In America’s shale country, nukes and gas are duking it out
SUBSIDISING nuclear power to fi ght climate change is one thing in liberal states like New York and New Jersey. It’s quite another in the natural gas bastions of Pennsylvania and Ohio.
Drillers and gas- fi red power plant operators are girding to fi ght measures to save moneylosing reactors in the Keystone and Buckeye states, saying they’ve learned from past defeats and are better positioned to win.
The looming debates are a key test of how far lawmakers in shale gas country are willing to go to fi ght climate change. Four left-leaning states have already approved bailouts for reactors, in step with aggressive targets to replace coal and gas with clean energy. This time fossilfuel proponents are fi ghting on their home turf.
“Natural gas is very, very strong” in Pennsylvania, said state Sen Ryan Aument, who supports subsidising reactors. “Those interests are well represented.”
In Pennsylvania, a Republican lawmaker introduced a bill Monday to support the state’s five plants, owned by Exelon Corp., FirstEnergy Solutions and Riverstone Holdings LLC’s Talen Energy Corp. Ohio legislators are preparing their own measure.
Time is critical for nuclear plants. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices. At least six have closed since 2013, including in New Jersey and Vermont.
FirstEnergy Solutions said it will close its Davis-Besse and Perry nuclear plants in Ohio without subsidies. Exelon needs to order a new reactor core by May for its Three Mile Island plant – site of the infamous 1979 meltdown – making it crucial for lawmakers to pass legislation this spring, Chief Executive Officer Chris Crane said on call with analysts last month.
“If we can get this through in that period of time, we will be able to save the unit,” Crane said.
New York became the fi rst state to throw reactors a lifeline in 2016, followed by Illinois, New Jersey and Connecticut. In each case, fossil fuel generators fought back, saying the bailouts were an intrusion into free markets and would drive up electricity prices. But all four states have aggressive cleanenergy targets, and without reactors they’d need to rely more heavily on power plants fuelled by coal and gas.
“That’s what resonated a lot with lawmakers in New York, Illinois and New Jersey,” said Timothy Fox, vice president at ClearView Energy Partners LLC. “That argument may not be as strong in states like Pennsylvania and Ohio.’’
Time is critical for nuclear plants. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices. At least six have closed since 2013, including in New Jersey and Vermont.
The two states straddle the Marcellus and Utica shale formations, one of the most prolific sources of gas in the US Oil and gas production supports more than 30,000 jobs in Pennsylvania and Ohio, according to US Labour Department. It also accounted for an average of two per cent of the two states’ gross domestic products in 2016 – compared to virtually none in New York, Illinois, New Jersey and Connecticut, according to Fox.
“We have a better opportunity for our argument to be successful here,’’ Chris Zeigler, executive director of the American Petroleum Institute’s Ohio office, said in an interview.
Past efforts to prop up reactors in the Rust Belt have struggled to advance. In Ohio, a bailout bill died in committee during the last session. Pennsylvania lawmakers fi rst formed a caucus nearly two years ago to focus on the issue. A coalition of gas- fi red power plant owners, manufactures and others have organised in Pennsylvania under the name Citizens Against Nuclear Bailouts to oppose the bill introduced this week by State Rep. Tom Mehaffie, a Republican whose district abuts Three Mile Island. A spokesman for the group, Steve Kratz, said any law favouring nuclear power over electricity from gas plants or other sources would undermine economic growth. — WP-Bloomberg