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Houston expert explains what’s needed to bend the curve on nuclear power

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Nuclear could be a powerful tool to address rising greenhouse-gas emissions. But to get there, the industry needs to raise its game. Photo via Pexels

I argued previously that nuclear power can help the world deal with two related challenges: energy security and climate change. I still think that is the case.

McKinsey & Company, where I worked for more than 30 years, also recently turned to the topic. The authors agreed that nuclear can play a significant role in decarbonization, and noted that there were some encouraging trends, even in markets, such as the United States, where new plants are thin on the ground. And then the authors asked a critical question: “Can the industry reverse the trend of exceeding budgets and timelines while scaling up fast enough to rise to the climate challenge?”

That query got me thinking. To me, the case for nuclear is clear and compelling. Given that electricity demand could triple by 2050, the need for low-emission and constant power is acute. Nuclear fits that bill. Other sources either emit much more (coal, gas, oil) or are intermittent (wind, solar). Little new hydro is being built. Nothing else is at anything like scale.

But clearly, nuclear has not carried the day, particularly in Europe, Japan, and the United States. These markets are, at best, wary of nuclear power. They are willing to invest some money in next-generation technologies or maybe to extend an operating license. But they are not doing much about the conditions that make new construction so costly and difficult.

For that to happen, I think we need to go deeper—to change mindsets among two very different sets of players.

Anti-nuclear green activists. As the Rolling Stones wisely noted, “You can’t always get what you want.” To deal with something as complicated and wide-ranging as climate change, there will be trade-offs. But if you want reliable power and lower emissions and if you don’t want thousands of square miles of land coated with wind and solar farms, something has to give.

Consider France. It gets more than two-thirds of its power from nuclear, which is a huge part of the reason it ranks 60th in the world in per capita carbon-dioxide emissions (4.46 tons), a much better performance than global peers like Japan (8.5), Belgium (8.1), Germany (7.9), and Austria (7.3). Those four countries have all dialed back on nuclear. Here is the Austrian energy minister, Leonore Gewessler: “The attempt to declare nuclear energy as sustainable and renewable must be resolutely opposed.”

If the goal is to reduce emissions, though, why should that be the case? Well, one response is that championing nuclear power could reduce investment in renewables. But again, if the goal is to reduce emissions, then why not embrace technologies that do exactly that? Whether nuclear can be considered “renewable” seems to me to be almost a theological question, not a technical one. And certainly not a useful one. The goal should not be X or Y percent of renewables, but how to promote an energy transition that delivers reliable, low-emission power. Somehow that point is lost, or dismissed. Instead, major environmental groups such as the Sierra Club (“unequivocally opposed”), Greenpeace (“say no to new nukes”), the Climate Action Network Europe, the European Environmental Bureau (“We advocate for an exit from nuclear energy”) and so on don’t see a place for nuclear.

The mindset shift needed among these and other green groups is to see nuclear as one component of a diversified energy system that can be part of the climate solution, and then to turn their considerable power and creativity toward convincing the public. I just don’t see how shutting down nuclear plants before their time, and replacing them with higher-emissions sources, as is often the case, helps to reduce emissions.

I am not holding my breath on this, but stranger things have happened. Heck, nuclear has found an unlikely advocate in film-maker Oliver Stone. His new documentary, “Nuclear,” argues that the public “has been trained, from the very beginning, to fear nuclear power. The very thing that we fear is what may save us.”

Nuclear could be a powerful tool to address rising greenhouse-gas emissions. But to get there, the industry needs to raise its game. Stone’s nuclear-could-save-us scenario would be likelier if the industry made a better case for itself. Not in safety or reliability, where its record is remarkably good, but in frustration and economics. The stereotype of huge delays and budget over-runs is no myth. Georgia is the only US state building plants, and they are both running years and billions beyond the initial projections.

Granted, some things are beyond the industry’s control: legal challenges plus complex and shifting regulation add up. Some countries clearly do better than others on this. South Korea, for example, gets a third of its power from nuclear, is building three more plants, and is expanding its export market. It will be interesting to see if it could develop something like a nuclear assembly line that drives down its costs, which are already much lower than in the United States.

