Offshore Drilling

After several days of teasers, I was anxious to read today about the Obama Administration’s decision on offshore oil/gas drilling.  With the huge oil discoveries that have been made off the coast of Brazil and even in the Gulf of Mexico, I am hopeful that a loosening of offshore drilling policy might spur some increase in domestic oil production, and help the U.S. economy.  The announcement can be found at the White House.  While I think the move is a good step, it leaves some things to be desired. For one thing, there is only a small areas that is being opened up to drilling. California and several oil-rich sections of the Alaskan coasts as well as the Northeast coast will remain off-limits.   So the good news is that folks can drill outside of Virginia and Southern states, and in the eastern  Gulf of Mexico.  Of course, drilling in the Gulf of Mexico is nothing new.  The Wall Street Journal reported today that the new areas “may hold between 39 billion and 63 billion barrels of recoverable oil and 168 trillion to 294 trillion cubic feet of recoverable natural gas.”  The U.S. typically consumes around 20 million barrels of oil a day and about 23 trillion cubic feet of natural gas.  This is only a good first step.  It will take years for some of the leases to actually take effect. And some areas may not come online until 2017.   I’d like to see a more aggressive push towards offshore drilling.  I know lots of critics will assert that we’re relying on dirty energy and drilling for more oil puts the oceans and environment at risk.  We can’t jump to renewables overnight.  While the nation is on the path to sourcing more of energy consumption to renewables, the domestic sources of oil and gas can spur financial capital for additional R&D into renewable energy, as well as help reduce the price of energy, and thus provide a little relief to the economy.

Wind Power & Health Issues

The Wall Street Journal featured an interesting op-ed this week about the side effects of wind turbines. The piece describes some of the health problems — sleep deprivation, memory loss, headaches — that individuals who live near wind farms are experiencing.

“Lawsuits that focus on noise pollution are now pending in Maine, Pennsylvania and New Zealand. In New Zealand, more than 750 complaints have been lodged against a large wind project near Makara since it began operating last April. The European Platform Against Windfarms lists 388 groups in 20 European countries. Canada has more than two dozen antiwind groups. In the U.S. there are about 100 such groups, and state legislators in Vermont recently introduced a bill that will require wind turbines be located no closer than 1.25 miles from any residence. In theory, big wind projects should only be built in desolate areas. But the reality is that many turbines are being installed close to homes. [snip...] ” http://online.wsj.com/article/SB10001424052748704240004575085631551312608.html?KEYWORDS=wind+turbines

Obama’s Nuclear Plan

The Obama administration this week unveiled its plan to “jumpstart”  the U.S. nuclear power industry by awarding U.S. government financing for nuclear reactors.

Under the plan, the Department of Energy will provide $8.33 billion in loan guarantees to Southern Company for the construction and operation of two new nuclear reactors in Georgia, which will generate approximately 2200 megawatt hours of electricity annually, once the plants are up and running.  (source) It’s enough energy to power 550,000 homes (says the POTUS).  This is a strong step toward increased nuclear energy production after 30-year hiatus.  It suggests that  U.S. policymakers finally acknowledge the need for more nuclear power resources, despite environmental opposition and the major financial investments.

Yet at the same time, the Obama administration has pulled the plug on an important component to the equation for successful nuclear plant construction: where to store increased nuclear waste.

For more than decade the federal government has been working to create a nuclear waste storage site at Yucca Mountain in Nevada. But that plan has been bogged down in political wrangling, thanks in large part to opposition from Senate Majority Leader Harry Reid as well as decision by the Obama administration in 2009 to de-fund the project. (source) The FY 2011 federal budget scraps all funding for the project, despite billions already spent.  The DOE budget explains: “The Administration has determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository and will discontinue its program to construct a repository at the mountain in 2010.”

It seems disingenuous to hail a decision to award loan guarantees for nuclear plant construction and at the same time, completely rule out a location for radioactive waste storage that’s been years in the making at the cost of billions.

Of course, I’m counting chickens before they are hatched.  It could take another decade for these two reactors to actually come online, thanks to the construction and regulatory requirements of the U.S. Nuclear Regulatory Commission.  It was the Bush administration that originally signed 2005 energy law that created the DOE’s loan guarantee program. In that time, the agency has received dozens of applications, but no grants have been awarded for nuclear plant construction.  The Wall Street Journal reported that DOE received 21 applications in 2008 for more than $121 Billion in loans. (The program is currently funded at about $18 Billion). What’s remarkable is that if all 21 applications were approved and the subsequent plants were online tomorrow, it could increase energy production by up to 33 percent.

I applaud the push to increase energy output, particularly if nuclear reactors can generate large amounts of electricity without the nasty emissions.  However, President Obama needs to be consistent in his push for cleaner energy – that includes funding the mechanism for storing nuclear waste in spite of the NIMBY lobby.