Copyright 2000 Federal News Service, Inc.
Federal News Service
March 30, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 4179 words
HEADLINE:
PREPARED TESTIMONY OF JOE F. COLVIN PRESIDENT AND CHIEF EXECUTIVE OFFICER
NUCLEAR ENERGY INSTITUTE
BEFORE THE SENATE
ENERGY AND NATURAL RESOURCES COMMITTEE
BODY:
On behalf of the Nuclear Energy Institute (NEI), I would like to thank
you, Chairman Murkowski, Ranking Member Bingaman and the members of this
Committee for inviting NEI to testify on the value of the more than 100 nuclear
power plants that provide our nation with vital energy security and
environmental protection benefits.
The Nuclear Energy Institute (NEI)
coordinates public policy for the U.S. nuclear energy industry. We represent 270
members with a broad spectrum of interests. In addition to representing every
U.S. utility that operates a nuclear power plant, NEI's membership includes
nuclear fuel cycle companies, suppliers, engineering and consulting firms,
national research laboratories, manufacturers of radiopharmaceuticals,
universities, labor unions and law firms.
The bills under discussion
todayS. 882, the Energy and Climate Policy Act of 1999 and S. 1776, the Climate
Change Energy Policy Response Act--reinforce two unassailable precepts to
effective management of potential climate change: first, addressing greenhouse
gas emissions demands informed, science-based energy policymaking; and second,
solutions will require long-term, cost-effective technologies deployed on a
global basis. On both counts, nuclear energy will continue to play a successful
and prominent role. THE LESSONS OF HISTORY
As Shakespeare has told us,
"Past is Prologue." As early as the 1960s, nuclear energy's ability to avoid
emissions that pollute the air was well understood. When energy security and
environmental policies converged in the 1970s, increased use of nuclear energy
became an integral element in energy policy decisions designed not only to
achieve energy security and economic benefits, but to protect air quality as
well.At the time of the first oil embargo in 1973, approximately 20 percent of
United States electricity supply came from oil-fired power plants. In some parts
of the nation--the Northeast, for example--the percentage of oil-fired electric
generation was considerably higher. Serious as it was, however, the 1973 embargo
was only the first of two massive shocks to .America's energy industry during
the 1970s. The second came during the unusually cold winter of 1976-77. Acute
shortages of natural gas and the legacy of federal price controls on interstate
gas transmission forced widespread shutdowns of schools and factories for weeks
throughout the Midwest. Obtaining natural gas for power generation--at the time,
the source of 18 percent of U.S. electricity supply--was impossible.
The
years proceeding the embargo era also saw the development of ambitious
regulatory efforts to improve the nation's air quality. Concern over the
environment compelled energy choices that protected our air quality while
meeting increasing demands for electricity and economic growth. To achieve both
these potentially divergent goals, the nation turned to nuclear energy.
The Clean Air Act is the principal federal statute addressing air
quality and manmade emissions by setting concentration levels for various
pollutants allowable in the ambient air. Regulations then prescribe various
limitations on emissions required to meet these standards. Pollutants controlled
by the Clean Air Act include sulfur dioxide (SO2), ozone (and its precursor
nitrogen oxide, or NOx) and particulate matter (PM). Much of the burden for
reducing concentrations of these pollutants has been focused on the electric
utility industry because of the ease and cost effectiveness of controlling
large, stationary sources compared to smaller, mobile sources. However, reducing
emissions was not the only method employed to achieve compliance with
increasingly stringent Clean Air Act limitations. Avoiding the emissions in the
first place while increasing electricity output was also critical.Although some
view air pollution compliance regimes as affecting only emitting sources, they
are actually being enforced against the total electric supply system. Emission
caps and permits under ambient air quality standards represent a finite level of
pollution permitted for a range of industrial activities, including electricity
production. These restrictions remain static even if the total amount of
electricity needed to satisfy demand in a specific region increases. States or
regions utilizing emission-free electricity sources, find it easier to
simultaneously meet both government imposed emissions limitations and growing
consumer demand for energy. The increased use of nuclear energy beginning in the
late 1960's and early 1970's provided this additional compliance tool.
