Cheap shale gas may delay nuclear power revival

PTI FEATURE

ENERGY/PF-82/2012

May 26,2012

Cheap shale gas may delay nuclear revival

Dr K S Parthasarathy

India does not have the luxury to choose a single mode of power generation. Whereas the demand for power in USA is expected to increase at the rate of just one percent per year, for India it is 9%.

Fukushima has adversely affected nuclear power generation in Germany and Japan. Regulators and operating managements in countries operating nuclear power plants carried out rigorous safety reviews and “stress checks” at plants worldwide. They are promptly carrying out safety upgrades wherever needed. It seems that Fukushima did not influence new aspirants for nuclear power.

    During the year, the U.S. Nuclear Regulatory Commission granted a combined construction and operating license for four reactors, two at Vogtle, near Waynesboro and two reactors near Jenkinsville, South Carolina. The Vogtle reactors will be the nation’s first in 30 years. The first unit will become operational in 2016 and the second, a year later.

    Nineteen companies and consortia are planning to construct and operate more than 30 nuclear power reactors in USA  The U.S. Nuclear Regulatory Commission is actively reviewing 10 combined license applications from 9 companies and consortia for 16 nuclear power plants.

    However, availability of cheap natural gas is likely to come in the way of nuclear revival The growth of power generation by wind, solar, and coal also may retard. Contrary to popular perception, more than concerns about safety, economics dictate the progress in the choice of power generation in advanced countries.

   India does not have the luxury to choose a single mode of power generation. Whereas the demand for power in USA is expected to increase at the rate of just one percent per year; for India it is 9%.

   Based on a report of the US Geological Survey, Bloomberg (May 17, 2012) noted that India holds 6.1 trillion cubic feet of technically recoverable shale gas reserves in three basins. That was less than 10 percent of the 63 trillion cubic feet estimate made the previous year, in April, by the U.S. Energy Information Administration.  Shri Sudhir Vasudeva, Chairman, ONGC  told Bloomberg that India is studying  the data for shale- gas deposits and awaiting a government policy on commercial drilling for gas trapped in shale rock, It may take four to five years before commercial drilling starts. According to Bloomberg, China will start production in June this year.

   The possibility of export of shale gas in liquefied form from the USA to India was discussed when a US delegation visited India recently.

   Abundance of natural gas in many regions is likely to change the geopolitical map in many ways. On March 15, 2012, The Wall Street Journal (WSJ) reported that utilities in USA are turning to natural gas to generate electricity, with 258 plants expected to be built from 2011 through 2015.

   “Enormous quantities of natural gas have been discovered in the U.S., especially in underground shale formations, where it is being extracted through hydraulic fracturing or "fracking." In 2010, there were more than 487,000 wells producing natural gas in 30 states, so-called shale-gas production now accounts for about one-third of U.S. natural-gas supplies”, the WSJ added
   Shale rocks are virtually impermeable. Gas and oil retained it cannot be extracted by normal means. Robert Mitchell, an engineer- entrepreneur with the support from many agencies developed the innovative technology of hydraulic fracturing or “fracking” to extract trapped gas from shale. 

   During the fracturing process, fracture fluids, primarily water with sand proppant and chemical additives, which are proprietary, are pumped at sufficiently high pressure to overcome the compressive stresses within the shale formation. After a few hours, the process increases the critical fracture pressure creating narrow fractures in the impermeable shale layers. The sand proppant is then pumped into these fractures to maintain a permeable pathway for fluid flow after the fracture fluid is withdrawn and the operation is completed.

   Faster to build and less expensive to operate, natural gas generation is likely to be a game changer. The WSJ quoted the U.S. Energy Information Administration as saying that it costs about $978 per kilowatt of capacity to build and fuel a big gas-fired power plant, compared with $5,339 per kilowatt for a nuclear plant.

   “A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50 percent and reduced investment in costlier sources of energy”. Bloomberg reported on January 17, 2012.

   “Exelon, the largest U.S. nuclear operator, canceled plans last summer to boost capacity at two nuclear plants in Illinois and Pennsylvania after analyzing economic factors,” a spokesman for Chicago-based Exelon, clarified to Bloomberg in an e-mail.

   “Impacts of shale gas and shale oil extraction on the environment and human health”, a 91 page report published in 2011 by the Director General of Internal Policies, European Parliament deals with the topic exhaustively.

   On June 9, 2011, researchers from the Massachusetts Institute of Technology in their study entitled “The Future of Natural Gas” noted that there are abundant supplies of natural gas in the world, and many of these supplies can be developed and produced at relatively low cost. They found out that in the U.S.A, a combination of demand reduction and displacement of coal-fired power by gas-fired generation is the lowest cost way to reduce CO2 emissions by up to 50%.

   MIT report identified leakage of natural gas or drilling fluids into shallow zones, on-site surface spills, off-site wastewater disposal, water withdrawal and road traffic and environmental disturbance as the major issues. Of the 43 widely reported incidents during 2005-2009, almost half appear to be related to the contamination of shallow water zones primarily with natural gas. Another third of reported incidents pertain to on-site surface spills.

   “With 20,000 shale wells drilled in the last 10 years, the environmental record of shale-gas development is for the most part a good one”, MIT report concluded. Though it is reassuring, popular perception differs.

   On April 18, this year, the US Environmental Protection Agency promulgated the first-ever regulations aimed at reducing toxic air pollution from “fracking.” When fully enforced in 2015, the regulations would cut 95 percent of smog-forming and toxic emissions from wells developed with fracking.

 Dr. K. S. Parthasarathy is former Secretary of the Atomic Energy Regulatory Board

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