Exelon Wants Help To Save Byron, Dresden and Braidwood nuclear power plants by Norris McDonald

Byron nuclear power plant

Byron nuclear power plant

Exelon could close three nuclear plants in northern Illinois, which together power the equivalent of 5.5 million homes in the region. Exelon issued the warning about the potential for “early retirement” of its Byron, Dresden and Braidwood nuclear stations in a Feb. 8 Securities & Exchange Commission filing. 

Braidwood, located in Will County, and Byron, near Rockford, have operating licenses from the Nuclear Regulatory Commission that don’t expire until the late 2040s. One of Dresden’s two reactors in Grundy County is licensed until 2029 and the other until 2031.

Dresden, Byron, and Braidwood nuclear plants in Illinois are showing increased signs of economic distress, which could lead to an early retirement, in a market that does not currently compensate them for their unique contribution to grid resiliency and their ability to produce large amounts of energy without carbon and air pollution.

Dresden nuclear power plant

Dresden nuclear power plant

The earliest the company could move to shutter Dresden is 2021. It’s committed to operating Dresden until June 2021 with regional grid managers. But Dresden bid was too high to qualify for “capacity” payments from consumers in northern Illinois in the most recent auction held by PJM Interconnection, which is responsible for managing wholesale power markets in all or part of 13 states and the District of Columbia from Illinois east to the mid-Atlantic.

The earliest Exelon could move to close Byron and Braidwood is mid-2022. Those plants have committed with PJM to operate until then.

That gives the state some time to determine what to do about potential closures. Springfield could act on wide-ranging energy legislation as early as this session, but its timetable depends at least in part on actions not yet taken by federal energy regulators.

Braidwood nuclear power plant

Braidwood nuclear power plant

PJM has proposed changes to its capacity auction—how it determines prices all consumers and businesses pay to plants for their promise to produce during the highest-demand periods of the year. State energy regulators have criticized those proposals as “punishment” for Illinois’ 2016 decision to subsidize two other Exelon-owned nukes that were slated to close, its Quad Cities station on the Mississippi River and its Clinton plant in central Illinois. If the Federal Energy Regulatory Commission approves PJM’s changes, the state could well move to take over the responsibility of adequate power generation from PJM.

In the short term, it’s highly unlikely that Exelon would be permitted to close all three plants should it come to that. The loss of all three could well jeopardize adequate power supplies to the nation’s third largest city.

But recent capacity auctions have made clear that northern Illinois enjoys a glut of power supplies currently. The closure of a single nuke clearly wouldn’t jeopardize that.

Capacity isn’t the only issue, though. Nuke closures could threaten Gov. J.B. Pritzker’s goal of eventually powering Illinois only through sources that don’t emit carbon. Exelon has been successful arguing that carbon-free nukes are a crucial component of state plans to address climate change by “de-carbonizing.”

Pritzker’s predecessor, Gov. Bruce Rauner, signed the last wide-ranging energy bill, the Future Energy Jobs Act, which slaps a surcharge on electric bills statewide to funnel more than $200 million a year to Exelon’s Quad Cities and Clinton nukes.  (Crain’s Chicago Business, 2/19/2019)

Pennsylvania Nuclear Power Support Legislation by Norris McDonald

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Two state lawmakers, Rep. Thomas Mehaffie III, R-Dauphin County and Sen. Ryan Aument, R-Lancaster County, plan to introduce legislation that could keep the Three Mile Island nuclear plant operational beyond its scheduled September closure. They are planning to sponsor bills in their respective chambers that would incorporate nuclear energy into the Alternative Energy Portfolio Standards Act — a 2004 law that requires a percentage of electricity to come from alternative sources.  The bill would add any source that produces electricity with a carbon-free footprint, similar to a California law passed in September requiring 100 percent carbon-free electricity by 2045.

Exelon Generation — which owns the Dauphin County Three Mile Island plant's Unit 1 reactor — must order fuel by June 1 or begin an irreversible decommissioning process. The company will not prepare for a refuel without new policy in place.

Nuclear energy sources produce 93 percent of the state's zero-carbon electricity, so it should be put on equal footing with the 16 other environmentally beneficial energy sources included in the law.

Three Miler Island nuclear plant

Three Miler Island nuclear plant

Three Mile Island is the site of the nation's worst nuclear accident. In 1979, the plant's Unit 2 reactor experienced a partial meltdown. Exelon owns and operates only the Unit 1 reactor.

Market prices set by regional grid operator PJM Interconnection are based on gas and don't account for bottom-line costs borne by nuclear operators. In 2004, gas prices were high, and no one anticipated them to drop so low.

Illinois, New Jersey and New York also recently approved subsidies for nuclear power

Exelon made $3.77 billion in net profits in 2017 for its combined operations of 13 nuclear plants — including two others in the state, according to its most recent stockholder report.

The state Legislature's Nuclear Energy Caucus believes updating the Alternative Energy Portfolio Standards Act is the best option for keeping plants open and protecting job retention.

Exelon employs more than 600 at Three Mile Island. 

The bipartisan nuclear caucus, co-chaired by four legislators, including Aument and Mehaffie, released a report in November showing that losing nuclear plants would cost the state about $4.6 billion annually.

