NCPA - National Center for Policy Analysis

Department of Energy Says No to Expanding Nuclear Capabilities

May 28, 2015

Although the nuclear industry accounts for 19 percent of U.S. electricity needs, the U.S. government has impeded the de­velopment of a healthy, competitive nuclear sector. In recent years, it has intervened as both a regulator, and as an industry player seeking financial profit for itself by selling uranium on the open market from its own stocks.

The Department of Energy (DOE) regularly releases such uranium inventory even when the market is in depressed conditions, in violation of federal law, as the Government Accountability Office has concluded, imposing significant losses on private industry.

These interventions create incentives against investment and capacity expan­sion in an industry that needs to be able to expand in order to keep providing American families with low-cost, reliable energy.

As a result, the U.S. nuclear energy sector faces extraordinary risks and regulatory burdens compared with its foreign com­petitors, forcing a potentially internationally competitive sector onto thin ice.

Congress could consider the following reforms:

  • State and federal government should create as much space for open competition in the nuclear energy sector as possible within reasonable environmental regulations.
  • Congress should streamline the nuclear regulatory framework, devolving as many regulatory functions as possible to the states.
  • DOE should be required to stick to the letter of the law in conducting transfers of its uranium stocks.
  • States should also do their part by streamlining their environmental regulations.

This results in reduced nuclear energy capac­ity (despite the artificially low spot price for natural uranium) which, together with the higher financing costs associated with elevated levels of risk and regulation, combine to result in higher prices for nuclear energy, which are ultimately born by America's working families.

Source: Mario Loyola, "The Need for Nuclear Regulatory Reform," Texas Public Policy Foundation, January 2015. 

 

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