When comprehensive Clean Air Act limits were first implemented in the
early 1970s, overall generation from emission-free sources was about 18 percent
of the total electricity produced, most of it coming from hydroelectricity. In
1973, just five percent of the U.S. electricity supply came from nuclear power
plants. In the subsequent decades, 89 new nuclear reactors began operating, more
than tripling the amount of electricity Americans receive from nuclear energy.
Today, 103 nuclear reactors supply approximately 20 percent of annual U.S.
electricity, provide a hedge against volatile fuel prices and other supply
disruptions and are the primary source of electricity in many of the states that
produce or use nuclear power. In total, non-emitting generation (nuclear and
hydroelectric) comprises 31 percent of total domestic electricity production.
Nuclear energy's cumulative avoidance of emissions since the 1973 oil
embargo is enormous, as illustrated by statistics on only two pollutants.
Between 1973 and 1998, the use of nuclear energy avoided the emission of 87.2
million tons of SO2 and more than 40 million tons of nitrogen oxides (NOx) at
the same time it helped states satisfy increasing demand for electricity. In
1998, SO2 emissions would have been 5.1 million tons higher; emissions of NOx
2.4 million tons higher had fossil generation been used instead of nuclear
energy.When the United States responded to the oil and gas shocks of the 1970s
by rebalancing its energy supply portfolio, it reduced dependence on oil- fired
power plants (from approximately 20 percent of supply in 1973 to just three
percent today) and increased reliance on coal and nuclear energy. Nuclear power
plants also became a major compliance element for Clean Air Act requirements in
states where they operate. Attainment designations permit programs, and other
compliance actions under State Implementation Plans, implicitly rely on the
continued availability of existing non-emitting electricity. Nuclear energy, by
avoiding additional emissions as electricity output grew, acted as a silent--yet
vital--partner in Clean Air Act compliance.
THE GREENHOUSE GAS CHALLENGE
AND NUCLEAR ENERGY
Lessons learned about the role of avoidance
technologies in meeting Clean Air Act requirements during the last 20 years are
prologue to the long-term, technology based solutions that will also be needed
to address man-made greenhouse gases like carbon dioxide or methane. But unique
factors affecting the control of these gases make avoidance technologies ever
more critical carbon is the energy source in the fuel, not a byproduct material
that can be eliminated through end-of- pipe controls or low content fuels. So
unlike conventional pollution control programs, avoidance and sequestration
technology rather than emission control programs will be the primary methods of
addressing carbon. S. 882 and S. 1776 are the first major legislative
initiatives in the climate change debate to recognize this significant fact and
promote responsive policy measures.
As with pollutants controlled under
the Clean Air Act, climate change policies generally focus on sources that emit
greenhouse gases or on technologies that reduce them. When the 1990 greenhouse
gas emission baseline was calculated for the United States, 20 percent of the
electricity was being supplied by nuclearplants, avoiding the release of over
141 million metric tons of emissions had carbon-based fuels been used instead.
Today, U.S. nuclear plants avoid a total of 165 million metric tons of carbon
annually; cumulatively, nuclear energy has avoided more than two billion metric
tons of U.S. carbon emissions since 1973. From a compliance perspective, this
contribution is essential. Based on current emission levels, the United States
would be required to reduce greenhouse gas emissions by 162 million tons to
achieve its original voluntary commitment to reach the 1990 baseline under the
United Nations Framework Convention on Climate Change (UNFCCC). Without the
avoided tons from nuclear energy, that commitment requirement would double to
over 325 million tons.
The existing treaty commitment prompted the
Clinton administration to call for voluntary commitments by industry to reduce
carbon emissions. In response, various industries, including electricity
providers, have undertaken to voluntarily mitigate their greenhouse gas
emissions in partnership with the Department of Energy. In 1998, nuclear power
plants provided almost one-half of the voluntary carbon reductions (the largest
component) achieved by U.S. industry under the voluntary reporting program
established in Section 1605b of the Energy Policy Act.