Governor Tom Wolf is worried about the workers at possibly affected plants and wants to do what he can to help them, but is looking forward to reviewing the legislation and is refraining from comment before seeing the exact language.

FirstEnergy Corp.'s Beaver Valley plant is due to close in 2021. Almost 25 percent of the state's nuclear generating capacity would be lost if both plants close prematurely. Nuclear accounts for 42 percent of the state's electricity production, and Pennsylvania's other three plants are facing negative market conditions. (York Dispatch, 2/22/2019)


Pennsylvania Nuclear Power Plant Update by Norris McDonald

Three Mile Island nuclear plant

Three Mile Island nuclear plant

Chicago-based Exelon Corp., announced in 2017 it that it will close the Three Mile Island nuclear plant unless Pennsylvania comes to its financial rescue. It set September 30 2019 as the closing date.

Ohio-based FirstEnergy Corp. also announced it will shut down its Beaver Valley nuclear power plant in western Pennsylvania — as well as two nuclear plants in Ohio — within three years unless Pennsylvania steps up.

So far, no rescue has been written into legislation.

Supportive lawmakers will introduce legislation to effectively give Pennsylvania's nuclear power plants the same preferential treatment as solar power, wind power and a handful of other niche energy sources received under a 2004 state law.

The owners of Pennsylvania's five nuclear power plants — primarily Exelon, FirstEnergy and Allentown-based Talen Energy — are backing that effort. The Center also supports the legislation.

PJM Interconnection, which operates the electric grid covering Pennsylvania and the 65 million people from Illinois east to Washington, has said those four nuclear power plant closings — two in Pennsylvania and two in Ohio — won't affect the availability of electricity.

But, last summer, the Federal Energy Regulatory Commission, in a 3-2 decision, ordered PJM to come up with a solution to protect the competitive market from what it described as a dangerous cascade of pressure on states to prop up otherwise viable power plants.

Exelon said Pennsylvania must enact legislation by June 1 if it is to keep operating Three Mile Island, since fuel must be ordered months in advance.

Gov. Tom Wolf hasn't taken a position on rescuing Pennsylvania's nuclear power plants. (Electric Light and Power, 2/19/2019)

House Select Committee on the Climate Crisis by Norris McDonald

Nancy Pelosi has appointed members to the House Select Committee on the Climate Crisis:

  • Congresswoman Kathy Castor of Florida, Chair

  • Assistant Speaker Ben Ray Luján of New Mexico

  • Congresswoman Suzanne Bonamici of Oregon

  • Congresswoman Julia Brownley of California

  • Congressman Sean Casten of Illinois

  • Congressman Jared Huffman of California

  • Congressman Mike Levin of California

  • Congressman A. Donald McEachin of Virginia

  • Congressman Joe Neguse of Colorado

The panel is simply exploratory and will be offering solutions to standing committees with jurisdiction to actually draft any legislation that is needed. 

Bios

(Roll Call, 2/7/2019)

National Grid Needs Natural Gas Pipeline by Norris McDonald

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National Grid may be forced to declare a moratorium on supplying natural gas to big new projects such as the Belmont Park redevelopment if the company’s plans for a $1 billion gas pipeline don’t receive a needed state permit by May 15. National Grid has already notified some large customers that have requested service that we will not be able to provide firm service" if the pipeline is not completed. 

Growing demand, including record gas sales this month, and plans to supply gas for several big development projects necessitate the pipeline, which would provide up to 400 million cubic feet a day of new gas to the region.

The plan awaits a critical water quality permit from New York State. But Gov. Andrew M. Cuomo’s administration last year rejected the application and has  hesitated to approve new fossil fuel infrastructure projects.  

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National Grid is seeking state approval for a 24-mile gas pipeline, which includes about 18 miles under New York Bay and connects with existing infrastructure at sea beyond the Rockaways. Photo Credit: Transcontinental Gas Pipe Line C

The 24-mile gas project, which will require no digging on land in New York,  includes about 18 miles of pipeline under New York Bay and connects with existing infrastructure at sea beyond the Rockaways.

 National Grid has contracted with the nation’s largest gas infrastructure company, Williams Transco, to build the new supply line, which also would also snake between infrastructure points in Pennsylvania and New Jersey.

Some environmental groups oppose the proposed gas line.

Over time, the company’s ability to expand its distribution network and absorb the 8,000 downstate customers a year it now converts from oil to natural gas, will be impacted.

On Jan. 21, the company’s downstate sector saw its highest volume day in its history when 2.8 billion cubic feet of gas moved through the lines.

National Grid’s New York operation provides natural gas to some 590,000 customers on Long Island and 1.2 million outer borough customers in New York City.

Other pipelines to Long Island are “maxed out, including the Iroquois pipeline across Long Island Sound. (Newsday, 2/1/2019)

Con Ed Natural Gas Moratorium by Norris McDonald

Two weeks ago, Consolidated Edison announced that come March 15 it would impose a natural gas moratorium in most of its Westchester service area, a move the utility said was prompted by increased customer demand and a shortage of new pipelines.

Real estate developers fear the plan could put the brakes on economic development, especially in struggling downtown areas in the southern part of the county where several multi-million dollar projects are in the works.

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New Rochelle and other cities in Westchester County are undergoing a historic process of renewal, and delay can often produce more than just delay, it can be the death knell of a project that might be enormously positive for a community.

