Nuclear demand is on hold

US Nuclear Energy Policy faces a bipartisan opening as Obama, GOP leaders, and industry back loan guarantees, new reactors, and emissions cuts amid recession-driven low electricity demand, cap-and-trade debates, and a cautious nuclear renaissance.

With political support now on both sides of the aisle on Capitol Hill, nuclear energy's long-awaited American "renaissance" is lacking one positive factor: the economy.

"The business environment is the principal driver," said Alex Flint of the Nuclear Energy Institute NEI, a Washington-base trade group. "How long is the recession going to last? When are we going to see the demand forecast pick up?"

The NEI's Steve Kerekes added: "The asterisk there is the impact of the recession. Electricity demand is still well below where it was in 2007."

After GOP takeover of the House, President Obama zeroed in on nuclear energy as an issue about which Democrats and Republicans "can move forward," even as the presidential race heats up. Senate Minority Leader Mitch McConnell, Kentucky Republican, agreed.

The president's backing of industry initiatives — earlier this year, he offered federal loan guarantees for the first new reactor projects in the U.S. in more than 30 years — combined with support from powerful returning Republicans like Rep. Joe L. Barton of Texas and Rep. Fred Upton of Michigan, have nuclear officials optimistic.

"I thought it was indicative of the times that, in their talks immediately after the election, the president, [incoming House Speaker John A.] Boehner and Sen. McConnell all mentioned nuclear energy," Mr. Flint said. "That is because nuclear energy is now... at the center of the debate about energy policy. We do believe it is the middle ground on which both parties can compromise."

The industry, which currently generates about 20 percent of the nation's electricity, has worked hard to present itself as a cleaner alternative to coal- and natural gas-fired plants and as an energy source that could ease the country's dependence on foreign oil. Those efforts have helped the industry rebuild public and political support that dissipated in the wake of 1979's Three Mile Island meltdown.

In the first two years of the Obama administration, the White House has backed the loan guarantees and proposed a clean energy standard, Virginia Sen. Jim Webb has called for doubling nuclear capacity, and even liberal Democrats like California Sen. Barbara Boxer and Sen. John Kerry have expressed support for a greater role by the industry.

Now, with pro-nuclear Republican allies set to ascend to key committee leadership roles in the GOP-controlled House, the industry is hoping for bipartisan support for nuclear energy initiatives.

Mr. Upton, the Republican expected to take over for California's Henry A. Waxman as chairman of the House Energy and Commerce Committee, for example, has made it clear that nuclear energy is a priority.

"Despite nuclear power's tremendous potential, the nation is lacking a coherent policy as we look toward the future. Nuclear was largely ignored as the job-killing cap-and-tax scheme made its way through the House last June," Mr. Upton wrote in an editorial published in April.

"The world's leading emitters understand the importance of nuclear power in reducing emissions globally. It is well past time we do the same or risk being left behind," he wrote.

Mr. Upton's rival for that key leadership post is Mr. Barton, long a vocal supporter of nuclear energy and the oil industry — he most recently drew notice for his apology to British Petroleum after the Gulf Coast oil spill.

Both congressman criticized the failed cap-and-trade climate bill co-sponsored by Rep. Waxman — with Mr. Barton going as far as to say cap-and-trade is "not just endangered, it's extinct."

The nuclear industry is expected to get a boost no matter which congressman wins the chairmanship.

"The new Congress will be more pro-nuclear than any... we've seen in decades," said Don Gillispie, chief executive officer of Alternate Energy Holdings Inc., a Boise, Idaho-based company that seeks to build new nuclear power plants and desalination systems. "We should see a resurgence of the industry, driven by nuclear innovation across the sector, the likes of which we haven't seen in 30 years."

There are skeptics.

Anti-nuclear power activists are already sounding the alarm about the costs of taxpayer-guaranteed loans and the environmental dangers of the "nuclear renaissance," posing, for the nuclear lobby, its toughest test yet.

In Vermont just recently, Democrat Peter Shumlin won a close race for governor after promising to shut down the state's troubled Yankee Nuclear Power Plant.

And fiscal conservatives, especially those among the "tea party" candidates sweeping into Congress, will have to decide which they find less objectionable: ongoing dependence on foreign oil or the federal subsidies sought by the nuclear industry.

"There are a lot of new faces coming to Congress," said the NEI's Mr. Kerekes. "So it's a little difficult to handicap at this point. But if we want to have a meaningful impact on reducing greenhouse gases, there has to be a substantive role for nuclear energy going forward, just based on our track record."

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