Yes to Efficiency, Resilience, and Renewables, No to a “War on Coal”: DOE Secretary Moniz Speaks at Columbia

Yesterday afternoon Secretary of Energy (and my former professor) Ernie Moniz addressed a packed house at Columbia University’s new Center on Global Energy Policy.  Moniz’s remarks demonstrated to me that (1) given the inaction of Congress, the Administration’s “Climate Action Plan” is about as comprehensive a “Plan B” as one can expect to reduce carbon pollution and prepare for the impacts of climate change; and (2) his combination of technical and political savvy are already making Moniz an extremely effective DOE head.  Notes on the key points of Moniz’s talk are below.

REUTERS/Kevin Lamarque

REUTERS/Kevin Lamarque

Resilient infrastructure (“not just about building sea walls”): Noting the coming one-year anniversary of Hurricane Sandy, Moniz emphasized the vulnerability of our energy infrastructure to super-storms, water scarcity, and other climate-driven trends.  Examples of this vulnerability include:

  • Hurricanes destroying (or forcing temporary closure of) oil and gas production and refining facilities around the Gulf of Mexico – a trend that has caused $8 billion in economic losses over the past few years.
  • Droughts diminishing the supply of cooling water for thermoelectric power plants and flowing water for hydroelectric plants (hence causing plant shutdowns).
  • Power lines and other electrical grid equipment being damaged by storms (as in Sandy) or wildfires (as is currently happening around San Francisco)

To counter these growing threats to US infrastructure, Moniz described the Administration’s Climate Action Plan as including a “step change” improvement in adapting the built environment to better withstand the physical impacts of a warmer climate.  To wit, prior to his talk Moniz had been in New Jersey signing a Memorandum of Understanding with Gov. Christie to build a micro-grid for New Jersey’s transit system that – in the event of a larger system will failure – will keep the trains and buses running.  Impressively, Moniz described the proposed NJ Transit micro-grid as including 50 Megawatts (MW) of distributed generation technologies such as batteries and solar panels (50 MW being capable of powering roughly 16,000 homes).  Moniz touted the New Jersey project as a harbinger of increased federal collaboration with states and localities to build smarter and more resilient infrastructure (or, as the Secretary put it, moving climate adaptation beyond “building sea walls”). 

Energy Efficiency (3 billion tons of “low-hanging fruit”) : Flush with Recovery Act dollars, Secretary Chu (Moniz’s predecessor at DOE) often began his speeches by detailing recent investments by ARPA-E, the Loan Guarantee Program Office, and other new DOE initiatives to fund clean energy innovation.   Moniz praised those programs but – in a nod to leaner fiscal times – chose instead to emphasize DOE’s role in setting standards for the energy efficiency of buildings and appliances.  For example, the Department will soon propose new, national standards for the energy efficiency of walk-in coolers and freezers, metal halide lamps, commercial refrigeration equipment, and electric motors.  The American Council for an Energy-Efficient Economy projects that, by 2035, stricter standards for these appliances could reduce energy bills by $3.8 billion annually and CO2 emissions by 26 million metric tons annually.

Moniz emphasized that although reducing CO2 emissions by “a few million tons annually” can seem insignificant – 2012 US CO2 emissions from energy demand were 5,3 billion tons- the collective impact of energy efficiency standards across the entire economy yields very significant reductions in both CO2 emissions and consumer energy bills.   Hence the Administration’s pursuit of a suite of new standards that (when combined with standards enacted during President Obama’s first term) will by 2030 reduce CO2 pollution by 3 billion tons annually (i.e. an amount equal to 56% of total 2012 energy-related CO2 emissions).  If energy efficiency is the “low-hanging fruit” of climate change policy, 3 billion tons of avoided CO2 would indeed be quite a bounty.  (For more on energy efficiency, see my Addendum below.)

Obama energy policy NOT a “war on coal”: Critics in Congress and industry attack President Obama’s Climate Action Plan as a “war on coal.”  As evidence critics point to EPA proposals to regulate greenhouse gas (GHG) pollution from new and existing power plants – the latter of which, they claim, will precipitate closure of 285 coal-fired plants in 32 states.  Moniz deftly rejected the “war on coal” charge, noting that DOE”s Loan Guarantee Program has recently set aside $8 billion to support innovative fossil energy projects such as carbon capture and storage (CCS) systems.  The risks of climate change demand action to move America toward a less carbon-intensive energy mix (hence the EPA regulations); at the same time, the Administration is supporting development of technologies that will enable all of America’s energy sources – including coal – to compete in a carbon-constrained marketplace.  Though unlikely to mollify Obama’s most strident critics, Moniz’ explanation of the Administration’s energy policy is to me quite persuasive.

