…by this Texan. Except that, as Dizzy Dean said, “It ain’t braggin’ eff you can do it.”

Via AEIdeas:

…about competition and private cost control.

The Saudis and their OPEC colleagues, at the start of the shale and fracking revolution last year, made an overt decision to keep their own production up, which would allow prices to drop (much of OPEC—especially Saudi Arabia—had lots of cash reserves with which to handle the drop), which would kill American deep drilling and put those competitors out of business, restoring price control to OPEC.

However.

The US shale industry is by necessity becoming more efficient than ever. Low oil prices have become an opportunity. The Saudis have lit a fire under producers to trim the fat, deploy new productivity-boosting technologies and zero in on the most productive geology.

And

Just a year ago, popular opinion seemed to be that shale oil production was generally unprofitable if oil prices fell below $80 per barrel.

And

Statoil, for example, reported that just in a few months it cut its drilling time for new wells in Texas’ Eagle Ford formation from 21 days to 17. That kind of efficiency gain has helped “petropreneurs” reduce the cost of drilling wells from $4.5 million to $3.5 million.

Other companies are experimenting with new fracking fluids and different types of sand to create better shale-rock fractures. Some are effectively incorporating Big Data to better understand the sweet spots of geologic formations and optimal well-spacing to increase productivity.

The result is a rapid decline in the break-even price across shale plays. Already, analysts believe it is now $60 per barrel and before long will fall to $50.

Oops.

Electricity producers in several states are asking for hundreds of millions of dollars in financial support to keep costly nuclear power plants in business[.]

For instance,

New York and federal regulators are weighing whether to make customers subsidize the Ginna nuclear station in Ontario, NY, 20 miles northeast of Rochester.

And

Illinois is considering financial assistance for three Exelon nuclear plants that the company says are suffering from low power prices. State officials are considering several forms of aid, including legislation that would require utilities to support carbon-free generators like nuclear and renewable energy.

And

FirstEnergy’s proposal would obligate three regulated Ohio utilities it owns—Ohio Edison, Toledo Edison and Cleveland Electric Illuminating—to buy kilowatts from Davis-Besse and other company-owned plants even when cheaper electricity is available on the open market.
Consumers would pay an extra $400 million in the first three years of a 15-year contract….

These are the wrong answers.

There’s no question that users of electricity from nuclear power plants should be the ones to bear the costs of electricity generated by them. However, those costs are artificially high, hugely high. Permitting, licensing, and government regulation add billions (yes, that’s with a ‘b’) to the cost of building a new plant (which would be more efficient and generate at lower cost than existing nuclear plants) and of operating plants, whether old or new. Those impediments don’t need to be anywhere near so extensive to achieve their legitimate purpose: to ensure the plant builders know what they’re doing and to ensure the plant operators know what they’re doing.

Another artificial cost of nuclear plant existence (much less operation) is storage of spent fuel. Nuclear plant operators have been charged a fee to support building, transportation to, and storage at a nuclear spent fuel repository in Yucca Mountain. Even after that facility was prevented from opening and the nuclear plants forced to store their fuel on their own sites, that fee has continued to be charged, and it’s added up to additional billions of dollars of cost, held essentially in escrow in Uncle Sugar’s hot, grimy, little hands. It’s time to open the Harry Reid Nuclear Fuel Repository in Yucca with no further delay. Or to build a facility somewhere else (Nevada and New Mexico have several other useable sites) and in the meantime return those billions in collected and unspent fees to the plant operators for their use in on-site storage.