Americans have a strong pragmatic streak. And they undoubtedly took notice recently when two devastating hurricanes knocked out power in much of the Southern United States. News channels focused on the harsh conditions that followed after families were left without power for days on end. It’s understandable, then, that a subsequent poll found 85 percent of voters saying the U.S. should act to protect the diversity of its electric grid against such disruptive events.
Storms aren’t the only cause of power grid disruptions. But they help to illustrate why the time is right for Washington to rethink the overall viability of the nation’s power sector. Thankfully, the Trump administration seems to be taking the challenge seriously as it looks to ensure sufficient, reliable electricity for the next generation of Americans.
What’s really at issue is “baseload” power — the electricity generation required to meet the nation’s daily needs, particularly during peak periods. And there’s an emerging problem, since baseload power has been declining in recent years.
For decades, coal and nuclear power plants anchored America’s baseload capacity. But rising natural gas production and a decade of successive federal regulations have served to eliminate a substantial portion of America’s coal fleet. At the same time, bankruptcies and cost overruns have burdened potential replacements for an aging nuclear industry.
The numbers are actually somewhat worrying. Coal still produces almost a third of America’s total electricity generation and nuclear adds another 20 percent. But many now look to natural gas, along with renewable platforms like wind and solar, to drive future power generation. The simple fact, though, is that coal and nuclear still account for a very sturdy 50 percent of America’s energy mix.
The Trump administration seems to grasp the ramifications of this point — and what the loss of more coal and nuclear power could mean for a stable grid. Just weeks ago, Energy Secretary Rick Perry issued a fairly comprehensive report on the state of America’s power sector. What he concluded is that the nation must necessarily continue to draw electricity from a diverse mix of sources.
This is a smart notion, since wind turbines and solar panels remain frustratingly intermittent — because the wind doesn’t always blow and the sun doesn’t always shine. But despite lavish subsidies and mandates, wind and solar only generate a very negligible 6 percent of total U.S. electricity. There’s also the boom in natural gas to consider, however. But even this expansion of natural gas now poses complications. That’s because the United States is not only transitioning to a greater reliance on natural gas for power generation, but also simultaneously gearing up for large-scale exportation of liquified natural gas, or LNG.
Ramping up natural gas exports could mean a real shift in market dynamics. Continental Resources CEO Harold Hamm predicts that the U.S. may start sending roughly 40 percent of its natural gas production offshore in the next three years. When that happens, U.S. consumers could see a real spike in gas prices as they begin to compete with gas-hungry consumers in Europe.
There are also logistical considerations. Gas-fired power plants depend on continuous pipeline service for their fuel supplies. But as the recent hurricanes demonstrated, pipeline chains are vulnerable to weather disruptions. When one factors in the dual challenge of potentially volatile gas prices — along with the slow growth of wind and solar — coal and nuclear emerge as logical options. Not only can they provide dependable baseline power, but they can also help to balance inevitable price fluctuations caused by greater LNG exports.
Perry is right to conclude that America should follow an “all of the above” energy strategy when it comes to the nation’s power sector. Meeting the ongoing demands of baseload power is an evolving challenge. It would be shortsighted, then, to overlook the contributions of coal and nuclear power in addressing America’s evolving electricity needs. Anything less would mean a failure to plan for the ongoing complexities of future power needs.
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