Sep
15
2014

Japanese Nuclear in Focus

In March of 2011, Japan experienced the worst nuclear incident in modern history when an earthquake led to the meltdown of three of the six reactors at the Fukushima Nuclear Plant. The incident led to serious questions about the future of nuclear power in Japan, with former Prime Minister Naoto Kan even announcing his commitment to end nuclear power in Japan altogether by 2040. While the Japanese voting public remains highly skeptical about the use of nuclear power, realities on the ground could be leading to a resurgence of nuclear power for the nation.

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Prior to the Fukushima incident, Japan’s forty-eight nuclear reactors produced 29% of the nation’s electricity, with liquified natural gas (LNG) also contributing 29% and coal-fired generating adding another 25%. According to data from the National Bureau of Asian Research, however, the use of nuclear power plummeted post-Fukushima, contributing just 11% of Japan’s power in 2011 and just 2% in 2012. Today, not one of Japan’s forty-eight nuclear reactors is generating electrons.

Depleting the world’s 3rd largest economy of nuclear power turned out to be a painful choice on a number of levels. According to a report from the Daily Mail, extra energy imports have led to a Japanese trade deficit of nearly $200 million. Electricity bills are up 50%. Carbon emissions from the nation’s electric power industry have doubled. Consumers, manufacturers, and power producers alike have felt the pinch of removing one of the nation’s staple baseload power resources.

Why such drastic results though? Part of the reason is that Japan replaced its nuclear capacity by using vastly more LNG; in fact, the use of LNG for power in Japan skyrocketed from 29% in 2010 to 48% in 2012. And so did the price. Japanese LNG costs nearly doubled after Fukushima. The price per million BTU of natural gas in Japan today is nearly five times the standard price in the U.S. Japan’s heavy use of LNG to replace nuclear power drove up demand, in turn driving up the price of a limited resource.

In addition to LNG, Japan is also leaning heavily on coal. A recent PBS special report details that Japan is running its fossil fuel fleet at full-tilt, importing $266 billion worth of oil, gas and coal in 2013. In fact, a report by Bloomberg shows that Japan’s ten power companies consumed 5.66 million metric tons of coal in January, a record for the month and 12 percent more than just a year ago. The nation is investing long-term in IGCC technology to make its coal-fired plants even more efficient.

In light of continued trade deficits and high power prices, Japanese leaders have reconsidered the wisdom of the nation’s total nuclear shutdown. Recently, Prime Minister Shinzo Abe revealed a new Basic Energy Plan that could bring the country’s 48 reactors back online after a series of rigorous safety tests. Japan is even considering adding new nuclear capacity. Perhaps in time, the nation might revert to a more balanced mix of fossil fuels, nuclear power, and renewables.

There is much to be learned from Japan’s experience in the three years since Fukushima. Faced with an urgent need to meet consumer demand for power, Japan resorted to the quick solution of natural gas. The results were predictable: rising natural gas prices and higher power bills. U.S. power suppliers, forced to replace significant coal-fired capacity due to new federal regulations, are already rushing to fill the void with natural gas. The domestic supply of natural gas in the U.S., of course, will make this bargain less costly, and perhaps smoother, than the Japanese experience, but no one knows the long-term effect of upsetting the balance of fuel sources (nuclear, coal, natural gas) that has served our nation’s consumers well for decades. Japan has witnessed the harmful effects of this imbalance up close, and is wisely reversing course toward a more sustainable future.

Sep
10
2014

Governors Weigh In On EPA Carbon Rule

Since EPA released its proposed rule on restricting carbon emissions, a steady drumbeat of opposition has emerged, raising concerns about the rule’s impact and questioning its legal basis. Earlier this week, PACE reported on a letter from state attorneys general to EPA that expressed a number of legal concerns. Now we can add the Republican Governors Association to the growing list of concerned parties. On Tuesday, fifteen Republican governors signed a letter to President Obama laying out their case against the rule.

Read the Letter from Governors Here

Signing the letter were Governors Robert Bentley (AL); Sean Parnell (AK); Jan Brewer (AZ); Butch Otter (ID); Mike Pence (IN); Phil Bryant (MS); Susana Martinez (NM); Pat McCrory (NC); Jack Dalrymple (ND); Mary Fallin (OK); Tom Corbett (PA); Nikki Haley (SC); Gary Herbert (UT); Scott Walker (WI); and Matthew Mead (WY).

