Nuclear Power and Election 2014:

What Lies Ahead?

The 2014 election results are in, with a big win for Republicans, so the speculation has already started about a number of issues, nuclear power among them.  While I don't usually publish blogposts two days in a row, as a long-term "Inside the Beltway" resident, I feel compelled to weigh in.

First, as everyone knows by now, the election put the Republicans in the majority in the Senate, so, for the last two years of Obama's presidency, he will face a Republican majority in both the House and Senate.  Many people see Republicans as stronger supporters of nuclear power than Democrats and therefore are anticipating a number of positive actions from Congress for the nuclear industry.

However, it is not clear how much of a change the new Republican majority will really bring to the nuclear industry.  For one thing, nuclear power isn't the only issue on Congress's agenda.  In fact, it isn't even the main issue.  Some of the favored causes of the Republican majority are likely to be trumped by an even greater favorite cause--the budget.  Therefore, it is not clear whether the Republican support for nuclear power will really translate into more funding for advanced nuclear R&D or more loan guarantees for new projects.  I wouldn't rule out some boost, but under the current fiscal environment, I wouldn't count on it either.

Another issue we often forget is that many Republicans come from states with very strong fossil fuel interests.  These states have been chafing under the increasing pressure to implement measures to reduce carbon emissions--the so-called "War on Coal."  Nuclear power has already been suffering from the current low prices of fossil fuels, and the new congressional lineup is unlikely to do anything that would favor any technologies over coal, oil and gas.  In fact, as Jim Conca points out in his blog at Forbes, nuclear power doesn't have any significant constituency.  It doesn't have a state leading the charge for uranium, like West Virginia, Texas, and Pennsylvania do for coal, oil and natural gas, and it has a much smaller total number of employees than the fossil industry has.

The Republican majority may have more influence on the regulatory side than on the operational or R&D sides, but even there, the crystal ball is still a bit foggy.  Sen. Harry Reid certainly loses his position as Senate Majority Leader.  Whether or not he can snag the position as Senate Minority Leader is still up in the air.  If he does get that position, he can still exert some influence over White House nominations.  However, there is a good chance that he will not get that position.  If the Senate Democratic membership sees his political stance as contributing to their downfall, they may turn to someone else who they think can rally more support in the next election.  That decision remains to be made.

Even if Reid does become Senate Minority Leader, though, the Republican control of the Senate means that it will be much more difficult to appoint someone to the Nuclear Regulatory Commission (NRC) who has a strong agenda on a particular issue, such as Yucca Mountain.

Whoever becomes Senate Minority Leader, we will still face the fact that there will be two Democratic Commission positions to be filled during the coming two years.  Indeed, action on these positions should start almost immediately.  Chairman Allison Macfarlane just announced that she will step down from her position on January 1, and the recent appointment of Commissioner Jeffrey Baran expires on June 30, 2015.  (That appointment was only to the remaining term of the position vacated by Commissioner Bill Magwood.)

(When Baran was appointed, I remember thinking that it was curious that he was appointed for a term of less than a year.  In the past, when such short time periods were involved, individuals were often nominated and confirmed for the following term at the same time.  I wondered at the time whether there were factions that wanted to see Baran in action before agreeing to a longer appointment.)

Historically, the positions on the NRC have not been the President's or the Senate's highest priority.  However, if neither position is filled, on July 1, the NRC will operate with a 3-member Commission, 2 of whom are Republicans.  Normally, the Administration would be likely to try to avoid such a lineup, but if there are no real "hot-button" issues before the Commission, the Administration may not want to expend its political capital on the NRC.  And since the two vacancies are both for Democratic slots, it would not be possible to "pair" the appointments (i.e., nominate a Democrat and a Republican together) as has become the practice in recent years.

The next position of a Republican to be filled will be that of Commissioner Bill Ostendorff.  His term ends June 30, 2016.  It is possible that all appointments could be delayed until then, but that would introduce a serious risk of the NRC having to operate with a 2-member Commission.  While that has happened before, it is an undesirable situation, and there will be some pressure not to allow that to happen.  I believe that Ostendorff is well respected.  However, the presidential election will be looming by that time, and that has often slowed appointments in the past, especially if a change in the party controlling the White House is anticipated. 

I should also note the impact of all of this on the position of NRC Chairman.  Most readers will know that the designation of the Chairman is at the sole discretion of the President.  However, the President can select only among the Commissioners who have been confirmed by the Senate.  Thus, presuming that no new Commissioner is nominated by the President and confirmed by the Senate before January 1 (and I think it would be almost impossible for that to happen), the President may only select from among the sitting Commissioners.  He may name the individual Chairman or Acting Chairman.  Although he can appoint any of the four Commissioners (Stephen Burns was just sworn in as Commissioner as I was writing this the morning of November 5), the likelihood is that he will turn to one of the two Democrats.  Most people feel that Commissioner Burns will get the nod because of his greater experience, but it is not yet clear whether he will become Chairman or Acting Chairman.

So, as usual in Washington, despite the decisiveness of this election, we are still faced with a number of uncertainties in how significant the election will prove to the nuclear industry.  The election seems to promise some changes, but to what extent they will be realized will depend on decisions still to be made and on external factors that are not yet completely clear.  Things may become a little clearer as the consequences of the election begin to play out in the Senate leadership positions and in other actions.

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The Election and Nuclear Power:

A Cautiously Positive Outlook

Although many in the industry feel that nuclear power fares significantly differently under the Democrats and Republicans differ significantly--and indeed, from time to time, some of the rhetoric makes it sound like that should be the case--I have never been convinced that it was.  I was therefore gratified that some of the major analyses I saw shortly before and shortly after the election support my view.  Although it may seem now that the election was ancient history, I waited in hopes of seeing more analyses.

To date, I have seen two analyses that are of particular note.  Both come from the pages of American Nuclear Society (ANS) publications, although both express the views of individuals.  One article is by Linda C. Byus, a columnist on finance for Nuclear News, the flagship publication of the ANS.  (This publication is available to ANS members only on the ANS website.  See page 23.)  

In the November issue of the journal, which was published just prior to the election, she expressed her view that there was bipartisan support for nuclear generation.  Her main messages were that 1) nuclear power generation is not a political priority for any party in the US today, 2) although theree may be some philosophical differences in the measures each party is willing to support, the overall campaign positions of both Presidential candidates were quite similar, and 3) the key determinant for the future of nuclear power in the coming years will be the economic recovery, as it will serve as a catalyst for energy demand growth.    

More recently, Jim Hopf provided a post-election outlook for nuclear energy in the ANS Nuclear Cafe.  In it, he covers a variety of issues and points out how the views of the Obama Administration are favorable to nuclear power in some ways while not so favorable in other ways.  For example, he projects that actions on Yucca Mountain will continue to be influenced by Sen. Harry Reid.  On the other hand, the Administration's views on climate change could ultimately lead to carbon dioxide restrictions, and that could help nuclear power.  He also notes that the Administration's views are unfavorable towards some energy sources that are viewed as alternatives, or competitors, to nuclear power--for example, coal.

Indeed, the energy landscape is very complex, so even the expressed preferences of one Party for or against nuclear power are often overtaken by other issues, including the environment and the economy.  Therefore, I expect that the overall prospects for nuclear power will continue to be positive.  Growth will be slower than was projected at the height of the Renaissance--but some of us always projected it would be.  Even Marvin Fertel, the CEO of the Nuclear Energy Institute, always cautioned against over-optimism.  The key, as Linda Byus says, will be the recovery of the economy.

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