Despite the positive attributes of nuclear power—zero carbon emissions, reliable generation, low fuel costs, and a small footprint—the outlook for new nuclear in the United States is “bearish,” said Anthony Ianno, a Morgan Stanley managing director who follows the electricity business as an investment banker and dealmaker.

Speaking at the annual Platts nuclear conference in Washington on Wednesday, Ianno said, “Right now the economics of nuclear are very challenging.” Although interest costs—an important component for high-capital-cost nuclear—have been low for many years, “overall costs of nuclear have increased,” he said.

Gas Crushes Nuclear in U.S.

The chief obstacle to building new nuclear plants, Ianno said, isn’t regulation (often a target of industry executives) or coal (the traditional roadblock to atomic energy) but natural gas. “Nuclear is much more expensive than the gas option.” He noted that the recent spot price for natural gas was at $1.90/MMBtu.

Jim Conca, chief scientist at UFA Ventures, told the meeting that “gas is not going to increase much in the future.” He cited Energy Information Administration projections that natural gas would not reach above $3.50 until at least 2025.

Ianno observed that with gas prices low and nuclear capital costs five times the cost of new gas capacity, “It’s hard to make a decision to invest in new nuclear. It’s very hard for a CEO to make that decision. It’s easier to say no than to go forward.” As a result, Ianno said that, despite his warm feelings for the nuclear industry, where he worked early in his career, including a stint at New York’s Indian Point plant, his view today toward building new nuclear capacity is “very bearish.”

Coal Beats Nuclear for Developing World

Conca put some of the nuclear promise and problems into context with other generating technologies, particularly in poor countries, where vast numbers of people have no access to electricity. In those cases, he said, there is a difficult conundrum between humans and the environment; humans are likely to prevail. “Lots of people in those countries spend six hours a day getting water,” he said, adding that lifting a family out of poverty “requires 3,000 kWh per person per year.” He defined getting out of poverty as having a lifespan of 40 years and believing that your children will also have a lifespan of 40.”

Coal, Conca pointed out, remains the fastest growing energy source in the world because of the need to lift large populations out of poverty. Coal, he said, “is the only way to eradicate poverty. Coal gave us the modern world. It is easier to put in coal generation than anything else.”

“We can’t not give poor people coal,” said Conca, “unless we can give them something else.” That could be nuclear, although that solution won’t work as quickly or cheaply as coal.

Renewables can’t do the job because of logistical hurdles, Conca said. To replace coal with wind worldwide, he said, would require 10 billion tons of steel and concrete annually. Current world production of steel and concrete is 1.5 billion tons.

Kennedy Maize is a long-time energy journalist and frequent POWER contributor (@kennedymaize)