Biden’s Budget Cuts Funding For Nuclear Energy At A Pivotal Moment

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For the first time since taking office, President Joe Biden cut funding for nuclear energy in his budget request, sending an unclear signal to an industry that has benefited from a firehose of federal spending in recently passed laws but depends heavily on long-term government support to reverse decades of decline.

The White House asked Congress for just under $1.6 billion for nuclear energy this year, down more than $210 million from the previous year. That doesn’t account for the billions dedicated to testing, financing, building and operating fission reactors in the Inflation Reduction Act and the bipartisan infrastructure law, two key pieces of legislation passed during the 46th president’s first two years.

It’s also far from a done deal. The president’s budget request is generally viewed as a statement of priorities, and Congress has frequently deviated in recent years and provided more funding than what the administration proposed.

Demand is growing for the U.S. to revive its ailing nuclear energy industry in a bid to replace fossil fuels, satisfy needs that solar and wind cannot meet alone, and give U.S. allies abroad an option beyond Russia for fission technology.

An administration official told HuffPost the proposed budget “builds on the investments provided” in the president’s two landmark spending laws, which earmarked a combined $6.7 billion for nuclear energy over the next decade.

“This equates to an increase,” said the official, who spoke on background.

But the past two years’ geyser of money ― expected to be doled out over the course of the next decade ― still falls short of what experts say is needed to turn the atomic power industry around in a country that hasn’t built a new reactor from the ground up in nearly half a century but has shuttered more than a dozen in just the past two decades.

“The general impression in the nuclear community is that the federal government is going to need to invest significantly more than what it’s proposing over the next few years in order to help solve the challenges ahead,” said Craig Piercy, the chief executive of the American Nuclear Society, a scientific organization that advocates for atomic power in the public interest. “We’re talking about amounts that start with a B, not an M.”

Since the Nuclear Regulatory Commission receives 90% of its budget from companies’ licensing fees, with direct federal funding providing just another 10%, the cuts primarily hit the Department of Energy, which is responsible for researching and developing novel technologies and approaches to harnessing the awesome power of split atoms to generate heat and electricity without the climate-changing emissions of fossil fuels.

Georgia Power Company's Plant Vogtle has begun splitting atoms in one of its two new reactors, the company said on March 6, 2023, a key step toward reaching commercial operation at the first new nuclear reactors built from scratch in decades in the United States.
Georgia Power Company’s Plant Vogtle has begun splitting atoms in one of its two new reactors, the company said on March 6, 2023, a key step toward reaching commercial operation at the first new nuclear reactors built from scratch in decades in the United States.

The White House proposed spending just $10 million to build NuScale Power’s debut commercial reactor at the Idaho National Laboratory, a first-of-its-kind project that would help jump-start the manufacturing of so-called small modular reactors.

Analysts hope these shrunken-down fission machines, known as SMRs, will reduce the cost and shorten the construction period for building an atomic power station through assembly-line repetition that makes building reactors more like constructing airplanes than airports. More than half a dozen companies are competing to build SMRs in the U.S., but NuScale’s design became the first to receive the Nuclear Regulatory Commission’s approval in January. Shortly afterward, a collection of municipal utilities in the Mountain West signed a deal to buy reactors from NuScale.

But as rising interest rates raise the cost of borrowing money and inflation jacks up the prices of concrete and other raw materials, the Portland, Oregon-based NuScale needs significantly more federal funding to complete its six-reactor Carbon Free Power Project in Idaho Falls.

On a quarterly earnings call with investors last Wednesday, NuScale’s chief financial officer, Chris Colbert, said “there isn’t much correlation between the president’s budget requests and what gets enacted.”

“Every year, we go through the same drill,” Colbert said. “Last year, the president’s budget was for $30 million [for the NuScale project]. The final enacted budget was for $165 million. That’s been a typical evolution for the last several years.”

