Today’s Key Takeaways: Fallout from Ukraine continues to dominate global energy markets. What do the experts say? White House pushes renewables to end reliance on foreign oil instead of increasing U.S. oil production. Millrock expecting busy exploration year in Alaska. Supreme Court hearing oral arguments on EPA’s ability to regulate climate change. Biden investing billions in nuclear energy.
NEWS OF THE DAY:
Will Boycotts of Russia Oil and Gas Exports Develop?
Andreas Exarheas, Rigzone, February 28, 2022
In this week’s preview of what to watch in oil and gas markets, Rigzone’s regular energy prognosticators focus on the Russia-Ukraine conflict, OPEC+ policy, U.S. supply and more. Read on below to find out the specifics.
Rigzone: What developments/trends will you be on the lookout for this week?
Tom Seng, Director – School of Energy Economics, Policy and Commerce, University of Tulsa’s Collins College of Business: Will the sanctions imposed on Russian assets and oligarchs bring any level of pressure down on Putin and force him to exit Ukraine? Will boycotts of Russian oil and gas exports develop? With a few more weeks of winter on the calendar, can Western Europe afford not to import energy from Russia? What are the prospects of an expedited Iran Nuclear agreement settlement that would free-up some much-needed oil supplies?
Jon Donnel, Managing Director, B. Riley Advisory Services: The fallout from the invasion of Ukraine will continue to dominate global energy markets for the foreseeable future. The U.S. and its allies announced various economic sanctions last week immediately following Russia’s actions that were primarily focused on limited Russia’s access to banking services and technology imports, but that conspicuously excluded restrictions on oil and natural gas sales. It will be important to gauge whether the sanctions are having the intended effect and how long that will take to materialize. Further, Russia has been an important member of the OPEC+ cartel, particularly regarding the recent production increases as the group has looked to balance the market as demand has improved over the past year. For now, it is unlikely that there will be material changes to the current agreement to add 400,000 barrels per day each month for the remainder of the year, but policy may need to change at the upcoming meeting in early March if additional sanctions are imposed on Russia.
Frederick J. Lawrence, Conference Speaker, and ex-Independent Petroleum Association of America (IPAA) Chief Economist: Ukraine will dominate the news for some time as well as the shifting global foreign policy themes that fill in to deal with Russia. This sea change will have ramifications for national security, energy and economies as countries pivot over time. A final agreement with Iran would certainly add supply in 2022. Some market watchers have proposed more bearish estimates on oil prices by year-end with possible additions by non-OPEC as well as Iran. However, there is a higher probability of the opposite occurring with future Russian supply being impacted (note the German decision to abandon Nordstream 2), continued inability of OPEC + to meet their production quotas and various regional production limitations (Middle East, Latin America, etc.).
Despite political roadblocks, the U.S. supply picture is one of the more positive. The large public independent producers have maintained their production discipline with continued focus on positive cash flow, share buybacks and increasing dividends. Many see total oil production increase of around 800,000 barrels per day to one million barrels per day for the U.S. in 2022 with growth primarily driven by the majors and private companies. The tight market balance, low inventories/spare capacity and longer-term issue of reserve replacement will keep upward pressure on the petroleum supply and demand balance. Natural gas especially deserves attention as more LNG will undoubtedly be needed to help our partners in Europe even if the fuel is not further ‘weaponized’ by Russia. The lack of additional regasification capacity on European shores will limit LNG export growth but natural gas continues to become more international (and less of a regional/continental fuel) in scope and a key element of global energy transition goals. Energy security will be front and center for consumers and the connected themes combining supply, national security and transition have rarely been so important (and complex).
Mark Le Dain, Vice President of Strategy with the oil and gas data firm Validere: High quality inventory in North America is running out. Several recent releases showcased this with names pointing to stagnating growth or surprising declines in certain assets. Expect more commentary to start to take notice which could start accelerating resource focused deals.
