Chu Says Budget Will Restart American Nuclear Power Industry

Feb 1: U.S. Department of Energy (DOE) Secretary Steven Chu issued a release reviewing the President's $28.4 billion Fiscal Year 2011 budget request for DOE. Chu highlighted the Administration’s commitment to create jobs with the development of a clean energy economy [See WIMS 2/1/10], invest in advanced science, research and innovation, maintain a strong nuclear deterrent and secure nuclear materials both at home and abroad, and improve energy efficiency to help curb greenhouse gas emissions that contribute to climate change. The FY 2011 budget request also places an emphasis on DOE improving fiscal performance with the proposed creation of a new initiative on Management Reform.

Secretary Chu said, "The President's budget cuts wasteful spending while making wise investments in innovation and clean energy that will put Americans back to work, save families money and keep our nation competitive in the global marketplace. This budget supports new approaches to energy research and invests in the next generation of scientists and engineers, and it will spark new clean energy projects nationwide, including restarting the American nuclear power industry."

On the nuclear power issue, the Nuclear Energy Institute (NEI) issued a release saying they welcomed the fiscal year 2011 budget request that would increase to $54.5 billion, from the $18.5 billion currently allotted, the amount of Federal loan guarantees to be accessed by companies planning to build new nuclear power plants. Referring to the Presidents statement in the State of the Union that he wanted “a new generation of safe, clean nuclear power plants,” and the budget proposal to triple the loan guarantee for new nuclear plants “is a tremendously positive development for our nation,” according to NEI's President and Chief Executive Officer Marvin Fertel.

Fertel said, “Coupled with the solid bipartisan support for nuclear energy that exists in Congress, the Administration’s initiative will make a meaningful difference in bringing about development of the nuclear energy facilities that our nation needs to meet rising electricity demand and increasingly stringent environmental requirements.” Fertel points out, however, that the budget request does not include funding for the DOE used nuclear fuel management program that for decades has focused on development of an underground repository at Yucca Mountain, NV. DOE has a license application for the facility pending with the NRC, but the Administration’s budget document states that Yucca Mountain “is not a workable option” and that the program will be discontinued this year.

Last Friday, the Administration directed DOE to establish a high level, blue ribbon committee to address the nuclear waste issue [See WIMS 1/29/10]. The Commission which was launched by Secretary Chu, is being co-chaired by former Congressman Lee Hamilton and former National Security Advisor Brent Scowcroft. The Commission is to provide advice and make recommendations on issues including alternatives for the storage, processing, and disposal of civilian and defense spent nuclear fuel and nuclear waste. Chu said, “Nuclear energy provides clean, safe, reliable power and has an important role to play as we build a low-carbon future. The Administration is committed to promoting nuclear power in the United States and developing a safe, long-term solution for the management of used nuclear fuel and nuclear waste." The 15-member Commission is charged with producing an interim report within 18 months and a final report within 24 months.

Other items highlighted by Chu in the President’s FY 2011 budget request for DOE included: Positions the United States to be the global leader in the new energy economy by developing new ways to produce and use clean and renewable energy; Maintains effective nuclear deterrence while working to secure all vulnerable nuclear materials around the world within four years; Engages in cross-disciplinary scientific approaches to our energy and national priorities – including innovative and transformative research at DOE’s National Laboratories; Expands the use of clean, renewable energy sources such as solar, wind, and geothermal while supporting the Administration’s goal to develop a smart, strong, and secure electricity grid; Promotes innovation in the renewable and nuclear energy sectors through the use of expanded loan guarantee authority; and Advances responsible environmental management by cleaning up hazardous, radioactive legacy waste from the Manhattan Project and the Cold War.

DOE indicated that in developing the budget, several program reductions and terminations are proposed which further demonstrate the Administration’s commitment to fiscal responsibility. They include: Eliminating more than $2.7 billion in tax subsidies for oil, coal and gas industries (estimated to generate more than $38.8 billion dollars in revenue over the next 10 years); Terminating Ultra-Deepwater exploration program, saving $50 million; and Canceling planned expansion of the Strategic Petroleum Reserve, saving $71 million.

American Petroleum Institute (API) President Jack Gerard issued a statement on provisions included in the FY 2011 budget submitted to Congress which he said are aimed at imposing new taxes on the oil and natural gas industry. He said, “With America still recovering from recession and one in ten Americans out of work, now is not the time to impose new taxes on the nation’s oil and natural gas industry. New taxes would mean fewer American jobs and less revenue at a time when we desperately need both. A robust U.S. oil and gas industry is essential to the recovery of the nation’s economy. In addition to providing the cost-competitive energy that it is the lifeblood of the economy, the industry is one of the largest employers in the country, supporting more than 9 million jobs, including many green jobs. Imposing new taxes would reduce our nation’s energy security by discouraging new investment in domestic oil and natural gas production and refining capacity and pushing those investments -- and American jobs -- abroad. We hope to work with the administration and Congress to seek sound public policies that will allow the oil and gas industry to create new jobs and help fuel an economic recovery that will benefit all Americans.”

The Natural Resources Defense Council (NRDC) issued a statement on January 29, in advance of the President's budget proposal, and said "additional billions of dollars in loan guarantees for the nuclear power industry would be a mistake." NRDC said, "Energy sources should compete for public dollars based on how well they provide the clean, efficient and affordable power we need. On that basis, nuclear power has a long way to go. It remains a high-cost, subsidy-dependent, radioactive-waste generating, water-depleting, non-renewable energy source that still carries with it the low probability of a high-consequence accident.We can get far more for our money by investing in efficiency gains, conservation and innovative technologies that generate power from wind, solar and other renewable sources; as well as biomass and waste heat from industry."

The Union of Concerned Scientists (UCS) also criticized loan guarantees for nuclear power. Ellen Vancko, nuclear energy and climate change project manager at UCS said, "increasing loan guarantees for nuclear power beyond what Congress already has authorized would shift unacceptable risks from the nuclear industry to U.S. taxpayers. This is a prime example of pork barrel politics on behalf of special interests. . . "While it may be appropriate to provide loan guarantees to support a small number of first-mover reactors, any decision to triple federal loan guarantees could divert critical financial resources from more cost-effective clean energy projects that would come on line much more quickly and put Americans back to work right now."
Secretary Chu will testify on the budget before the Senate Energy & Natural Resources Committee, Chaired by Senator Jeff Bingaman (D-NM) on February 4. Bingaman issued a release indicating, "This Budget Request is a powerful statement of the priority that President Obama is giving to energy, technological competitiveness and nuclear weapons security imperatives, despite the tough fiscal environment we find ourselves in. On most major programs in the department, the President’s budget request basically gets it right. I hope that this request attracts vigorous support from everyone who cares deeply about securing our nation’s energy future, boosting our economic growth and combating nuclear nonproliferation.”

Access a release from DOE with additional details (click here). Access a lengthy release from NEI addressing various DOE budget issues (click here). Access a release from API (click here). Access a release from NRDC (click here). Access a release with links to additional information from UCS (click here). Access a release from Senator Bingaman (click here). Access the detailed 215-page budget document focusing exclusively on Nuclear Energy, Defense Nuclear Waste Disposal & Nuclear Waste Disposal (click here). Access links to more summary and detailed DOE budget documents on additional subjects (click here). Access links to additional DOE budget information (click here).