A sensible, science-based approach to fracking: Questions from the audience focused predominantly on hydraulic fracturing (“fracking”) and the related issue of fugitive methane emissions from unconventional natural gas production.  Amid sporadic heckling from one audience member, Moniz articulated three points:

  • Worse than coal?  Probably not: Contrary to the findings of some researchers that gas from shale wells is over its life-cycle worse for the climate than coal, Moniz referenced newer findings that shale gas has not substantially changed the overall GHG intensity of natural gas production (i.e. that shale gas is still less GHG-intensive, hence better for the climate, than coal).  While this topic is complex and justifies a longer post, Moniz’s emphasis on actual data – as opposed to blind assertions – is comforting.
  • “Manageable” does not mean “being managed”: Some in industry dismiss environmental concerns about fracking by insisting that any issues are manageable through sound engineering.  Moniz rightly noted, however, that a solution (i.e. sound well-casing) being available is different from a solution being implemented.  He then stressed the importance of ensuring consistent application of best practices (though declined to offer or endorse any specific ideas on how to do this).
  • Focus on the system (not just the well): Finally, beyond preventing leaky wells, Moniz noted the importance of also reducing leakage of methane from pipelines, compressor stations, and other aspects of the natural gas system.  This ought to be a focus of the Administration’s new “comprehensive, interagency methane strategy.”

Particularly given the potential for unconventional gas production to spread to other countries (the Secretary specifically mentioned China, Argentina, and Eastern Europe), one hopes Moniz will use his perch at DOE to help ensure that the environmental issues around fracking are in fact “being managed.”

Wait-and-see on nuclear: Echoing some of my points in last week’s post, Moniz articulated a “wait-and-see” approach toward investment in new US nuclear reactors.  The most pressing issue is for the four new reactors being constructed in Georgia and South Carolina to reach completion on-time and on-budget (which, at this early stage, still looks feasible).  A second issue is to implement a new long-term solution for storing nuclear waste (a topic on which Moniz has helped to formulate recommendations).  Progress on both those fronts (and, I’ll add, higher natural gas prices) seem prerequisite for any significant, sustained investment in new nuclear power plants.

Overall a very encouraging afternoon.  With any luck Moniz will return to NYC a few years from now to share DOE’s many accomplishments under his leadership.

Addendum for the wonks among you (energy efficiency and the Social Cost of Carbon): Moniz reported increased DOE engagement with OMB’s Office of Information and Regulatory Analysis (OIRA) to expedite approval of new energy efficiency standards.  Encouragingly, he noted that – in calculating the costs and benefits of proposed regulations – OIRA has begun to use a revised Social Cost of Carbon estimate of $36/ton.  The new higher figure reflects, in part, more explicit representation of economic damages due to sea level rise.  May better accounting for the costs of carbon pollution enable pollution-reduction policies such as energy efficiency standards to pass regulatory scrutiny more quickly!

Tough Economics and Loose Nukes, not Environmentalists, Are Biggest Obstacles to Growth of Nuclear Power: Comment on Eduardo Porter NYT Column

In yesterday’s Times, Eduardo Porter makes the case for nuclear power as a means to combat climate change.  Though Porter is right to emphasize the potential role for nuclear power in reducing greenhouse gas emissions, he both misdiagnoses the causes of nuclear power’s current woes and overlooks legitimate risks associated with its scale-up.


Getting the story straight: Prospects for new nuclear power plants vary considerably across the globe.  The future for nuclear is bleakest in Germany and other European nations that have made political commitments to ban construction of new reactors and phase out existing programs (post-Fukushima, Japan may ultimately join this category as well).  The future for nuclear is brightest in China and other Asian economies in search of new (non-polluting, energy secure) sources of base-load power; through 2035, the IEA projects that developing Asian economies will add 147 GW of new nuclear capacity (an amount equal to nearly 40% of current installed nuclear capacity).  Somewhere in between Continental Europe and Asia is the United States, where the politics permit new nuclear development – Southern Company recently began construction on the first new US nuclear plant in three decades – but the challenging economics of nuclear have so far deterred investment in new reactors.

Bane of US nuclear industry is economics, not environmentalists:  Porter suggests that the US nuclear industry essentially never recovered from the public backlash following Three Mile Island and Chernobyl; one could label this the “Ralph Nader and Carly Simon killed the atom” thesis.  Regrettably, this does not correspond to reality.  Through 2009 the combination of high natural gas prices and concern about climate regulation led to talk of a “nuclear renaissance,” with utilities across the country planning dozens of new projects; what has done in (or delayed) nearly all of these projects is not a groundswell of environmentalist opposition, but a nosedive in natural gas prices – from $13/MMBtu in 2008 to $3.55/MMBtu today.

Current gas prices in the US make the cost of electricity from a new nuclear plant more than 60% more expensive than electricity from a new natural gas combined-cycle plant.  By depressing wholesale power prices, cheap natural gas is making it uneconomic to even maintain existing nuclear plants, let alone invest in new ones.  To wit,  the Department of Energy has yet to find any takers for the remaining $10 billion in loan guarantees it has set aside for nuclear projects.  Getting this money out the door – and two to three new reactors in the ground – would strengthen confidence that new US reactors can (with some level of government assistance, in at least some markets) be a sensible investment.

