On Nuclear Energy: Lessons in Promoting

For more than thirty years, there hasn’t been a new nuclear plant built in the United States. This is due to a number of reasons, including cost overruns, environmental lawsuits, political palatability and an unjustified fear of nuclear technology. That may all change with President Obama recently announcing support for nuclear power by giving his blessing and taxpayer dollars for two new nuclear plants in Georgia.
 
While embracing an energy source that is carbon free and can generate reliable and affordable power is a good decision, politicians are once again heading down the wrong path. These days it seems nothing can be promoted without taxpayer funded handouts.
 
President Obama claims the plants are safe, clean and will be needed to meet increased energy demand in the near future. He is correct. The 104 nuclear plants around the country have an excellent record of safety, provide the nation with 20 percent of its electricity and constitute up to 70 percent of the emission-free energy generation in the United States.
 
For a president who is concerned about human-caused climate change, nuclear power represents a reliable energy source (unlike wind or solar) that can provide the energy to meet growing demand without releasing emissions. In fact, the Nuclear Energy Institute states that, since 1995, the 104 nuclear reactors have ‘offset’ 9.4 billion metric tons of carbon dioxide, 19 million tons of nitrous oxide and 50 tons of sulfur dioxide. This is the carbon reduction equivalent to taking more than 1.8 billion cars off the road for a year.
 
So, what’s the problem? Politicians seem to think the only way to promote an energy source is by handing out billions of taxpayer dollars. President Obama dedicated more than $8 billion in loan guarantees to facilitate the construction of the two new nuclear plants. Loan guarantees are essentially subsidies that artificially prop up an industry. This means that taxpayers are on the hook if these projects do not come to fruition or other problems arise.
 
Energy subsidies are certainly not a new idea. In reality, all energy sources in the United States are subsidized to a varying degree. The U.S. Energy Information Administration reported in early 2008 that the federal government subsidizes solar energy at $24.34 per megawatt-hour (MWh), wind at $23.37 per MWh, natural gas at 25 cents per MWh, coal at 44 cents per MWh and hydroelectricity at 67 cents per MWh. Nuclear falls in a bit above fossil fuels at $1.59 per MWh.
 
Unfortunately, the government does not have the best track record when it comes to picking winners and losers in the energy business. Think synfuels, ethanol, and the unreliable energy provided by the wind and solar industries, which still amounts to less than 1 percent of our nation’s energy supply.
 
It is time to allow the market to decide which energy technologies move to the front of the line. Instead of dumping more taxpayer dollars onto the energy pile, the first step in this transition would require the repeal of subsidies to all energy sources. If nuclear power is viable and produces the energy needed and desired by citizens, it will thrive without government intervention (pdf).
 
Still thirsty for more on renewable energy sources? Take a look at this piece on clean energy policy and public opinion.
 
(Sources: Department of Energy; Pew Center on Global Climate Change; Nuclear Energy Institute)
 
(Photo credit: photorush; C.C. 3.0)