June 2, 2008 | WebMemo on Energy and Environment
Anxiety over human-induced global warming is driving the debate over energy policy. The Lieberman-Warner climate change bill (S. 3036) is the political manifestation of this fear.
Many who support the broader agenda of reducing greenhouse gas emissions, such as carbon dioxide (CO2), view Lieberman-Warner as a significant step forward and see the benefits of reducing carbon dioxide as outweighing the costs of the bill. Those who are more skeptical of global warming take an opposite view. A recent Heritage Foundation analysis, for example, estimates the costs to the U.S. economy at between $1.8 trillion and $4.8 trillion by 2030.
While analyses differ, they have some common threads. For example, most show that Lieberman-Warner will have a significant negative economic impact. They also assume that some CO2-free technologies will be brought online quicker than many believe is technologically or economically feasible. Finally, most rely on a broad expansion of nuclear power to mitigate the bill's negative economic consequences and to help achieve the CO2 cap targets.
Although many supporters of Lieberman-Warner are quick to call attention to conclusions that show the least negative economic impact, they often fail to mention that the results depend on a massive expansion of nuclear power. For example, as noted by the Environmental Defense Fund, an Environmental Protection Agency (EPA) analysis concludes that economic growth would be minimally affected by Lieberman-Warner but makes no mention of the fact that this conclusion depends on a broad expansion of nuclear energy.
It is not just that nuclear power is needed, but that a massive amount of nuclear power is needed in a relatively short period of time. The EPA analysis assumes a 150 percent increase in nuclear power by 2050. While meeting this demand would require a substantial industrial effort, it is miniscule in comparison to an Energy Information Agency (EIA) analysis that suggests that the U.S. must increase its nuclear capacity by 268 gigawatts of new nuclear power by 2030.
These numbers must be put into perspective. The U.S. has 104 operating reactors today with a capacity of approximately 100 gigawatts. New reactors would likely be larger, on average, than existing reactors. Assuming that the average new reactor will produce about 1.3 gigawatts of electric power, the EPA analysis would require nearly 50 new reactors, while the EIA's analysis would require approximately 200 over the next 25 years.
The reality is that the United States has not ordered a new reactor since the mid-1970s and it does not have the industrial infrastructure to build even one reactor today. Its industrial and intellectual base atrophied as the nuclear industry declined over the past three decades. Large forging production, heavy manufacturing, specialized piping, mining, fuel services, and skilled labor all must be reconstituted in massive quantities.
Global supply is no more promising, especially when one considers that the rest of the world is coming to similar conclusions about the emerging role of nuclear power in meeting CO2 reductions. The global nuclear industrial base currently supports 33 reactors under construction (mostly in Asia and Russia) and the normal operation and maintenance of the world's existing 439 reactors (including those in the U.S.). Even under today's conditions, bottlenecks emerge within the global supply chain for items such as heavy forgings, piping, skilled labor, and manufacturing.
While building enough nuclear power plants to minimize the economic impacts of CO2 caps may be desirable, the reality is that the global industrial base could not support such a project in the U.S., much less the rest of the world. Thus, the amount of nuclear power required to sustain the optimistic Lieberman-Warner economic projections is impossible to achieve within the timeframes that they would require. This is especially true as the U.S. has yet to resolve many issues that continue to face the nuclear industry. Using such optimistic nuclear projections to support an analysis with minimal economic consequences of S. 3036 is therefore completely unrealistic.
It is ironic that support for Lieberman-Warner that is based on such unrealistic scenarios is often coupled with strong antagonism toward nuclear power. Passive support is no better. Given the role of nuclear energy in minimizing the economic impacts of CO2 reductions, those who support such cuts should actively support nuclear power.
Many politicians and organizations attempt to remain agnostic or tepid toward nuclear energy by arguing that nuclear power might have a role to play if certain conditions are met. They then ensure that their conditions are set in such a way as to be unattainable. To suggest that the nuclear industry must improve its safety record is an example of this. No one has ever died as a result of commercial nuclear power in the U.S. How does one improve on this? To argue that the waste problem must first be solved, but then to stand in the way of building Yucca Mountain or reprocessing nuclear fuel (both of which are safe methods of waste management), is equally dubious.
If one views atmospheric emissions as such a threat that CO2 reductions should be made the central organizing tenet of America's economic and energy policy (and thus society), then the moral policy should be to achieve that objective in an economically rational way. The motives of anyone who denies society access to the technologies best capable of achieving its stated goals, either by explicit antagonism or through implicit passivity, must be questioned.
On the other hand, if CO2 reduction is truly the objective, then maximizing America's nuclear resources as quickly as possible should be a top priority. While doing so would still not likely allow the U.S. to meet the levels of nuclear power described in either the EIA or the EPA analyses, it could at least minimize the economic impact of Lieberman-Warner. But doing so will require long-term, sustained, bipartisan support for nuclear energy. Without this support, the billions of dollars of private capital needed to expand America's nuclear capacity will simply not be invested. Without this investment, even the rosiest Lieberman-Warner economic projections lose what little credibility they had at the outset.
Top 10 List for a Sustained Reemergence of Nuclear Power
The massive increases in nuclear power over the next 25 years on the scale described in some S. 3036 analyses might be unrealistic, but the right policies could at least move the nation in the right direction. Although the Energy Policy Acts (EPACTs) of 1992 and 2005 provide some reform and incentives to boost the nuclear industry, they do not provide the systemic overhaul that would be necessary to meet the demands required to satisfy Lieberman-Warner. Existing legislation assures that the U.S. will build six to 10 reactors, which does almost nothing to mitigate the consequences of CO2 caps.
If CO2 reductions are the goal, then the U.S. needs a sustainable nuclear energy industry that can be successful without government intervention. To assure that it is prepared to meet demand for nuclear energy beyond constructing the plants supported by EPACT 2005, the U.S. must:
Commitment to cutting CO2 should be equaled by commitment to nuclear energy. To deny the United States access to nuclear technology while mandating CO2 caps is hypocritical and indefensible.
The United States will need substantially more nuclear power to survive the Lieberman-Warner bill economically. While the Energy Policy Act of 2005 may have a near-term role in reestablishing nuclear power in the U.S, it does not bring about the fundamental changes that will be required to establish a sustainable, market-based nuclear industry. If the nation is committed to reducing CO2, then it must also be committed to the long-term success of nuclear power.
Jack Spencer is Research Fellow in Nuclear Energy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
 Environmental Defense Fund, "EPA Analysis Forecasts Robust Economic Growth With Change Law," press release, March 14, 2008, at http://www.edf.org/pressrelease.cfm?contentID=7738.
 United States Environmental Protection Agency, EPA Analysis of the Lieberman-Warner Climate Change Security Act of 2008, March 14, 2008, at http://www.epa.gov/climatechange/downloads/s2191_EPA_Analysis.pdf (May 22, 2008).
 United States Department of Energy, Office of Integrated Analysis and Forecasting, Energy Market and Economic Impacts of S.2191, the Lieberman-Warner Climate Security Act of 2007, April 2008, at /static/reportimages/95C27098369FF27A32739233F35EC699.pdf (May 22, 2008).
 James Sherk and Guinevere Nell, "More H-1B Visas, More American Jobs, A Better Economy," Heritage Foundation Center for Data Analysis Report No. CDA08-01, April 30, 2008, at http://www.heritage.org/Research/Labor/cda08-01.cfm.
 Jack Spencer and Nick Loris, "Uranium Mining Is Important for Securing America's Energy Future," Heritage Foundation WebMemo No. 1866, March 25, 2008, at http://www.heritage.org/Research/EnergyandEnvironment/wm1866.cfm.