Skeptics of nuclear energy say the high upfront costs and glacial speed of building new reactors make atomic power too expensive and slow to provide a meaningful solution in the fight against climate change. But supporters say that’s a symptom of warped policy design and a lack of experienced workers, and point to how the right mix of subsidies, supply chains and power-purchase contracts sent the price of once-costly natural gas, solar panels and wind turbines plummeting over the past two decades.

Comparing costs alone also fails to capture key differences between generating sources, both in terms of the benefits each provides and how long the infrastructure itself lasts. With the exception of scheduled refueling periods every few years, nuclear reactors pump out 24/7 carbon-free power, unlike weather-dependent solar and wind, and do so on astronomically smaller tracts of land per megawatt. Fuel cycles that can last as long as five years in some cases also insulate nuclear stations from the kinds of price shocks gas-burning plants faced after Russia invaded Ukraine ― the likes of which analysts and traders say are the new normal.

Few other energy sources offer that same degree of security and dependability without emissions. Hydroelectric dams are one, but such projects are extremely ecologically destructive to build and, as is increasingly clear along the Colorado River in the U.S. West, vulnerable to drought. Geothermal energy holds vast potential, but the technologies to tap that underground heat remain geographically limited.

While batteries buttress solar and wind, the lithium, cobalt and other metals needed to make them are already facing supply crunches as demand for electric vehicles soars. The World Bank estimates that the mining of so-called critical minerals may increase by as much as 500% in the coming decades. And it’s not just batteries and electric vehicles competing for those metals ― windmills and solar panels use them in huge quantities. Offshore turbines, for example, use nearly three times as much minerals per megawatt as a nuclear plant, according to International Energy Agency data.

Construction is underway on the Russian-designed Akkuyu Nuclear Power Plant in the Gulnar district of Mersin, Turkey, on Dec. 25, 2022.
Construction is underway on the Russian-designed Akkuyu Nuclear Power Plant in the Gulnar district of Mersin, Turkey, on Dec. 25, 2022.

Anadolu Agency via Getty Images

In debates over atomic energy, anti-nuclear activists concerned about the risks of radioactive waste have downplayed other energy sources’ toxic pollution.

Aside from causing climate change, fossil fuels produce tiny particles of air pollution that research now links to everything from asthma and lung cancer to erectile dysfunction and dementia, and cause 1 in 5 deaths worldwide every year, according to one Harvard University study. While all the spent nuclear fuel generated over the past 80 years in the U.S. could fit in a single Walmart Supercenter and slowly becomes less radioactive over hundreds to thousands of years, a single coal-fired plant can produce mountains of ash containing toxic materials that remain deadly forever. Manufacturing solar panels and windmills generally requires fossil fuels, and photovoltaic panels and turbine blades ― which are rarely recycled, and often can’t be ― pile up in landfills and can create toxic concentrations of metals such as lead and cadmium.

That has all fueled policymakers’ interest in nuclear energy in recent years as they scramble to cut emissions. The war in Ukraine, which drove up natural gas prices, has only amplified that appeal.

But there’s a catch: As the U.S., which pioneered fission, has shied away from nuclear energy in recent years, Russia has become the world’s dominant exporter of fuel and reactor technology. As such, the U.S. and its allies have declined to sanction the Russian state nuclear firm Rosatom even as they piled trade restrictions on the Kremlin’s fossil fuel exporters.

Biden’s budget reflects that conflict. The one increase in the Energy Department’s nuclear funding is a 20% bump for the special kinds of fuel needed for companies participating in the government’s Advanced Reactor Demonstration Program, which seeks to commercialize technologies that go beyond the traditional pressurized water reactors used in most nuclear plants. The most widely used variety of advanced reactor fuel is exclusively sold by a Russian company, a challenge that has already caused delays for the Bill Gates-backed reactor startup TerraPower.

Last September, Biden requested $1.5 billion to boost domestic uranium production as part of a massive spending package to aid Ukraine ― only to be rebuffed by Congress. This time, the White House proposed giving the Energy Department’s Office of Manufacturing and Energy Supply Chains just $75 million to “support rebuilding domestic uranium production and enrichment capacity” through the Defense Production Act ― the first time the president’s budget has called for using the little-known Korean War-era statute for nuclear fuel.

