Follow up on Conversation With Cato’s Jerry Taylor – Reactions from a Heritage Foundation Fellow

There have been several posts on Atomic Insights and on MasterResource.org that have offered contrasting views of the role of government and free markets in developing atomic energy. Jerry Taylor has taken the position that nuclear energy is hopelessly dependent on government subsidies and asserts that is a fundamental weakness with the technology. He has compared the Republican party’s interest in nuclear energy with the Democratic Party’s interest in solar energy.

While I have no interest in getting bogged down in a partisan squabble, I take offense at that notion from a technological point of view. Fission has only been known to humans for about 60 years, but world wide, it produces the energy equivalent of 12 million barrels of oil per day of useful electricity. That figure does not count the energy produced in aircraft carriers, icebreakers and submarines. In contrast, humans have known that the sun provides useful energy that can be collected with engineered devices ever since our distant ancestors saw a sunrise and felt its warmth in the summer. Despite that long history of awareness, solar energy supplies 843 million kilowatt hours of electricity in the US compared to 806 Billion kilowatt hours for atomic fission. That is a factor of almost 1000 in favor of the far more recently developed technology.

Taylor has also dismissed any notion that the current cost of nuclear energy and its lack of success in attracting private investment without some guaranteed government support mechanisms just might be related to the onerous burden of regulations that add direct cost and uncertain amounts of time to any development schedule. (See, for example, a cartoon illustration depicting the handicapping that has been imposed to try to restrict fission’s technical advantages from causing a huge market shift away from fossil fuel.)

Based on my reading of his work, Taylor’s opinion of nuclear energy is so far removed from reality that I suspect that his view is tinted by his organization’s relationship with nuclear energy’s primary competition – natural gas, oil and coal.

I decided that it might be time to ask for an outside opinion from someone else who has a good reputation for supporting free market principles. Here is the response from Jack Spencer, Research Fellow, Nuclear Energy at the Heritage Foundation.

I have been following the debate. I am a daily reader of Atomic Insights. Actually, I do not agree with Jerry Taylor on this. My position has always been that the government should not be in the picking energy sources business. So whether we should use nuclear energy or natural gas should be decided by the market.

With that said, I believe that clean, affordable nuclear energy is critical to the future of the nation. Jerry basically assumes nuclear is inherently expensive and thus not market viable. I take a very different stance. I believe that nuclear is shackled by bad policy. Jerry accepts that regulatory barriers could be partly to blame for nuke’s cost, but then argues that because no one has demonstrated an accounting of it, that those costs may be overblown, thus largely dismissing the argument. I believe that he also argues that blaming high costs on regulatory inefficiency is further undermined because the industry doesn’t complain too much about regulation and that the permitting process was already reformed to meet industry needs.

What this ignores is that regulation can be used to protect some at the expense of others. While the regulatory burden is exceedingly high for the established nuclear industry, it is not insurmountable. That probably is not the case for new reactor technologies, thus without reform, the current regulatory structure acts to protect big nuclear from potential competition. I would further argue that it is not just about regulation, though that is part of it, but it is about policy in general.

We have a large light-water centric regulatory and subsidy system that largely crowds out other technologies, thus denying consumers the benefits that would result from a competitive nuclear energy marketplace. We have a broken nuclear waste management system that does nothing to promote economic efficiency or long-term sustainability. And we have politicians that by and large listen to the monolithic voice of that sector of the nuclear industry that has the most to gain by the status quo and most to lose through reform.

The result is a nuclear industry that lacks technological diversity, that needs government support to survive and opens itself to criticisms from both the left and the right.

I vote for a technically diverse fission power industry, one that includes as many different types of reactor power systems as the fossil fuel industry has combustion power systems. I am confident that the technology is superior and can compete very well on any playing field that is even remotely fair. Such a situation might very well cause a massive disruption and realignment of the world’s power structure, but it would put affordable, reliable, clean power into the hands of many people who have never experienced the benefits that such power can provide.

Let the great game continue, but let’s have some rules that are at least slightly less onerous and costly.