Exelon CEO Says Shale Gas Competes with Chinese Nuclear Power
Exelon Corp is the largest owner/operator of nuclear power plants in the United States. John Rowe, CEO of Exelon, said even though his company’s stock price is half what it was since 2008 largely because of the discovery and mining of shale gas, nevertheless, he’s a supporter of shale gas. While attending a conference in Philadelphia recently, he remarked:
Rowe…said in an interview Friday that before shale gas came along, Exelon made so much money generating power in high-priced electricity markets that one of his company’s main concerns was "how to keep people from taking [the profits] away from us."
Fast forward three years. An abundance of gas produced from formations like Pennsylvania’s Marcellus Shale has driven down gas commodity prices and, by extension, the price Exelon gets for generating electricity. Exelon’s stock today is trading at half its 2008 peak.
"You watch next year our earnings will be down compared to this year, and the principal reason for that will be low natural gas prices," said Rowe.
"Low gas prices are good for America, not quite so good for Exelon," said Rowe, who is retiring next year after his company completes a planned merger with Constellation Energy Group of Baltimore.
Rather than erecting barriers to natural gas, Rowe believes government should embrace the newfound domestic fuel source that produces less pollution than other fossil fuels such as coal or petroleum.
"What we have today in Pennsylvania, in the whole Northeast, is the great domestic blessing of cheap natural gas," he told the Wharton audience. "It gives us a bridge, at least a 10-year bridge, maybe a 20-year bridge, in which we can produce much cleaner energy at a low cost. That’s a unique blessing."
Exelon, the nation’s largest producer of nuclear power, is no longer looking at building new reactors because of shale gas and this year’s disaster of Japan’s Fukushima reactors, Rowe said.
"I cannot build a new nuclear plant to compete with gas." Rowe, 65, told the Wharton audience. "I cannot build a new nuclear plant to compete with what China can build. . . . But I can build gas-fired capacity in ways that allow Pennsylvania to compete with China."*
*Philadelphia Inquirer/Utility Products (accessed Oct 31, 2011) – Exelon’s Rowe and unlikely booster for shale gas