Can nuclear power be decoupled from nuclear weapons?:  Porter rightly emphasizes that the “merciless arithmetic” of climate change will be averted only through rapid global deployment of low-carbon energy sources.  Yet he overlooks how building new nuclear plants on the scale and time-frame necessary to affect climate change may increase proliferation of nuclear weapons.  The current technologies of civilian nuclear energy (enrichment of uranium and, in some cases, reprocessing of spent plutonium) and framework of governance over the nuclear fuel cycle (each country sets its own rules) do far too little to separate the virtues of nuclear power from the dangers of nuclear weapons.

In a 2009 paper titled “Balancing Risks: Nuclear Energy & Climate Change,” Princeton professors Robert Socolow and Alexander Glaser examine the tradeoffs surrounding a large-scale expansion of nuclear power.  To craft a scenario where new nuclear plants contribute significantly to reducing CO2 emissions (i.e. where nuclear becomes a “stabilization wedge“), the authors contemplate increasing global nuclear generating capacity four-fold over the next four decades – from 394 GWe in 2010 to 1,500 GWe in 2050.  A nuclear build of this magnitude will necessarily involve developing nuclear plants “in regions that are politically unstable today” – thereby, in the judgment of these two experts, creating “significant” additional risks of nuclear terrorism or even regional nuclear war.   Such perils underpin the authors’ conviction that – despite its potential to mitigate climate change – “the world is not now safe for a rapid global expansion of nuclear energy.”

As to what would make the world safer for a rapid global nuclear build-up, Socolow and Glaser recommend:

  • Greater progress toward nuclear disarmament: As of today there are still more than 20,000 nuclear weapons in the world.  Nuclear powers have been reluctant to trim their arsenals, and many countries without such weapons see getting them as the key to status and long-term security.  This logic reinforces the unfortunate relationship between civilian nuclear power and nuclear armaments.  Continuing the efforts of the Obama administration and others to rid the world of nuclear weapons will help build momentum for changes (discussed below) necessary to reduce the link between nuclear power plants and nuclear weapons.
  • An end to fuel reprocessing to separate plutonium: In order to ensure a reliable supply of nuclear fuel, six countries (chiefly France, India, Japan, and Russia) reprocess their commercial spent fuel in order to separate fissionable plutonium.   Separated plutonium, however, a critical ingredient for the production of nuclear weapons – hence vulnerable to being diverted to military uses  or acquired by terrorists.   Given that global uranium reserves are sufficient to enable a major expansion of nuclear power without the need for plutonium, Socolow and Glaser recommend phasing out reprocessing and moving all countries toward the “once-through” fuel cycle.
  • Uranium enrichment plants under multinational ownership and control:  Nuclear reactors need enriched uranium – that is, uranium with a sufficiently high content of the U-235 isotope.  While nuclear fuel from a commercial enrichment facility cannot form the basis of a weapon, the same facility can in principle manufacture weapons-grade “highly-enriched uranium.”  To reduce the risk of rogue enrichment facilities (such as Iran’s Natanz plant), Socolow and Glaser urge bringing all enrichment facilities under multinational ownership and control.  How to motivate countries to cede national ownership of the nuclear fuel cycle is a thorny issue.  That said, any strategy for scaling up nuclear power must include a plan to safeguard uranium enrichment plants.

Socolow and Glaser’s reminder that “nuclear war is a terrible trade for slowing the pace of climate change” is a necessary addendum to Porter’s conclusion that “if nuclear power is to play a leading role combating climate change, it should start now.”  Making nuclear power a part of the solution to climate change should start now – but, in addition to breaking ground on new plants (such as those needed to at least maintain the current 19% nuclear share of the US power supply), these efforts must include new technology choices and structures of governance that disconnect the growth of nuclear power from the spread of nuclear weapons.

Addendum for true energy nerds (more on the economics of nuclear):

What of Porter’s reference to the 2010 International Energy Agency (IEA) finding that, with a $30/ton price on CO2, “a new generation of nuclear power… is potentially the cheapest energy source of all”?  Though the IEA’s projections for Europe and Asia may be sound, note that the assumed natural gas price for North America ($7.78/MMBtu) appears high relative to both current and projected future prices; for example, the latest Energy Information Administration reference case for the US electricity sector does not see a natural gas price above $7/MMBtu until 2036.  Because fuel costs account for 75% or more of the levelized cost of electricity from gas turbines, the IEA’s gas price assumption for North America disadvantages the projected costs of gas-fired plants relative to nuclear plants.

Assuming instead a North American gas price around $4-5/MMBtu, then even with a $30/ton price on CO2, gas-fired plants with carbon capture and storage (CCS) are likely to be competitive with new nuclear plants.  My point here is not to dismiss new nuclear plants as a potentially cost-effective source of low-carbon energy (delays at projects such as Finland’s Olkiluoto 3 nuclear plant notwithstanding); rather, it is merely to qualify Porter’s enthusiasm about the projected costs of nuclear relative to other technologies (notably, gas-fired plants with CCS).  Rather than tout the competitiveness of nuclear in a world with a $30/ton CO2 price, the focus should be on legislative and regulatory efforts to actually make that $30/ton CO2 price a reality.