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“We knew these rules were bad when the EPA first released them, and they keep getting worse the more we learn,” explained Indiana Governor Mike Pence. “The proposal is ill-conceived, poorly constructed, and will cause significant harm in the states. We should be focused on an energy policy that pursues affordable and reliable energy, rather than a climate agenda that will drive up electricity prices without any discernible impact on global carbon dioxide emissions. I am grateful that these fellow governors have joined me in identifying to the President many of the unconsidered consequences and implications of this proposal, and I hope that the President will reverse course and withdraw the proposed rules without delay.”

In the letter, the governors argue that EPA does not have the authority to regulate power plants under Section 111(d) of the Clean Air Act, since plants are already regulated under another section of the Act. The letter also lists five specific concerns that the proposed rule fails to address. First, the governors believe that EPA has not answered questions regarding EPA’s intention of enforcing state climate proposals that fall outside EPA’s authority, such as renewable standard and energy efficiency programs.

Second, the governors are concerned about EPA’s broad assumptions of the ability of states to increase renewable energy to replace base load power. EPA has failed to consider actual availability of renewables to states and the impact of increased renewables on grid reliability and base load capacity.

Third, the letter points out that EPA’s rule would require a significant increase in natural gas generation in order to increase base load capacity due to coal plant shutdowns. Currently, the U.S. does not have the needed infrastructure to accommodate such a shift, and EPA has not considered the tremendous financial costs that would be necessary.

Fourth, EPA has not addressed how states will be able to increase nuclear capacity that would be necessary to meet EPA’s emission targets, and this administration continues to ignore the need for a centralized waste disposal site.

Finally, the letter argues that EPA has not considered how the importing and exporting of energy between states will affect emissions targets for states. States that have made large energy investments would be unfairly penalized, and many states rely on generation from other states especially those with a high percentage of coal-fired generation.

“The economic health of our nation depends on accomplishing a balanced energy and environment policy. The United States should be pursuing a strategy that achieves its objectives without severely harming our economies and pitting states against one another,” the letter concludes. “To help facilitate a successful energy policy, we bring these important state concerns to your attention and request thoughtful answers to our questions.”

Sep
08
2014

Attorneys General Raise Objections to Carbon Rule

In the wake of EPA’s landmark restriction on carbon dioxide, a number of groups have raised important objections both about the agency’s methodology and the efficacy of the rule. Added to that list in recent days are a number of state attorneys general.

In a joint letter to EPA Administrator Gina McCarthy, thirteen attorneys general from across the nation have voiced their concerns about the withholding of important data by the agency. The authors allege that EPA’s failure to disclose critical information violates the Clean Air Act and should precipitate the withdrawal of carbon rules that govern both existing and new power plants. Signing the letter were Attorneys General Luther Strange (Alabama), Gregory Zoeller (Indiana), Derek Schmidt (Kansas), Buddy Caldwell (Louisiana), Tim Fox (Montana), Jon Bruning (Nebraska), Wayne Stenehjem (North Dakota), Mike DeWine (Ohio), Scott Pruitt (Oklahoma), Alan Wilson (South Carolina), Marty Jackley (South Dakota), Patrick Morrisey (West Virginia), and Peter Michael (Wyoming).

Read the Full Letter Here

“In the Existing Source Rule, EPA omitted from the docket 84% of the modeling runs on which it relied in crafting the proposed Rule, without which the States and the public cannot comment meaningfully on the proposal,” the letter argues. “Specifically, the docket does not include 21 out of 25 of the Integrated Planning Model modeling runs that the agency used to justify the standards imposed by the Rule.”

The attorneys general argue that without the data withheld by EPA, the states and the public have insufficient information to determine whether compliance with the new rules is possible. The data in question involves projections ranging from the year 2016 to 2030.

“In light of these clear violations of Section 307 [of the Clean Air Act], EPA should withdraw the Existing Source Rule and the Modified Source Rule immediately,” the letter states. “With regard to the proposed Existing Source rule, the Rule is wholly unlawful on other grounds and therefore may not be re-proposed at all, even if EPA were to compile the data and documents required by Section 307.”