On Tuesday, the Senate narrowly gave the nuclear industry a much needed energy boost. By a 50-48 vote, it rejected an amendment offered by Sen. Ron Wyden, Oregon Democrat, that would have stripped the power plant loan guarantees from the omnibus energy bill.
It was a wise decision, despite the potential cost of the measures. Under the bill, championed by Energy Committee Sen. Pete Domenici, the government would grant loan guarantees of half the cost of at least six advanced design nuclear power plants, enough to add 8,400 megawatts of electricity to the grid. The bill would require the government to buy electricity from those plants, but, if the construction projects default, the Congressional Budget Office estimates that taxpayers could be left with a $16 billion tab. The bill also authorizes $1.1 billion for the government to build a demonstration nuclear co-generation plant that would produce both electricity and hydrogen.
That plant could be dismissed as mere pork, but it actually represents an important practical link between nuclear power and a hydrogen-based economy (which admittedly remains very much conjectural). Such plants have long been championed by Jesse Ausubel, director of the Program for the Human Environment at Rockefeller University in New York, as a reasonable means to supply the clean-burning fuel that Americans will need — especially if the administration’s hydrogen car initiative succeeds.
The energy bill passed by the House authorizes neither the loan guarantees nor the co-generation project. However, like the Senate bill, it provides $1.7 billion in funding for nuclear energy research and commercial development activities.
While the final numbers can be settled in conference, it is essential that Congress give the nuclear industry some sort of stimulus. A new power plant hasn’t been ordered in 25 years, and some of those plants took over a decade to build. Still-untested streamlining provisions in the 1992 Energy Policy Act could reduce power plant construction times to three to four years, but that is far from certain.
Moreover, as Energy Secretary Spencer Abraham pointed out in an interview with editors and reporters from The Washington Times, America is headed for a sharp drop-off in nuclear power between 2025 and 2050, as licenses expire and old reactors are shut down. Since 2000, 16 of the 104 nuclear reactors in operation have received 20-year license extensions. Fourteen other reactors have filed for such extensions, and, over the next six years, 20 more reactors are expected to do so.
Some of that fall-off might be made up for in increased capacity at other plants. However, they will be hard-pressed to make up for the loss of up to half of existent reactors, much less sate America’s increased energy needs. According to the 2003 estimates from the Energy Information Administration, electricity demand will grow by 1.8 percent each year between now and 2025. Yet, while energy needs are increasing, energy options are continuing to narrow. Even natural gas, the fuel favored by environmentalists, is in short supply.
Nuclear energy is an important part of the diversified energy portfolio that Americans depend on for both national security and economic development. Notwithstanding the potential cost of the loan guarantees, the Senate has done well to encourage the revival of the nuclear industry.