William Tucker vs Jerry Taylor – Is Nuclear Power a Good Investment or a Risky Business Dependent on Government Subsidy?

The Reason Foundation recently hosted a moderated discussion between William Tucker, author of Terrestrial Energy: How Nuclear Power Will Lead the Green Revolution and End America’s Long Energy Odyssey, and Jerry Taylor, a senior fellow at the Cato Institute.

In addition to the initial essays, Reason’s Out of Control blog hosted a continuing exchange titled REASON ROUNDTABLE: NUCLEAR POWER AND ENERGY INDEPENDENCE that provides some detailed follow-up by both authors along with some injections by additional participants in the nuclear debate. You will see some familiar names in the comment thread.

Bill provides a detailed defense of actual nuclear power economics and proposes that the primary reason that nuclear power is thought to be uneconomical for new investments is that utility customers are assuming in their cost computations that there will be opposition that will stretch out plant construction timelines. He summarizes his argument with the following thought:

The real solution then to making nuclear energy economically feasible may lie in changing the popular perception of nuclear as forbidding and dangerous. People should consider nuclear as natural as the ground beneath their feet (hence I have titled my forthcoming book Terrestrial Energy).

Jerry Taylor, the man on the opposite side of this debate, is not an environmentalist or a leftist, he is from the Cato Institute, an organization that bills itself as a defender of limited government, free markets, individual liberty and peace. His opinion of nuclear power is that it is a risky investment that takes too long to begin paying off for investors, especially because of the rather unique structure of electricity markets. (According to Taylor, reliable baseload power is inherently less valuable than peaking power, an interpretation of the market that is difficult to comprehend.) Here is his concluding paragraph:

Those who favor nuclear power should adopt a policy of tough love. Getting this industry off the government dole would finally force it to innovate or die – at least in the United States. Welfare, after all, breeds sloth in both individual and corporate recipients. The Left’s distrust of nuclear power is not a sufficient rationale for the Right’s embrace of the same.

While I have some libertarian sympathies, my maturing outlook on the world recognizes that there are times when a government hand up can be useful for both individuals and struggling businesses. Though no one would put the nuclear power generation business in the “struggling” category, it should be pretty obvious that the American nuclear plant construction industry is essentially being restarted from scratch. The benefits of nuclear fission power for the nation are at least as worthy of public investment as building sports stadiums, airports, or public transportation especially if that investment consists mainly of a promise of fair treatment and a loan co-signature.