The drive to reduce carbon emissions has changed the worldwide discussion of energy in recent years, no longer focused mainly on the politics of oil, but on various forms of “renewable” energy. I’ve always thought that term somewhat ironic because all energy is renewable. We can use the sun, wind, and water without using them up, of course. But even coal, oil, and gas are still being created by natural processes; they just take a lot longer.
Some forms of energy do not emit carbon dioxide but may have other consequences, and thus are politically incorrect, such as hydroelectric power that requires dams and turbines. It’s fun to watch people who advocate zero emissions explain why they nevertheless oppose such a vast and continuously renewed resource that does not require importing rare earth minerals from China.
The clean energy agenda has also renewed interest in nuclear energy, for the same reasons, though the opposition is a bit more complicated because of safety concerns stemming from high-profile accidents like Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011). Still, there is increased development because nuclear power plants produce no greenhouse gases while operating. The UN International Panel on Climate Change says over the course of its life cycle, nuclear produces about the same amount of “carbon dioxide-equivalent emissions per unit of electricity” as wind, and only a third as much as solar.
So inevitably, climate conscious policy makers have ramped up nuclear production in many areas. In fact, since the Russian invasion of Ukraine has threated European energy supplies, Germany cancelled its planned decommissioning of several nuclear plants. New investments suggest a rapid increase in nuclear power. The World Nuclear Association says there are 440 nuclear reactors operating in 32 countries, another 60 under construction, about 100 more on order, and another 300 proposed. Most are outside the U.S., in China, Russia, India, South Korea, South America, and the Middle East, and virtually all of them are government subsidized.
That begs the question whether the coming spike in nuclear power is spurred by sound business judgment, or sound politics.
Development of alternative energy sources has been a role of government in the U.S. at least since President Eisenhower’s “Atoms for Peace” program, established in 1953 to develop peaceful uses of the new nuclear technology. Since then, one study says the U.S. has provided $73 billion in nuclear power subsidies, far less than wind and solar subsidies, but enough to stimulate considerable development. In other words, nuclear energy has relied at least as much on politics as on the marketplace.
A 2022 CATO study concluded that over the lifetime of a nuclear plant built at today’s costs, it could be “cost‐competitive with coal power” only with a significant government-imposed carbon tax to level the playing field. That isn’t competition. That is using government policy to gain competitive advantage, at the expense of consumers. Compared to natural gas, the findings were even worse: an extreme carbon tax of over $200 per ton would be required to make nuclear power competitive with today’s efficient gas-fired plants. That’s much higher even than anti-fossil-fuel activists have sought. CATO’s obvious conclusion is that the costs of new nuclear power plants are “not offset by the value of the avoided carbon emissions.”
The nuclear industry could hardly be blamed for wanting to ensure continuation of such subsidies. But in at least some cases, that has led to blatant bribery, as highlighted in a new campaign by Citizens for the Republic (CFTR) to expose corruption in the nuclear industry.
In 2020, Commonwealth Edison pled guilty to a charge of bribery of the Illinois state legislature to pass the “Energy Infrastructure Modernization Act” providing public funds to upgrade the company’s power grid, and the Future Energy Jobs Act, providing massive nuclear power subsidies. And in Ohio, FirstEnergy was fined $230 million for bribing state officials to grant the company a $1.3 billion bailout. A former Speaker of the House and a former state Republican chairman were convicted of taking $60 million in bribes from FirstEnergy, while the company poured millions into the campaigns of 21 legislative candidates who supported a bill providing $150 million annually in higher-rate-based subsidies for two of the firm’s nuclear plants.
Opponents of farm subsidies often accuse large operators of “farming the government,” rather than the marketplace. Private investors in the energy sector might well ask if such companies are a good business risk, or if they depend entirely on fickle government policymakers for their prosperity.
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