In reports dating back to 2017, ConEd warned state regulators of the chance of a moratorium. It cited customers who were moving away from home heating oil in favor of natural gas and the state’s reluctance to approve new natural gas pipelines.

The Cuomo Administration has established a number of clean energy goals for the coming decades, including relying on renewables like wind and solar power for a greater share of the state’s energy needs. (LoHud, 2/4/2019)

National Fuels Pipeline Court Ruling by Norris McDonald

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National Fuel Gas Co. won a key federal appeals court ruling on Tuesday for a pipeline it wants to build through Western New York from Pennsylvania.

The state Department of Environmental Conservation did not assert a sufficient basis to deny a water quality certificate the company needs to build the pipeline, a trio of appellate judges in New York City ruled.

The proposed 97-mile Northern Access Pipeline, a nearly half-billion dollar project, would carry natural gas from shale gas country in Pennsylvania through Allegany, Cattaraugus and Erie counties. It would cross more than 190 creeks and streams.

In its April 2017 denial, the DEC said National Fuel failed to demonstrate it could build the pipeline and safely protect water quality.

The appeals court found the DEC's reasoning flimsy. The judges ruled the agency failed to provide evidence to support its ruling.

"Although this is a close case, the denial letter here insufficiently explains any rational connection between facts found and choices made," according to the ruling.

The court, however, left an opening for the DEC to explain the basis for its denial.

DEC is considering all options to defend their decision and our authority to protect New York State’s water quality resources," according to an agency statement.

The Federal Energy Regulatory Commission, the U.S. agency that regulates the transmission of electricity and natural gas, has already approved the pipeline project. National Fuel was also required to obtain state water quality certifications from Pennsylvania and New York before beginning construction. Pennsylvania granted its permit a year ago. New York State denied the company a permit in April 2017.

"Because the (DEC) did not sufficiently articulate the basis for its conclusion, on appeal we cannot evaluate the department's conclusions and decide whether they are arbitrary and capricious," the judges wrote. "We are not permitted to provide a reasoned basis for the agency's action that the agency itself has not given. We express no opinion as to whether there is substantial evidence in the record to support the department's denial." Instead, the appeals judges gave "the department an opportunity to explain more clearly – should it choose to do so – the basis for its decision."

The federal lawsuit is one of several court cases pending, and its outcome will likely have implications for the other cases.

If the DEC cannot deny the water quality permit, that would undercut the cases filed by landowners. They're relying on the denial to argue against National Fuel's right to their property using eminent domain laws. Landowners have contended National Fuel cannot use eminent domain because the company doesn't have a viable project without that permit. (The Buffalo News, 2/6/2019)

President Trump Right on California Wildfires by Norris McDonald

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PRESIDENT’S CORNER

By Norris McDonald

President Trump is threatening to withhold emergency relief funds via the Federal Emergency Management Agency (FEMA) if California does not provide better management of its wildfire programs.

The president is right to criticize California’s wildfire program. It is virtually nonexistent to the extent that most of these wildfires could be prevented with proper management programs. Center research indicates that there is an entrenched wildfire industrial complex that resists preventing wildfires because it would cut its budgets and power. Current wildfire efforts enjoy a vast array of personnel and equipment from airplanes and helicopters to trucks and gear. The institutions want more equipment and more gear and higher budgets, not less.

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Although California has wildfire mitigation programs, they are woefully inadequate. The Center is proposing firebreaks combined with wood chip to electricity plants to mitigate wildfires. We believe that over 90% of wildfires in the state could be prevented. But such prevention would require massive and extensive firebreaks. Unfortunately, for the wildfire industrial complex, such prevention would lead to massive cuts in their budgets and operations. These activities and equipment would be reassigned to prevention. Thus, President Trump is right to challenge current practices. All of America looks at California each year and wonders why the massive wildfires occur. (The Atlantic, 1/10/2019)

Background

Center Promotes Proposed Biomass Plant in Sacramento

Proposed New Jersey Greenhouse Gas Rule by Norris McDonald

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The New Jersey Department of Environmental Protection today made public a draft proposed regulation to reduce greenhouse gases from the electricity sector, which will be open for public comment from Dec. 17 to Feb. 15.

In developing this proposed rule, New Jersey has taken an important step towards resuming participation in our regional market-based program. The RGGI states applaud New Jersey’s progress and appreciate the many collaborative conversations that have taken place thus far. As we evaluate New Jersey’s proposed regulation, we note the consistency of the proposed program elements with those set forth in the 2017 Model Rule.

The RGGI states have now established a track record of more than a decade of auctioning allowances and reinvesting proceeds for consumer benefit. During this time, our states have significantly reduced power sector emissions while enhancing economic growth. The entry of additional states into our market has the potential to make our regional program even more cost-effective, and allow more participants to share in these benefits.

The RGGI states look forward to continuing conversations with New Jersey as its state-specific process for the rule moves forward, including the gathering of stakeholder input.

About the Regional Greenhouse Gas Initiative

The New England and Mid-Atlantic states participating in the fourth RGGI control period (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) have implemented the first mandatory market-based regulatory program in the U.S. to reduce greenhouse gas emissions. The 2018 RGGI cap is 82.2 million short tons. The RGGI states also include interim adjustments to the RGGI cap to account for banked CO2 allowances. The 2018 RGGI adjusted cap is 60.3 million short tons.

