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Haley Zaremba

Oilprice

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Investors Turn Bullish On America’s Nuclear Decommissioning Business

Nuclear

The nuclear industry in the United States is on the decline. Although nuclear has garnered a hefty number of headlines and support from pundits on both sides of the political spectrum in the past months, nuclear still is not favored or even trusted by most constituents in the United States, and nuclear power was very tellingly left out of the clean energy strategy laid out by the Democratic Party’s Green New Deal fact sheet.

While nuclear does hold a lot of promise as part of a solution to combating climate change and decreasing the United States’ carbon emissions, it also has a fair amount of drawbacks. Constructing new nuclear power plants is extremely cost prohibitive, especially when forced to compete with the incredibly cheap and abundant natural gas currently flooding U.S. markets, as well as wind and solar power, which become cheaper and more efficient with each passing year.

In addition to hefty construction costs, nuclear accidents, while extremely rare, are also massively expensive and challenging to clean up and remediate--on top of their other obvious catastrophic consequences. Also working against nuclear energy in the U.S. is widespread public mistrust of nuclear energy, thanks in large part to accidents like Dauphin County, Pennsylvania’s 1979 Three Mile Island accident. And then there is a fair amount of political adversity, not to mention the mega-powerful lobbies behind more traditional forms of energy in the United States.

In fact, nuclear energy in the United States has gone from being touted as “too cheap to meter” to requiring massive and repeated handouts from state governments just to keep going. “One such state is Connecticut, where local news source the Connecticut Mirror just published a direct-to-the-point op-ed aptly titled ‘Nuclear plants will require ever-increasing subsidies’. The author Joel Gordes, Connecticut-based energy and environmental strategist, argues that since the very beginning of nuclear energy in their country when the argument for the resource was that nuclear energy was dirt cheap, nuclear has been deceptively pricey and getting pricier all the time.” Related: Tesla Slashes Prices Again

Now Bloomberg reports that the fastest growing sector of the nuclear industry in the United States has nothing to do with its resurgence, but with its demise. “The fastest growing part of the nuclear industry in the U.S. involves a small but expanding group of companies that specialize in tearing reactors down faster and cheaper than ever before,” begins the article succinctly titled “Fastest-Growing Nuclear Business Is Tearing Down U.S. Plants“.

One of the companies at the forefront of this trend is Northstar Group Services Inc. the New York City-based company recently acquired a Vermont nuclear plant from New Orleans, Louisiana’s Entergy Corp. The plant, while shuttered since 2014, was not due to be demolished until 2068 “using a $510 million decommissioning trust fund that would appreciate over time to cover $1.2 billion in anticipated costs” according to Bloomberg’s reporting. Enter Northstar, and along with it the future of (the end of) the nuclear industry. Northstar will dismantle the Vermont plant over 40 years sooner by 2026 and at a much lower cost to boot.

“The trick: Northstar would avoid up to $8 million a year in fuel-storage costs, and use the trust fund to get paid for the work” says Bloomberg. “And once the job’s done, they get 45% of whatever’s left in the fund. With nine other plants expected to shut by 2025, others are moving to replicate the strategy.”

While this new quick-demolition sector of the nuclear industry is still quite nascent in the United States, it’s on track to keep growing and become an even more significant part of the nuclear energy landscape. While companies like Northstar are bullish about the decommissioning’s money-making potential, there are also some significant criticisms about this new development in the industry. Quicker cleanup is not always better, the argument goes. With lots of money to be made over expedited nuclear plant dismantling, there is cause for concern about whether safety will be the priority it should be. When it comes to nuclear power, the last thing we want is for cleanup companies to be cutting corners.

By Haley Zaremba for Oilprice.com

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