August 2008

Congress should OK nukes

With natural gas, electricity, crude oil, and gasoline prices soaring, the move towards drilling in heretofore-restricted areas and revitalizing the nuclear industry are gaining momentum.

Mark Perry, professor of finance and economics at the University of Michigan, opined if ever there was a question about the need for nuclear power, it is gone now, what with the rising cost of fossil fuels.

The high price of oil, natural gas, and coal should be a wake-up call to all regions of the country that the era of boundless use of cheap fossil fuels is over-and that nuclear power will need to play a larger role in supplying electricity to homes, business, and industry.

Although natural gas is now the fuel of choice in electricity generation, its price has quadrupled in recent years, and supplies are extremely tight.

Using one-quarter of the gas supply on electricity generation is a waste. Since 1990, virtually all of the new electric-power capacity in the country has used natural gas, and that has driven up the price of natural gas.

Increased global competition for LNG is feeding the surge in gas prices. Today, an LNG tanker pulling into port in Japan or Spain can get almost $20 per million BTUs, which is far higher than the U.S. price.

Most Americans probably do not realize the effect all of this is having on some key industries. In the chemical industry, a big natural gas user, more than 118,000 American jobs have been lost since 2000.

For U.S. manufacturing overall, about 3 million jobs have been lost in that time due in large part to energy costs.

Today, there are about 120 major chemical plants-each costing more than $1 billion-going up around the world, but not one in the U.S.

John McCain wants 45 new reactors by 2030, followed by another wave of plants. Barack Obama said nuclear energy is worth investigating for further development.

Nicholas Sheble (nsheble@isa.org) writes and edits Government News.