The Wall Street Journal printed an article today on the high costs of new nuclear power in the United States. But guess what? Energy prices are escalating across the board. And much of the price increase is because commodity prices for products like cement, steel and copper are rising. Then there are the labor costs. No new nuclear plants have been built in decades and those with the experience and skill to build new plants can command top pay.
Many of these problems, however, are not unique to the nuclear industry. Coal plants are expensive and so are windmills and solar projects. If they weren’t, then no one would consider nuclear and renewables would not need mandates and subsidies to survive.
Then there is the cost of taxing carbon dioxide. The economics of nuclear power shifts dramatically if Congress is successful in passing legislation that puts a price on CO2 emissions. A recent Energy Information Agency study calculated the economic costs of one piece of such legislation, the Lieberman-Warner climate change bill. The EIA looked at seven scenarios for meeting the Lieberman-Warner mandates. The scenario that resulted in the least economic harm would require well over 200 new reactors to be built in the U.S.
The simple fact is that energy prices are increasing and if the nation wants to limit CO2 emissions, then nuclear must be part of the answer. So the question for policy makers is two-fold. First, what can be done to reduce energy prices overall and second what can be done to reduce the construction costs of nuclear power plants.
Luckily, there are answers and most fixes would get at both problems:
- First, commit to the free trade of commodities. Simply lifting tariffs on the products, like steel and cement mentioned by the WSJ would reduce construction costs. The U.S. would have the added benefit of gaining access to the resources to build the energy plants, of whatever source, to meet its energy demands.
- Second, open America’s doors to legal immigration of skilled labor. The Heritage Foundation is sponsoring an event today on the economic impact of inadequate H-1B visa access. While the nation debates the problem of illegal immigration, it too quickly ignores the benefits of legal immigration of skilled workers. These are the exact types of people the U.S. will need to build a 21st century energy infrastructure.
- Third, liberalize the global commercial nuclear market. Unfortunately, international commercial nuclear markets are some of the most regulated and tightly controlled in the world. The U.S. must gain access to the potential boom in global nuclear business to rebuild its own nuclear industry and have access to the goods and services that are required to meet energy demands.
- Forth, increase supply. The United States needs to increase energy supplies. Not just for gas, oil, and uranium but for energy services. Whether it is wind turbines, uranium enrichment, or fossil fuel production, domestic and global resources are needed. The more supply that exists, the lower the prices will be.
- Fifth, let the market work. The United States does not need the government to dictate how it produces energy. Consumers, producers and entrepreneurs can handle that just fine.
- Sixth, minimize regulation. The nuclear energy industry is one of the most heavily regulated in the country. At best, it will take nearly four years before the Nuclear Regulatory Commission will give approval to build a new plant. Furthermore, regulatory mandates have drastically increased the amount of construction materials needed to build a plant despite experience showing that such reinforcements were unnecessary. While safety must always be maintained, permitting and construction regulation overhauls could yield significant savings.
post written by Heritage Foundation nuclear energy research fellow Jack Spencer.
