Posted by Matt Dempsey matt_dempsey@epw.senate.gov

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National Journal Energy and Environment Blog 

Does Nuclear Fit the Bill? - Inhofe Response

Link to National Journal Energy and Environment Blog 

Today on their Energy an Environment Blog, National Journal asks: Does Nuclear Fit the Bill?:

Recent endorsements by key senators, such as John Kerry, D-Mass., and Lindsey Graham, R-S.C., (in their joint op-ed) and Tom Carper, D-Del., could be early signs nuclear energy is gaining traction as an indispensable part of the recently introduced Senate climate change legislation. Still, lawmakers and experts alike cite obstacles, including high construction costs and lengthy license processes, that the industry will need to overcome. What obstacles do you think are holding up nuclear development? Should the climate bill include provisions to help revitalize the industry, such as streamlining the process of getting new plants built? And if so, how? Would nuclear provisions help Senate leaders win 60 votes? Alternatively, why do you think nuclear energy should not be an integral part of Kerry-Boxer? -- Amy Harder, NationalJournal.com

Senator Inhofe Response

"Tying Nuclear Provisions to a Profoundly Bad Idea Still Leaves a Profoundly Bad Idea"

Link to Full Inhofe Response

The talk of the Beltway climate change debate these days is nuclear power. Suddenly a potential compromise has emerged to couple cap-and-trade legislation with provisions to advance construction of new nuclear power plants. But is it real, or just another mirage concocted by the industry's fiercest opponents? As of now, one can only speculate. But if last year's debate on Lieberman-Warner is any guide, one should expect little of anything that matters for nuclear. During the debate, former Sen. John Warner (R-Va.) said, "We're going to have a nuclear provision, I can assure you of that." Democratic opposition assured that the final bill was nuclear-free.

Such opposition, of course, is unsurprising. Consider that some of the same senators who now talk of nuclear compromise have plainly identified themselves as staunchly anti-nuclear. During the debate on the McCain-Lieberman bill in 2005, for example, Sen. Barbara Boxer (D-Calif.) said, "Nuclear power is not the solution to climate change, and it is not ‘clean.'"

But let's assume that the industry's opponents have a "road-to-Damascus" conversion, and agree to support provisions that can encourage construction of new nuclear power plants, including, to name a few, further streamlining the regulatory process, support for reprocessing, and loan guarantees for new plants. These are steps that Congress can and should take. But we can't forget the essential point: attaching them to a national energy tax doesn't cancel out or eliminate a national energy tax.

The national energy tax in question, of course, is cap-and-trade, a misguided, flawed, and ultimately ineffective approach to addressing global climate change. Yes, let's do things to support more nuclear plants, but those things should be detached from the Waxman-Markey, Kerry-Boxer, Massachusetts-California style energy tax. This tax will affect just about every good and service in the economy. It will mean higher electricity and gasoline prices, fewer jobs, and a less competitive American manufacturing sector. Again, tying nuclear provisions to a profoundly bad idea still leaves a profoundly bad idea.

Some assert that cap-and-trade, or setting a price on carbon, is the prime mover that will usher in the nuclear renaissance. Why, then, do we need nuclear provisions in cap-and-trade legislation at all? Indeed, this is the view of Sen. Tom Carper (D-Del.), chairman of EPW's Subcommittee on Clean Air and Nuclear Safety, who said recently: "The [Kerry-Boxer] legislation as drawn provides enormous incentives for the generation of electricity from sources that don't create carbon. Nuclear is right there. So there'll be a lot of incentives, just from the way the allowance system will be set up." In other words, cap-and-trade by itself necessarily means more plants.

The Congressional Budget Office (CBO) has a different, more nuanced, view. According to CBO's report, titled, "Nuclear Power's Role in Generating Electricity," the price of carbon must reach $45 per ton before nuclear becomes the technology of choice over natural gas. EPA's analysis of Waxman-Markey shows that the price of carbon doesn't reach that threshold until after 2040. Here is the translation: unless the price of carbon goes sky high, we won't get enough nuclear plants built to meet the carbon reductions mandated in the Kerry-Boxer bill; and, if we don't get enough nuclear plants built, the price of carbon will go sky high.

The "grand compromise" on nuclear power, which hasn't even hatched yet, probably won't have much of anything to encourage the nuclear renaissance. Yet even if it did, we can't forget that whatever is proposed is being tied to a fundamentally flawed policy that will destroy jobs, raise energy prices, and weaken America's energy security. Let's pass an energy policy that makes nuclear power a strong component of our energy mix. But let's keep cap-and-trade out of it.

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