Tuesday, February 02, 2010

The Department of Energy 2011 Budget Request

Or the nuclear elements thereof, anyway. This was written for NEI’s member newsletter, Nuclear Energy Overview, and provides a fairly thorough overview of the nuclear elements of this year’s budget request.

This is just the beginning of the annual process, with the House and Senate due to hold many hearings, grouse about this or that, and vote for more or less money requested by the administration. DOE is not immune from this process, though we wonder whether the nuclear element will not be seen as pleasing to a fairly wide swath of Congress folk. As always, time will tell.

You can pick up a pdf of the budget request here if you want to follow along.

This is original reporting.

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The DOE budget proposal for 2011 requests a tripling of its loan guarantee authority for new nuclear power plants, from $18.4 billion to $54 billion.

At the same time, the budget zeroes out the Yucca Mountain used fuel repository project, as the department expects to pull the license application within the month. DOE on Feb. 1 filed a motion with NRC’s licensing board to suspend licensing review for the project.

Energy Secretary Steven Chu said the increased loan guarantee authority would provide assistance to seven to 10 nuclear power plant projects.

The industry welcomed the increase and highlighted the potential for job creation. “These loan guarantees will serve as a catalyst to accelerate construction of new nuclear plants,” said Marvin Fertel, NEI’s president and CEO, “creating thousands of high-paying, long-term jobs in the process. By supporting new reactors, loan guarantees also will reinvigorate U.S. manufacturing capability for nuclear energy components.”

The loan guarantee program empowers the energy secretary to provide loan guarantees for up to 80 percent of the cost of “innovative technologies” that “avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases.”

The guarantees are not an actual appropriation and, therefore, do not represent an outlay of taxpayer dollars when the clean-energy projects are successfully completed. In fact, recipients will be charged a percentage fee. The guarantees are designed to boost investor confidence and allow worthy projects to move ahead with financing on more reasonable terms that ultimately will lower the overall cost of electricity generated by those projects.

Chu said the department “is working hard to restart the nuclear energy industry,” with loan guarantees intended to demonstrate to funding agencies that nuclear energy plants can be built without cost or schedule overruns. He said the government would not need to issue further loan guarantees after the first projects go on line, as they will demonstrate the economic feasibility of funding nuclear energy plants.

While the overall program covers a range of energy projects, it now provides $18.5 billion specifically for nuclear energy projects. DOE has not yet issued any loan guarantees under the program.

Chu also announced that DOE requested no funds in fiscal 2011 for the Yucca Mountain repository program, on direction from the administration to withdraw its license application from the NRC for a construction permit. According to the budget request, “The administration has determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository and will discontinue its program to construct a repository at the mountain in 2010.” 

Chu said that stopping all work on the repository does not abrogate any aspect of the government’s obligations to safely manage used nuclear fuel and radioactive waste under the Nuclear Waste Policy Act, as “the act only requires a path going forward.” He added that last week’s announcement of a blue ribbon commission to explore alternatives to Yucca Mountain “represents that path.”

Other notable budget items:

  • A reorganization of budget line items, with some projects such as the Generation IV advanced reactor program zeroed out and others included in new categories such as nuclear energy enabling technologies and reactor concepts research and development.
  • The new reactor concepts research and development program would explore ways to extend the life of nuclear energy plants and to study the potential embodied in small, nuclear reactors and of next generation plants to generate process heat for industrial or other uses.
  • Nuclear energy enabling technology, another new line item, would focus on potentially transformative technologies in the areas of reactors, fuel cycle approaches and reducing proliferation.
  • Nuclear Power 2010, an effort by government and industry to develop a new, faster licensing procedure for new nuclear plants has been zeroed out due to “successful completion.”
  • Cuts were made in funding for the Idaho National Labs from $173 million to $162.5 million to reflect the completion of several projects, although the lab received $4 million to process EBR-II used nuclear fuel.
  • Re-Energyse, a new program to encourage students to pursue careers in science, engineering and entrepreneurship related to clean energy, would replace the similar Integrated University Program.
  • A new International Nuclear Energy Cooperation program within the Office of Nuclear Energy would support the department’s international engagements and other commitments relevant to civilian nuclear energy.
  • A grant of $45 million would go to uranium enrichment company USEC while the company prepares to submit a new loan guarantee application for its American Centrifuge project in Ohio.

11 comments:

Anonymous said...

“the act only requires a path going forward.” He added that last week’s announcement of a blue ribbon commission to explore alternatives to Yucca Mountain “represents that path.”

Uh, oh. Bureaucrat-ese alert. "Path", and especially "path going foward" is bureaucratic jargon for deny, delay, and kick the can down the road. The DOE is in clear violation of a federal law (NWPA). Anyone who knows anything about government knows that a "blue ribbon commission" serves only two purposes. The first is to run out the clock. The second is to provide political cover ("Look, see, we're DOING SOMETHING, we have all these GREAT MINDS working on the problem."). Bah! Bunch of lousy, inept cowards, they are.

Brian Mays said...

