Thursday, October 09, 2008

Fact Check: Joe Romm on New Nukes

Joe Romm manages to be quite a chameleon when it comes to nuclear power. On certain occasions, he manages to be quite reasonable--as when he admitted that the Russians have no good non-carbon energy options outside of fission. He insists that he's not "anti-nuclear." But much of the time his writing on the subject is more reminiscent of Paul Gunther than of an even-handed, sober-minded analyst. And for someone who has been bashing nuclear power in the national media for years, Romm seems to have a difficult time keeping basic facts straight.

Take, for instance, this statement that Romm inserted into Finrod's comment to this post on Climate Progress:
JR: Gimme a break Once there is a price for carbon dioxide that reflects its actual damage to humanity, wind and solar will do just fine, thank you. Right now, new nuclear plants get all of the subsidies that wind gets, plus this absurd 80% loan guarantee, full liability protection, and expedited licensing.
In this comment Romm makes four claims, which I will go through one at a time.

Claim #1: New nuclear plants "get all of the subsidies wind gets."
It's hard to boil the complex reality of US energy subsidies to a short statement, but all things considered I don't believe this is a fair assessment. It is true that the Energy Policy Act of 2005 expanded the Production Tax Credit of 1.9 cents per kW/hr to the first 6000 megawatts of new nuclear capacity. However, with current reactor designs this only represents 4-5 units, when there are dozens currently being planned for the US. The act calls for allocating the 6000 MW among various reactors, with each of them receiving a fraction of the credit.

The list of federal incentives (which represent de facto or explicit subsidies) for renewable energy sources is actually pretty extensive. Fortunately, there's a handy website that lists and explains them all. You can go through them at length if you like, but I would like to direct readers' attention to the Renewable Energy Production Incentive (REPI). This is not the same thing as the Production Tax Credit (PTC). As the DSIRE website explains:
The Federal Renewable Energy Production Incentive (REPI) provides incentive payments for electricity produced and sold by new qualifying renewable energy facilities. Qualifying systems are eligible for annual incentive payments of 1.5¢ per kilowatt-hour (in 1993 dollars and indexed for inflation) for the first 10-year period of their operation, subject to the availability of annual appropriations in each federal fiscal year of operation.
As new nuclear systems are ineligible for this significant federal subsidy, I believe that we can dismiss Romm's first claim as demonstrably false.

Claim #2: New Nuclear Plants receive "this absurd 80% loan guarantee" in addition to all the incentives received by new wind capacity.
I find this sentiment quite ironic, given that the DOE program that provides the loan guarantees provides the same incentive to renewable power projects. Here's the nuclear power solicitation, and here's the renewable power solicitation. Seems like nuclear projects possess no advantages that renewables do not from the loan guarantee program, with the exception of the $18 billion limit for nuclear plant guarantees (vs. $10 billion for renewables). Doesn't strike me as all that "absurd."

Claim #3: New Nuclear Plants receive "full liability protection."
This is one of the longstanding myths about the Price-Anderson Act. Buried in the intense legalese of the law is a section that nullifies any guarantee of legal protection above the Price-Anderson limit. The relevant text is here:
(2) In the event of a nuclear incident involving damages in excess of the amount of aggregate public liability under paragraph (1), the Congress will thoroughly review the particular incident in accordance with the procedures set forth in subsection (i) of this section and will in accordance with such procedures, take whatever action is determined to be necessary (including approval of appropriate compensation plans and appropriation of funds) to provide full and prompt compensation to the public for all public liability claims resulting from a disaster of such magnitude.
(3) No provision of paragraph (1) may be construed to preclude the Congress from enacting a revenue measure, applicable to licensees of the Commission required to maintain financial protection pursuant to subsection (b) of this section, to fund any action undertaken pursuant to paragraph (2).

Translation: In case of a nuclear incident resulting in claims greater than the Price-Anderson limit, Congress can pass measures to extract revenues from the licencee to cover the cost of liability. This means that if the "American Chernobyl" that anti-nukes like Harvey Wasserman fantasize about somehow actually happened, Congress would use its powers to expropriate everything the reactor operator owned. That doesn't sound like "full liability protection" to me. The provisions of the law are a considerable deviation from how liability law normally works, but that sword cuts both ways--take, for instance, this clause in the legislation:

The Commission or the Secretary, as appropriate, may incorporate provisions in indemnity agreements with licensees and contractors under this section, and may require provisions to be incorporated in insurance policies or contracts furnished as proof of financial protection, which waive
(i) any issue or defense as to conduct of the claimant or fault of persons indemnified,
(ii) any issue or defense as to charitable or governmental immunity, and
(iii) any issue or defense based on any statute of limitations if suit is instituted within three years from the date on which the claimant first knew, or reasonably could have known, of his injury or damage and the cause thereof.

Basically, under Price-Anderson licencees waive their right to several defenses that they would be fully entitles to use in conventional liability cases. Full liability protection? I think not. At the same time, the law is very helpful in case of incidents with claims below the Price-Anderson limit, as operators are not individually liable for the full sum under such cases. So it is a subsidy--just not anywhere near as advantageous one as its detractors imagine.

Claim #4: New Nuclear Plants Receive "Expedited Licensing"
A semantic quibble, but current NRC procedures are only "expedited" in comparison to the way they worked prior to the 2005 Energy Bill. Under current circumstances, all the new plant designs still require NRC approval--and the shortage of qualified NRC staff to evaluate them isn't making things progress any quicker. If the NRC was rubber-stamping applications, that would be one thing; but so long as it takes four years or more for new designs to be approved, licensing is anything but "expedited."

So on the whole, I think Romm's aside has a somewhat tenuous relationship with legal reality. Wind power receives a lengthy list of subsidies not available to new nuclear plants, wind and nuclear receive the same 80% loan guarantees from the same DOE program, Price-Anderson allows Congress to expropriate the assets of reactor operators in case of a serious accident, and 48+ months is still a long time. But somehow I doubt that he will admit any of this.


Anonymous said...

Good review--I'd suggest posting it to Romm's blog but he'd just delete it.

Things cleared up for me a lot when Joe Romm let slip one time that his family used to own a radon-detection business, and then the financial picture became much more clear.

Sovietologist said...

Yeah, I've found that Romm simply fails to allow unfriendly comments out of moderation. And furthermore, a blog post can contain a lot more detail than a comment.

Charles Barton said...

Excellen post!

Finrod said...

I've posted a new comment on that thread, but Romm has not responded. He very likely won't.

Stewart Peterson said...

A minor quibble re: #3--Price-Anderson's real value isn't in protecting the nuclear industry from being bankrupted by lawsuits resulting from a real accident, but by shotgun frivolous lawsuits resulting from imagined problems.

Sovietologist said...

Stewart: Precisely.

Looking through the text of Price-Anderson, I'm starting to wonder if it might be a fool's bargain. It's not at all implausible that a frivolous suit could result in claims exceeding the Price-Anderson limit, at which point the law's extrajudicial liability mechanisms come into play. Deprived of conventional legal defenses, the nuclear industry would be hard-pressed to defend itself against politically motivated members of Congress who would then be determining its fate. It might be wise to seek an alternative paradigm with more robust liability tests.

al fin said...

Romm operates under conflicting constraints regarding what he can or cannot advocate. He does the best he can.

I would like to think that the Obama administration would listen to nuclear advocates, as opposed to the Luddites. Unfortunately, I see little reason to expect firm and timely action to expedite new nuclear power from the Obama administration.