One of the biggest contributors to the ongoing decline of the U.S. nuclear industry is booming natural gas development, according to a new study.
In a study published in March, the Institute for Energy and Environment identified cost overruns, slowing demand and plunging natgas prices-which this week fell to a five month low-as key forces behind nuclear’s decline.
Cheap and abundant natural gas is eating away at nuclear energy’s traditional role in generating electricity in a way that has made the sector’s prospects increasingly precarious, according to the institute and others. Even as the U.S. renews its push for climate change policies that could give nuclear a new lease on life, some observers are doubtful much can be done to arrest the sector’s spiral.
“The shale industry in the U.S. and what’s happening in terms of production and development…has taken the world by surprise,” said Margaret Hill, co-chair of the environmental practice at law firm Blank Rome. “I don’t think anybody foresaw what was going to happen.”
(Read more: Prince warns US shale could hurt Saudi economy )
Hill said the long-term prospects of the nuclear industry are uncertain at best, especially in a sector operating in the shadow of Japan’s 2011 nuclear disaster. “The economics and the environment are driving development and the use of shale oll and gas to provide power,” she said.
Furthermore, “the economics of nuclear plants are very difficult to maintain, and very costly to do so,” she said. Hill pointed to issues that have for years dogged Yucca Mountain’s nuclear facility in Las Vegas, Nevada, the site of vociferous environmental opposition.
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Meanwhile, there are still about 100 active nuclear plants in the U.S. that employ more than 100,000 workers, according to NEI data. Those plants generate “substantial domestic economic value in electricity sales and revenue-$40 billion to $50 billion each year,” NEI said.
Yet the landscape remains dotted with failing projects, with four reactors having been retired this year alone.
Just a few years ago, there were prospects for a nuclear revival, said Blank Rome’s Hill. However, the resurgence of oil and gas production is changing all that.
Read more at US natgas boom sucks nuclear power into downdraft
