Dramatic Policy Shifts in 1997 Drive Renewed Support For Nuclear Energy
Washington, D.C., December 30, 1997--Far-reaching industry and government policy initiatives, coupled with growing federal recognition for the need to retain and expand the role of clean energy sources, significantly shifted policymakers' attitudes in 1997 and generated greater public support for the world's nuclear energy program.
Support for nuclear energy in 1997 was especially evident in several key areas:
-- Worldwide initiatives to curb "greenhouse gas" emissions
-- Nuclear technology exports to China
-- Nuclear waste management
"In the United States, the transition to a competitive electricity market has forced policymakers to reexamine nuclear energy as the electricity source that will play a vital role in the nation's economic growth and in meeting emerging clean air requirements," said Joe F. Colvin, president and chief executive officer of the Nuclear Energy Institute.
The need for greater use of emission-free electricity sources also focused increased attention on nuclear energy's significant economic benefits. Production costs at U.S. nuclear power plants were 1.91 cents per kilowatt-hour in 1996, according to the Utility Data Institute compared to coal (1.83 cents), and were considerably cheaper than natural gas (3.38 cents) and oil (4.14 cents).
The world's need for nuclear energy as an economic and environmentally friendly source of electricity was underscored at the Kyoto Conference on Global Climate Change in December when the United States and other leading industrialized nations made a serious commitment to cut greenhouse gas emissions by the 2008-2012 time frame. As such, the United States, which currently produces 34 percent of the world's carbon emissions, pledged to reduce greenhouse gas emissions 7 percent by 2010.
Nuclear energy, which respectively provides 20 percent of the United States' and 17 percent of the world's electricity, does not contribute to increasing concentrations of atmospheric carbon dioxide thought by many to contribute to global climate change.
Government Studies Cite Need for Nuclear Energy
In the process of developing its strategy to reduce emissions, two separate studies by the Administration underscored the need for the more than 100 nuclear power plants producing electricity in the U.S. today, and for continued research and development of advanced nuclear power plants.
Maintaining the nation's nuclear power plants, including extending operation beyond the initial 40-year license period, "could result in a very large contribution to carbon reductions" over the next 25 years, according to a September study by five U.S. Department of Energy national laboratories.
Another study released in November by the President's Committee of Science and Technology Advisors also recommended measures to ensure a viable nuclear energy industry. Funding for research and development on advanced nuclear technology would increase from $42 million to $119 million as part of a $1.1 billion energy research package.
"The potential benefits of an expanded contribution from fission in helping address the carbon-dioxide challenge warrant the modest research initiative proposed," the president's advisors said. "To write off fission now as some have suggested would be imprudent in energy terms and would risk losing much U.S. influence over safety and proliferation resistance of nuclear energy activities in other countries."
The U.S. Senate Energy and Natural Resources Committee held 14 hearings throughout 1997 to review energy policy issues, and after an exhaustive review, Committee Chairman Sen. Frank Murkowski recommended a series of energy policy principles, including the establishment of an "emission-free portfolio standard."
Murkowski said the standard would "provide an incentive to keep emission-free sources operating and replace them with emission-free sources when they reach the end of their operating lives. Nuclear energy has reduced 90 percent of greenhouse gas emissions in the electricity sector since 1973--more than 2 billion tons of carbon alone."
In a speech supporting nuclear energy at Harvard University, Senate Energy and Natural Resources Committee member Sen. Pete Dominici said, "What the President should have said is that we need nuclear energy to meet [clean air] goals. After all, in 1996, nuclear power plants prevented the emission of 147 million metric tons of carbon, 2.5 million tons of nitrogen oxide and 5 million tons of sulfur dioxide."
Summit Opens Door to Nuclear Energy Trade
U.S. policy on nuclear technology trade with China also received heightened attention in 1997. At the U.S.-China summit in Washington, President Clinton announced his intent to certify that China has met the conditions necessary to lift trade barriers that have prevented commercial nuclear trade since 1985.
Electricity is the fastest growing source of energy in China, which makes that country the largest single market for power generation equipment. As such, China, which already has 11 nuclear reactors in operation or under construction, has announced an ambitious plan to add a total of 50,000 megawatts of new nuclear energy by 2020. To put this in perspective, China requires the construction equivalent to two new nuclear power reactors each year. Such a market could produce more than $1.6 billion per year in U.S. exports to China, with more than 25,000 U.S. technical jobs supported by those exports.
"It is also in the United States'--and the world's--interest to ensure China operates nuclear power plants as safely as possible by allowing China to benefit from the strides made in America to standardize designs and to improve the safety of this technology," said Colvin. "The Chinese recognize the United States' experience in designing the safest, most reliable nuclear energy plants in the world, and understandably want an opportunity to purchase this technology."
President Clinton's description of the agreement as a "win-win-win" situation that "serves America's national security, environmental and economic interests" is a radical departure from the Administration's policy on other nuclear energy issues, most notably nuclear waste management. This "disconnect" in policy toward nuclear energy was best illustrated by the Administration's repeated veto threats on bipartisan legislation that the U.S. House of Representatives and the Senate approved by wide margins in 1997 to reform the federal government's program to store used nuclear fuel.
Under existing law, the federal government has a legal obligation to begin managing used nuclear fuel from the nation's nuclear power plants beginning, Jan. 31, 1998. To date, ratepayers of nuclear-generated electricity have paid the federal government approximately $14 billion for this service, but the Energy Department now says a facility will not be ready until 2010 at the earliest.
On November 14, the U.S. District Court of Appeals reaffirmed the Energy Department's unequivocal obligation and rejected DOE's efforts to skirt liability by claiming that it faced an "unavoidable delay" in managing used nuclear fuel. As the Associated Press reported, the ruling "opened the door for utilities to seek compensation" from the government if it fails to meet its obligation. Potential liabilities to the federal government--and consequently, the American taxpayer--are estimated at $56 billion.
As the federal government's program to collect this money from electricity consumers goes on unabated, utilities throughout the country continue to exhaust on-site storage space for used nuclear fuel--27 units in 14 states will deplete existing on-site storage space by the end of 1998.
"Above and beyond the Energy Department's professed intent to default on its statutory obligation to begin taking used fuel no later than Jan. 31, 1998, the Department of Energy now plans to pay damages with utilities' own money," said Colvin. "Doing nothing, which is the Administration's answer to this national environmental challenge, is not a solution given the severe consequences to taxpayers, ratepayers and utilities. The President should drop his veto threat and work with Congress to develop a sensible solution." ###
The Nuclear Energy Institute is the nuclear energy industry's Washington-based policy organization. This news release and additional information about nuclear energy are available on NEI's Internet site at http://www.nei.org.
For more information, contact NEI's Media Relations staff at 202/739-8000 during business hours or 703/644-8805 after hours and weekends.
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