Like any other sector, nuclear needs to excel at competitiveness, cost control, and innovation—and it hasn’t. In the United States, the typical template has been to build really big plants, each unique, and each very expensive because of the size. The McKinsey report noted a number of things that the industry itself could do better, such as learning and applying best practices for large-scale projects; establishing standard designs; and using modular construction techniques. US construction productivity has stagnated for decades; the use of digitization and automation could help.

There are reasons to believe that the industry is improving. A cluster of companies is developing smaller, salt-cooled reactors; these are cheaper and safer. In January 2023, the Nuclear Regulatory Commission certified NuScale’s small modular reactor that uses natural water circulation, obviating the need for pumps and thus lowering capital costs. Compared to the 1,000 MW Georgia plants, NuScale’s are about 77MW, but can be added onto. No such plants have been built yet in the United States, though; advanced fission and fusion are even further away. So at the moment, this is all about potential. As one Department of Energy official put it, “It becomes truly real when electrons go on the grid.”

McKinsey concluded: “We believe a nuclear scale-up is achievable. It’s time for the industry to meet the challenge.” I agree,

Nuclear could be a powerful tool to address rising greenhouse-gas emissions. But to get there, the industry needs to raise its game. And it could use a little help from its enemies.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn.

Students from the University of Houston are celebrating a win at a national competition focused on carbon innovation. Photo via UH.edu

University of Houston team places in prestigious DOE collegiate challenge

top of class

A team of students from the University of Houston have placed in the top three teams for a national competition for the Department of Energy.

The inaugural American-Made Carbon Management Collegiate Competition, hosted by the U.S. Department of Energy's Office of Fossil Energy and Carbon Management, or FECM, tasked the student teams with "proposing regional carbon networks capable of transporting at least one million metric tons of carbon dioxide per year from industrial sources," according to a news release from DOE.

“With this competition, DOE hopes to inspire the next generation of carbon management professionals to develop carbon dioxide transport infrastructure that will help drive technological innovation and emissions reductions, new regional economic development, and high-wage employment for communities across the United States,” Brad Crabtree, assistant secretary of fossil energy and carbon management at DOE, says in the release.

GreenHouston, the University of Houston team mentored by Assistant Professor Jian Shi from the UH Cullen College of Engineering, took third place in the competition, securing a $5,000 cash prize. Sequestration Squad of University of Michigan secured first place and $12,000 and Biggest Little Lithium of the University of Nevada won second and a $8,000 prize.

The UH team's proposal was for an optimized carbon dioxide transportation pipeline for the Houston area. The presentation included cost analysis, revenue potential, safety considerations, weather hazards, and social impact on neighboring communities, according to a release from UH.

“We chose the greater Houston metropolitan area as our target transition area because it is a global hub of the hydrocarbon energy industry,” says Fatemeh Kalantari, team leader, in the release.

“Our team was committed to delivering an optimized and cost-effective carbon dioxide transfer plan in the Houston area, with a focus on safety, environmental justice, and social engagement,” she continues. “Our goal is to ensure the health and safety of the diverse population residing in Houston by mitigating the harmful effects of carbon dioxide emissions from refineries and industries in the area, thus avoiding environmental toxicity.”

With the third place win, GreenHouston will get to present their proposal at DOE’s annual Carbon Management Research Project Review Meeting slated for August.

"We are thrilled to see the exceptional work and dedication displayed by the GreenHouston team in this competition," said Ramanan Krishnamoorti, vice president of energy and innovation at UH. "The team’s innovative proposal exemplifies UH’s commitment to addressing the pressing global issue of carbon management and advancing sustainable practices. We wish the students continued success."

The team included four Cullen College of Engineering doctoral students from the Department of Electrical and Computer Engineering – Kalantari, Massiagbe Diabate, Steven Chen, and Simon Peter Nsah Abongmbo – and one student, Bethel O. Mbakaogu, pursuing his master’s degree in supply chain and logistics technology.

The prize money will go toward funding additional research, refining existing technologies, addressing remaining challenges and raising awareness of CCUS and its project, according to the release, as the team feels a responsibility to continue to work on the GreenHouston project.

