February 3, 2010
"But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country." -President Barack Obama, 1/27/10
BACKGROUND: In his State of the Union address to Congress, President Obama suggested building a new generation of nuclear power plants in the U.S. The President's budget released on February 1, 2010, includes $36 billion in new Department of Energy loan authority-for a total of $54.5 billion-to triple existing support for loan guarantees for nuclear power facilities. It is thought that these funds could support perhaps six new reactors. While loan guarantees can help utilities with near-term financing, they also create taxpayer liabilities, dole out preferential treatment and distort capital markets. Additionally, in January 2010, the Administration named a "blue ribbon" Washington panel to study nuclear waste disposal options. New rhetoric and government subsidies for nuclear power aside, the Obama Administration's past actions have undermined the industry and the President's proposal avoids the bold, no-cost solutions that would truly jumpstart nuclear power in the U.S.
AN ANTI-NUCLEAR ADMINISTRATION: The President's proposal to increase federal spending on loan guarantees for nuclear power plants has been outweighed by numerous anti-nuclear actions taken by the Administration, most recently in the Fiscal Year 2011 budget.
- Terminating Yucca Application: The President's Fiscal Year 2011 budget terminates the application of the Yucca Mountain Nuclear Waste Repository to the Nuclear Regulatory Commission (NRC). According to the Administration, they have "determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository." The budget cuts all funding for development of the facility, transportation access, and additional engineering. However, Yucca is still by law the nation's solution for spent nuclear fuel, and the President's budget raises questions about how the license can be pulled without exposing the U.S. government to potentially billions of dollars in liability payments. Under the Department's contract with utilities, the government was supposed to have started taking spent fuel from power plants by 1998 (which is currently being stored at sites across the country). This decision to scrap Yucca Mountain as a solution for spent fuel increases uncertainty for industry and jeopardizes the future of nuclear power in the U.S. Yucca is the only permanent storage option already approved by Congress.
- Sham "Blue Ribbon" Panel: After nearly a year, the Obama Administration finally named its "blue ribbon" Washington panel to study what to do with spent nuclear fuel currently piling up at power plants. Labor unions and environmental organizations are well-represented on the commission. However, it is hard to see how this panel and its recommendations can be taken seriously if it doesn't consider the nuclear repository at Yucca Mountain, which the Administration defunded in its Fiscal Year 2011 budget. By removing a viable disposal option from the table, the credibility of the panel is already in jeopardy. A geologic repository is critical to the long-term success of nuclear power in the U.S.
- Excluding Nuclear from Energy Legislation: The House-passed cap-and-tax energy bill, H.R. 2454, excluded nuclear power (a greenhouse gas neutral technology) from its federal renewable energy standard (RES), which would have made it easier for many States to comply with this costly mandate. The RES, which includes other clean energy sources like wind and solar, curiously barred nuclear power from the mix. Energy and Commerce Committee Democrats rejected a GOP amendment to include nuclear in the RES during markup of H.R. 2454. If the Obama Administration were serious about promoting nuclear power in the U.S. it would, at a minimum, pressure the Democrat Congress to include this emission-free energy source in its federal RES mandate.
NO-COST NUCLEAR PLAN: The House Republican all-of-the-above energy plan, H.R. 2846, includes a no-cost nuclear power initiative. The 104 nuclear reactors in America today provide the U.S. with 20 percent of its electricity and 73 percent of its CO2-free electricity, yet no new reactors have been ordered since 1978. The bill establishes a national goal to bring 100 new nuclear reactors online over the next 20 years to strengthen America's commitment to clean, reliable energy. According to data from Oxford Economics, building 100 new reactors and an appropriate number of enrichment and reprocessing plants over the next 20 years would create 356,000 manufacturing and construction jobs, 242,000 permanent jobs, and an additional 404,000 jobs from induced economic activity.
Recognizing that the greatest impediment to nuclear power in the U.S. is the high regulatory burden and the lack of a spent fuel repository and not a lack of federal subsidies, the American Energy Act includes the following provisions to jumpstart the U.S. nuclear industry:
- Fast Track Regulatory Process: The bill authorizes an accelerated regulatory process for new reactor applicants, which meet certain conditions, in order to cut the time needed to permit new plants by roughly 50 percent.
- Health and Safety: The bill clarifies that nothing would decrease the NRC's ability to maintain the highest public health and safety standards.
- Yucca Mountain: The bill prohibits the Administration from withdrawing the Yucca Mountain application before the NRC, and repeals Yucca Mountain's current 70,000-metric ton limitation, letting science and technology rather than politics dictate how much the repository can safely hold.
- Recycling: The bill requires the Secretary of Energy to use amounts in the current Waste Fund to enter into long-term contracts with private sector entities for the recycling of spent fuel, and prohibits future Administrations from blocking or hindering recycling spent nuclear fuel.
- Tariff Suspension: The plan suspends import tariffs and duties on imported nuclear components for five years where there is no domestic manufacturer.
- Investment Tax Credit: The bill expands an existing energy investment tax credit for renewable energy equipment to include nuclear and clean-coal equipment.
- National Nuclear Energy Council: The legislation establishes a National Nuclear Energy Council to help nuclear energy related investors navigate the federal bureaucracy to efficiently bring their products and services into the marketplace. The Council would also identify ongoing barriers to nuclear energy.
- Mandatory Hearings for Uncontested Licenses: The legislation would eliminate mandatory timely and costly adjudicatory hearings for uncontested license applications.
- Uranium Supply-Disruption Mitigation Reserve: The plan creates a uranium supply-disruption mitigation reserve whereby the Energy Department would audit all unused materials in its system that could be used to power commercial reactors. Some portion of this uranium would be allocated to a temporary reserve of reactor fuel to protect against a foreign supplier attempt to deny U.S. energy producers access to uranium fuel.
- Uranium Supply Summit: The bill requires a federal uranium supply summit to report on ways to domestically produce enough uranium to meet 30 percent of demand by 2030.
- Temporary Spent-Fuel Storage: The plan directs the Interior Department to grant all necessary rights of way and land use authorizations needed for proposed spent fuel storage facilities if a State and locality reach an agreement with a private entity.
For additional information, contact:
The House Republican Conference Policy Office