We are getting used to brazen coronavirus claims for federal largess, but it’s hard to beat the claims coming from the nuclear industry. Even before the pandemic hit, it had for the most part given up competing for new power plant sales in the domestic and international energy marketplace and instead was wrapping itself in the flag and declaring itself essential to U.S. national security, and therefore deserving of generous federal support.
This approach has the full backing of the Trump Energy Department, and has been dutifully rolled out as part of the broader scramble for federal relief funds unleashed by the coronavirus crisis. As Energy Secretary Danny Ray Brouillette made clear to radio talk show host Hugh Hewitt in an April 28 interview:
We’ve lost our leadership both on the technology side and on the market side… to the Russians and the Chinese. And why does that matter? Well, obviously it matters, because we are, we were the world leader not only in the development of nuclear technology, but in the export of this technology around the world. And we lost that, and it leads to a national defense issue.
And, indeed, DOE’s web site announces: “Nuclear power is intrinsically tied to National Security.” Among the ways DOE plans to restore American nuclear energy leadership are “minimizing commercial fleet fiscal vulnerabilities [DOE-speak for subsidizing],” and “leveling the playing field against state-owned enterprises.”
The implication is that other countries are not competing fairly, as if they snuck around us to jump the line. Now, to cope with this, we have to sweeten the deals we offer to get the sales. And as a thriving nuclear sector is supposedly a necessary condition for gaining foreign sales, we have to prop up domestic nuclear plants, too.
If nothing else, there is a stunning lack of self-awareness in this view. Yes, the United States pioneered the light water reactor technology used around the world. But, as a result of U.S. business decisions, in part reflecting the unfavorable economics of nuclear power in the United States but also poor management, we effectively no longer have any reactor manufacturers.
Combustion Engineering, a company with 28,000 employees, a pressurized water reactor manufacturer, sold itself in 1989 to the European firm ABB Asea Brown Boveri Ltd. The great Westinghouse firm, once the world leader on pressurized water reactors, blundered financially into becoming a subsidiary of the CBS Corporation. In 1995, CBS sold it to British Nuclear Fuels Limited. BNFL in turn sold Westinghouse nuclear activities to Toshiba in 2006.
Westinghouse, by then a shell of its former self, performed so miserably in constructing the last large reactors to be built in the United States in South Carolina and Georgia that it went bankrupt and almost took Toshiba down, too. The South Carolina owners canceled their two plants, and the remaining two in Georgia will cost nearly $30 billion, double the original contract price. After this experience, it is hard to see any future sales of large reactors in the United States.
General Electric used to build boiling water reactors, but it only offers sales abroad as a junior partner to Japan’s Hitachi Corporation. Its reputation is anyway tarnished because it designed the plants that failed during the 2011 Fukushima accident. In short, U.S. nuclear plant manufacturing capabilities are much diminished, and the domestic market just isn’t there. And it isn’t there because nuclear economics are extremely unfavorable.
Currently, the US still has 95 power reactors online, supplying a bit less than 20 percent of America’s electrical demand. They are on average 39 years old. Only two plants, the ones in Georgia, are now under construction and they are expected to be the last large ones to be built for some time.
That hasn’t fazed the nuclear faithful both in and out of government. They still think, as their predecessors thought sixty years ago, that nuclear power is the technology of the future. They paint a picture of our putative arch-enemies, Russia and China, selling nuclear power plants and locking up nuclear relationships with numerous states, including important friendly states such as Saudi Arabia and Turkey, relationships that will last for the rest of the century. We will be frozen out and will thereby lose influence throughout the world. But it’s still not too late if we follow the advice of the Energy Department, the nuclear industry, and a gaggle of consultants looking to cash in.
What is it we have to do? The battles in Washington turn on so-called agreements for cooperation with potential customers that are prerequisites for sales of major reactors and components. The main issue concerns whether we will accept customers that also want to acquire acquires auxiliary facilities that can be used to produce plutonium and highly enriched uranium, the fuels that are also the explosives used in nuclear weapons. The only position consistent with non-proliferation, halting the spread of nuclear weapons, is “no.”
But the nuclear enthusiasts say that’s too strict, that others have more accommodating terms, and that if we sell with looser terms, we’ll have more influence. They have their eye especially on Saudi Arabia, a country that at one point said, implausibly, it was going to build 16 nuclear power plants. They don’t seem to pay attention to the other thing the Saudis said—the crown prince’s statement that if Iran was going to get a bomb, he was going to get one, too, and fast.
It’s not just the Trump crowd that opposes tightening security rules over nuclear exports (in the name, they say, of security). President Obama’s Energy Secretary, Ernest Moniz, has been arguing that subsidizing domestic nuclear power and encouraging nuclear sales without especially tight security restrictions—restrictions that go by the rubric of “gold standard”—are in the interests of U.S. nuclear security, and even support the deterrence value of our nuclear weapons.
All this is a bit much. Do we really think that Russia, with a GNP below that of Italy, is capable of freezing us out of the world? Does it have the financial capacity to offer generous terms on many projects? Will they ever be completed?
Nuclear power is just one U.S. export technology, and not exactly the most promising. For example, the U.S. exported $136 billion in aircraft last year; U.S. nuclear exports for the same period could only be measured in millions of dollars. China is building a comparatively large number of nuclear plants but nuclear power supplies less than five percent of its electrical demand and is only projected to account for seven percent by 2040. Any large accident will turn this program off.
There are many more exciting technologies to share with others. We don’t have to sell out our nonproliferation policies. If anything, we should be strengthening them, and convincing Russia and China to conform to them, as well.
As for the DOE and industry sales pitch, we should see it for what it is: a con to get at the federal trough.