Phil Kangas, Grant Thornton Partner In Charge, Energy Advisory, Natural Resources and Mining: The United Nations Environment Assembly (UNEA-5) is set to take place in Nairobi and virtually this week, setting the stage for substantial discussions on a blueprint for an international plastics treaty. The initiative has been touted by some as the most significant environmental pact since the 2015 Paris Agreement on Climate Change. The U.S. is among the world leaders in producing plastic polymers and generates more plastic waste per person than any other nation. Over 100 countries are expected to participate at the conference, and the details of the treaty will take time to finalize. With the close ties between plastics and the oil and gas industries, we’ll be watching what is ultimately included in the framework. Also, any agreement would need ratification by an evenly divided Senate. Political support espoused for the framework that is ultimately approved will be worth watching.
Psaki pushes renewable energy to stop dependence on foreign oil instead of increasing US production
Michael Lee, FOX Business, February 28, 2022
White House press secretary Jen Psaki said the U.S. needs to decrease its reliance on foreign oil by switching over to renewable energy, not increasing domestic production.
“We need to reduce our dependence on foreign oil, on oil in general, and we need to look at other ways of having energy in our country and others,” Psaki said during an interview with ABC This Week Sunday. “We’ve seen over the last week or so… a number of European countries are recognizing they need to reduce their own reliance on Russian oil.”
Psaki’s comments come as fears grow that energy prices could continue to rise amid Russia’s ongoing war in Ukraine, with many NATO countries such as Germany dependent on Russian oil to fuel their countries.
That dependence has also limited the international response to Russia’s invasion, with sanctions being specifically designed not to target Russian fuel exports amid fears such a move could send energy prices soaring in Europe.
The comments also come after the Biden administration last week began delaying decisions on new oil and gas leases after a federal judge blocked the administration from using higher climate change cost estimates when regulating polluting industries.
The ruling stems from President Biden’s decision on his first day in office to restore the climate cost estimate to $51 per ton of carbon dioxide emissions, up from the $7 it was slashed to during the Trump administration.
LNG Buyers Pause Purchases From Russia on Sanction Uncertainty
Stephen Stapcynzski, Ann Koh, Bloomberg, February 28, 2022
- Traders cautious about buying LNG or using vessels from Russia
- The move will tighten amount of available supply in the market
Several liquefied natural gas buyers have paused further purchases from Russia due to the quickly evolving wave of sanctions from the West, adding to worries over tight global supplies of the super-chilled fuel.
Some importers from Asia to South America have decided to temporarily halt buying spot LNG shipments from Russia as they wait for more clarity on restrictions against banks and companies, according to traders. Across the board, traders say they are being more cautious about buying LNG or using vessels from Russian entities.
The move will intensify global competition for a shrinking pool of available LNG, exacerbating a global shortage that threatens to send spot prices of the heating and power plant fuel higher. Russia was the fourth-largest LNG exporter in 2021.
Western nations agreed over the weekend to exclude some Russian banks from the SWIFT bank messaging system. Meanwhile, Singapore is planning to announce measures to block certain Russian banks and financial transactions connected to Russia, Foreign Minister Vivian Balakrishnan said in Parliament on Monday.
While the new raft of sanctions don’t directly target energy, the volatile and fast-moving backdrop is making it challenging for LNG buyers to commit to more shipments from Russia.
Some smaller importer are struggling to get letters of credit from banks to purchase Russian LNG, effectively halting their procurement, the traders said, requesting anonymity to discuss private details. At least two of China’s largest state-owned banks are restricting financing for purchases of Russian commodities.
To be sure, LNG importers are continuing to take delivery of Russian shipments under long-term contracts or that were previously purchased, traders said.
