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  • Nuclear Yes, Subsidies NO!

    callaway-nuclear2

    The Heritage Foundation’s stance against expanding subsidies for nuclear energy has once again been manipulated by the anti-nuclear crowd to infer that we are anti-nuclear. This time, Harvey Wasserman on The Huffington Post wrote that Heritage, along with some other groups, believe that nuclear energy is “too expensive to matter.”

    To be clear: We are not anti-nuclear. The Heritage Foundation has written in study after study over the past three years that we not only believe that nuclear energy can be a critical part of America’s energy future but that nuclear technology can revolutionize energy production. However, to reach that potential, the United States must transform the policies and regulations that govern commercial nuclear operations. We believe that only an industry rooted in the free-market, supported by predictable and efficient regulation can yield such an outcome.

    Our stance on nuclear power is not that it is too expensive to matter but that its promise is too important to subsidize.

    Wasserman’s mischaracterization of our position on nuclear is not the only area where he misses the mark.

    On nuclear waste, he states that the industry “can’t solve its waste problems.” This is just not true. The problem with solving the waste problem is not technical. It could be safely stored in Yucca Mountain or recycled or processed in any number of other ways that makes it perfectly safe for disposal. The problem is 100% political. For example, the Obama Administration’s fight to terminate Yucca Mountain is not based on a technical determination. It does not even want to allow the Nuclear Regulatory Commission to look at its feasibility. It is some other calculation that is driving the policy.

    He states that it can not stop leaking radiation. While it is true that there have been a couple of highly publicized tritium leaks in recent weeks, it is also true that the nuclear industry has a long history of safe operations and that the NRC has done an outstanding job of ensuring that policies are in place to protect people and the environment from any such leaks. The Nuclear Regulatory Commission strictly regulates the nuclear industry and the industry has an exceptional safety record as a result. When problems are identified, they are either fixed or operations cease. If contamination occurs, it is cleaned.

    He states that the industry can not pay for itself or insure itself. On these points, Wasserman has a point, to a point. Industry is asking for subsidies as it attempts to restart itself after a 30 year hiatus. These initial subsidies have some justification given the massive risk that government policy poses and the way government played an integral role in shutting down nuclear in the past. These subsidies should be used to transition into an environment where the industry can support itself. So whether or not the nuclear industry can or can not pay for itself has yet to be seen. As for insurance, the Price-Anderson insurance program was put in place to ensure that the United States had a nuclear industry capable of support our national security requirements. In a perfect world, the program could be ended, however, industry does pay for the insurance as part of the framework and it fulfills the requirements of the Price-Anderson Act with private funding.

    And finally, he makes the same tired arguments that new nuclear plants take too long to build. He claims that with licensing and construction uncertainty the soonest a new plant could come on line is within seven years. Perhaps he is correct on this, but that is not a reason to forgo nuclear power. Just think, had the U.S. started in 2003, we would be bringing our first plant on line today. And once the first one is here, more can follow quickly. So if we start today, we could begin bringing our new fleet of nuclear reactors on line by 2017. Similar arguments are made by the anti-drilling crowd, but if those companies who want to build new nuclear or drill in new areas deem a project profitable, why should length stop them?

    That is not too long to wait for an energy revolution. And maybe that is what Mr. Wasserman is afraid of.

    Posted in Energy [slideshow_deploy]

    5 Responses to Nuclear Yes, Subsidies NO!

    1. Jim Baird, Nanaimo, says:

      Nuclear can pay for itself by capitalizing on the back end of the fuel cycle.

      “New Invention Using Spent Nuclear Fuel Rods Could Unlock U.S. Oil Reserves Three Times Larger Than Saudi Arabia's” – http://www.businessinsider.com/spend-nuclear-fuel… .

    2. Anna, TX says:

      You fail to address an important fact that prevents nuclear being built in the absence of subsidies: the fact that, save for Exelon, there are no utilities with assets large enough to warrant a loan in the mount of a few billion without loan guarantees. And the costs are high indeed — a utility expects to bear approximately $2 billion in cost of building two reactors by the time it gets a final "go ahead" from the NRC. The utilities are making a substantial commitment, but the sheer amount of the loans needed are too much for the markets in the U.S. to bear.

    3. Dave - Chelsea, MI says:

      2nd generation Nuclear Plants create enough heat to make liquefying coal very viable — if we liquefy coal we can meet all of America’s distillate-product needs….and that would result in the U S of A becoming a net exporter of energy….Aren’t we looking to increase our Exports?

    4. Mike, Topeka, Ks says:

      Why not repeal Jimmy Carter's executive order banning the recycling of uranium rods. It is my understanding that this alone would reduce our waste considerably. Might be worth a try.

    5. Rod Adams, Lynchburg says:

      Jack – this is one of your best pieces. Of course, I might have that opinion because we happen to agree with what you wrote :-)

      Nuclear energy does not need subsidies to thrive; its technical capability is orders of magnitude better than its closest competitor.

      What it needs is a regulatory system that recognizes its value for the general prosperity. We have reasonable (though not perfect) models for the kind of regulatory oversight required for nuclear energy in organizations like the FAA. Flying in heavier than air machines is pretty darned risky if you do not take a lot of care to make sure that pilots are well-trained, machines are carefully engineered and manufactured, mechanics do their jobs reliably, the air traffic control system functions, and flight attendants play their important role.

      Under the watchful eyes of the FAA, the United States led the world in enabling flight to be safe, routine and extremely valuable for the economy. At one time, the same could be said about the AEC and its careful regulation of nuclear energy. With our leadership, the world built enough machines within just a few of decades of discovering self sustaining fission to produce about 30% more energy every year than Saudi Arabia produces (even at its current peak level.)

      Unfortunately, the coal industry did not like the fact that serious industry observers were predicting that it would be out of business by 2000 if nuclear energy kept growing. It worked hard with Congress and pressure groups to convince everyone that there was something inherently wrong with a regulator that did not take all possible actions to slow down the growth of a valuable new technology. It then elected a President that it could claim was a "nuclear engineer" even though he resigned his commission 18 months before the very first nuclear submarine went to sea.

      There has not been a single new nuclear power plant that has been started and completed since the AEC was dismantled and the Nuclear Regulatory Commission was imposed on the industry with a mandate to strive for absolute safety no matter what the costs.

      Today, the array of competitors that want to slow nuclear development remains strong. The gas industry is overproducing and causing a price collapse to a level that makes it seem uneconomical to build new nuclear. The term that should be applied is "price war", but most observers fail to make the connection. Since the gas industry and the oil industry are one and the same, they have the deep pockets required to maintain the price war as long as required to discourage competition. This is the 1990s all over again.

      Some "nuclear" companies are part of the opposition because they are making more money today selling combustion turbines and heavily subsidized industrial wind turbines than they would make by investing heavily in new nuclear energy. Their leaders are not long term thinkers and believe there is too much uncertainty in the nuclear industry to make a disruptive shift.

      You and I agree here. Subsidies are not a good thing. We also agree that excessive regulations can stifle technology development. I hope we can agree that I am not a conspiracy nut when I point out that established businesses often USE regulations to stifle their competition. They use the political power that their current cash flows provide to make it seem like the regulations are coming from "the liberals" when at least part of the push for using regulations is to create a good, old fashioned "barrier to entry" as described in Business 101.

      The effort to slow nuclear is at least partially the result of fossil fuel capitalists using capital to shift the balance of supply and demand into their favor to produce more capital for themselves.

      Rod Adams

      Publisher, Atomic Insights

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