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ERROR: type should be string, got "https://online.wsj.com/article/SB10001424052702304459804577281490129153610.html\nCheap Natural Gas Unplugs U.S. Nuclear-Power Revival\nBy Rebecca Smith\nMarch 15, 2012 10:30 pm ET\nThe U.S. nuclear industry seemed to be staging a comeback several years ago, with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board.\nWhat killed the revival wasn't last year's nuclear accident in Japan, nor was it a soft economy that dented demand for electricity. Rather, a shale-gas boom flooded the U.S. market with cheap natural gas, offering utilities a cheaper, less risky alternative to nuclear technology.\nDuke Energy Corp., taking advantage of cheap and plentiful natural gas, is building a large gas-fired power plant, above, in Rockingham County, N.C.\nAerial Photos Elite, LLC\n\"It's killed off new coal and now it's killing off new nuclear,\" says David Crane, chief executive of NRG Energy Inc., NRG 2.41% a power-generation company based in Princeton, N.J. \"Gas has come along at just the right time to upset everything.\"\nAcross the country, utilities are turning to natural gas to generate electricity, with 258 plants expected to be built from 2011 through 2015, federal statistics indicate. Not only are gas-fired plants faster to build than reactors, they are much less expensive. The U.S. Energy Information Administration says it costs about $978 per kilowatt of capacity to build and fuel a big gas-fired power plant, compared with $5,339 per kilowatt for a nuclear plant.\nChina Expects Soaring Shale-Gas Output\nDeal Journal: Natural Gas Gets Some Love\nAlready, the inexpensive natural gas is putting downward pressure on electricity costs for consumers and businesses.\nThe EIA has forecast that the nation will add 222 gigawatts of generating capacity between 2010 and 2035—equivalent to one-fifth of the current U.S. capacity. The biggest chunk of that addition—58%—will be fired by natural gas, it said, followed by renewable sources, including hydropower, at 31%, then coal at 8% and nuclear power at 4%.\n\"What utility doesn't want cheap fuel?\" says Steve Piper, associate director of energy fundamentals at SNL Financial, a research company. He predicts natural gas will remain the \"default fuel\" for as long as gas production remains high and prices stay low.\nThe picture looks different in much of the rest of the world. Many developing nations, for example, which don't have ready access to cheap natural gas, are plowing ahead with plans to build new reactors, according to the World Nuclear Association. Once built, nuclear plants produce some of the cheapest electricity available other than big hydroelectric dams.\nIn the U.S., even believers in nuclear energy are responding to the allure of abundant gas. Dominion Resources Inc., D 1.60% Virginia's biggest utility company and operator of seven nuclear reactors, put one new gas-fired plant in service last May and recently got approval to build another that is twice as big. On the drawing board are two more plants that would nearly double the company's gas-fired generating capacity.\nMeanwhile, Dominion is shutting down some old coal-fired plants and only inching forward on a proposal to build a big reactor at its existing North Anna nuclear plant. The company says it is still seeking approval from the U.S. Nuclear Regulatory Commission, but doesn't expect it before 2015—and may yet kill the project.\n\"Right now, things are pointing to gas,\" says David Christian, Dominion's chief executive and former chief nuclear officer. He says natural gas's share of the electricity market, now about 25%, could rise to 30% or 40% in the future.\nBut like some others in the industry, Dominion's Mr. Christian worries about relying too heavily on any one fuel, including natural gas. \"Even if it's economical,\" he asks, \"is it wise?\"\nThere are no guarantees that natural gas will continue to be advantageous over the long term, so momentum ultimately could shift back to nuclear power. Natural-gas prices could spike, as they have before. Already, gas producers are drilling fewer wells because of low prices.\nAt some point, Congress could impose a fee on greenhouse-gas emissions. Although modern gas-fired plants release only about half as much carbon dioxide as coal-fired plants, they are nowhere near as clean as nuclear plants, which emit almost no air pollution.\nFuel-supply problems also could bedevil gas-fired plants. Though most plants are expected to be built near existing gas-transmission pipelines, there could be disruptions if gas demand outstrips pipeline capacity. That has happened during cold snaps, when home-heating needs, which get priority, increase.\nThe nation's 104 nuclear plants, by contrast, never have to compete with households. And nuclear plants typically run 18 to 24 months before stopping to refuel, making their productivity the envy of the rest of the power industry.\nNatural-gas companies are working to assuage utilities' concerns. Steven Farris, chief executive of Apache Corp., points to the current price—about $2.30 per million British thermal units—as proof that gas is abundant. \"Obviously, we've got more gas than we used to, or we'd have $13 gas,\" he says. \"We just have a tremendous amount of gas.\"\nMr. Farris doesn't claim natural gas can or should meet most of the nation's power needs. But he says his industry could furnish enough to replace the 185 biggest coal-burning power plants.\nThe gas industry's goal is to \"grow demand for their fuel as they grow production,\" says John Somerhalder, chief executive of AGL Resources, a big natural-gas distribution utility based in Atlanta. There is no better customer, he says, than the power industry.\nEnormous quantities of natural gas have been discovered in the U.S., especially in underground shale formations, where it is being extracted through hydraulic fracturing, or \"fracking.