- Intra-day value for second-half March DES cargo to North Asia assessed at $40.575, +$6.225 from the previous session, according to S&P Global Platts
- 1H April +$6.175 to $40.375
- There were no bids and offers on S&P Global Platts JKM LNG Market on Close
- Singapore’s Energy Market Authority purchased an LNG cargo on a DES basis for delivery in March via Singapore LNG Corp., which may indicate that it aims to avoid a near-term supply crunch
- PTT is seeking at least one LNG cargo on a DES basis for April delivery to Thailand
- Gail issued a swap tender seeking to buy an LNG cargo for April 4-10 delivery to Dabhol in India on a DES basis, and offering a cargo loading March 1-8, 2023 from Sabine Pass, U.S., on an FOB basis
Busy 2022 on Millrock’s Alaska projects
Shane Lasley, North of 60 Mining News, February 25, 2022
From an expected multimillion-dollar exploration program on the hardrock sources of the placer gold discovered by Felix Pedro in the Fairbanks Mining District 120 years ago to preliminary investigations of the Nikolai nickel-copper-cobalt-chromium-platinum group element project recently added to its portfolio, Millrock Resources Inc. is looking forward to a busy year of exploration on the properties it has generated in Alaska.
“Millrock is looking forward to a very active upcoming year with numerous catalysts that could serve to drive the company’s share price upwards,” said Millrock Resources President and CEO Gregory Beischer. “Our shareholdings in other junior exploration companies have the potential to significantly increase in value in 2022.”
As a project generator, Millrock identifies and acquires prospective early-stage mineral exploration projects; completes the preliminary data compilation and fieldwork to demonstrate the project’s potential; and then finds a partner that will invest the millions of dollars on the drilling and other exploration programs needed to delineate an economically viable mining project.
In exchange, Millrock typically receives some cash, holds a royalty on the vended property, and gains an equity position in the company that options it. Millrock also often retains a joint venture interest in the property and receives payment for managing or executing further exploration.
During 2022, there will be active exploration programs on at least six gold projects Millrock has generated under this business strategy.
Enter Felix Gold
Much of this exploration will be carried out by Felix Gold Ltd., an Australian mineral exploration company that recently completed a A$10 million (U$7.1 million) initial public offering and listing on the Australian Securities Exchange.
Early in 2021, Felix entered into a strategic alliance with Millrock on several Interior Alaska gold exploration projects – Treasure Creek and Ester Grant near the Interior Alaska city of Fairbanks, plus the Liberty Bell project about 70 miles to the southwest.
In exchange for becoming a roughly 10% shareholder of Felix after its ASX listing, Millrock has assigned the Australia-based company all its rights to the Fairbanks District and Liberty Bell properties.
Felix plans to kick off its 2022 exploration with a drill program slated to get underway in March at Treasure Creek.
Situated about 13 miles west of Kinross Gold Corp.’s Fort Knox Mine, Treasure Creek hosts numerous prospects with interesting drill intersections reported by prior workers. Roughly 2,000 soil samples collected by Felix and Millrock geologists last year have identified two key targets for 2022 drilling – Northwest Array and Eastgate.
Located about five miles south of Treasure Creek, the Ester Grant property is home to the past-producing Grant gold mine.
According to a calculation completed for Felix, Grant hosts 5.8 million metric tons of Australian Joint Ore Reserves Committee-compliant inferred resource averaging 1.95 grams per metric ton (364,000 ounces) gold. Roughly 136,000 oz of this gold is contained within an underground resource averaging 6.2 g/t gold.
The JORC-compliant report has also identified an exploration target at Grant Mine with the potential for approximately another 500,000 oz of gold in around 6 million metric tons of resource averaging approximately 2 g/t gold.
Millrock says Felix plans to carry out some drilling at Ester Grant this summer.
Over the past year, the Felix Gold team has also significantly enlarged its land holdings in the Fairbanks District to around 73,000 acres. Much of this expanded property is encompassed by NE Fairbanks, a roughly 36,000-acre land package adjacent to extensive historical placer gold producing streams and within six miles of Kinross Gold Corp.’s Fort Knox and Gil gold mines and Freegold Ventures Ltd.’s Golden Summit exploration project.
Felix plans to carry out reverse circulation drilling this summer to follow up on gold-in-soil anomalies identified during sampling last year.
