Wednesday, January 07, 2015

More of The Nuclear Year 2014

Father-Time-and-Baby-Time-Shaking-HandsIndustries are dynamic entities that are always in process. That means they don’t lend themselves to top 10 lists, which work better for finished objects such as movies and books. We may say that Godzilla was the best 2014 movie to feature Yucca Mountain (built not for used fuel but to imprison a malevolent insect), but that’s a different kind of judgment. Some of the items we’ll include here started earlier than 2014 or started in 2014 but will not reach a milestone until 2015 or beyond. That’s how it goes.

With that in mind, let’s look at 2014:

From a financial  viewpoint, two items stand out: the President’s  request to revive the Decommissioning and Decontamination tax on nuclear plants was turned back in the appropriations bill that passed for 2015. The industry has no problem paying that tax – in fact, it’s paid the full amount two times over. It just was not eager for a third go-round – and Congress agreed.

Similarly, the court-ordered end of the Nuclear Waste Fee, which was intended to fund the construction and operation of the Yucca Mountain used fuel repository. Until the government meets its obligation to devise a used fuel strategy that can include a budget, the industry should not have to pay for that lack of strategy. Now, when we say the industry does not have to pay these fees, we really mean that you the ratepayer does not have to pay them, either. That’s approximately a billion dollars (just in 2015!) that won’t be diverted into government coffers waiting for a purpose.

The appropriations process was altogether pretty positive for the nuclear industry. Notably, the federal government will continue to partner with industry on small and next generation reactors. These projects promote goals the government has given a high priority, carbon dioxide emissions and energy diversity among them.

For a subject that is way too fluid to limit to a single year, consider trade. The nuclear energy aspect of trade has a special twist, the so-called 123 agreements. These are signed by State Department officials from two countries to allow trade in nuclear technologies. These date back to the original Atomic Energy Act of 1954 (123 is the section of the act dealing with these agreements) and root in the desire by the United States to tightly hold nuclear technology. That notion didn’t make it past the 50s, but 123 agreements remain useful to ensure that bad actors stay out of the nuclear business and that the rights of American companies are respected overseas. In general, these have not proven to be a large issue – a 123 agreement with Vietnam took force last year, for example. This year, agreements will be signed with China and South Korea. The latter should be noncontroversial, but the China agreement could be subject to greater scrutiny – but more because China is China than anything nuclear-related. A great many American vendors work with the Chinese nuclear industry, so it’s worth keeping an eye on it. 

Or consider another ongoing trade issue, the Export-Import bank. This depression-era entity became controversial to some members of Congress as a symbol of crony capitalism. Whatever the merits of that view, the bank has become such a factor in the global marketplace that virtually every first-world country has an equivalent entity. The existence of the U.S. Ex-Im Bank sends a message that America takes trade seriously, so it is equally important to companies that use the bank’s service and those that don’t.

The Ex-Im Bank provides credit to both American and foreign companies that engage in trade. NEI took the nuclear angle on the drive to reauthorize the bank’s charter, but this obviously is not a nuclear-specific issue. Many commerce and manufacturing organizations share NEI’s view (cool infographic – collect the set!). In 2014, the bank was reauthorized, but only for a few months. It needs a reauthorization with a reasonable lending authority. This is a big issue, especially with so much nuclear activity happening around the world.

These are some of the key issues that define the nuclear scene as 2014 blends seamlessly into 2015, but there are plenty of others. For example, Congress will probably take a closer look at used nuclear fuel options in 2015 and has already announced that energy policy will be a large topic in the new session.

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