“The energy landscape by 2050 will be characterized by reduced greenhouse gas emissions, cleaner air quality, and a more sustainable environment,” Kalantari says. “The transition to green energy will not only mitigate the harmful effects of carbon dioxide on climate change but also create new jobs, promote economic growth, and enhance energy security. This is important, and we want to be part of it.”

The team of students plans to continue to work on the GreenHouston project. Photo courtesy

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This article originally ran on InnovationMap.

There's no silver bullet for clean energy. We need an all-hands-on-deck approach, writes Scott Nyquist. Photo via Getty Images

Houston expert: When it comes to the future of energy and climate, think 'all of the above'

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People in the energy industry don’t have the Oscars. For us, the big event of the year is CERAWeek — a conference stuffed with CEOs, top policymakers, and environmental and energy wonks held annually in March.

CERAWeek 2022, with the theme“Pace of Change: Energy, Climate, and Innovation," meant the return of in-person activations, panels, and networking. Walking and talking between sessions and around the coffee table, it occurred to me that the unofficial theme of the event was “Maybe now we can find middle ground on energy.” This idea came up time and time again, from all kinds of people.

As with too many other issues, the discussion of the future of US energy has become polarized. On one end of the spectrum are those who want everything renewable and/or electrified by ….. last week, whatever the cost. Their mantra for fossil fuels: “Keep them in the ground.”

On the other end, are those who dismiss climate change, saying we can always adapt and that it doesn’t much matter, anyway. Just keep digging and drilling and mining as we have always done. And in the middle are the great majority of Americans who are not passionate either way, but want to be responsible consumers, and also to be able to visit grandma without breaking the bank.

I believe that the transition toward an energy system that is cleaner and less reliant on fossil fuels is realand will ultimately bring substantial benefits. At the same time, I believe that energy security and economics also matter. At a time when inflation was already running high, paying an average of $4.25 a gallon at the pump is piling pain on tens of millions of US households. Ultimately, over decades, the use of electric vehicles will reduce the need for oil and that lower-emissions sources, including renewables, will provide a larger share of the power supply, which today depends largely on gas and coal. But that moment is not now, or next week. Indeed, fossil fuels continue to account for almost 80 percent of US primary energy consumption, and a similar figure globally.

Here is one way to think about the interplay between the energy transition and energy security: “We need an energy strategy for the future—an all-of-the-above strategy for the 21st century that develops every source of American-made energy.” No, that isn’t some apologist for Big Oil; it was President Obama. In 2014, the Obama White House also noted the role of US domestic oil and gas production in enhancing economic resilience and reducing vulnerability to oil shocks. In short, the White House argued, US oil and gas production can bring real benefits for the country. I think that is still true.

Does that mean throwing in the towel on the energy transition and climate change? Absolutely not. There are a variety of ways to pursue the goal of reducing emissions and eventually getting to net-zero emissions. I’ve touched on many of them in previous posts—including reducing methane emissions,pricing carbon, hydrogen, renewables, electric vehicles, urban planning, carbon capture, and negative emissions technologies. In other words, an “all of the above strategy” makes sense in this regard, too.

I don’t know how, or if, a middle ground can be captured. But from what I heard at CERAWeek last year, from people of otherwise widely divergent views, there just may be momentum to get there. A middle-ground consensus rests on three premises. First, we need fossil fuels for energy security and reliability now and until the time when technologies are in place to secure the energy transition. Second, at the same time, we need to be investing in the energy transition because climate change is real and matters. And third, for sustained and systematic progress, government and industry need to work together.

Or, in a phrase, “all of the above.”

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn.

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Houston-based co. closes acquisition of 50 percent stake in Texas cogeneration facility

M&A Moves

Fengate Asset Management announced the financial close on the acquisition of a 50 percent interest in Freeport Power Limited, which owns a 440-megawatt cogeneration facility in Freeport, Texas.

FPL is located near the Freeport Energy Center, which is a 260-megawatt cogeneration facility that is currently owned and managed by Fengate. The two facilities work to provide cost-effective power and steam to Dow’s Freeport site, which is the largest integrated chemical manufacturing complex in the Western Hemisphere.