“Our key projects, which are surrounded by extensive alluvial gold production, are located along the main gold trend and contain dozens of identified prospects, where historical drill intercepts remain open and emulate other major deposits in the district. Felix is excited to have multiple walk-up drill targets with indications of large-scale gold potential,” Felix Gold Managing Director and CEO Kylie Prendergast penned in a Jan. 31 letter to shareholders. “Our value proposition is further underpinned by an existing 364,000 oz gold mineral resource at Grant-Ester where significant upside potential also exists.”
The newly listed Australian exploration company also plans to carry out drilling at Liberty Bell, a 15,200-acre property near the Parks Highway south of Fairbanks.
Based on exploration that dates as far back as the 1930s, 1.24 million tons of historical resource averaging 0.1 oz/t, or about 6 g/t gold, was outlined at Liberty Bell in the 1980s.
Millrock says gold is widely distributed across the Liberty Bell property, including bulk tonnage intrusion-related high-grade skarn mineralization.
To gain a better understanding of Liberty Bell, Felix plans to carry out drilling in areas where 10- to 100-meter-thick layers of gravel obscure interesting geophysical anomalies.
Getting closer at 64North
As Felix launches its inaugural drill program on the Fairbanks District and Liberty Bell properties, Resolution Minerals Ltd. continues to explore 64North, a roughly 160,000-acre land package surrounding Northern Star Resources Ltd.’s Pogo gold mine in the Goodpaster Mining District.
Under a deal signed at the end of 2019, Resolution has the option to earn up to a 60% interest in this enormous land package by investing US$20 million in exploration spending and issuing shares to Millrock over four years.
Upon earning a 60% interest on the entire 64North project, Resolution will have the option to increase its interest on one of nine claim blocks that make up the larger project – West Pogo, Shaw, Eagle, LMS-X, South Pogo, East Pogo, North Pogo, Last Chance, and Divide – by funding a feasibility study and Millrock’s portion of mine development on the selected block.
By mid-2021, Resolution had invested enough to earn a 42% interest in 64North.
Resolution has developed a compelling series of drill targets at the Tourmaline Ridge prospect on the West Pogo block of claims.
Located about 1,000 meters southwest of the Aurora prospect, Tourmaline Ridge lies on a trend of mineralization that extends northeast to the Pogo gold mine. Northern Star’s Goodpaster discovery lies along this trend between the Aurora and current operations at Pogo.
“The Tourmaline Ridge prospect is in a great neighborhood for gold mineralization,” said Resolution Minerals Managing Director Duncan Chessell. “The prospect is about two kilometers (1.2 miles) along the ridge line from Resolution’s Sunrise Prospect, which has demonstrated a 280-meter-wide intrusion-hosted gold mineralization zone identified in drilling earlier this year.”
Prospecting and sampling, including surface rock chip sampling that returned grades as high as 118 g/t gold, has outlined a 1,800- by 750-meter zone at Tourmaline Ridge.
Resolution cut two trenches for a total of 820 meters across this zone to test for a large-scale gold system that is a hybrid of vein-hosted mineralization similar to Pogo and bulk tonnage mineralization similar to the deposits at Fort Knox.
The Australian explorer says preliminary results from this trenching and the other 2021 exploration have identified the highest-ranking drill target so far at 64North, including a one-meter trench sample that averaged 4.8 g/t gold.
Resolution plans to carry out a four-hole drill program to test for high-grade Pogo-style gold mineralization on the Tourmaline Ridge Aurora-Goodpaster trend early this summer.
“We are very excited to put a potential road accessible large scale Pogo-style discovery in front of the drill bit for Resolution investors,” said Chessell. “It has been a difficult road until this point, but we have high expectations for this drill program.”
“We are confident that these trenching results in combination with all the other contributing factors support the potential for a large-scale Pogo-style gold mineralisation, below Tourmaline Ridge,” he added.
Potential El Nido drilling
In addition to attracting Aussie explorers, Millrock cut a deal with Coeur Explorations, a subsidiary of Coeur Mining Inc., for exploration of the Apex gold project in Southeast Alaska.
Located about 70 miles southwest of Juneau, Apex is home to the historical Apex and El Nido mines, which produced at least 34,000 oz of gold from ore averaging around 1 oz/t gold during sporadic operations between 1922 and 1940.
