The American Energy Act (AEA), introduced today by House
Republicans, puts forth a pro-market agenda that allows nuclear
energy to compete based on its merits, such as being affordable,
domestic, and emissions-free.
To do this, the AEA would:
- Provide an efficient, predictable, and expedited pathway to
permitting new reactors;
- Suspend tariffs on imported reactor components;
- Provide the Nuclear Regulatory Commission (NRC) the authority
to complete its review of the Yucca Mountain repository;
- Repeal the artificial limitations on Yucca Mountain's capacity;
- Provide an avenue to start recycling spent nuclear fuel in the
Reducing Red Tape and Increasing
The AEA will cut in half the amount of time necessary to permit
a new nuclear power plant. The current schedule for new plant
permitting--which has already been streamlined--takes approximately
four years, assuming everything goes according to plan. The problem
with the current strategy is that it treats all applicants the same
when, in fact, each applicant is very different.
The AEA allows those permit applicants that are committed to
building a reactor in the short term and have met certain
conditions to get their Combined Operations and Construction
License in about half the time. This speedier process should cost
less, be more predictable, and bring Americans more emissions-free
nuclear power sooner.
The legislation would also help bring new reactor technologies
into the marketplace. First, it directs the NRC to develop a
certification schedule for new, innovative reactor designs.
The bill would also create a National Nuclear Energy Council.
Currently, no comprehensive policy on nuclear energy issues exists.
The result is often a confusing application of policy in real-world
situations. This is further complicated when multiple government
stakeholders have different interpretations of different issues.
Having an entity to coordinate the federal government's policy with
the needs of the nuclear industry could prove invaluable.
The United States has a very limited nuclear industrial base
today because no new nuclear plants have been ordered for over
three decades. While this is beginning to turn around, much remains
to be done and putting tariffs on goods that are not produced
domestically helps no one.
The AEA would do much to promote the expansion of nuclear power
by suspending for five years all tariffs on any nuclear component
that is not currently produced in America. Ultimately, U.S. policy
should strive for a tariff-free world; however, the AEA moves the
nation in that direction and will reduce the cost of nuclear power
in the process.
Yucca Mountain Construction Permit
Under any realistic waste management scenario, there will be a
need for long-term geologic storage. President Obama has publicly
supported nuclear power with the caveat that waste storage and
management be based on sound science.
Despite this, the Administration has stated that Yucca Mountain
is no longer a possibility. Since the NRC has not finished its
review of the Department of Energy's application for a permit to
construct the repository at Yucca Mountain, the President's
rejection of Yucca seems premature. This has led to significant
speculation as to whether the Administration would continue to
support the NRC's Yucca review process.
The AEA removes any speculation about the NRC's review of the
application by providing specific direction to the commission to
finish the review.
Removing Artificial Capacity Limits on
The United States has 60,000 tons of high-level nuclear waste
stored at more than 100 sites in 39 states, and its 104 commercial nuclear reactors
produce approximately 2,000 tons of used fuel every year.
The Yucca Mountain repository's capacity is statutorily limited
to 70,000 tons of waste. Of this, 63,000 tons will be allocated to
commercial waste, and 7,000 tons will be allocated to the
Department of Energy. These congressionally mandated limits were
set without regard to Yucca's actual capacity, which is much larger
than the current limit.
The AEA repeals the 70,000-ton limitation and instead allows
technology, science, and physical capacity to determine the
Recycling Nuclear Fuel
Current U.S. policy is to dispose of America's spent nuclear
fuel without any further processing once it is removed from the
reactor. Not only has this system not worked, but as the AEA
recognizes, it is a waste of resources.
To create power, reactor fuel must contain 3-5 percent enriched
fissionable uranium (U-235). Once the enriched fuel falls below
that level, it must be replaced. Yet this "spent" fuel generally
retains about 95 percent of its original content, and that uranium
(along with other byproducts in the spent fuel) can be recovered,
recycled, and used again. Indeed, many countries--such as France,
Great Britain, and Japan--already recycle their nuclear fuel.
Although the AEA does not fully resolve the problem, it makes
significant progress toward a sustainable solution. First, it
allows money that the federal government has collected for waste
disposal to be spent on nuclear fuel recycling. It also permits the
Department of Energy to enter into long-term contracts with nuclear
fuel recycling firms, which will provide the predictability
necessary for the private sector to invest in a nuclear fuel
reprocessing plant. While a fully privatized system would work
better and be more sustainable, the system set up by the AEA is a
significant step forward.
The U.S. Department of Energy controls large amounts of uranium
that is not needed for national security purposes. The AEA directs
the Energy Department to undergo an audit to account for this
uranium. The AEA then uses this uranium to create a reserve that
could be tapped should a foreign supplier--or something
else--disrupt America's uranium supplies. While establishing such a
reserve makes sense, the legislation should allow for this uranium
to eventually be introduced back into the marketplace.
A New Approach to Nuclear Energy
The American Energy Act represents a turning point in American
nuclear energy policy. Instead of using subsidies to help make
nuclear energy more competitive, the AEA largely relies on
economically sound, market-based proposals. While subsidies might
give the United States a handful of rectors, the market-based
policies proposed in the AEA puts the U.S. nuclear renaissance on
the fast track.
Spencer is Research Fellow in Nuclear Energy in the Thomas A.
Roe Institute for Economic Policy Studies at The Heritage