“We are thrilled to have closed this acquisition, which aligns with our strategy of acquiring behind-the-meter cogeneration projects with strong industrial partners like Dow,” Greg Calhoun, managing director of Infrastructure Investments at Fengate, says in a news release.

Fengate was able to acquire interest in FPL under a strategic operating partnership with asset manager Ironclad Energy. The partnership with Ironclad was established in 2022 to acquire and operate cogeneration, district energy and other power generation projects throughout North America.

“This is our second acquisition with Fengate, and we look forward to continuing our partnership to optimize and expand the portfolio,” Christopher Fanella, president and CFO of Ironclad Energy, says in the release.

Fengate opened its first U.S. office in 2017 in Houston.

“Combined heat and power projects like FPL will continue to play an important role in the U.S. power industry – especially for hard-to-abate industrial sectors – to ensure reliability, efficiency and affordability,” adds in the release.

Houston energy leader on why the future of fuels is more than electric vehicles

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Gasoline, diesel, bunker fuel, and jet fuel. Four liquid hydrocarbons that have been powering transportation for the last 100-plus years.

Gas stations, truck stops, ports, and airport fuel terminals have been built up over the last century to make transportation easy and reliable.

These conventional fuels release Greenhouse Gases (GHG) when they are used, and governments all over the world are working on plans to shift towards cleaner fuels in an effort to lower emissions and minimize the effects of climate change.

For passenger cars, it’s clear that electricity will be the cleaner fuel type, with most countries adopting electric vehicles (EVs), and in some cases, providing their citizens with incentives to make the switch.

While many articles have been written about EVs and the benefits that come along with them, they fail to look at the transportation system as a whole.

Trucks, cargo ships, and airplanes are modes of transportation that are used every day, but they don’t often get the spotlight like EVs do.

For governments to be effective in curbing transportation-related greenhouse emissions, they must consider all forms of transportation and cleaner fuel options for them as well.

43 percent of GHG emissions comes from these modes of transportation. Therefore, using electricity to reduce GHG emissions in light duty vehicles only accounts for part of the total transportation emissions equation.

The path to cleaner fuels for these transportation modes has its challenges.

According to Ed Emmett, Fellow in Energy and Transportation Policy at the Baker Institute Center for Energy Studies (CES);

  • "Airplanes cannot be realistically powered by electricity, at least not currently, and handle the same requisite freight and passenger loads"
  • "The long-haul trucking industry [...] pushed back against electrification as being impractical due to the size and weight of batteries, their limited range, and the cost of adoption"
  • "Shipowners have expressed reluctance to scrap existing bunker fueled ships for newer, more expensive ships, especially when other fueling options, e.g. biofuels and hydrocarbon derivatives-for fleets can be made available"

Finding low-cost, reliable, and environmentally sound fuels for the various segments of transportation is complex. As Emmett suggests in his latest article;

"Hovering over the transition to other fuels for almost every transportation mode is the question of dependability of supply. For the trucking industry, the truck stop industry must be able to adapt to new fuel requirements. For ocean shipping, ports must be able to meet the fuel needs of new ships. Airlines, air cargo carriers and airports need to be on the same page when it comes to aviation fuels. In other words, the adoption equation in transitions in transportation is not only a function of the availability and cost of the new technology but also a function of the cost of the full supply chain needed to support fuel production and delivery to the point of use. Going forward, the transportation industry is facing a dilemma: How are environmental concerns addressed while simultaneously maintaining operational efficiency and avoiding unnecessary upward cost shifts for moving goods and people? In answering that question, for the first time in history, modes of transportation may end up going in multiple different directions when it comes to the fuels each mode ultimately chooses."

This is why many forecasts predict that hydrocarbon demand will continue through 2050, despite ambitious aspirations of achieving net zero emissions by that year. The McKinsey "slow evolution" scenario has global liquid hydrocarbon demand in 2050 at 92mmb/d versus 103 mmb/d in 2023. With their "continued momentum" scenario, oil demand is 75 mmb/d. Proportionally, global oil demand related to GHG emissions from transportation would decline 11-27 percent. The global uptake of EVs is the primary driver of uncertainty around future oil demand. In all the McKinsey scenarios, the share of EVs in passenger cars sales is expected to be above 90 percent by 2050.