RGGI is composed of individual CO2 budget trading programs in each state, based on each state’s independent legal authority. A CO2 allowance represents a limited authorization to emit one short ton of CO2, as issued by a respective state. A regulated power plant must hold CO2 allowances equal to its emissions for each three-year control period. RGGI’s fourth control period began on January 1, 2018 and extends through December 31, 2020. For more information visit www.rggi.org

About Regional Greenhouse Gas Initiative, Inc. 

Regional Greenhouse Gas Initiative, Inc. (RGGI, Inc.) was created to provide technical and administrative services to the states participating in the Regional Greenhouse Gas Initiative. RGGI, Inc. is a 501(c)(3) nonprofit organization. For more information, visit www.rggi.org/rggi-inc/contact.

Center President Receives New York City Proclamation by Norris McDonald

On November 14, 2018 the New York City Council presented Center President Norris McDonald with a proclamation recognizing his environmental work.

Councilwoman Inez Barron nominated McDonald for the proclamation. Councilwoman Barron introduced environmental justice legislation that drafted by McDonald and was passed by the council and signed into law by Mayor Bill de Blasio in 2017.

The videos below capture the moment.

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Southern California Edison Unveils Wildfire Mitigation Plan by Norris McDonald

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Southern California Edison unveiled a $582 million program Monday that would step up wildfire safety measures, including a plan to replace nearly 600 miles of its power lines with insulated wire.

In complying with wildfire mitigation plans spelled out in Senate Bill 901, officials for the utility on Monday filed details of its Grid Safety and Resiliency Program with the California Public Utilities Commission.

Edison plans to replace nearly 600 miles of overhead power lines in high fire risk areas with insulated wire by the end of 2020. The move would mark the first large-scale deployment of insulated wire in the U.S. designed to reduce wildfire risk.

While up to 10 percent of wildfire ignitions in California are from power lines, within Edison’s service area more than half of ignitions associated with distribution lines are caused when objects such as metallic balloons, tree limbs and palm fronds come into contact with power lines.

While bare, uninsulated wire meets California state standards and is widely used by utilities across the country, insulated wires can significantly reduce the potential for ignitions resulting from contact with foreign objects.

In addition, insulated wires provide the greatest overall value compared to other mitigation measures such as undergrounding lines.

The utility also wants to make its poles safer.  The new poles would be made from “layers of strong glass fibers bonded with epoxy resins.

Under the plan, where appropriate and whenever utility poles are to be replaced, they will be replaced with fire-resistant composite poles that would support the increased weight and diameter of the insulated wire.

Edison also plans to replace about 3,400 miles of overhead line with insulated wire between 2021 and 2025.

Funding for that work would be included in future general rate case requests.

The utility infrastructure would be further improved under the new plan with the installation of fuses and circuit-breaker type devices called remote-controlled automatic reclosers.

Edison is installing 15,700 “current limiting fuses” which would interrupt current more quickly and avoid the potential creation of their own heat source during fuse operation when compared to traditional, industry standard fuses.

The move promises to limit the number of customers affected by an outage.

Use of “reclosers” would  stop affected circuits from automatically re-energizing so that work crews can physically inspect the lines before they are re-energized. (The Signal, 9/10/2018)

Governor Brown Signs Utility Wildfire Bailout Bill by Norris McDonald

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Gov. Jerry Brown signed a bill that aids Pacific Gas & Electric in covering the costs of last year’s devastating Wine Country wildfires — passing along some of the burden to ratepayers in the process.

The bill, SB 901, will enable PG&E to issue state-authorized bonds to settle more than 200 wildfire-related lawsuits filed by 2,700 plaintiffs against the utility. Higher electricity bills will help repay the bonds.

In June, PG&E said it would post $2.5 billion in charges against its profit to cover losses from the fires.

The law also requires power companies to implement fire prevention strategies by improving their infrastructure and conduction “projects to improve overall forest health and resistance to wildfires,” according to a statement. The higher standards of whether the utilities adequately maintain their power lines will be overseen by the California Public Utilities Commission.

The wildfires that ravaged Northern California in October killed 44 people and destroyed as many as 8,900 structures and 6,100 vehicles. The state tallied nearly $10 billion in commercial and residential insurance claims, with estimates for total damages as high as $15 billion. (San Francisco Business Times, 9/24/2018)

Bitcoin Cryptocurrency Energy Use by Norris McDonald

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Bitcoin’s electricity usage is enormous. 

Burning huge amounts of electricity isn’t incidental to bitcoin: instead, it’s embedded into the innermost core of the currency, as the operation known as “mining”. In simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.

The more electricity you burn, and the faster your computer, the higher your chance of winning the competition. The prize? 12.5 bitcoin – still worth over $100,000 – plus all the transaction fees paid in the past 10 minutes, which according analysts’ estimates is another $2,500 or so.

This is a winner-takes-all game, where the prize is guaranteed to be paid to one, and only one, miner every 10 minutes. Burning more electricity increases your chances of winning, but correspondingly decreases everyone else’s – and so they have a motivation to burn more electricity in turn.