Surface exploration was done by WGM Inc. in the 1980s, but no drilling was carried out, and the property has been dormant until Millrock secured an option on the core claim group in 2016.
“From historic documents, we know that high-grade gold ore was previously mined, but there has never been a single exploratory hole drilled,” Beischer said previously. “It seems likely that the known high-grade gold-bearing quartz veins will continue along strike and in the down-dip direction.”
Under the agreement, Coeur will be responsible for making cash payments and funding exploration expenditures to keep an option agreement with the underlying landowner, Apex El Nido Gold Mines, in good standing.
Millrock is carrying out the exploration on the Apex property under a services agreement with Coeur.
Strong gold results from soil sampling carried out last year traced the known gold-bearing vein system more than 1,000 meters from the old mine workings.
Coeur is contemplating a summer 2022 drill program at Apex El Nido.
Base and critical metals
In addition to the gold properties, Millrock has generated a couple of projects rich in copper, nickel, and other base and critical metals.
The newest addition to its portfolio is Nikolai, an extensive land package covering nickel-copper-cobalt-chromium-platinum group metals prospects in Alaska’s underexplored Wrangellia Terrane.
Nikolai includes the Eureka and Canwell claim blocks about 80 miles (130 kilometers) south of Delta Junction, Alaska.
Consisting of 104 state mining claims staked by Millrock, the Eureka claim block covers a roughly 10-mile-long trend of nickel-copper-cobalt-platinum group metal mineralization that was explored by Pure Nickel Inc. (now Galleon Gold Corp.) from 2007 through 2014.
Based on historical drilling, Millrock has identified a roughly 1,700- by 600- by 300-meter zone of mineralization at Eureka that hosts potentially economic concentrations, albeit low grades, of nickel, copper, cobalt, platinum, palladium, and gold. Additionally, the project generator postulates that higher grade mineralization may occur in embayment features at the base of the Eureka Zone, where heavy metals may accumulate during fractionation and crystallization of the ultramafic intrusion. Further drilling, however, is needed to confirm this hypothesis.
Canwell consists of a block of 43 (previously reported as 42) state mining claims about 11 miles to the northeast that Millrock is optioning from David Johnson. Very high grades of nickel, copper, and PGEs were identified with historical surface rock sampling and drilling. In addition to platinum and palladium, Canwell hosts the rarer and more expensive PGEs – iridium, osmium, rhodium, ruthenium.
“Millrock is very pleased to have generated this nickel-dominant project which also has a variety of accompanying critical and strategic metals,” Beischer said earlier this month.
Millrock’s Alaska portfolio also includes Chisna, a district-scale porphyry copper-gold project about 75 miles southeast of Nikolai.
Previous exploration and work carried out by Millrock geologists have identified several copper-gold prospects across the four blocks of state mining claims and Alaska Native lands at Chisna – Grubstake, Ravine, POW, and Dragonslayer.
Grubstake includes both state mining claims and lands owned by Ahtna Inc., the Alaska Native Claims Settlement Act (ANCSA) regional corporation for this part of the state.
Work carried out by previous explorers has identified copper porphyry mineralization enriched in gold at Grubstake. Previous drilling here has cut moderate to low copper grades but high gold values. Millrock has completed soil sampling work that has extended the surface anomaly considerably. Reprocessing of magnetic data has identified a large target southeast and northeast of the previously drilled area.
The Ravine claims have seen very little exploration, and their potential is poorly understood. Millrock, however, says some encouraging massive sulfide boulders related to mafic dikes indicate the potential for volcanogenic massive sulfide deposits is present on this underexplored block of claims.
The project generator says POW is another underexplored property that hosts intriguing color anomalies, and anomalous copper-in-soils are scattered across the claims. This early-stage prospect requires more systematic mapping and sampling to refine areas for geophysics and potential drilling.