The Good News

Despite the relatively slow progress expected for reducing GHG emissions in the global transportation sector, there are solutions emerging that lower the carbon footprint tied to traditional petroleum-based fuels. Emmett highlights some of the methods under study, noting that "sustainable biofuels sourced from cooking oils, animal fats, and agriculture products, as well as hydrogen, methanol, ammonia, and various e-fuels are among the options being tested. Some ocean carriers are already ordering ships powered by liquified natural gas, bio-e-methanol, bio/e-methane, ammonia, and hydrogen. Airlines are already using sustainable aviation fuel as a supplement to basic aviation fuel. Railroads are testing hydrogen locomotives. The trucking industry is decarbonizing local delivery by using vehicles powered by electricity, compressed natural gas, and sustainable diesel. Long-haul trucking companies are considering sustainable diesel as a drop-in fuel for existing equipment, and fuel suppliers are researching new engines fueled by hydrogen and other alternative fuels."

Most of these options will require a combination of increased government incentives, along with advancements in technology and cost reductions.

McKinsey's "sustainable transformation" scenario, which considers potential shifts in government regulations as well as advancements in technology and cost, suggests there is moderate growth in alternative fuels alongside growth in EVs. Mckinsey projects;

  • EV demand could grow to over 90 percent of total passenger car sales by 2050
  • EVs to make up around 80 percent of commercial truck sales by 2050
  • In aviation, low carbon fuels such as biofuels, synfuels, hydrogen and electricity are projected to grow to 49 percent by 2050.

According to McKinsey, the combination of these alternatives along with demand changes in power and chemicals could reduce global oil demand to 60 mmb/d in 2050. The shift to cleaner fuels, for modes of transportation other than EVs, is underway but the progress and adoption will take decades to achieve according to McKinsey’s forecasts.

Looking more closely at EVs, the story may not be as dire globally as it seems to be in the West. While the U.S. appears to be losing momentum on electric vehicle adoption, China is roaring ahead. New electric car registrations in China reached 8.1 million in 2023, increasing by 35 percent relative to 2022. McKinsey’s forecasts have underestimated global EV sales in the past, with China surpassing their estimates, while the U.S. lags behind. It’s clear that China is the winner in EV adoption; could they also lead the way to adopt cleaner fuels for other modes of transport? That is something governments and the transportation industry will be watching in the years ahead.

Conclusion

While we are not on a trajectory to meet the aspirations to reduce global GHG emissions in the transportation sector, there are emerging solutions that could be adopted should governments around the world decide to put in place the incentives to get there. Moving forward, the future of transportation fuels will be shaped by a mix of innovation, government policies, and what consumers want. The focus will be on ensuring that the transportation sector remains reliable, secure, and economically robust, while also reducing GHG emissions. But, decarbonizing the transportation sector is much more than just EV's – it's a broader effort that will require continued global progress in each of the multiple transportation segments.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn on October 9, 2024.

Houston company secures $10M contract to deliver subsea well decommissioning solution

big deal

Houston energy services provider Expro was awarded a contract valued at over $10 million for the provision of a well decommissioning solution.

The solution will combine subsea safety systems and surface processing design that can enable safe entry to the well and management of well fluids.

“The contract reinforces our reputation as the leading provider of subsea safety systems and surface well test equipment, including within the P&A sector,” Iain Farley, Expro’s regional vice president for Europe and Sub-Saharan Africa, says in a news release. "It demonstrates our commitment to delivering best-in-class equipment, allied with the highest standards of safety and service quality that Expro is renowned for.”

Expro will provide from its global support hub in Aberdeen, a surface fluid management package and a market-leading 7-3/8 inch large-bore subsea test tree assembly (SSTTA). This will include surface tree and controls that can provide dual barrier and disconnect capability to facilitate re-entry into the subsea wells.

Expro has been supplying its subsea safety systems and well test equipment to the construction of many of the 52 wells now being plugged and abandoned.

“Having been involved in the development phase for many of these fields, we have gained a life of well experience that will be invaluable for this P&A campaign,” Farley adds. “Our expertise and know-how will help deliver key technical and commercial benefits for the client across the project.”

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