EPA's New Rule and Nuclear Power:

Another Renaissance?

It's been a big week.  In France, the world celebrated the 70th anniversary of the D-Day invasion.  I heard one report call it one of the most historic wars in the history of the world.  And in the U.S., the Environmental Protection Agency (EPA) released its new rules for the reduction of carbon dioxide emissions.

I am not particularly trying to draw any connections between the two events (although I am sure that some will say the EPA rules are an epic war on coal!).  I just mention this because, with D-Day being celebrated this week, it was a little hard for me to start by saying the biggest news was the EPA announcement.  It is the event of the day that is likely to have the most impact on the future, just as D-Day had a profound effect on the course of history in its time..  Well, I suppose there's my parallel.

To get serious, the pundits are now lining up to predict what effect the rules are going to have--on the coal industry, on renewables, on natural gas, and on nuclear power.  I personally think there is still a lot uncertainty about this whole initiative.  Will Congress find a way to undercut it?  Will there be legal challenges?  What will happen if the next Administration opposes it?

And even if it succeeds, it pointedly does not spell out a single, uniform solution.  It does not follow the path of some states have adopted in the past by mandating a percentage of renewables (or any other energy source).  It merely spells out the carbon dioxide reduction goals and identifies several possible approaches to reaching those goals.

In that sense, it doesn't mandate--or handicap--either renewable energy sources or nuclear power.  This looks like it should be a good thing for nuclear power.  We have just been going through a bleak period where we have seen some plant closures spurred by a flawed marketplace, and have heard warnings that there could be more such closures.  There have been calls to fix that marketplace.  This EPA rule doesn't directly do that, but it may create incentives to modify the marketplace rules in order to create a more level playing field for all clean energy sources. 

At a minimum, it should help halt the premature closures of the current fleet of nuclear power plants.  The longer-term impacts are more difficult to project.  It should encourage the completion of the current nuclear power plant construction projects, and it may revive some that are on the books that have stalled in recent years.  It could even spur the initiation of some new projects, although that is less certain.  It will probably give at least some encouragement to advanced reactor development plans.  However, realistically, the goals in the EPA plan are relatively short term, so designs that are not yet ready for prime time may not help meet the goals.

On the other hand, one prominent point that has been made about the EPA goals is that they still fall short of US commitments to the global community for greenhouse gas reductions, specifically, the broader targets of the 2009 United National Copenhagen Accord.  Therefore, if this is viewed as a first step, and if even more stringent goals are expected to follow, the incentive to develop new designs could be very strong.

As is often the case with government rules and regulations, the landscape is very complex.  There are a lot of interacting factors.  There are a lot of special interests who are going to weigh in heavily on this.  We already see the coal lobby lining up.  And although this rule is very favorable for renewable energy, we already see complaints that it has the fingerprints of the nuclear lobby on it.

Realistically, the most reliable predictions are the nearest-term ones, and the primary near-term prediction for nuclear power is that the rule will help stave off the threat of closures of operating plants.  This rule has the potential to set the stage for longer-term R&D as well--for a variety of energy sources, including clean coal, renewables, and advanced nuclear power.  But a lot of things have to happen before we are sure of just how much this rule may help longer-term projects.  It is a bit too early to break out the champagne.  But perhaps we can put it in the frig to chill.

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