With the administration and Democratic lawmakers in Congress pushing to enact greenhouse-gas (GHG) regulation, nuclear power has taken center stage as both a clean technology solution and a political bargaining chip. Consequently, the industry’s hopes for new construction projects have brightened considerably. Whether this policy momentum can usher in a sustainable nuclear renaissance, however, remains questionable at best.
In June 2008, when the U.S. House of Representatives passed the Waxman-Markey American Clean Energy and Security Act, it effectively sent a shot across the bow of lawmakers who oppose GHG regulation. Waxman-Markey would establish a cap-and-trade program for carbon emissions allowances, and would create a federal renewable energy standard (RES).
The bill was largely silent on nuclear power development, including provisions only to avoid disincentives to nuclear vis-à-vis the way a utility’s baseline generation is calculated for RES purposes. But since June, climate legislation has continued evolving in Congress—albeit slowly, as Capitol Hill has focused mostly on health care reform. In early November, the Senate Environment and Public Works (EPW) committee approved—despite a boycott by Republican senators—a climate bill co-sponsored by Sens. John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) (S.1733, the Clean Energy Jobs & American Power Act). Hill watchers considered the bill dead on arrival on the Senate floor, because the Republican boycott prevented the EPW committee from reaching a quorum that would’ve allowed amendments to the bill—such as incentives for new nuclear construction, which might’ve made it more palatable to centrists in the full Senate. However, on a separate track, Sen. Kerry joined independent Sen. Joe Lieberman (Ct.) and Republican Sen. Lindsey Graham (S.C.) to craft what the lawmakers called a “60-vote bill.”
Nuclear industry advocates view the Kerry-Graham-Lieberman climate bill as the best opportunity in decades to enact strong federal support for new nuclear development. That’s because lawmakers on both sides of the aisle now view nuclear incentives as a prerequisite to politically viable climate legislation. “We’ve been approached by any number of folks who recognize the situation—that to have a robust climate-change policy in this country, we have to support the necessary technologies,” says Leslie Kass, director of business policy and programs at the Nuclear Energy Institute. “They’re making sure that whatever policies they put in place are useful, meaningful and substantive.”
Likewise, administration officials—including the president himself and DOE Secretary Steven Chu—recently have spoken unequivocally in favor of pro-nuclear policies. In a speech in mid-October, President Obama said, “There’s no reason why technologically we can’t employ nuclear energy in a safe and effective way. Japan does it and France does it and it doesn’t have greenhouse-gas emissions, so it would be stupid for us not to do that.”
Further, environmental advocates who historically have fought tooth-and-nail against nuclear energy are accepting it as part of the bargain for climate legislation. “You can’t solve the climate problem by taking nuclear off the table,” said Carter Roberts, CEO of the World Wildlife Federation, in an interview with Environment & Energy News. “It’s not our first choice [but] it’s probable that nuclear will have to be part of the solution. We believe the Senate will make the right trade-offs and come ready to pass a real hard cap and the means to get there.”
Whether such trade-offs will get legislation across the finish line during the 2009 Congressional term, however, seems unlikely at this writing in mid-November. Major legislation like climate policy faces long odds next year, with many members of Congress turning their attention to the 2010 mid-term elections. That could spell trouble for nuclear incentives.
“There might be a miscalculation in tying nuclear so closely to the climate debate,” says Jack Spencer, a research fellow at The Heritage Foundation. “It should be tied to the environmental debate generally, because nuclear is so environmentally friendly. But if climate legislation doesn’t go forward next year, then you’ve tied your future to a wagon that might go nowhere.”
Nuclear industry advocates are seeking a series of policy changes to help launch the nuclear renaissance. In late October, NEI sent to federal lawmakers a wish list that includes, among other things: new plant financing—primarily through a proposed quasi-bank called the Clean Energy Deployment Administration; tax incentives for nuclear equipment manufacturing and hiring; steps to further streamline the new-plant licensing process; financial incentives for developing “voluntary” interim spent-fuel storage facilities; and reforms to nuclear fuel supply markets, particularly involving government-generated inventories.
“Our immediate concerns are with the loan-guarantee program, making sure that’s effectively implemented to get the first couple of projects off the ground,” Kass says. However, NEI intends the package of proposals to lay the groundwork for a sustainable nuclear renaissance. “Our development cycle is long,” she says. “It spans the traditional election cycle, even for a senator. This long-term view is difficult when we’re subjected to every election, [with governments] coming and going.”
Spent-fuel management represents perhaps the most notorious example. The Obama administration took the Yucca Mountain repository project “off the table” early in 2009, and DOE deleted its funding in the agency’s 2010 budget request. Killing Yucca Mountain closed off the industry’s exit strategy from its current, temporary approach—i.e., storing spent fuel onsite in dry casks. This is a problem because while dry casks keep the current nuclear fleet generating power, they can raise local political conflicts for such facilities as Xcel Energy’s Prairie Island plant—where residents fought to prevent Xcel from doubling the number of casks at the site to accommodate a 164-MW uprate. Without a long-term strategy for dealing with spent fuel, the industry might find any new-plant renaissance difficult to sustain (see “Nuclear Breach”).
To formulate a more rational strategy, DOE Secretary Steven Chu announced earlier this year that he would assemble a blue-ribbon commission of nuclear policy experts, and that the commission would consider the full range of options for dealing with spent fuel. “Having that group take a fresh look at the issue and having stars in the administration behind it will be helpful for everyone,” Kass says.
Exactly when the commission will be launched, however, and how its work will translate into actual policy, remains unknown. In response to Fortnightly’s inquiries, DOE only reiterated what’s it’s said all year—that the commission would be formed “soon.” In any case, NEI argues that a careful and deliberative approach will yield a better result than would a faster decision. “Time is on our side,” Kass says. “The first plan would’ve put all the fuel into a deep repository, but now we’re looking at recycling and reprocessing, harvesting more energy from the fuel and having a smaller waste stream at the end.”
However, as time passes with no effective solution in sight—and with spent-fuel management becoming more costly and risky—a nuclear renaissance looks increasingly unlikely.
“The industry views the blue ribbon commission as progress because it allows the government to kick the waste-management can down the road a little,” Spencer says. “But it’s a façade that allows the government to check off the boxes and pretend they’ll come up with a plan, and allows the industry to build highly subsidized reactors without fixing the waste problem.”
And while loan guarantees and other policy changes might allow the industry to build a few new reactors, Spencer argues those projects won’t launch a renaissance, because they’ll be relying on more of the same inefficient, centralized policy approaches that led to the industry’s state of paralysis. As such, any hope for a true renaissance might be naïve.
“Nuclear is in a better position than it’s been in since the early 1960s, and that’s what makes this so frustrating,” Spencer says. “Subsidies and central control only reward mediocrity and take away incentives to innovate and reduce costs. We have this historic opportunity to bring about a systemic change and create a truly American approach, a sustainable and economical nuclear industry. But as long as the industry is so focused on government subsidies and support, we’ll never get there.”