Texas Institute to Evaluate Nuclear Power as Alternative to Natural Gas

Thursday, 11 March 2004

United States – the Texas Institute for the Advancement of Chemical Technology (TIACT) is to investigate the feasibility of using nuclear power to meet the energy needs of US industrial end-users.

High and increasingly volatile natural gas prices that have created economic turmoil and led to plant closures in the US petrochemical industry have prompted this move, which was announced by TIACT yesterday, 10 March 2004 – along with confirmation that it will receive financial assistance from the U.S. Department of Energy (DOE) in the form of a cost-shared cooperative agreement.

”Manufacturers are getting whipsawed by high natural gas prices,” said Dr Charles Holland, TIACT’s president and emeritus professor of chemical engineering at Texas A&M University, commenting on the significant energy requirements in manufacturing basic chemical commodities such as ethylene.

Natural gas is an essential feedstock for US petrochemical manufacturing. The lack of an alternative local raw material equivalent to natural gas makes it more costly to produce everyday chemical commodities. The cost of electricity, the other key ingredient in the production of chemicals, is also affected by high natural gas prices because almost all of the new power plants built in recent years burn natural gas. Faced with global competition, chemical companies have been unable to offset these higher costs and the unfortunate result is that production is moving offshore.

Dr Holland says that nuclear power is seen as a possible long-term solution to these problems.

“With DOE’s financial assistance and with contributions from TIACT members, we will be able to study the feasibility of building a nuclear plant to serve the needs of the petrochemical industry in a way that makes environmental as well as economic sense.”

The TIACT study will prepare the business and technical case for constructing a privately financed nuclear power plant to serve the chemical industry’s needs in particular, as well as those of the general public.

“The key to making the business case for a nuclear plant is constructing a balanced evaluation all the uncertainties - costs, market prices, the licensing process and so on - and to still be able to confidently project a high rate of return,” says John Redding of EnergyPath Corp., the energy consulting firm conducting the studies with TIACT and Stanford University.

“There are two parts to this study that are really fascinating. The first is the active involvement of end users and how that might influence potential owners and investors. The other is strengthening the business case by using some of the plant’s output to make fresh water and hydrogen, in effect making the nuclear plant a co-generator,” he added.

Source: TIACT and EnergyPath Corporation joint press release.