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Myth: Nuclear Energy Relies on Government Subsidies
The myth that the nuclear energy industry receives a massive amount of taxpayer subsidies is alive and well in internet chatrooms, blogging websites, and even certain “think tanks.” One of the goals of Clean Energy Insight is to provide easy access to facts about nuclear energy. So we are starting a “Wednesday Facts Series” that will address perpetuated nuclear industry myths that aim to harm the nuclear industry for the benefit of certain special interests.
Loan Guarantees
The issue of massive nuclear industry subsidies has been preserved with a number of issues. The first and most recent is that the Loan Guarantees considered in recent “Stimulus” legislation are actually taxpayer subsidies. Loan Guarantees are not subsidies. They are loan guarantees. It’s that simple.
Price-Anderson Act
Second, the Price-Anderson Act has also been attacked as a government subsidy program for the Nuclear industry. The fact is that the Price-Anderson Act provides liability insurance protection to the nuclear industry at no cost to the public whatsoever. The purpose of the Act was to remove economic barriers and actually stimulate a competitive private Nuclear industry while providing public compensation in the event of a Nuclear incident. To date, the Price-Anderson Act hasn’t cost taxpayers one dime. Here is a detailed fact sheet from the NEI about the history and nature of the Price-Anderson Act.
Traditional Subsidies
The “Analysis of Federal Expenditures for Energy Development” or “Bezdek Report” was completed in September 2008 by Management Information Services Inc. The attached graph comes from the Bezdek Report and shows a summary of federal incentives for various energy industries.
Disbursements are another word for federal grants or traditional subsidies. This is the culprit in question today. As you can see, federal subsidies going to the Nuclear industry total $-14 Billion. This means that the nuclear industry actually pays more to the federal government than it is given. This can be explained by the Nuclear Waste Fund (Yucca Mountain) payments to the government from the Nuclear industry. The Nuclear industry actually subsidizes the federal government!
The only gripe that some may have about this data and Nuclear power is the large amount of Research and Development funds that were apparently handed to the commercial Nuclear industry. This is not the case. Most, if not all, of these monies were given to federal government research facilities like the Oak Ridge National Laboratory during the early days of Nuclear power research (notice that the statistics cover 1950-2006).
I hope this article served to raise awareness about the facts surrounding the myths about Nuclear industry subsidies. Next Wednesday, Tyler Moses will address the myth that people have a “not in my backyard” mentality when it comes to Nuclear power plants.
Summary of Federal Incentives, 1950-2006 |
|||||||||
| Type of Incentive | Energy Source | Summary for Incentive Type | |||||||
| Oil | Natural Gas | Coal | Hydro | Nuclear | Renewable | Geothermal | Total | Share | |
| Tax Policy | 173 | 88 | 31 | 12 | 20 | 2 | 326 | 45% | |
| Regulation | 116 | 3 | 7 | 5 | 11 | 142 | 20% | ||
| R&D | 7 | 6 | 32 | 1 | 67 | 19 | 3 | 135 | 19% |
| Market Activity | 5 | 2 | 2 | 59 | 2 | 2 | 72 | 10% | |
| Gov’t Services | 31 | 1 | 14 | 1 | 1 | 2 | 50 | 7% | |
| Disbursements (Subsidies) | 3 | 8 | 2 | -14 | 2 | 1 | ~0% | ||
| Total | 335 | 100 | 94 | 80 | 65 | 45 | 7 | 726 | |
| Share | 46% | 14% | 13% | 11% | 9% | 6% | 1% | 100% | |
In case you are interested, here are brief explanations of the other incentive categories:
Tax Policy includes federal tax credits, exemptions, deductions, etc. as incentives for investment.
Regulation includes federal mandates and government-funded controls on certain energy industries. An example is the Oil industry’s exemption from price controls in certain cases.
Research and Development includes federal funding for scientific research and development.
Market Activity involves direct federal government involvement in the marketplace.
Government Services refers to all services provided by the government with “direct charge.”
You guys are good! This is a great summary article on this. Have you seen the EIA report prepared for Sen. Alexander on this matter? If not I’ll try to find it for you when I get a chance.
I’ve always thought “loan guarantee” was a poor choice of words to describe the program. To the lay person, it sounds like the government is handing over the loan — guaranteed — for the plant. And that is certainly how the anti-nuclear groups like to spin it. I would have preferred something more like “finance insurance” program instead.
Very well written article.
[...] Even Schmidt admits in the video that renewables rely on federal subsidies to be competitive. Something that Nuclear power does not rely on. As you can see, nuclear is far cheaper than any variation of wind and solar [...]
There are other sources of nuclear power!
I have recently been introduced to Thorium….. Thanks to similar radioactive properties to the uranium used to power the world’s nuclear reactors – and its by product, plutonium, used in nuclear weapons – thorium can also be used to power a controlled nuclear reaction that heats water, producing steam to power turbines that produce large quantities of electricity.
PLUS POINT: From an environmental perspective, the good news about thorium is that it’s far less radioactively damaging than uranium: its naturally occurring form, monazite, is said to be reasonably safe for human exposure, while the waste products from its use in a nuclear reactor decay remain dangerous for only a fraction as long – decades instead of thousands of years, by some accounts.
So Uranium and Plutonium can take thousands of years to decay safely, but Thorium does it in just a few decades?
Read on…………. http://just-me-in-t.blogspot.com/2010/06/nuclear-terror-nightmares-are-made-of.html