Dragonslayer is an electromagnetic geophysical anomaly that Millrock says is comparable to Pebble in both size and intensity. A ring of high conductivity surrounds a magnetic core. Soil sampling indicates a broad array of metallic anomalies typical of a porphyry copper-gold system. The next steps for this prospect included induced polarization geophysical surveying and drilling.
Millrock has been talking to several companies interested in partnering with the project generator at Chisna.
Supreme Court to hear case challenging the scope of EPA’s climate powers
Rachel Frazin, The Hill, February 28, 2022
The Supreme Court is set to hear oral arguments Monday in a case that could limit the Environmental Protection Agency’s (EPA) ability to regulate climate change.
At issue in the case is the extent to which the agency can pursue climate regulations that have broad impacts on areas such as the power sector.
Two coal companies, as well as a group of states led by West Virginia and North Dakota, are challenging a lower court ruling that tossed a Trump-era rule governing power plants.
That Trump rule loosened regulations surrounding climate change when compared to the Obama-era Clean Power Plan (CPP), which sought to reduce releases of greenhouse gases through improved efficiency measures, as well as the adoption of more natural gas and renewable energy, as opposed to coal.
The Supreme Court stayed that plan, preventing it from taking effect, in 2016. And the Trump administration replaced it with the Affordable Clean Energy (ACE) rule, which still sought efficiency improvements, but excluded the switch to cleaner fuels.
CPP was expected to be significantly more impactful than ACE, reducing carbon dioxide emissions by 415 million short tons by 2030 compared to its successor’s 11 million short tons.
Neither rule is currently in place, as a court also struck down the Trump rule last year.
But as the Biden administration is working on its own regulations for power plants, the states and coal companies are seeking to limit its authority to do so.
They have argued that a key provision in the Clean Air Act only allows the EPA to regulate the pollution sources themselves, rather than setting broader standards that could change the makeup of the country’s power supply.
“They have the ability to regulate a source, and so for instance that could be the coal fired power plant, and that could be for heat efficiencies or items within the power plant,” West Virginia Attorney General Patrick Morrisey told The Hill in an interview.
But, he added, they can’t “go so far afield” and create a system that could “impact consumer demand or force rewrites of the power grid.”
The government disagrees, arguing that the law’s call for a “best system of emissions reduction” enables it to regulate both within the power plant and outside its boundaries.
It said in a court briefing that the definition of the word system “encompasses inside- and outside-the-fenceline measures alike.”
And the government and their environmentalist allies argue that since neither the Obama rule nor the Trump rule is in place, there’s nothing to sue over.
“’Seinfeld,’ they used to say, ‘This is a show about nothing.’ In some ways, this case is about nothing,” said David Doniger, senior strategic director of the Natural Resources Defense Council’s climate & clean energy program.
“Big arguments about two rules that are not in effect and don’t do anything. The first step is to decide whether they were right to take the case in spite of the fact that there’s no rule in place,” Doniger said.
But Morrisey argues that policy similar to the Obama administration’s is “bound to be repeated.”
For his part, EPA Administrator Michael Regan said he would use a “clean slate” when asked if the administration would pursue a “new version of the Clean Power Plan” during his confirmation hearing last year.
“It’s my understanding that we have to take a look at what [were] the plans for the Clean Power Plan and what were the plans for the ACE rule. The reality is — is that it presents a significant opportunity for the Environmental Protection Agency to take a clean slate in how do we best move forward,” Regan said at the time.
“There are lots and lots of, I would say, examples of success and failure that we’ve seen in past tries,” he added.
Biden Is Ready To Bet Big On Nuclear Energy
Felicity Bradstock, OilPrice.Com, February 27, 2022
- The United States sees nuclear energy as a key component in its net-zero ambitions.
- Despite an uncertain revenue outlook, the Department of Energy has announced it will be investing billions into keeping existing nuclear power plants open over the next few years.
- Coal-dependent states are also welcoming nuclear power as a means of conserving their long-standing energy industries.