These voluntary
avoidances were achieved primarily through increased efficiency and plant
uprates. Since 1990, three new nuclear power plants were added to the power
grid; Watts Bar in Tennessee and Commanche Peak Units 1 & 2 in North Texas.
In addition, the equivalent of sixteen 1,000-megawatt nuclear power plants have
been added to the grid through dramatic increases in electricity output. These
"virtual" new power plants have allowed the United States to avoid millions of
additional tons of harmful air emissions, while also being one of the most
successful energy efficiency programs of the last decade.
But not all of
this progress is being captured effectively in the current 1605b program. NEI
supports the provisions of S. 882 that improve the NationalInventory and
Voluntary Reporting provisions in Section 1605b. Specifically, the bill
recognizes that a ton avoided is as valuable as a ton reduced, and ensures that
avoided greenhouse gas emissions will be equally registered and recognized in
Department of Energy programs. DOE should develop standardized benchmark
measurements for calculating emissions avoided. These could be based on emission
levels of likely substitute generation.
Right now, most companies
calculate avoidances through internal offsets because they also own emitting
plants. With a benchmark based a standardized figure, such as the emission rate
in the power pool, companies that own and operate primarily avoidance
technologies can still participate in the program. This need for standardized
benchmarking holds true for all non-emitting technologies such as hydro and
renewables--production increases at those facilities should not have to rely on
offsets against co-owned emitting generation to be counted and recognized. These
accounting improvements will help achieve a goal of your bills--use accurate and
transparent government sponsored reporting to identify the technologies that are
managing greenhouse gas emissions so consumers and the market can respond.
FUTURE INCREASES IN NUCLEAR ENERGY R&D FUNDING VITAL
The
current fleet of nuclear energy plants has done yeoman's duty in the overlapping
demands of energy and environmental policy requirements. Nuclear power plants
have reduced America's dependence on foreign, oil, safely and reliably provided
20 percent of the country's electricity, successfully managed our used fuel and
avoided emitting billions of tons of pollutants into the air. And, our industry
provides the major contribution to carbon risk management.
Population
growth and economic expansion are expected to increase U.S. electricity demand
by 50 to 75 percent over the next ten years. To meet more stringent Clean Air
Act requirements and effectively manage carbon risk, the United States
mustincrease its percentage of available non-emitting sources of electricity,
such as nuclear energy, solar, hydro and wind, above the current baseline of 30
percent. Of these technologies, nuclear energy is the only expandable,
large-scale electricity source that avoids emissions and can meet the baseload
energy demands of a growing, modern economy. The current assets have only a
finite potential remaining to enhance these services through up-rates, improved
efficiency, and license renewals for an additional 20 years. The industry and
the country must begin planning now to build new nuclear plants.
Continued research and development will be key to maintaining existing
capacity and bringing on new plants to meet our future environmental challenges.
In comparison to other electricity generating sources, nuclear energy is
unequivocally the most economical federal research and development investment.
In 1998, the federal government spent one penny on nuclear energy R&D for
every kilowatt-hour of electricity generated at nuclear power plants. By
comparison, the cost of natural gas R&D per kilowatt-hour generated, was 36
cents; for solar photovoltaics, $21,566; and for wind energy
$10,700. Today's high-tech industries either adjust to rapidly
changing circumstances or they fall behind their competitors. Obtaining a fair
share of our nation's R&D funding is essential for the expanded utilization
of our nation's clean non-emitting nuclear energy.
Both S. 882 and S.
1776 recognize that the pace of research and development of advanced energy
technologies that can reduce greenhouse gases is too slow and that most programs
are under-funded. NEI believes that adequate funding of current programs coupled
with the additional funding provided in these bills, will go a long way to
ensuring that the United States maintains its leadership around the world in
avoidance technologies capable of cutting back greenhouse gases emission levels
while supporting sustainable development.The President's Committee of Advisors
on Science and Technology (PCAST) shares this view. Their recent report
acknowledge the importance of nuclear energy to avoiding carbon emissions and
suggests that the Administration should recognize. nuclear energy as an energy
option that could contribute substantially to meeting national and international
goals.