Agreed. Chu is simply wrong here. There is nothing in the NWPA that talks about a "path" or a "way forward." It specifies that the "waste" must go to a repository, and in 1987, that repository became Yucca Mountain. The President and the DOE can't simply go their own way. They're breaking the law.

Even if, during the site characterization phase, which has now passed, the Secretary of Energy had determined the Yucca Mounain site to be unsuitable for a repository, he would have to report to Congress within six months with his recommendations for further actions. However, only Congress can decide the "path going forward," because only Congress has legislative authority.

Abandoning the site and replacing the licensing effort with a blue-ribbon panel, after the licensing phase has begun, to provide recommendations two years from now is a clear violation of the act.

Anonymous said...

So what can the Congress do when faced with an Executive Branch that is not performing it's mandated function? Probably very little. They can cut off funding. They can impeach the President or any other federal official (e.g., judges) where they have legal authority to do so. They can hold hearings. I guess if they put someone under oath in a hearing and ask them if they intend to carry out the law (NWPA in this case), and they answer "no", or refuse to answer, they can hold them in contempt. I guess that would have some legal sanction attached to it. But if it requires DOJ action, that would be the Executive Branch pitted against itself. Constitutional crisis? I don't know...

Anonymous said...

Unless Congress decides to change the current law, the next Republican president can restart the Yucca Mountain license review. Given the amount of money that will be wasted by the Obama administration's termination decision, restarting the license review would be the best thing the Republican's could do for taxpayers and ratepayers.

Anonymous said...

the next Republican president can restart the Yucca Mountain license review

DOE is saying it wants NRC to withdraw the application "with prejudice," so that it cannot be resubmitted. I don't know how that would work legally, and am not certain it would. It's not like a criminal charge, where double jeopardy attaches.

Anonymous said...

It is an interesting Constitutional problem. Our tripartite system delineates the functions of government in such a way that failure of any one of the three branches to perform it's mandated function effectively vetoes the actions of the others. The Executive is charged with placing and operating the bureaucratic machinery necessary to carry out the will of Congress. In this case, the will of Congress is embodied by the NWPA. They haven't repealed it. The Executive Branch has effectively vetoed a Congressional Act by refusing to carry out it's mandates and adhere to it's provisions. I guess it is up to the Congress to remedy that if they have the will, but their remedies are limited and are somewhat blunt instruments.

Anonymous said...

If DOE requests that the application be "withdrawn with prejudice" and the NRC agrees, they are both effectively voiding the provisions of the NWPA as passsed by Congress. The NWPA specifically designated Yucca Mountain as the repository site and the only legal way that could have been overturned was during the characterization phase, if there had been a determination made, based on the science knowledge available, that the site was unsuitable. That phase has passed and no such determination was made. The decision has moved into the political realm, and the NWPA makes no provision for that. The Executive Branch is clearly overstepping its authority and intruding upon the purview of the legislative branch. DOE and NRC have no authority to unilaterally abrogate a provision of federal law.

Brian Mays said...

What can the NRC do if the DOE withdraws the license application? I can't see how this is the fault of the NRC.

The main constraint that the NWPA places on the NRC is that the commission has to complete the license review within three years of the submittal.

Anonymous said...

They can refuse to be a party to breaking federal law. The "with prejudice" part is what concerns me. My understanding of the legal term "with prejudice" means it cannot be considered again even if resubmitted by a future administration.

The bottom line is, someone has to step in and stop this nonsense, whether it is the Congress or the USSC or whoever. The NWPA is still on the books. It hasn't been repealed, it hasn't been amended in any way that allows the DOE to unilaterally abandon the designated repository site based only on political considerations and replace it with a sham "Blue Ribbon Commission". There is nothing in the NWPA that allows for that. Either the laws passed by Congress mean something, or they don't. If they do, then someone has to step up and say this crap is illegal, and do something about it. If not, the whole process is irrelevant and we may as well do away with it.

Brian Mays said...

Eh ... the only people who are throwing around "with prejudice" are Obama's folks, mostly Reid and Chu. I'd take it with a huge grain of salt.

Actually, the much larger threat to being able to resubmit the license application is that the government is about to be sued for failing to adhere to its own laws. The DOJ is very likely to lose these lawsuits, which means there will be almost no money left in the nuclear waste fund to pay for the licensing process and no money left to pay for the repository.

Congress passes the laws, but it is the responsibility of the Executive Branch (starting with the President) to enforce them. The President is answerable to Congress in so much as Congress has the power of impeachment, but ultimately, the President is answerable to the people.

I expect that these lawsuits, if successful as I expect them to be, will be a huge embarrassment for the Obama administration. Don't be surprised if Obama's political enemies seize upon this issue as the lawsuits go forth.

Anonymous said...

If they aren't going to build a repository as the law requires then they should lose the lawsuits, and the monies paid refunded, because the work was not done. The ratepayers have been assessed a charge for the purpose of managing the back end of the fuel cycle, not to pay for a "Blue Ribbon Commission", and whatever vaporware it might produce (or not).

The lawsuits would be moot if the DOE would follow the law and continue the process of getting a repository online. Lacking that, we should get our money back.