The U.S. government is pumping money into nuclear energy despite the uncertain revenue outlook. While many criticize Biden for supporting an industry with such high costs when the money could be put towards developing the renewable energy sector, the state is adamant that this is a necessary move to meet net-zero targets and bridge the gap in the energy transition. The Department of Energy (DoE) has announced it will be investing billions into keeping existing nuclear power plants open over the next few years in a bid to support the U.S. aim to develop its clean energy sector. Several nuclear plants are losing too much money to stay open without government support. But the government sees this as a worthwhile investment as nuclear power is key to helping Biden meet his pledge of reducing greenhouse gas emissions by 50 percent by 2030. The funding comes from the Bipartisan Infrastructure Law that came into effect in November, with a $6 billion Civil Nuclear Credit Program.
Deregulation is largely blamed for nuclear power plants’ struggling finances, as selling power on an open market means buyers often opt for the cheapest option, typically natural gas. At present, there are 10 states with deregulated power plants. And based on the current low price of natural gas, as much as one-third of nuclear power could be lost as it simply cannot compete. This would mean a decrease from 96 gigawatts to 60 gigawatts by 2030.
While deregulation drove competition in the past, new climate change targets could mean that the government needs to change its energy strategy to push people to switch to cleaner energy sources. Under current market rules, nuclear power will remain uncompetitive as new, lower-cost energy sources arrive, such as wind and solar power. But as neither of these are as reliable in providing stable power as nuclear, the U.S. cannot give up on its power plants.
Secretary of Energy Jennifer M. Granholm stated, “U.S. nuclear power plants are essential to achieving President Biden’s climate goals and DOE is committed to keeping 100% clean electricity flowing and preventing premature closures.” Further, “The Bipartisan Infrastructure Law makes this all possible by allowing us to leverage our existing clean energy infrastructure, strengthen our energy security and protect U.S. jobs. DOE is facilitating the development of next-generation technologies that can ultimately lower emissions and bolster the clean energy workforce”, she said.
So, does nuclear power present a viable way to achieve net-zero? In the U.K., alongside wind and solar energy, nuclear and emerging technologies such as hydrogen are all integral parts of the government’s energy transition strategy. The International Atomic Energy Agency (IAEA) explains that “nuclear power can help complement and integrate the expected large shares of renewable generation by ensuring 24/7 energy supply reliability and dispatchability.” The IEAE believes that maintaining nuclear energy output is therefore vital to the shift towards renewables.
While the disposal of nuclear waste continues to be a key concern for many, others are questioning the exorbitant costs related to nuclear energy production. Green energy advocates say the money being spent on keeping nuclear power plants running could be better invested in developing renewable alternatives. A report by the IDLES program at Imperial College, London suggested: “Nuclear energy would need to halve in cost to warrant major new builds within a cost-optimal [net-zero] system.”
But these concerns haven’t stopped big coal states from getting on board. Some of the historically most important coal states in the U.S. are now embracing alternative energy projects as many towns and cities across the country stand to lose huge amounts of revenue and thousands of jobs as America moves away from fossil fuels.
West Virginia recently passed a bill getting rid of a ban on nuclear plant construction that has been in place for a century. Similarly, Indiana passed a bill incentivizing the construction of nuclear plants on existing fossil fuel sites. Wyoming and Montana made similar moves during the last two years, and Missouri is looking to do the same. This suggests that many states that once staunchly opposed nuclear power are now embracing it as a means of conserving their energy industries.
This new trend is becoming known as the coal-to-energy transition. Many coal-reliant regions see it as a means of maintaining economic stability during times of uncertainty. Alice Caponiti from the U.S. Department of Energy explains, “Coal and other fossil sites offer substantial value as potential sites for new nuclear plants in terms of their existing power grid and other infrastructure, ready access to water sources, and a local skilled workforce.”
While many have fears about overinvestment in an industry that will continue to have much higher costs than renewable alternatives, the U.S. and several other countries see nuclear power as vital to the transition away from fossil fuels. The DoE is propping up the industry to ensure that the U.S. meets its net-zero targets over the coming decades. And now coal-dependent states are welcoming nuclear power as a means of conserving their long-standing energy industries, thereby replacing jobs, and supporting the local economy.