Thursday, February 16, 2012

2013 Nuclear energy budgets in a time of deficits

Expectations are limited as Congress looks for places to slash spending

The U.S. Department of Energy (DOE) and the U.S. Nuclear Regulatory Commission (NRC) find themselves, as usual, in the discretionary part of the federal budget.  With programs not driven by entitlement laws, both agency's live under the perpetual threat of severe funding constraints.

That's why the FY2013 budget request from the White House is a mixed bag. It is a relief that the President, who is nominally pro-nuclear, but mostly pro-green voter, didn't do more damage to both agencies.

It's clear from the Keystone Pipeline decision and the ongoing Yucca Mountain fiasco that the Obama White House can and will throw any project under the bus that threatens to undercut  the green wing of the Democratic Party.  That's political reality. While some House and Senate members rant about it, the proof of pro-nuclear support in Congress will be in the Appropriation Committees' markups later this year.

In a presidential election year, the budget becomes a political football. Still, the numbers represent a starting point so here's a quick summary.

Nuclear energy's light hidden away

In DOE's $27 billion budget request (briefing slides), funding for nuclear energy R&D and new technology development amounts to less than 3% of the entire budget. The agency's priorities are reflected in $11.5 billion (42.5%) for the nuclear weapons complex, including the defense program labs, under civilian control through NNSA.

Environmental management continues to produce budgets driven by federal court consent decrees.  Despite a series of efforts by the federal government over the years to over turn them, DOE's request this year is $5.7 billion or 20% of the entire agency's budget. That's consistent with a $6 billion/year history of spending.

Reflecting Obama's fixation on green politics in a presidential election year, the DOE budget request includes $2.3 billion, or 8.6% of the budget, for energy efficiency and renewables.  Venture capitalists like former VP Al Gore will find comfort in these numbers.

Details of the NE budget

One of the first things that stands out is that the budget request zeros out a $14 million line item for scholarships for nuclear energy engineering education (program fact sheets).  Next, it zeros out a $5 million line item for university programs.

Taken together, there is a clear message that while the Obama Administration gives lip service to nuclear energy, it is cutting off the future of the industry by limiting a skilled workforce to operate current and new plants.

In the world of nuclear reactor R&D, the budget slashes $41 million (-25%) from nuclear reactor R&D and cuts $9 (5%) million from the advanced fuel cycle program.

In a draft funding opportunity announcement issued earlier this year DOE offered $452 million in cost sharing funds over five years to developers of small modular reactors.  The agency plans to make one award, or divide the pot among two firms, by September 2012.

Simple math shows that works out to $90 million a year.  For FY2013 DOE requested $62 million, or about two-thirds of the amount, which is a clear signal to any applicant the agency appears to be short changing its own promises even before it gets the formal RFP ready for publication.

Of course, any funds are better than none at all, and with a deficit minded congress breathing down its neck, DOE might be worried that asking for the full amount would be futile.

Nuclear Regulatory Agency

The NRC's budget request for FY2013 is essentially flat being $1.053 billion v. enacted funding in FY2012 of $1.038 billion. There are moving pieces.  (agency briefing slides)

Nuclear safety increases slightly in terms of dollars, but loses 25 people. The NRC said in a press release the staffing cuts are in support functions.  Even so that means engineers charging utilities $273/hr in reimbursable costs will spend more time shuffling paper instead of analyzing it. It seems the agency is being penny wise and pound foolish with this part of the budget request.

Funding for new reactor licensing remains stagnant in terms of funding and staffing.  Spent fuel storage and transportation gets a slight increase of funds and a few new staff.  Funding for Yucca Mountain remains zeroed out.

Fukushima Near-Term Task Force recommendations and regulatory actions are included in the proposed budget.  Reactor Safety increases by $9.7 million due primarily to implementation of lessons learned recommendations from the near term task force resulting from the Fukushima Daiichi accident.

The Materials and Waste Safety budget increases by $5.2 million to support activities in Fuel Facilities, Nuclear Materials Users, Spent Fuel Storage and Transportation, and Decommissioning and Low Level Waste Business Lines. The increase is primarily due to increased support to update the Waste Confidence Rule by 2019 and Uranium Recovery Licensing activities.

The NRC gets 90% of its funding through fee recovery from regulated nuclear facilities.  The funds do not go directly to the agency. Instead, they go to the Treasury Dept. and Congress allocates the money to the agency through the appropriation process.

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eliot.brenner said...

To clarify and put the personnel reductions at the NRC into perspective, the 25 slots to be reduced in the fiscal year that starts next Oct. 1 are fractionally over one-half of one percent of the agency workforce. They are throughout the agency and not solely in the nuclear safety arena. The reductions are due to a concerted effort by agency managers to wring out savings for the taxpayers based on a year-long review of our administrative overhead. Engineers will not be chosing between analyzing and shuffling paper.

Thanks for the opportunty to put the reductions into perspective.

Eliot Brenner
Director, Office of Public Affairs
Nuclear Regulatory Commission

Rod Adams said...

If Eliot Brenner's response is correct, why has the agency repeatededly indicated that both new reactor licensing and license renewals are going to be delayed due to the resource constraints imposed? Existing facilities are not the only ones who are charged $273 per regulator hour for the service of being regulated; all applicants for NRC licenses pay those fees.

Delays are always costly to any business enterprise. It is unconscionable for the government to both add costs and delays while charging such hefty fees on a per hour basis.

Mr._Ed said...

"It's clear from the Keystone Pipeline decision and the ongoing Yucca Mountain fiasco that the Obama White House can and will throw any project under the bus that threatens to undercut the green wing of the Democratic Party.” This is an odd statement in that it blames the President for not being pro-oil and pro-nuclear at the same time. It may be based on frustration but let’s look at it from another perspective: Yes, energy decisions besides being economical are also political. Are we to deny that politics didn’t end up forcing Yucca Mountain to be the only site to be considered for long term storage of spent nuclear fuel? Disposition of spent nuclear fuel has been an issue under the purview of both the political parties since the 1980’s. It is not a given that nuclear power is going to solve the world’s energy and climate problems; only that it’s going to play a part in a solution. Displacing oil supplies from the likes of Venezuela and Nigeria may be a good choice in terms of energy security and job stimulation but due consideration should be given to environmental concerns in routing the Keystone pipeline. Maybe renewables deserve a chance to get a leg up before those options are foreclosed by technologies such as nuclear that have been allowed to reach the market place through government support. It just might make for a better energy solution in the long run.