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Cryptocurrencies are electronic forms of money, and bitcoin is one of the most widely distributed and prevalently used cryptocurrencies today. Blockchain is the mechanism used to authenticate cryptocurrencies and all of these concepts are of huge importance to the power industry because the fundamental process behind blockchain, including the creation and use of cryptocurrencies requires significant power usage and it represents a possible trend for the future.

Cryptocurrency requires an immense amount of power to exist. Without tons of energy, there is no Bitcoin. To truly wrap your head around cryptocurrency, you must first understand that the basic economics of it are rooted in energy, not some weird software algorithm. The existence of the algorithm is why it consumes so much energy, and all software improvements to Bitcoin are made with reducing this dynamic in mind. The problem is that a big part of what makes Bitcoin so incredibly secure is its energy consumption.

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Blockchain technology is a method of using a network of decentralized computers to validate a transaction using common algorithms and creating a unique encrypted identifier or block, which is added to a string of records (a chain of blocks) associated with that transaction, thereby creating an incorruptible digital record.  Blockchain technology was originally created to document cryptocurrency transactions, but it is recognized to have potentially unlimited potential for other uses. Those uses include supply chain records, stock transactions, financial transactions beyond cryptocurrencies, crowdsourcing, real estate records management and more.  Major retailers, banks and software companies are closely monitoring the advancement of blockchain technology.

Of all the uses for blockchain technology, its application to cryptocurrencies is the most prevalent. Cryptocurrencies exist only in the Ethernet. They have no intrinsic value like the old U.S. currencies made of gold or redeemable for silver; supply is not controlled by a central bank or government; and they have no physical form. That is why the creation of unique and nearly impossible-to-fudge digital records for cryptocurrencies is so important.  And it is not just an intellectual exercise. The estimated annual revenue associated with the creation of the most common cryptocurrency, bitcoin, is roughly $7 Billion.  Plus, there are more than 1000 additional cryptocurrencies on the web.

So why are cryptocurrencies and blockchain technology of importance to the power industry?  It’s simple. Creating and validating a cryptocurrency, say a bitcoin, requires significant computing power to run mathematical algorithms.  Remote computer systems extensively involved in so called “mining” for bitcoin or solving the equations that document a new piece in the digital records of the currency require power to run and disperse heat.   When cryptocurrencies were just a novelty, the computer power needed was insignificant.  Today, data centers and even extensive server farms that draw 10’s of megawatts are required for large operations. Estimates of the energy use for bitcoin creation, likely the most common cryptocurrency, range from 14 to 57 TWh annually, worldwide.  Operations develop where power is cheap and major mining operations may favor cooler regions where computer system cooling costs will be less. 

Just a few years into the cryptocurrency revolution, bitcoin mining is already eating up an estimated 20,000 gigawatt hours of electricity per year. That’s roughly .1% of global generation, on par with the power demand of Ireland. The primary culprits are bitcoin mining appliances like the Antminer S9, which is a computer processor that does nothing but endlessly crunch algorithms to lengthen the blockchain. An Antminer draws a load of 1.5 kilowatts — enough to power two refrigerators and a flatscreen TV. If you run an Antminer 24/7 for a year it will produce about 0.85 bitcoins, at a cost of about 15,000 kilowatt hours. Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin. Even with bitcoin having plunged to $11,600 this morning, there’s still money to be made, assuming you can get your machines cheap enough. Walmart sells the Antminer s9 for $8,200.

The electricity consumption needed to “mine” cryptocurrencies this year will outpace global electric vehicle demand according to some reports. This growing increase for power has brought energy usage to the forefront of the crypto conversation. Even a slight edge in terms of computational power can help miners win a larger share of the distributed rewards, which has prompted a race to build more powerful and more energy-consuming mining computers. At the same time, the Bitcoin network keeps making calculations harder to solve, necessitating more and more power to secure the same rewards.

It’s hard to make reliable calculations because mining facilities tend to keep their operations behind closed doors. But some research claims the entire Bitcoin network could consume as much as 7.7 gigawatts of electricity by the end of this year—enough to power a country the size of Austria. 

Cryptocurrency mining’s massive energy consumption may be leaving a big carbon footprint too. The network is mostly fueled by power plants in China where coal-based electricity is available at very low rates.  This results in an extreme carbon footprint for each unique Bitcoin transaction.

The Bitcoin network currently processes 200,000 transactions per day using at least 300 kWh per transaction. This could exceed 900 kWh per transaction by the end of this year. That doesn’t factor in the electricity needed to get rid of all the heat these machines produce which adds significantly to the energy load depending on factors such as climate and chosen cooling technology.  (The Guardian, 1/17/2018, Propmodo, 5/17/2018, T&D World, 8/23/2018, Forbes, 1/16/2018, Paste, 5/18/2018))

Russian Natural Gas Market by Norris McDonald

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Russia is our biggest competitor in the international natural gas market. They are proposing to build Nord Stream 2, a 48- inch natural gas pipeline that will run from near St. Petersburg in Russia to Greifswald in northeastern Germany. It would run under the Baltic Sea parallel to Nord Stream 1, which was built in 2011. Russia is already supplying most of Germany’s natural gas. This pipeline will double the amount of gas Germany can import from Russia. Germany currently uses more natural gas than any other European country and they expect their natural gas demand to increase. This is a major win for Gazprom, the Russian natural gas company.

