Will the USA follow Europe and become reliant on Russian Natural Gas? (Fast Fission Podcast 4)
News stories are not always as benign as they appear.
On October 9, 2009 Forbes.com ran a story about Gazprom, Russia’s state owned natural gas company. It would seem they’ve set up shop in Houston, TX and have begun a very aggressive program to enter the US natural gas market. They are targeting 5% of the market within 5 years, and 10% within 10 years.
Their strategy? Import LNG into the US and sell it at a price low enough to undercut domestic suppliers. Since the US uses about 60 billion cubic feet of gas per day, that would mean importing 6 billion cu feet per day from Russia. That amount of gas would mean $64 Million flowing out of the US into Russia every day, along with a loss of American jobs and energy security.
Russia already has undue political influence in Europe where they control a large percentage of the natural gas supply. There’s little the USA can do to prevent the Russians from carryout out their plan; LNG is a commodity bought and sold on the international market. The only sure way to prevent importing energy is to have a supply of lower cost home-grown energy. The only large scale domestic energy sources with low enough costs to compete with gas are coal and nuclear. Wind and solar can’t compete with the price and are too unpredictable for base load energy. With air pollution and carbon concerns, it’s unlikely coal will be an option for expansion in the near term, at least until carbon capture and storage is commercialized.
That leaves nuclear energy as the only option. And it is a good option too! Each new nuclear plant that comes on line eliminates the need to burn 250 million cubic feet of natural gas per day. Using current natural gas prices,every large nuclear plant displaces $857K per day in gas sales. The same is true in Europe, where each nuclear plant built takes a bite out of Gazprom’s profits.