COLUMN-Want energy independence? Keep the nuclear option and limit exports

by Reuters
Friday, 11 July 2014 15:56 GMT

(John Licata is the founder and chief energy strategist at Blue Phoenix. The opinions expressed here are his own.)

By John Licata

July 11 (Reuters) - Whether or not you follow the energy markets, it's very likely you've heard the phrase "U.S. energy independence" at one time or another in recent years. Yet the very notion that the United States can be completely self-sufficient when it comes to supplying our domestic need for energy consumption is seriously flawed for a number of reasons ranging from population growth, pure economics, a lack of public policy and a dated permitting process vital to commercialize new energy projects. Collectively, this should have Americans questioning whether U.S. power production can be enough to completely eliminate the need for foreign energy sources.

The biggest use for energy is electricity. Using 2013 data from the Energy Information Administration (EIA), in order to produce electricity in the United States, we used a total of 4,058,209 thousand megawatt-hours last year of which 39 percent was supplied from coal, 27 percent from natural gas, 19 percent came from nuclear, 7 percent from hydropower, 6 percent from other renewables, 1 percent from petroleum and less than 1 percent from other gases. So, despite the Obama administration's efforts to help fight carbon emissions, coal still dominates in the United States. In fact, according to a recent EIA Short-Term Energy Outlook (STEO), the allure of cheaper coal has actually fostered its greater use to offset an increase in natural gas prices.

Coal, of course, releases an enormous amount of carbon dioxide when it's burned.

On the one hand, we're boosting our independence by using our own coal supply to produce electricity, but on the other, the whole environmental argument may be being shoved under the rug because of it. This suggests the United States can't be energy independent and simultaneously win the war on carbon. Something has to give. We don't have enough clean domestic energy supply to produce electricity if we abandon domestic coal and simultaneously close perfectly good nuclear plants. Instead, we need more nuclear power since its use won't add to carbon emission output.

Here's the problem. The United States consumes 55 million pounds of uranium per year, yet only produces 4 million pounds. The rest comes from places such as Kazakhstan and Australia. We already import 93 percent of our enriched uranium, so in reality, our reliance on foreign enriched uranium is far greater than our dependence on foreign oil.

Another issue weighing on energy independence is a growing U.S. population. During the recent economic recession, population growth slowed, according to the U.S. census bureau. The reason often cited is that a large number of people felt financially insecure, causing them to reconsider starting families. Considering the Federal Reserve is now a bit more optimistic about U.S. job market, it's not unreasonable to think fertility rates may once again be on the rise. Bottom line: More people means more future energy demand that the U.S. will be challenged to satisfy.

Then there's the hydraulic fracturing (fracking) boom. The technique, which involves pumping a mixture of water and chemicals into shale deposits at high pressures, has given the United States access to vast new oil and natural gas supplies.

But instead of using more of that new-found energy booty here at home, politicians believe we should export excess supplies. The problem here is that the shale movement was supposed to be by Americans for Americans. So why not first run domestic refiners at full capacity and store the extra oil? Consider this: As of June 20, 2014, the Strategic Petroleum Reserve (SPR), the nation's piggybank for oil, contained 691 million barrels. Capacity for the SPR is 727 million barrels so isn't talk of exporting our oil premature since we could keep gasoline prices low and further lessen our dependence on foreign oil during any crisis by tapping a full SPR right here at home?

As for natural gas, if it's seen as the ultimate catalyst for energy independence, why would we export it when more Americans are using it to heat and power their homes? Additionally, there are those, including legendary energy man T. Boone Pickens, who believe we should tap excess natural gas to fuel the trucking sector. If we can use more natural gas here at home, we could further decrease our reliance on foreign energy. However, if the United States now uses our excess natural gas for exports or as a political weapon to weaken Russia's position over Ukraine and Europe, we risk delaying our own goal of becoming energy independent.

Moving to renewables. I'm a big a believer in the future of geothermal, solar and wind power. However, geothermal is still being researched, the sun doesn't always shine and wind doesn't always blow. Costs are being driven down to make renewables more competitive with fossil fuels, but mainstream energy storage solutions are still needed to make renewables, which only account for 10 percent of our current energy mix, play a bigger role in helping the United States become more energy independent.

At the end of the day, the United States can't be energy independent without a true national energy policy. We need to seriously rethink exporting natural gas and closing nuclear plants at a time where sustainability meets reality head on. Our newly found oil and gas supplies need to help Americans before they help the rest of the world. Therefore politicians should be pushing for innovation here at home to lower energy prices, not create an environment where our supposed energy independence creates even more dependence on foreign energy. (John Licata)

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