Programs such as the Nuclear Energy Research Initiative (NERI),
and Nuclear Energy Plant Optimization (NEPO) should be funded at levels double
the Administration's 2001 budget request. These programs are designed to produce
generic improvements that reduce capital and operating cost for both current and
available advanced designs. Although DOE's Energy Information Agency (EIA)
continues to grossly overstate the cost of advanced nuclear generation at
$2,390 per kilowatt of capacity, detailed engineering estimates
put the figure at $1,500.00 and dropping. Our nation's energy
and security needs and environmental goals demand that we continue programs that
will make nuclear energy technology available today and for future generations.
Funding also is important for the Energy Department's University Support
Program, that helps maintain research reactors and enhances educational programs
in nuclear science and technology at colleges and universities.
NEI also
supports funding for current and future waste management technologies important
to the nuclear industry. Foremost among these is the federal repository program.
Keeping this program on track towards a presidential decision in 2001 on whether
or not to proceed with construction of Yucca Mountain is the
centerpiece of our national policy for used nuclear fuel disposal. The nuclear
industry is encouraged by the impressive scientific foundation for
decision-making that has been established and is actively supporting full
program funding to ensure that approaching program milestones can be met. Along
with repository siting, improved future waste management technologies should be
pursued to maximize the value of our disposal capacity. By minimizing waste
created and the amounts offuel used, technologies such as transmutation (the
conversion/accelerated decay of used nuclear fuel into less toxic materials) and
the Fast Flux Test Facility (FFTF) help improve energy efficiency. These
technologies hold promise to help future generations effectively manage and
isolate used fuel in geologic repositories.
S. 882 would provide R&D
funding to develop new technologies or improve existing technologies, including
development of advanced nuclear generation designs, that reduce or avoid
greenhouse gas emissions and improve energy efficiency. S. 1776 includes
provisions for a Department of Energy review of energy technology research and
development. This includes an assessment of the market status of each energy
technology, of the potential barriers to deployment of the technology, and of
the length of time it will take for commercial use in a manner that will result
in meaningful emissions reductions.
NEI supports both efforts to ensure
that largescale, non-emitting generation is further developed and expanded to
manage future risks from carbon emissions.
In what may be viewed as a
response to the energy policy initiatives in this committee's legislation, the
Clinton Administration is collaborating with more than a dozen nations to lay
the foundation for an international research and development program for
globally deployable advanced reactor designs. Known as the International Nuclear
Energy Research Initiative (NERI/I), this new nuclear R&D initiative, funded
jointly by all participating nations to promote bilateral and multilateral
research, is focused on advanced technologies to improve safe and efficient
nuclear power plant operation and waste management. NERI is strongly supported
by the nuclear industry.
Increased international deployment of nuclear
energy will be a key element of the global response to climate change. The
Byrd-Hagel Resolution, supported unanimously in the Senate, identified
developing country participation in greenhouse gas emission abatement as a
minimum condition to U.S. acceptance ofbinding emission limitations under the
Kyoto Protocol. Large-scale, non-emitting technology like nuclear energy will be
undeniably crucial for any meaningful participation in greenhouse gas emission
abatement in advanced developing countries like China. For other developing
economies that are not yet producing significant levels of greenhouse gases due
to lack of economic growth, emission avoidance will be the major alternative
available to provide meaningful participation. Research and development that
ensures the United States retains its premier place in nuclear technology
production is not only a domestic compliance requirement, but also a crucial
international need in attaining a global solution to the climate issue.
ELECTRICITY SUPPLY AND CLEAN AIR: A FUTURE THAT NEEDS NUCLEAR ENERGY
The Administration's meager R&D funding requests for nuclear energy
point to a disconnect between its rhetorical support for action to address
climate change and its lack of active support for the primary technology capable
of addressing the issue without crippling the nation's electrical energy supply.
With more than 2,200 reactor years of operating experience, the United
States has the largest commercial nuclear power industry in the world.
