New EIA chief thinks cheap gas hurting coal more than EPA

The new head of the Energy Information Administration (EIA) believes that cheap natural gas prices are hurting coal more in the electric power generation market than tough anti-pollution standards from the Environmental Protection Agency (EPA).

“It’s clearly being driven more by price competition,” EIA Administrator Adam Sieminski said when asked July 2 for his thoughts on coal’s declining share in the power market. Inter-fuel price competition and the “price benefits associated with lower cost natural gas,” are the big issue hurting coal at least in the short term, Sieminski said.

Longer-term, “the age of the coal plants and the need for emissions reduction” will also weigh heavily on coal-fired generation, Sieminski said.

Sieminski made his comments during the Platts Energy Podium; a reporter roundtable session held July 2 in Washington, D.C. Podcasts of recent such podium events are available on the company’s website.

Sieminski is still pretty new to EIA’s top job. Sieminski was sworn in on June 4, as the eighth administrator of EIA, the data and analytical arm of the U.S. Department of Energy. While awaiting confirmation by the Senate, he was a senior director on the staff of the National Security Council. Previously, he was the chief energy economist for Deutsche Bank, working on the institution’s global commodities research and trading units.

During the question-and-answer session, Sieminski noted that natural gas pulled even with coal-fired generation for electricity market share in April when both fuel sectors claimed roughly one-third of the electric generation market. Coal typically claims about half of the power market share and this is the first time gas has pulled even in years, Sieminski noted.

Much of the session was dominated by petroleum discussion. Sieminski said it is conceivable that the United States could be exporting some oil in a few years. The EIA official also talked about natural gas markets and planned exports of liquefied natural gas (LNG).

Like other government agencies, EIA is coping with budget cuts and staff issues. Within the next five years it is likely that many of EIA’s most experienced staff members will resign, Sieminski said.

Jaczko reflects on NRC tenure

While Sieminski is just starting his tenure at EIA, Nuclear Regulatory Commission (NRC) Chairman Gregory Jaczko was preparing to leave that organization when he spoke to reporters July 5. Jaczko said his last day at NRC would be July 6.

Jaczko announced his plans to resign in May. Since then President Obama nominated and the Senate confirmed geologist and academic Allison Macfarlane as the new leader of NRC. Jaczko has been on the commission since 2005 and was named chairman in 2009.

Since then, however, Jaczko, has staked out positions that often put him at odds with the nuclear power industry and his management style has sparked rare public criticism from the other four members of the commission – including his fellow Democrats.

Asked if he would now change anything about his past chilly relations with the rest of the commissioners, he replied: “Well, yeah. I would have made them better.” The remark drew laughs.

Jaczko said he has always been passionate about the things he believes in. At the same time, the outgoing NRC chairman said his communication style was not always effective and his actions “were not always popular.”

Although he is leaving NRC more than a year before his term expires, Jaczko indicated he was happy with the choice of Macfarlane as the new NRC chair. “I was very comfortable with the name I’d heard as replacement,” the outgoing chairman said.

The commission must decide how to handle the various recommendations of a senior NRC staff task force following the Fukushima meltdown in Japan. The NRC must decide if these are basic safety fundamentals or items subject to cost-benefit analysis, Jaczko said.

Since the beginning of the year, Jaczko has cast the commission’s lone dissenting vote against the first new nuclear power plant applications in 30 years because of lack of upfront assurances that the new plants would implement Fukushima-inspired safeguards.

While Jaczko said he had not yet read the English language summary of a new Japanese report on Fukushima, he agrees with the conclusion that “group think” should often be challenged when it comes to nuclear energy.

As to whether there will be additional new nuclear plants approved in the United States in addition to the ones approved this year in Georgia and South Carolina, Jaczko said that depends on how successful groups led by Southern (NYSE: SO) and SCANA (NYSE: SCG) are in building those plants on time and on budget.

Jaczko said many of the companies that filed nuclear plant applications in 2007 and 2008, are still pursuing them – albeit on a go-slow timetable.

As for license renewals, Jaczko said he would like to see a less narrow, more comprehensive review before plants receive a 20-year license extension. Jaczko also said “the jury is still out” on whether existing nuclear plants should be allowed to run longer than 60 years. Economics might discourage 60-year-plus operation of a plant with “an older design” that requires a lot of modification, Jaczko said.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.