Energy policy, especially targets for lower carbon dioxide
emissions, has emerged as a priority for Congress and the Obama
Administration. Unfortunately, nuclear energy seems to have been
forgotten by leadership in both the legislative and executive
branches of government.
First, the President's budget had almost nothing related to
advancing nuclear energy. Then Henry Waxman (D-CA) and Edward
Markey (D-MA) released their American Clean Energy and Security Act
of 2009, which would enact numerous misguided environmental
provisions, including a costly carbon dioxide cap-and-trade
program, but offers virtually nothing regarding nuclear energy. This
is extremely problematic given the fact that emissions-free nuclear
energy could help meet both congressional and Administration energy
policy objectives for clean, affordable, domestic energy.
This could be a blessing in disguise, given the heavy-handed
approach that the President's budget and Waxman-Markey take in
promoting politically correct energy sources like wind and solar.
When it comes to nuclear energy, policymakers should reject the
subsidies-first mentality that permeates most current thinking and
instead focus on the following five free market priorities.
1. Return to the Original Intent of
Energy Policy Act (EPACT) of 2005
EPACT 2005 provided loan guarantees, standby support, and
production tax credits to mitigate the effect of decades of
regulatory risk for approximately the first six nuclear reactors
built in the U.S.
Congress and the nuclear industry believed these provisions
would provide predictability after years of erratic regulatory
hurdles through targeted and limited temporary assistance. More
importantly, EPACT 2005 displayed broad, bipartisan support for
clean, affordable nuclear energy.
This has devolved, however, into nuclear subsidy creep, with
expansion of tax credits, standby support, and unlimited loan
guarantees under consideration. While many were willing to accept
some limited subsidies for nuclear energy, this call for more
taxpayer support is splitting what was largely a consensus that
accepted nuclear energy's place in America's energy mix.
Even more concerning, however, is that subsidies will prevent
the nuclear industry from ever realizing its full potential.
Government interference will result in inefficiencies and
politically-driven business decisions that will stifle
technological development and drive up costs.
To restore broad support and to ensure a market-competitive
nuclear industry, direct and indirect taxpayer support established
by EPACT 2005 should not be extended beyond what is currently
2. Avoid Creating a
Government-Dependent Nuclear Industry
Expanded and unlimited subsidies will not create a sustainable
nuclear industry; in fact, it will do just the opposite. Relying on
continual handouts from Washington will create a dependent,
vulnerable industry that is not likely to be viable in the long
Not only should loan guarantees be limited, but congressional
attempts to reinvigorate the nuclear industry through
taxpayer-subsidized workforce and manufacturing-expansion programs
are not needed.
Confidence among private investors in the nuclear industry is
being demonstrated today. Private companies are expanding their
workforce, enrichment and manufacturing facilities are expanding
capacity, universities are increasing the size of their nuclear
engineering programs, and the private sector is implementing
craft-labor workforce programs. This is all being done without
additional taxpayer largesse and before ground has even broken on a
new nuclear plant in the U.S. Creating dependence where a
sustainable industry is emerging is simply bad policy.
3. Remain Committed to Scientific
Conclusion on Yucca Mountain
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.
The Nuclear Regulatory Commission (NRC) is currently reviewing
the Department of Energy's application for a permit to construct
the repository at Yucca Mountain. President Obama should fully
support this process.
To ensure that its conclusions are legitimate, the NRC must have
the freedom to pursue a transparent, fact-based process in a
non-adversarial environment. While inputs from local stakeholders
must be accommodated, the NRC must be allowed to make decisions
based on good science and engineering in a timely manner. This
requires a process that allows valid concerns to be heard and
resolved without being hijacked by outside, agenda-driven
4. Introduce Market Principles into
Nuclear Waste Management Reform
While the private sector efficiently manages front-end
(fuel-related) activities and plant operations, the government
remains in control of America's dysfunctional regime for waste
management. The time has come to reform America's approach to
nuclear waste management.
The federal government's inability to fulfill its legal
obligations under the 1982 Nuclear Waste Policy Act has often been
cited as a significant obstacle to building additional nuclear
power plants. Given nuclear power's potential to help solve many of
the nation's energy problems, now is the time to break the impasse
over managing the nation's used nuclear fuel.
The current system is driven by government programs and
politics. There is little connection between used-fuel management
programs, economics, and the needs of the nuclear industry. Any
successful plan must grow out of the private sector, be driven by
sound economics, and provide access to the funds that have been set
aside for nuclear waste management activities.
5. Focus the Government on Key
The federal government has several extremely important roles to
play when it comes to nuclear energy. Rather than micromanaging the
industry, government should limit itself to:
- Allowing the industry to operate under free market
- Establishing predictable and effective regulation that will
ensure safety and security,
- Supporting critical basic research and development, and
- Opening Yucca Mountain.
A Different Approach on Energy
Despite early promise, the nuclear industry proved unsustainable
largely due to government intervention. Now the U.S. has the
opportunity to restart its nuclear industry.
However, the industry's future should be in the hands of the
private sector--not government bureaucrats. This not only ensures
that decisions are made based more on a project's value than its
politics, but it also frees government resources to focus on the
critical role of providing efficient regulations that allow
business to flourish while protecting public health and safety.
Government might be able to give the United States a handful of
reactors, but only the private sector can provide a true nuclear
Spencer is Research Fellow in Nuclear Energy and Nicolas D.
Loris is a Research Assistant in the Thomas A. Roe Institute
for Economic Policy Studies, at The Heritage Foundation.