An ideal program to establish a new uranium supply chain in the U.S. would likely require about $2.5 billion over 10 years, said Jacob DeWitte, the chief executive of Oklo Inc., a startup designing advanced “fast” reactors that run on HALEU — high-assay low-enriched uranium, pronounced HAY-loo — the special kind of fuel over which Russia currently has a monopoly. The budget proposes about $120 million for HALEU production.

“We really need to see the U.S. move faster and more robustly on the fuel side, and that’s really important, not just for Oklo but for everyone,” DeWitte said in an interview over Zoom. “Just bluntly, it baffles me why we’re not seeing more concerted activity here.”

In a photo from 2015, Jacob DeWitte, the chief executive of Oklo Inc., speaks with Leslie Dewan of Transatomic Power.
In a photo from 2015, Jacob DeWitte, the chief executive of Oklo Inc., speaks with Leslie Dewan of Transatomic Power.

Steve Jennings via Getty Images

After two years of Congress refusing to provide any funding, Biden’s budget request also slashed funding for the Versatile Test Reactor, a proposed government project at the Idaho National Laboratory that would help speed up research into new technologies and make existing ones more efficient. Currently, Russia operates the only such test reactor in the world.

The president’s previous budget proposed “the minimum level of funding needed just to keep the project alive without actually moving forward on building the thing,” said Adam Stein, the director of nuclear energy innovation at the Breakthrough Institute, an environmental think tank that advocates for atomic power. The latest budget completely “zeroes it out.”

“Not having this kind of R&D component is the exact same thing as not having the ability to do lab research on solar cells years ago,” he said. “It’s fundamental R&D capabilities for the world, really, because all of our partner countries would come to us for this testing. If we want to move away from Russia in the nuclear supply chain, we need to move away from them in R&D as well.”

One source who spoke to HuffPost on background suggested the funding cut could set the stage for the administration to revamp the Versatile Test Reactor program with international funding partners. The Energy Department declined to comment on the funding plans but said the project was put on hold while the agency focuses on building other reactors, including the NuScale plant in Idaho.

By contrast, the White House pitched a 9% increase in funding for the Energy Department’s Office of Science, with $1 billion earmarked for nuclear fusion, the long-sought holy grail of clean energy that would capture the power produced when two atoms join together rather than split, as in fission. The energy source would, in theory, generate little to no long-lasting radiation. And while replicating the kind of reaction that powers the sun has proven so challenging that an oft-told joke describes fusion as the energy source of a tomorrow that never comes, the Lawrence Livermore National Laboratory in California made a major breakthrough in December, briefly generating more power from a fusion reaction than it took to spark.

Still, federal scientists said it would be decades before commercial fusion power plants arrive, perhaps 50 years or more even for the type of fusion that just achieved that milestone. It could be a century before some of the more promising types of fusion power plant designs become viable. And lost in much of the excitement over the announcement was the fact that Congress funded the Lawrence Livermore program to explicitly focus on fusion for nuclear weapons, not civilian electricity generation.

That doesn’t mean the White House shouldn’t ramp up funding for fusion research, Stein said. But the budget should reflect the mammoth task ahead of overhauling the nation’s entire energy system.

“It’s not just one or the other. It’s not fission versus fusion. It’s not fission versus solar and wind,” Stein said. “There are people who say nuclear is taking resources away from solar and wind. In reality, we need a broad approach to our energy strategy.”

As if to emphasize the point of long-term investments, the U.S. marked what could be a pivotal moment for its nuclear industry the same week the budget came out. After 14 years and billions of dollars in cost overruns, the first new reactor built from scratch in the country in nearly half a century — an advanced, large-scale reactor at northeast Georgia’s Plant Vogtle — split its first atoms, signaling what could be the final stages of constructing what would be the second-largest power plant in the U.S.

Clarification: This article has been updated to clarify Adam Stein’s comment.