Other nations that rely on nuclear energy to meet both energy and clean
air goals--notably France, Japan and South Korea--have achieved self sufficiency
in nuclear power because of technology transfers and partnerships with U.S.
nuclear power plant suppliers. The successful industry/government research and
development program that led to the design and certification by the Nuclear
Regulatory Commission of three advanced light-water reactor designs is a model
of successful R&D in the nuclear energy industry. Fortunately, some of these
advanced reactors are being built in Asian markets to meet new electricity
demand and as part of their commitments to reduce carbon and other emissions.
Unfortunately, the American taxpayers that paid for their design are not
similarly benefiting from their use domestically, yet many of our international
economic competitors are.
Fortunately, during the 1990s, there was a
steady improvement in nuclear power plant safety and production, with the
average capacity factor for all 103 nuclear power reactors reaching 86.8 percent
in 1999--a 9.2 percent increase over 1998. Unfortunately, this efficiency
improvement will top out, with no baseload, nonemitting generation increases in
the works to enhance our avoidance capability.
Fortunately, owners of
the vast majority of nuclear power plants are expected to extend the operating
licenses at existing plants for an additional 20 years, a move that will
preserve the existing air quality compliance contribution from these facilities.
Just a week ago, in a landmark decision, the NRC approved relicensing for two
reactor units at Calvert Cliff's plant in Maryland. Twenty-eight other units
have either begun the renewal process or announced their intention to do so.
Unfortunately, future air quality compliance requirements, including carbon risk
management, will need more than just continued operation of existing facilities
to succeed.
Our growing economy in the digital age will compel more--not
less electricity use in the future. At the same time, many non-emitting sources
will find it difficult to increase their contribution. Hydropower generates
about 10 percent of U.S. electricity, but the Energy Information Administration
projects an increase of less than 1,000 megawatts of hydropower by 2020. There
may be significant opportunities to expand other non-emitting renewables, such
as solar and wind, but those sources require dwindling land resources and may
not be co-located with demand. Therefore, additional nuclear energy remains the
primary emission-free option to power economic growth.In recent years, state and
federal initiatives have launched a more competitive electricity industry. As
companies prepare to do business in this new competitive electricity market, the
unbundling of their products and services will require a reexamination of costs
and allocation of value to activities that previously were not valued. The
importance of nuclear energy to clean air and carbon abatement is one of these
previously unvalued services for which companies must receive economic benefit
to prevent competitive disadvantages and position nuclear power plants to
continue their crucial environmental contribution. Any plausible strategy to
mitigate greenhouse gas emissions will require an expanded contribution of
nuclear energy in the United States and around the world.
Nuclear energy
remains a cost competitive alternative in the emerging deregulated electricity
market. Free-market competition demands that the "playing field be level" for
all electric utility companies. In addition to ensuring future R&D funding
for nuclear energy, Congress also must pave the way for sensible, market-based
business decisions that will preserve and extend the operation of today's
nuclear power plants. These include a streamlined, objective NRC licensing
process, the elimination of unnecessary requirements that may prevent effective
ownership transactions in a competitive market, and the implementation of the
nation's program for safe, centralized disposal of used nuclear fuel.
And most importantly, public policy incentives to encourage carbon
abatement or avoidance technologies must be equally applied, be they production
and/or investment tax credits to address climate change, access to market-based
pollution control mechanisms, or access to favorable financing and other funding
mechanisms. Equal treatment in these market and incentive programs will allow
new nuclear plants to effectively compete with alternative forms of generation,
ensuring that nuclear energy's unique ability to provide energy security and
environmental protection remains available to the American economy and American
way of life.
CONCLUSION
Next month, America will celebrate the
30th anniversary of Earth Day, and the significant environmental strides we have
made since 1971. One of the most prominent environmental protection advancements
in the industrial sector during this time has been the increased reliance on
nuclear energy to power our fastgrowing digital economy. Congress should not
lose sight of this important clean air and greenhouse gas compliance tool, and
policymakers should employ a strategy that maximizes nuclear energy's potential
to improve air quality. Research and development funding, streamlined business
regulation, waste management program implementation, and equal access to
incentives will ensure that nuclear energy will continue to help meet our
nation's intertwined public policy goals regarding energy production and
environmental protection.
END
LOAD-DATE: April
1, 2000 
