Being “well intentioned” isn’t the same as doing well. Look no further than the recently introduced American Energy Innovation Act.
The bill proposes an extensive federally funded and directed research, development, and demonstration program for advanced nuclear technologies through the Department of Energy.
It’s Act 2 of the Nuclear Energy Leadership Act, the first half of which was quietly passed in December’s massive spending bill.
The proclaimed purpose is to help the nuclear industry innovate and compete, both now and in the future, and in competitive markets at home and abroad.
But rather than improving private-sector access to federal assets, reducing regulatory barriers, and addressing the political risks that nuclear energy faces, it quite literally proposes that the government do the work of private companies for them—to improve their product, acquire financing, and find potential customers.
Such a program is far outside the responsibility of the federal government—and of the federal taxpayer. But it could also erect new barriers for companies that don’t go through the Energy Department program.
In the end, it makes the nuclear industry politically dependent, and consequently politically vulnerable. But what’s worse is, we’ve tried this all before, and the track record isn’t good.
The Energy Policy Act of 2005 set out on the same grand mission. In that not-so-distant past, Congress authorized, among many other favors for the nuclear industry, $1.25 billion for a public-private partnership, the Next Generation Nuclear Power Plant. Congress spent $528 million through 2010, only to abandon it in 2011 during the pre-licensing process.
The Energy Policy Act also created a subsidy for 6,000 megawatts from new nuclear reactors. Even with the enthusiasm of the hailed “nuclear renaissance” and an extension of the subsidy, we got less than that. Rather than fix underlying government-imposed issues challenging the nuclear industry, Congress subsidized two reactors that were half-built before being canceled and another pair that have doubled in cost and construction time.
In fact, one could argue that the industry is worse off because of the Energy Policy Act, having shaken customer confidence and convinced others that nuclear energy can’t be built affordably.
Instead of bringing about a “nuclear renaissance,” subsidies have tied nuclear energy investment and innovation to political whims rather than smart business decisions, common sense, and good ideas.
Additionally, the American Energy Innovation Act creates a program of the same flavor for existing light-water reactors (the class of reactors operating today around the U.S.).
For a few examples, the bill declares it the responsibility of the government (aka the taxpayer) to “enable the continued operation of existing nuclear power plants,” to “improve [their] performance and reduce operation and maintenance costs,” and to develop an “integrated investment strategy” for nuclear technologies and capabilities.
This is industrial policy, plain and simple.
On the whole, Congress did good work with the Nuclear Energy Innovation Capabilities Act in 2018 and the Nuclear Energy Innovation and Modernization Act in 2019.
What the American Energy Innovation Act proposes is a bridge too far.
Unfortunately, the bill totally ignores issues where congressional leadership is desperately needed and is uniquely suited to address.
If Congress were really interested in helping the nuclear industry—both existing nuclear power plants and the advanced reactors of tomorrow—it should address the regulatory burdens and uncertainties created by government itself.
One painfully obvious place for Congress to start is the nuclear waste impasse. That an “all-encompassing” energy bill misses such a critical issue for the industry, and a costly one for taxpayers, is baffling.
This piece originally appeared in The Daily Signal