Over the past years, PACE has written about the need for a revitalization of the U.S. commercial nuclear sector. With new environmental rules that limit the emission of carbon dioxide and a continuing need for reliable power, nuclear has an important role to play in America’s energy future. Earlier this month, we wrote about the “two steps forward, one step back” atmosphere that seems to define the state of the nuclear industry in the U.S., noting that progress is being made despite continued shutdowns of nuclear units.
While much of the discussion about nuclear’s future hinges on government policy, there has been much less focus on the private side of the nuclear equation. A recent report from James Stafford of OilPrice.com, however, offers glimmers of hope that interest from the private sector might be the shot in the arm that nuclear needs to restart in the U.S.
In contrast to the U.S. experience, the world at large shows no signs of stopping when it comes to the use of nuclear power for electricity. China is in the process of building twenty new reactors. Japan is hitting the reset button on many of its units after the disaster at Fukushima. South Korea is building four reactors. Even Sweden, best known for its renewable investments, remains dedicated to the health of its nuclear fleet.
“Reality is finally trumping negative sentiment,” says Paul D. Gray, CEO of uranium and lithium miner Zadar Ventures Ltd. “And the reality is that we can’t wean ourselves off fossil fuels without nuclear power.”
Governments have responded to this reality. The UK has committed £250 million to research and development in the nuclear sector. Stateside, the U.S. government has pledged $82 million to study and construct the next generation of nuclear reactors.
Private investors are stepping up to the plate, as well. Stafford notes that “private investors such as Bill Gates, D. E. Shaw, and Chinese billionaire Li Kashing have been pouring money in such research – and uranium mining – for years now.” For example, Gates’s TerraPower has developed an innovative traveling wave reactor that utilizes nuclear waste. Similarly, MIT researchers are designing a reactor that uses waste, combined with molten salt, to generate electricity.
“When you have fission, you have a million times more energy than when you burn hydrocarbons,” Gates noted in 2012. “That’s a nice advantage to have.”
The idea of private investment working together with government resources offers strong potential for nuclear power in the U.S., but the focus of our nation’s leaders remains in question. A recent piece by The Daily Caller notes that the terms “nuclear power” and “nuclear energy” appear nowhere in the 2016 Democratic draft platform. For an energy source that contributes about a fifth of America’s electricity, emitting zero carbon, that would seem to be a significant oversight. Nuclear obviously has much to offer when it comes to building an energy future that works for customers.
How do changing regulations affect the climate for businesses, especially those owned by black entrepreneurs? That was a major topic of conversation at the annual conference of the National Black Chamber of Commerce, held last week in New Orleans. The conference convened at the Port of New Orleans, a significant symbol of the interconnection between commerce and energy.
On Thursday, PACE Executive Director Lance Brown joined a panel that discussed regulatory conditions affecting the U.S. economy and business owners. Other panelists included Representative Garret Graves, who represents Louisiana’s 6th District, and Antonio Williams, Senior Director of Government and External Affairs at Comcast. The session was entitled “Understanding the Consequences of Regulatory Overreach of Energy and Telecom.” It was moderated by Bill Kovacs, Senior Vice President of Environment, Technology and Regulatory Affairs at the U.S. Chamber of Commerce.
During his presentation, Brown discussed the climate being created by the United States Environmental Protection Agency (EPA) and the way that climate has affected sectors of the economy, particularly the utility industry that serves businesses and industries.
“American consumers sometimes don’t realize that it’s not just the regulations implemented by EPA that affect electricity rates and the reliability of power. For the most part, the power industry is used to meeting environmental standards and incorporating new technology,” Brown explained to conference attendees. “It is the uncertainty that creates the biggest effect. You are now seeing utilities make significant decisions about future generation not based on actual regulations, but on the specter of new regulations. In that way, EPA is essentially controlling what the future of energy looks like.”
PACE wrote recently about the way that EPA rules are beginning to replace local planning when it comes to energy decisions. We passed along the comments of Travis Kavulla, President of the National Association of Regulatory Utility Commissioners (NARUC), who has criticized EPA for its top-down approach to rule-making. Other state regulators and lawmakers have expressed similar concerns.
The National Black Chamber of Commerce has partnered with PACE before on energy issues that affect business owners. Brown spoke last year at the Chamber’s annual conference, held in Fort Lauderdale, Florida.
“The National Black Chamber of Commerce is not just an important voice for expressing the views of black-owned businesses, but it is also a platform to articulate a sensible vision of regulation for all businesses,” says Brown. “We are proud to support their efforts to encourage the growth and vitality of the American economy.”
It appears there’s a new leader in global oil reserves. And it’s us. According to a report from the Financial Times, the United States now leads the world in recoverable oil reserves. A recent estimate form Rystad Energy estimates recoverable oil in the U.S. to be 264 billion barrels, compared to Russia’s 256 billion barrels and Saudi Arabia’s 212 billion barrels.
That is, of course, good news for American consumers. It is also welcome news for the geopolitical scene, which has been influenced to a great degree by middle eastern nations that wield global power through their vast oil holdings. Perhaps even better news is that, given recent discoveries in the Permian Basin in Texas and New Mexico, America’s oil glut is likely to increase even more.
“There is little potential for future surprised in many other countries, but in the US there is,” said Per Magnus Nysveen, analyst at Rystad Energy. “Three years ago the US was behind Russia, Canada, and Saudi Arabia.”
Not all experts agree, though, on either the amount of recoverable oil in the U.S. or about what expanded reserves in the U.S. would mean globally. Other notable estimates still place the U.S. behind other nations in oil reserves. Some experts also believe that U.S. reserves are not likely to disrupt the oil market completely, mostly because of the relatively high expense of producing American oil. Richard Mallinson, of Energy Aspects in London, for example, explains that the cost of production is a huge factor in determining the significance of oil holdings.
“Reserve numbers matter but lots of other factors also determine short and long term returns from what the oil companies and nations hold,” Mallinson told Financial Times. “The rise in prominence of the US doesn’t diminish the role of Saudi Arabia or Russia, which have some of the cheapest to produce oil in the world.”
While opinions vary about how America’s oil reserves will eventually affect the global marketplace, one piece of news that is not disputed is that gas prices in the U.S. have benefitted from a drop in oil prices. In fact, the Energy Information Administration (EIA) recently reported that the retail price of regular season will average $2.04 per gallon during the summer of 2016. That is down from $2.63 per gallon last summer and also represents the lowest summer average since 2004. That means more disposable income in the hands of American consumers and lower overhead costs for many businesses.
See EIA’s Fuel Outlook Here
“Access to more domestic oil is good for America’s national security and ultimately good for consumers here at home,” says PACE Executive Director Lance Brown. “However, we have to remain committed to keeping production costs for American oil competitive. The U.S. can use its oil supplies to make our nation stronger and more independent, but that won’t be possible if we choose a path of excessive regulation and higher costs of production.”