Gazprom has been providing natural gas to Europe for over 40 years. They are the largest exporter of natural gas to the European market. The US entered this market last year with natural gas shipments Poland. Natural gas demand in Europe is expected to continue to increase.

European natural gas production is decreasing. Most counties have banned or restricted hydraulic fracturing, which is required on almost every well in order to produce natural gas or oil. These countries are turning to Russia for their natural gas needs. Russia, like all countries, fracks almost every well. Mr. Putin will continue to frack and make billions of dollars from Europe. Gazprom’s contracts with its European customers are long term and tied to oil prices.

Shale Crescent

Shale Crescent

America can compete in Europe but Russia has an advantage with their pipeline over our LNG. However, our competition will force Russia to stay competitive, like what happened in Poland when the US started shipping them LNG last summer. Gazprom now has some competition from the USA.

The other problem Europe has by getting gas from Putin and Gazprom is that Putin can apply political pressure, if he chooses, like he did in Ukraine in 2014 and simply close the valve, shutting off their natural gas.

Natural gas prices in the USA are not tied to oil prices. The current Dominion South Pointe price for natural gas in the Shale Crescent USA is $2.40 per MM BTU. This is equivalent to oil at $14.40 per barrel. Oil on the world market is selling for $70 per barrel. (The Parkersburg News and Sentinel, 7/28/2018, Shale Crescent USA)

Marcellus and Utica Shale by Norris McDonald

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Marcellus shale has become one of the world's largest natural gas fields and the Utica Shale - located a few thousand feet below the Marcellus - has become a new drilling target.  Marcellus Shale occurs in the subsurface beneath much of Ohio, West Virginia, Pennsylvania and New York.  Small areas of Maryland, Kentucky, Tennessee and Virginia are also underlain by the Marcellus Shale.

Utica shale underlies significant portions of Ohio, Pennsylvania, West Virginia, New York, Quebec and other parts of eastern North America.  In the subsurface, the Utica Shale is located a few thousand feet below the Marcellus Shale.

In 2011 the Energy Information Administration reported that the Marcellus Shale contained approximately 410 trillion cubic feet of technically recoverable natural gas.

The United States Geological Survey's mean estimates of undiscovered, technically recoverable unconventional resources indicate that the Utica Shale contains about 38 trillion cubic feet of natural gas, about 940 million barrels of oil, and 208 million barrels of natural gas liquids.

Of course, It is difficult to estimate the amount of gas in a rock unit that varies in thickness, composition and character, and is located thousands of feet below Earth's surface.

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The Utica Shale has not been extensively developed for two reasons: 1) its great depth over much of its geographic extent, and, 2) its limited ability to yield gas and oil to a well because of its low permeability. This is starting to change as horizontal drilling and hydraulic fracturing are used to stimulate production. These methods were not extensively used in the Utica Shale prior to 2010.

In central Pennsylvania, the Utica can be up to 7000 feet below the Marcellus Shale, but that depth difference decreases to the west. In eastern Ohio the Utica can be less than 3000 feet below the Marcellus.  Most of the drilling activity in the Utica Shale has occurred in eastern Ohio.  Most of the shale drilling activity in Pennsylvania has targeted the Marcellus Shale, which is above the Utica Shale.  (Geology.com, Geology.com)    https://geology.com/articles/utica-shale/

LNG Liquefaction Ship by Norris McDonald

Shell built the world’s second floating LNG facility in 2013.  Prelude weighs in at 600,000 tonnes, which is six times the weight of the world's largest aircraft carrier.  Prelude, a "floating liquefied natural gas facility" is 1,600 feet long and 243 feet wide. That makes it the biggest ship in the world.  

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As a floating natural gas facility, it will be anchored off the coast of Western Australia for 25 years, acting more like a platform than a mobile vessel.  The ship will be anchored to the sea floor with a 93-metre-tall turret while it processes 175 Olympic swimming pools' worth of liquid natural gas year-round.

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Gas will be harvested from the ocean, processed on board and then transferred to transport ships.  The ship could be supplied by pipelines from the mainland.  In the past, offshore gas had to be piped onto land and liquefied in shore side plants. But with the mega-ships, offshore LNG can be processed on site.

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Prelude has three 6,700-horsepower engines, giving it the combined power of about 152 cars.  The ship floated out of dry dock for the first time in late November 2013. It began its job off the coast of Western Australia in 2017. 

Prelude was built by the Technip /Samsung Consortium (TSC) in South Korea for a joint venture between Royal Dutch Shell, KOGAS and Inpex.  It was made with more than 260,000 tonnes of steel. At full load, it will displace more than 600,000 tonnes, more than five times the displacement of a Nimitz-class aircraft carrier. The hull was launched in December 2013.

The main double-hulled structure was built by the Technip Samsung Consortium in the Samsung Heavy Industries Geoje shipyard in South Korea. 

Prelude FLNG was approved for funding by Shell in 2011.  Analyst estimates in 2013 for the cost of the vessel were between US$10.8 to 12.6 billion.  Shell estimated in 2014 that the project would cost up to US$3.5 billion per million tons of production capacity. 

