Chesapeake Ditches Oil For Natural Gas // The German Nuclear Situation Drags On // GE Hitachi and the TVA Announce Nuclear Collaboration

Chesapeake Ditches Oil For Natural Gas

Chesapeake, once the part of the shale revolution's tip of the spear, plans to exit oil and bet it all on natural gas.

"The company — which grew from obscurity in the late 1980s to become the best-known player in the fracking revolution that made America the world’s biggest producer of oil and natural gas — said it would offload oil producing assets in south Texas’s Eagle Ford basin, allowing it to focus solely on gas production from Louisiana’s Haynesville basin and the Marcellus in Appalachia," reports the Financial Times.

Chesapeake was one of the many companies that went under during Covid. It has now come back and promised greater capital discipline, less growth, and greater return to shareholders. This pivot informs the company's decision to ditch oil for gas.

“We stand to help the world through the gas that we deliver as much as anyone else,” said Chesapeake's chief executive Nick Dell’Osso. “The US is now connected more fully to the rest of the world through LNG exports and that connectivity is going to nearly double over the next five to seven years.”

The German Nuclear Situation Drags On

Germany will be dragged kicking and screaming into keeping its nuclear plants online during an energy crisis if it's going to keep them on at all.

Recent entries in this drama include the German Finance Minister, Christian Lindner, asking that Russian gas quit being used for electricity and for the country's three remaining nuclear reactors to remain on.

To put this in perspective, German publication DW writes, "In this first quarter of the year, nuclear plants accounted for 6% of the country's electricity generation and gas for 13%."

In addition to Lindner's comments, this happened:

The more the German government lies, the more dangerous the situation gets. The country is experiencing a coal and gas squeeze that is threatening to cripple its entire economy this winter. While keeping their nuclear reactors thrumming won't totally save them, to let them do dark is the height of folly.

The nuclear phaseout was begun by an SDP-Green Party coalition years ago. These parties seem to be pursuing the plan until the very end. If the Greens back out now it means the end of their ideological and political legitimacy--it would mean that Germany's anti-nuclear energy plan, the Energiewende, has been a failure.

GE Hitachi and the TVA Announce Nuclear Collaboration

GE Hitachi will be helping the Tennessee Valley Authority plan and acquire a preliminary construction permit for the BWRX-300 small modular reactor at the Clinch River site. GEH will also supply the TVA with information as the public power titan continues to investigate the viability of SMRs in the Tennessee Valley area.

"I am pleased to announce that TVA has taken another step on that road (to building a small modular reactor) and signed a two-party agreement with GE-Hitachi which will support our planning and preliminary licensing for the potential deployment of an SMR at the Clinch River site," TVA President Lyash said during on Tuesday. "The agreement will provide additional information to analyze the viability of SMRs in the Valley."

The BWRX-300 is based on the already NRC-certified EBWR reactor. According to GEH's website, the reactor "represents the simplest, yet most innovative BWR design since GE began developing nuclear reactors in 1955."

"How far we've fallen that there are almost no entities left in the country that can attempt to reboot our nuclear skills," said Mark Nelson of the Radiant Energy Fund. "The TVA is certainly one of them. They've chosen a sensible, if small, design."

"This follows an April 2022 collaboration agreement with Ontario Power Generation to support the development of small modular reactors as an effective long-term source of 24/7 carbon-free energy in both Canada and the U.S. Such collaborations could help reduce the financial risk that comes from development of innovative technology, as well as future deployment costs," the TVA said in a press release.

The link between Ontario Power and the TVA goes back to the opening of the 20th century. When Franklin Delano Roosevelt was Governor of New York, he commissioned a study on Ontario Power. Roosevelt was frustrated by the political grip private utilities had on his state and wanted to know if a public option, like Ontario's, was possible. He never succeeded in bringing public power to New York, but the TVA, built as part of FDR's sweeping New Deal, was an outgrowth of his distrust of utilities and his admiration of Ontario Power.

“If you were going to pick a great utility to bring back nuclear, TVA is it," said Madi Hilly, founder of the Campaign for a Green Nuclear Deal. "If you had to pick a small but sensible reactor design, BWRX300 is it.”

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Conversation Starters

• Climate Scientist Roger Pielke, Jr. has challenged green proponents of the Inflation Reduction Act to make their case that it will actually reduce emissions. I highly recommend his article as it works as an object lesson for how to think about energy, climate, and reducing emissions.

• Hawaii is receiving its last coal shipment. The state believes that renewables, which are technically incapable of fully replacing fossil fuels due to their intermittency, will fully replace fossil fuels. Electricity prices are expected to increase on the island.

• The EU has decreased its gas dependence on Russia by 50%. “We have already managed to cope with an overall reduction in the share of Russian gas imports from 40% at the beginning of the year to around 20% today, principally by buying more LNG, whose share of gas usage has doubled from 19% to 37%,” the EU’s top diplomat said. Norway, Algeria, and Azerbaijan are supplying more gas by pipeline but it is still not enough to replace the loss of Russian energy.

Crom's Blessing