\" In 2010, there were more than 487,000 wells producing natural gas in 30 states, led by Texas with 95,000 wells, according to the EIA, the statistics arm of the Department of Energy. So-called shale-gas production now accounts for about one-third of U.S. natural-gas supplies.\nThe new supplies have helped push down prices to just one-third of their level in 2005.\nNatural gas serves three major markets in the U.S.: home heating, electricity production and industrial uses such as the manufacture of chemicals and plastics. In 2011, the power industry used about the same amount as the industrial sector, but it is expected to pull ahead in coming years.\nOne reason utilities are finding it hard to resist cheap gas is that there is a surplus of gas-fired generating capacity in many parts of the nation, the result of a building boom that lasted from 1998 to 2005. Due in part to deregulation and inexpensive capital, in 2001 alone utilities added 60,000 gas-fired megawatts, equivalent to more than 120 big plants.\nBut the 2002 collapse of Enron Corp., the big energy marketer, led to a credit squeeze that eventually pushed some of the biggest and most indebted power-plant builders into bankruptcy court, including NRG Energy; Calpine Corp. ; PG&E Corp.'s PCG 2.34% National Energy Group; and Mirant Corp.\n\"The beauty of inexpensive gas now is utilities are able to take advantage of overbuilding 10 years ago,\" says Curt Launer, managing director of equities research at Deutsche Bank Securities Inc. in New York. \"Any utility that can use gas is trying to use more of it.\"\nOnly two big U.S. utilities, Southern Co. SO 1.43% and Scana Corp. , are pushing ahead with nuclear construction plans. Each plans to build two reactors called the AP1000, developed by Westinghouse Electric Co., which is majority-owned by Toshiba Corp. TOSYY 1.29% They are doing so in partnership with smaller utilities that will share the costs and take some of the electricity.\nSouthern won its final approvals in February to build two reactors at a site next to its existing Vogtle plant in Georgia. The company expects to spend $6.1 billion for its 45.7% share of the roughly $14 billion project.\nSouthern's chief executive, Tom Fanning, says he is confident the two reactors will look smart over their 40- to 60-year lives. \"While gas looks cheap today, it's looked cheap in the past, only to disappoint\" when prices rose, he says.\nGeorgia regulators approved the project based on the company's projections that the reactors would cost $1 billion to $6.5 billion less than coal-fired or gas-fired plants over the many decades plants would run. Regulators require such comparisons so utility customers don't get saddled with unnecessary costs.\nScana hopes to clear a final regulatory hurdle within weeks so it can build two units in South Carolina.\nNagging cost worries, however, are creating friction on both projects. Shaw Group, a Baton Rouge-based construction company hired by both Southern and Scana to build their reactors, recently notified the two utilities it had unanticipated costs, which may exceed $400 million for the two companies, and wants to discuss who should absorb them.\nShaw spokeswoman Gentry Brann says the company's utility agreements date from 2008. \"There have been multiple regulatory changes since then that have increased the cost\" to Shaw, she says, including higher labor costs. The utilities say they expect to resolve the matter amicably.\nOne of Scana's partners is having reservations about its participation level. State-owned Santee Cooper is one of South Carolina's biggest power producers and furnishes most of its electricity to electric cooperatives and city-owned utilities. It took a 45% interest in Scana's planned nuclear project some years back, thinking demand would keep rising.\n\"That was about the time the economy tanked,\" says Mollie Gore, a spokeswoman for Santee Cooper.\nNow the company wants to trim its stake to 20% because it doesn't need as much power, and it is negotiating with Duke Energy Corp. DUK 1.43% and other utilities, hoping to shift some of its obligation.\nThe U.S. Nuclear Regulatory Commission is actively reviewing license applications from nine utilities for 18 new reactors, says David Matthews, director of new reactor licensing for the agency. But the agency doesn't expect to be overseeing much actual construction soon.\nUtility executives say they are seeking permits to preserve development options. Clearing regulatory hurdles at the NRC takes a minimum of four years. If the economics of natural gas change, they say, they want to be ready to move.\nDTE Energy Co., for example, is seeking a license to build a reactor at its Fermi site in Michigan. Although it hopes to get the license next year, it hasn't yet made any decision about whether to build a plant.\nPPL Corp. PPL 1.12% , in Allentown, Pa., has been seeking permission for several years to build a reactor adjacent to its Susquehanna reactors at Berwick, Pa. Bill Spence, PPL's chief executive, says he thinks the new reactor now could cost $13 billion to $15 billion—a sum so large that he would need investment partners. So PPL isn't in any hurry to get the license, he says.\nMeantime, the company is jumping on the gas bandwagon. In February, it bought a 705-megawatt gas-fired power plant in Lebanon, Pa., for $304 million, including debt assumption. That is about half what it would cost to build a similar unit, the company says.\n\"Our plan is to stay flexible,\" he says. \"Nuclear is an option for the future—but I don't have to decide now.\"\n—Daniel Gilbert contributed to this article.\nWrite to Rebecca Smith at rebecca.smith@wsj.com\nNike:\nUp to 40% off best-selling gear with Nike promo code\nEastbay:\n15% off for military members with Eastbay promo code\nadidas:\nExtra 15% off - adidas coupon + free shipping"