in important ways and apparently with little disruption to the sector, especially in comparison to the normal disruptions associated with a changing world.”Just a bit of perspective. These regs are disruptive, but reality is even more so, even assuming nobody bombs Iran. http://www.rff.org/News/Features/Pages/Secular-Trends-Environmental-Regulations-and-Electricity-Markets.aspx

Michael63129: I understand that your study underestimated the effects of coal, as it did not reflect methane leakage in coal mines. Here’s a study that took that into account: National Center for Atmospheric Research tried to combine all the known data—everything from methane leakage in coal mines to the cooling effects of coal-fired sulfur pollution—and concluded, in the words of the scientist Tom Wigley, that the switch to natural gas “would do little to help solve the climate problem.” Why Not Frack? | Bill McKibben | The New York Review of Books
So maybe it’s more like a wash. Or maybe sensible regulation can enable tighter seals at natural gas wells as it were. But given the anti-regulatory hysteria, despite record levels of oil drilling under Obama, I’m less than sanguine.

On preview: New South Korean nuclear plants have also had cost over-runs. Blaming the hippies won’t work, since nuclear cost overruns occur in countries without hippies. On preview II: With rather stringent nuke regs in Japan, we still had an economic catastrophe a year ago. Seems like we need to tighten nuke safety even further.

47

Is this a joke? If not it is incredibly ignorant of the reality of South Korea.

:confused:

I have no idea what is means. You seem to be suggesting that a coal fired power plant in the same location would not have been damaged by the record tsunami and earthquake.

48

Blake: I made the mistake of trying to jam a response to your post within the 5 min edit window. Let me reshape my argument, such as it is.

Cost over-runs are endemic to the nuclear industry, across all countries. You are correct in saying that the public demands greater safety from nuclear power plants in terms of expected life years. But there are caveats. a) These are real preferences, ones that would carry over if we somehow had a free market in all of this. b) Expected value might be the wrong way of thinking about small chances of catastrophic risks. c) Yes, there is a great deal of dread concerning nuclear radiation. But characterizing these reptile-brain responses as “A political problem”, oversimplifies to some extent.
The Fukushima meltdown cost lives and damaged health. But yes, I agree that those harms are dwarfed by those of the actual tsunami. So I’m focusing on the economic costs of creating a 450 square mile evacuation zone. I’m asserting that avoiding such a situation justifies greater efforts at nuclear safety. Either that, or you have to add in the costs of creating periodic economic kill-zones to your tally. Possibly, you might say that Japanese authorities are over-reacting, though I’m not certain you want to go there.

49

That may be true, but we don’t have a free market. That is the whole point of this thread. We are discussing a market that has massive distortions imposed by government regulation and subsidies. What the costs might be in a free market is rather irrelevant when we are discussing the effects of state-imposed sanctions upon a market. In short, since we don’t have a state regulated market, we may as well have a market that is manipulated to achieve some end. Having a state-regulated market that weild a big stick against both polluting energies and non polluting energy is just plain silly.

Hard to see how else to think about it.

Not really because they are readily solved with political intervention.

Once again, if this was a totally apolitical discussion you might have a point. But it isn’t. It is a discussion about the effect of political interference on the industry inorder to achieve a stated aim. As such any problem which prevents an effective means of achieving that aim because of a *lack *of correct political interference is entirely apolitical issue.

Why?

See, I just don’t get this. Coal power plants cause massive environmental problems every day in the form of tailings dam and washpools collapsing. The minesites themselves occupy thousands of square miles of land that is much less inhabitable and much less valuable than the Fukishima exclusion zone. If you believe the more strident climate change alarmists, non-nuclear power will literally render the Earth uninhabitable.

Yet for some reason a 450km exclusion zone demands greater effrost at safety.

That makes no sense at all. Shouldn’t safety efforts be predicated upon risk and cost, rather than whether something is scary?

Well of course you should do that.

The Fukushima event was, according to scientists, a once in 1, 000 year event. So if we spread that cost across all the world’s nuclear power stations, compounded over 1, 000 years that would be, what, about $1.50 a year?

Of course to be logical and fair we should also be doing the same thing to coal power, forcing coal power to cover the costs of global warming and all the environmental problems that it causes, including the thousands of deaths annually. But we don’t which iwas my point all along: If the regulations on nuclear plants were reduced to a level that made them produce only 1/100th the number and severity of health and environmental problems as coal or hydro, rather than the 1/1, 000, 000th that current regulation requires, then they would be directly economically competitive with coal.

I’m really not qualified to comment. My point is not that the reaction is unwarranted. My point is that if entire cost of nuclear power were a Fukushima style event every hundred years, it is still far, far less risky than coal power, which produced comparable effects on an *annual *basis.

I have no issue with all players paying the costs of their mistakes or being forced to reduce those risks to an acceptable standard. The problem is that ATM nuclear pays for their mistakes and reduces their risks and coal does not do anything comparable.

50

The Economist reference already been given; may I humbly request that this thread not become another nuke thread? Can we stay focused on the NG/coal dynamic please?

51

It is extraordinarily difficult to predict natural gas prices. Five years ago we thought the U.S. would have a shortage and would be a major importer of liquified natural gas. Now, we think we may be a major exporter. Look at the almost comical situation of Cheniere Energy, Inc. Their entire existence is a perfect case study of our rapidly changing ideas of natural gas production capabilities of the U.S.

