Is the U.S. Government Ready to Foot the Bill for Trump's Nuclear Ambitions?
By Leonard Hyman & William Tilles
Bechtel CEO Craig Albert, fresh from his involvement in the Vogtle nuclear project, has boldly stated that the government should help cover the costs of new nuclear plants if Donald Trump's vision for nuclear expansion is to become a reality. This raises a crucial question: Are we heading towards another round of government subsidies for an industry that already relies heavily on them?
Nuclear power's reliance on government assistance isn't new. Subsidies cover various aspects, including insurance, fuel, and waste disposal. But here's where it gets controversial: if more reactors are truly needed, shouldn't the government itself take the reins, building and operating them to potentially lower the enormous capital costs?
For years, experts have argued that nuclear power in the U.S. has never been a straightforward commercial venture. In fact, it might not even be a rational one, given the extensive list of government subsidies it requires. Compared to other electricity sources, nuclear often falls short in terms of cost-effectiveness. Consider the alternatives: if climate change isn't a concern, why not invest in coal and gas, which the U.S. has in abundance and can run constantly? And if climate change is a priority, wind and solar, coupled with batteries and improved transmission, can provide similar base load power at comparable prices, without the need for imported resources. But this is where the plot thickens: China's dominance in rare earth processing is a significant factor. So, which would take longer: building a new nuclear plant or establishing rare earth processing facilities in more friendly locations?
And this is the part most people miss: if national security or climate concerns are paramount, perhaps we should address our excessive electricity consumption, which is significantly higher than in other developed countries with similar climates. Energy economists have long argued that saving energy is cheaper than producing it. However, this idea has faced political resistance since Jimmy Carter's efforts to promote energy conservation in the White House back in 1977. Sad.
Here's the bottom line: We need electricity, but nuclear power might not be the best solution. So why should we subsidize the risk? This isn't cutting-edge technology; our first commercial reactor dates back to 1957. It's an old, complex technology that has consistently underperformed. While a workable fusion reactor could revolutionize the energy landscape, more fission reactors may not be the answer. But, if the powers that be insist on more nuclear plants, the government should take charge. It would open the nuclear subsidy to public scrutiny and save a bundle on capital costs. The government can always finance things much more cheaply than the private sector. The conclusion is that nuclear power is not a place for the private sector because it is not, and has never been, a commercially viable business.
What do you think? Do you agree with the assessment that nuclear power isn't commercially viable? Should the government take a more active role in the nuclear industry? Share your thoughts in the comments below!
By Leonard Hyman and William Tilles for Oilprice.com