The Prelude FLNG system will be used in the Prelude and Concerto gas fields in the Browse LNG Basin, 120 mi off the coast of Australia; drilling and gas production are both expected to begin in 2016. It has a planned life expectancy of 25 years. The Prelude and Concerto fields are expected to produce 5.3 million tonnes of liquid and condensate per year; this includes 3.6 million tonnes of liquified natural gas, 1.3 million tonnes of condensate, and 400,000 tonnes of liquified petroleum gas.

Natural gas will be extracted from wells and liquefied by chilling it to −260 °F.  The ability to produce and offload LNG to large LNG carriers is an important innovation, which reduces costs and removes the need for long pipelines to land-based LNG processing plants. 

It will produce 110,000 barrels of oil equivalent (BOE) per day.

On July 25, 2017, after a journey of 3,600 miles from its construction site in South Korea, Prelude arrived on site in Western Australian waters. It will begin its hook-up and commissioning phase, and is expected to become operational in 2018.    (Fast Company, 10/12/2009, News.com, 12/9/2013, Wiki)

Natural Gas Pipeline Approval Is A National Security Issue by Norris McDonald

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The United States is the world’s biggest natural gas producer, yet environmental lawsuits by states, green groups and property owners have tied up pipeline construction.  This is making it difficult to get shipments to some regions, including fuel-hungry New England.  America needs new regulations or laws that favor reasonable approval of pipelines.  In fact, pipeline infrastructure obstruction is a national security issue that puts our country at risk.

The administration of President Donald Trump has said that constraints on pipelines and other energy infrastructure can trigger price spikes and pose a risk to national security but has yet to intervene in state or local-level permitting issues.  U.S. Energy Secretary Rick Perry agrees that New York’s efforts to stop new pipelines could pose “a national security issue that outweighs the political concerns in Albany, New York.”

President Trump could invoke the Defense Production Act to accelerate pipeline approvals based on national security.  This is a draconian measure, but draconian measures are needed when our national security is at risk.  

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The United States needs to have the capability to neutralize Russia's natural gas stranglehold on Europe.  The USA can do that by exporting liquefied natural gas (LNG).  Yet, without the pipelines to get our natural gas reserves to ports, such leverage is not possible.  Russia would also like to get Japan hooked on its natural gas and is building a pipeline to do just that.  Again, we need to have the ability to compete with Russia in delivering natural gas to Japan.  The industry is now eyeing growing export markets by investing in facilities that can liquefy gas for shipment overseas. The United States has sent cargoes to nearly 30 countries in the past year.

America cannot afford blackouts, principally because it puts our security at risk.  Nuclear power plants and coal-fired power plants are closing at record rates and are being replaced with natural gas plants.  Base load power plants burn a mind boggling amount of natural gas to make up for nuclear and coal.  If we do not have the pipeline capacity to deliver the natural gas to the plants, we will inevitably have blackouts and brownouts.  This is unacceptable in our internet age.  Right now gas from the Marcellus and Utica shale is being blocked by some neighboring states, which cuts off markets in New England.

Pipeline projects that are under construction are getting held up by judges in lawsuits and this needs to be addressed.  Absent a Defense Production Act pathway, it might have to be addressed either by the U.S. Federal Energy Regulatory Commission (FERC) or with legislation.   FERC oversees construction of new pipelines.  FERC in April asked stakeholders to submit comments on whether the commission should revise existing pipeline approval policies, yielding feedback from industry backers.

In recent weeks, environmental groups like the Sierra Club have won court orders delaying construction on EQT Midstream Partners LP’s Mountain Valley pipeline at several locations in West Virginia, and are now seeking a court order to also stop construction in Virginia.  Mountain Valley is one of several pipelines under construction to move gas from the Marcellus and Utica shale formations in Pennsylvania, West Virginia and Ohio to consumers in the Southeast, Gulf Coast and Midwest.

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Production in the Marcellus and Utica, the biggest shale gas formations in the United States, has ballooned to 28.9 billion cubic feet per day (bcfd) from 1.5 bcfd a decade ago, according to federal energy data. One billion cubic feet is enough to fuel about 5 million U.S. homes for a day.

Polar vortex weather in the winter or a cyber attack could threaten to leave Wall Street in the dark and hospitals without power.  In January, gas prices soared to a record high due to pipeline constraints during an extreme cold spell that forced power generators in New England to resort to burning diesel and Russian imported LNG.  (Reuters, 6/28/2018)

No Money In Supporting Nuclear Power For Environmentalists by Norris McDonald

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PRESIDENT'S CORNER

By Norris McDonald

It was refreshing to see the New York Post article about a recent paper by Matthew C. Nisbet, a communications professor at Northeastern University, that examined the climate-change and energy grants given by 19 green-leaning philanthropies — including familiar names like the Hewlett, Kresge and MacArthur foundations.  His conclusion: America’s biggest environmental groups seldom, if ever, talk about the climate-change benefits of nuclear energy. Why not? There’s no money in it. 

As the first environmentalist to publicly and aggressively support nuclear power in the climate change and global warming era, I can testify that Professor Nisbet's conclusion is absolute true.  I have been working as a pro-nuclear environmental activist for 18 years and I can barely pay my rent.  I also seriously doubt that my recommendation to the nuclear industry to start funding the environmental groups to support nuclear power will be adopted because they probably are not willing to put up the tens  to hundreds of millions of dollars it would take to get them to acknowledge the obvious: that nuclear power is the best weapon against global warming.