All I can tell anyone from a natural gas price prediction standpoint is that prices are low with no forseeable end. Having said that, there are some so-called experts like Henry Groppe predicting prices will be above $9.00 later this year. He’s certainly an outlier, but he’s reasonably well respected. To get a sense of what the market thinks, current futures prices don’t even get to $7.00 by the end of 2024 (the last futures contract trading on the CME).

I think we’re going to stay below $5.00 for several years. I wonder how much coal to gas switching that has occurred over the past year is semi-permanent. Economically you would think that if the price of natural gas rises to something like $3.50 that it all moves back to coal creating a resistance level (in the short-term) for natural gas prices around that level. Maybe it doesn’t switch back though.

While the basic industry rule is that the cure for low natural gas prices is low natural gas prices (meaning low prices reduce production causing prices to rise), I wonder if that is really the case now. So much of the new natural gas production being brought online now is basically a by-product of liquids production. That’s certainly the case with the Eagle Ford. It all feels very unsustainable right now since you can’t really make money in dry gas production at these prices. I just don’t know what changes that.

I realize you’re asking a question about the longer term prospects, but I honestly can’t even begin to make a prediction. When you want to know about prices several decades out, so much is unknown. I mean we might have large scale production from methane hydrates in the next hundred years. How does that change the estimated technically recoverable reserves of natural gas? I can tell you for certain that the U.S. won’t be isolated from the global natural gas price several decades out. At that point, it doesn’t even really make sense to talk in terms of U.S. reserves and U.S. consumption anymore.

Sorry for the very wishy-washy answer.

52

Why do you think natural gas and oil are coming from different sources? They seem just as tied as ever, maybe moreso. There’s so much associated gas in the tight oil plays (or liquids rich plays) that oil/liquids production is almost single handedly keeping up gas production. It’s also more difficult to get a handle on gas versus oil rig count now.

I think the decoupling of oil and gas pricing can be heavily attributed to simply the fact that natural gas is a local market and oil is a global market. If there was a big LNG liquefaction industry in the U.S. you would see a sharp increase in the price.

53

There are a couple of plants that have regulatory approval to export LNG. Cheniere is the most noteworthy as they can export anywhere. Nothing is operational right now though.

54

I wouldn’t defer to me too much. What I know about pricing only comes from the analysts that I read. I’m also much more interested in the pricing out about five years.

My personal opinion is that there aren’t any good forecasts. Even things that in retrospect seem very easy to understand had no one predicting them beforehand. For example, why didn’t anyone see the WTI / Brent differential coming? It seems so incredibly obvious in retrospect.

55

Has not most of the recent increase in gas production been in unassociated shale deposits?

56

Most has been in the shales, but most of these also produce oil. The Haynesville is the most noteworthy of the dry gas shales, and activity is significantly down there. What’s keeping drilling going in the Marcellus and Barnett (mostly gas plays) is the liquids component. The sales of either the NGLs (which has pricing more closely tied to crude oil), lighter condensate, or even crude oil itself has significantly enhanced the economics of those plays. The most active shale areas right now are the Bakken, Eagle Ford, Utica, Granite Wash and Permian. These plays are much more oil or NGL plays but they have significant gas volumes associated with them. The newer unconventional plays that are just starting to get developed are also more liquids driven: Tuscaloosa Marine Shale, Lower Smackover Brown Dense, Monterey Shale, Niobrara Shale, Mississippi Lime, etc.

So while you may think of the Barnett Shale as a gas play, and it certainly is, the current activity is more on the higher liquids component areas of the field. And while you may think of the Eagle Ford as an oil play, it is really a play with a gas window, an oil window, and a condensate window; the dry gas window area is not that active right now while the oil window and condensate window also still produce a bunch of gas.

57

Ok that makes sense. I guess there’s not much point in going after just NG now, given its price and what you could be getting from a mixed formation.

58

That shit goes for like $1000 a kilo, right?

59

Here’s an article on exporting NG, but it’s WSJ and may be paywalled:

60

It’s not wishy-washy at all. It states very clearly that the adequacy of NG supplies to meet demand over a more moderate term is an unknown, that among respected experts you can find outliers that think prices will rise dramatically even in the short term. Given that unknown the potential for massive volatility in that decadal time frame seems significant. Based on that it would seem that it only makes sense to rely on NG as our prime source of power generation if we also have capacity to switch to other sources within a short period of time if/when prices do spike.

OTOH building new less-dirty coal plants, let alone new nuclear, is not something that can be done quickly; building enough of them to make a significant impact on a national scale would take much longer yet. Many new renewables can go up faster, but each one is much smaller; also making an impact on a national scale something that would take many years.

Unless it is built already we will not have the capacity to switch to other sources within a short period of time.

I’m not sure what the response to that should be. It seems like building lots of high up front cost alternatives to NG, like nukes and many renewables, while the short term predictions are that they will be unable to compete on price with NG, is a very expensive insurance policy. Coal, even less dirty coal, is cheaper up front, but even less dirty coal has huge implicit costs in terms of CO2.

I lean to a diversified approach myself - don’t use too much of the NG at one time so that it lasts longer (and also so the risk of excessive volatility is reduced) by also building renewables, next generation nuke, and even some less dirty new coal (I still lean toward co-firing with biomass) at the same time. And unfortunately the market seems ill equipped to make such happen on its own.