Here are some of the findings from his paper:

Between 2011 and 2015, the 19 foundations made 2,502 grants totaling nearly $557 million to environmental groups like the Sierra Club (the largest single recipient, with nearly $49 million in grants), Natural Resources Defense Council and Environmental Defense Fund.

Of that $557 million, the big environmental groups received nearly $187 million to promote renewable energy and efficiency. They got another $92.5 million for “climate change-related communication, media and mobilization” and nearly $82 million to oppose hydraulic fracturing and to “promote actions to limit/oppose [the] fossil fuel industry.” But “no grants were focused on promoting nuclear energy, though $175,000 in grants were devoted to opposing nuclear energy for cost and safety reasons.”

To underscore: Over a five-year period, some of America’s biggest foundations doled out more than half a billion dollars to some of America’s biggest environmental groups and not a penny was spent promoting nuclear energy, even though nuclear provides about 20 percent of US electricity and twice as much emissions-free juice as all US solar and wind, combined.

Why would any of the large environmental groups risk losing many millions of dollars to support correct science as it relates to nuclear power and global warming?  Nisbet’s paper is important because it exposes the anti-nuclear orthodoxy that prevails at some of America’s biggest philanthropic groups. Just as important, it shows that those same philanthropic groups are ignoring the conclusions of the world’s top climate scientists.

President Trump Invokes National Security To Save Nuclear Power Plants by Norris McDonald

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President Donald Trump ordered his Energy Secretary Rick Perry to take immediate action to stem power plant closures, arguing that a decline in coal and nuclear electricity is putting the nation’s security at risk.  Impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our nation’s energy mix and impacting the resilience of our power grid.   The Center supports President Trump's order and we look forward to promoting Energy Secretary Rick Perry's recommendations.

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Under the Energy Department’s draft plan, the administration would take action under two laws: the Federal Power Act that allows the government to guarantee profits for power plants amid grid emergencies, and the 68-year-old Defense Production Act, a Cold War-era statute once invoked by President Harry Truman to help the steel industry.

For two years, the Energy Department would direct the purchase of power or electric generation capacity from a designated list of facilities “to forestall any future actions toward retirement, decommissioning or deactivation,” according to the memo. The proposed Energy Department directive also would tell some of those facilities to continue generating and delivering electric power according to their existing or recent contracts with utilities.

It’s not clear that the Federal Energy Regulatory Commission would go along with the plan. Although the administration could aim to bypass the electric regulators completely, FERC could play a role in any effort to require grid operators to make out-of-market payments to electric generators.

Trump’s directive comes as administration officials search for ways to extend the life of money-losing coal and nuclear power plants that face competition from cheaper natural gas and renewable energy. The plants are considered “fuel-secure” because they house coal and nuclear material on site and are not dependent on pipelines that can be disrupted, wind that stops blowing or a sun that sets.

The department’s strategy, outlined in a memo that would use authority granted under a pair of federal laws to establish a “strategic electric generation reserve” and compel grid operators to buy electricity from at-risk plants. The steps are necessary to protect national security.

The move comes as Trump uses similar national security arguments to justify market interventions aimed at protecting other treasured political constituencies -- steelworkers and automakers -- at the expense of U.S. allies.

A FirstEnergy Corp. subsidiary requested immediate intervention from Perry’s agency in late March, after the Ohio-based company announced it would shut three nuclear power plants feeding the nation’s largest grid, operated by PJM Interconnection LLC.

Some 12,000 megawatts of coal-fired power are expected to retire this year, according to the National Mining Association.  (Bloomberg, 6/1/2018)

House Passes Nuclear Waste Bill To Revive Yucca Mountain by Norris McDonald

EHJ President Norris McDonald at Yucca Mountain in 2005

EHJ President Norris McDonald at Yucca Mountain in 2005

On May 10, 2018, the House  approved a bill (H.R. 3053 - Nuclear Waste Policy Amendments Act of 2017) to revive the mothballed nuclear waste dump at Nevada’s Yucca Mountain.  The bill would help solve a nuclear-waste storage problem that has festered for more than three decades.  The House approved the bill, 340-72, sending the measure to the Senate, where Nevada’s two senators have vowed to block it.

More than 80,000 metric tons of spent fuel from commercial nuclear power plants sit idle in 121 communities across 39 states. 

The bill directs the Energy Department to continue a licensing process for Yucca Mountain while also moving forward with a separate plan for a temporary storage site in New Mexico or Texas.

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This bill amends the Nuclear Waste Policy Act of 1982 to direct the Department of Energy (DOE) to initiate a program to consolidate and temporarily store commercial spent nuclear fuel during the development, construction, and operation of a permanent nuclear waste repository.

The bill addresses federal land withdrawal and related management issues, including the permanent withdrawal of specific federal land for repository use by DOE, updating the Nuclear Regulatory Commission licensing process and conditions for the repository, and limiting activities relating to developing a separate defense waste repository used for storing high-level radioactive waste and spent nuclear fuel derived from the atomic energy defense activities of DOE.

DOE may enter into agreements to provide benefits to state, local, and Tribal governments that might host or be affected by facilities related to storing nuclear waste.

The bill revises the method by which DOE funds its nuclear waste management activities though the collection and usage of the Nuclear Waste Fund.

[GovTrack]