On March 31st, President Biden unveiled a massive $2 trillion infrastructure and clean energy plan called the American Jobs Plan that aims, in part, to tackle what the White House calls two of the greatest challenges of our time: the climate crisis and competition with China.  Among the proposed investments, the American Jobs Plan calls for funding for the development of advanced nuclear reactors and for a clean electricity standard that can potentially support operating plants. Other provisions of the plan include clean energy tax credits, investments for upgrades to the electric grid, and plans to clean up abandoned mines and cap orphan oil and gas wells. In line with his focus on environmental justice, President Biden asks that 40% of the benefits from investment in clean energy go to disadvantaged communities.

Along with the American Jobs Plan, President Biden is releasing a Made in America Tax Plan to increase corporate tax payments, which are intended to pay for the American jobs plan.

Shortly after the American Jobs Plan was announced, White House National Climate Advisor and former EPA Administrator Gina McCarthy told reporters that nuclear energy should be one of the power sources eligible for a national clean energy mandate sought by the White House as part of its infrastructure and clean energy plan.

Based on an initial review, provisions in the American Jobs Plan that impact the advanced nuclear industry include the following:

  • President Biden proposes a 10-year extension and phase down of investment tax credits and production tax credits for clean energy storage and generation. The Administration will also support private investment and state and local programs like “clean energy block grants” that provide grant money to help reduce fossil fuel emissions. It also plans on making federal buildings run on clean power 100% of the time and aims to establish an Energy Efficiency and Clean Energy Standard to cut electricity bills and pollution. In doing so it will incentivize use of “carbon pollution-free energy” like nuclear.
  • The American Jobs Plan calls on Congress to invest $35 billion in a “full range” of technological solutions to address climate change. Of the $35 billion requested, $15 billion would go to demonstration projects for climate R&D priorities, which include advanced nuclear and rare earth element recovery technologies. In February 2021, President Biden established a new Climate Innovation Working Group as part of the National Climate Task Force, to advance his commitment to launching an Advanced Research Projects Agency-Climate (ARPA-C). The working group will help coordinate and strengthen federal government-wide efforts to foster affordable, innovative technologies that can help America achieve the President’s goal of net zero economy-wide emissions by 2050. It will also protect the American people from the impacts of droughts and floods, larger and more frequent wildfires, and stronger hurricanes. ARPA-C would help “develop new methods for reducing emissions and building climate resilience, as well as expanding across-the-board funding for climate research.”
  • The plan proposes to utilize the federal government’s purchasing power (currently measured at over a half trillion dollars) for clean energy production and supporting “high quality jobs.” To reach the net-zero emissions goal, Congress is asked to enable manufacture of critical technologies like advanced nuclear reactors and fuel. The plan calls for an investment by Congress of $46 billion in federal purchasing power to meet these goals.
  • The plan calls for job training in clean energy and other high demand sectors as part of a $40 billion Dislocated Workers Program and other training programs. The Dislocated Workers Program aims to provide support for Americans who lost their jobs “through no fault of their own.” This program may apply to those that lose their jobs in the energy transition, but only time will tell as additional details of the plan are revealed. Moreover, the plan proposes that underserved communities (presumably communities of color and economically disadvantaged communities) will be prioritized for new clean energy jobs.

What’s next?

The American Jobs Plan has already grabbed the attention and backing of organizations that support the use of nuclear power for clean energy, with the Nuclear Innovation Alliance issuing a statement of support as the plan “incorporates advanced nuclear energy as eligible for funding for demonstration projects, building on ongoing activities by the Department of Energy and industry to demonstrate the commercial viability of next generation nuclear power.” The Atlantic Council also applauded the plan, remarking that increased R&D funding “will develop and demonstrate technologies, such as . . . advanced nuclear innovation” which will “help maintain US global leadership.” In another statement of support, the American Nuclear Society highlighted that “a growing world market for small modular and advanced reactor designs promise[s] job growth for communities across the U.S.” The plan was lauded as the “most ambitious climate and clean energy plan undertaken by any US administration” by the think tank Third Way.

However, for the plan to come to fruition, the President will need the support of Congress, and the plan is already experiencing some backlash from both sides of the political aisle. Republicans do not generally support the tax increases, and Democrats argue that the plan falls short of expectations. While Senate Majority Leader Chuck Schumer (D-NY) supports the plan, Democrats hold a razor-thin majority in Congress and not all Congressional Democrats appear to support the plan (the parties are tied in the Senate with the Vice President casting the tie-breaking vote, and Democrats hold only a seven-person majority in the House). For example, Representative Alexandria Ocasio-Cortez (D-NY) has criticized the plan for not going far enough. Senate Minority Leader Mitch McConnell (R-KY) admitted that even if the plan could help support Kentucky infrastructure, he would still vote against it due to its method of funding.

For more information, please contact blog authors.

 

On March 25, the U.S. Senate Committee on Energy and Natural Resources held a hearing entitled “The Latest Developments in the Nuclear Energy Sector with a Focus on Ways to Maintain and Expand the Use of Nuclear Energy in the United States and Abroad.” A recording of the hearing is available here.  This full Committee hearing included testimonies from experts in nuclear, including blog contributor and Hogan Lovells Partner Amy Roma, whose testimony can be found here. Her testimony discusses the important benefits nuclear power offers for this country’s national security, economic interests, and climate change goals.

Amy draws on a paper she co-wrote, along with blog author Sachin Desai, and well-known utility executive Mike Wallace, Back from the Brink: A Threatened Nuclear Energy Industry Compromises National Security, to tell the story of this country’s long relationship with commercial nuclear power.  As she explained in her testimony, commercial nuclear power has always served as an important tool to achieve U.S. national security objectives and U.S. economic interests, and it is important for the U.S. to maintain global leadership in nuclear power.  The global market opportunity for new nuclear projects is huge and growing, with the current market already in the hundreds of billions of dollars. If carbon mitigation measures are deployed, the global nuclear market would be in the trillions of dollars.

While the U.S. has lost out on the global nuclear market over recent years, the U.S. has a significant innovation edge in next generation technologies. In particular, the U.S. leads the world in the development of advanced fission reactors, as well as the nascent fusion industry. These advanced technologies are diverse but share common design features, such as they are designed to be affordable, scalable, and safe, and can be used for both power and non-power applications, such as hydrogen production, water desalination, and process heat for industrial uses.

U.S. innovation, when properly supported, can stand up to state backed competitors from foreign competitors. We saw this recently in the aerospace market. In 2013, Russia controlled about half of the launch industry. Due in large part to the success of SpaceX, shepherded by NASA’s COTS program, Russia is now estimated to capture only 10 percent of the market. Amy argued that we can likewise re-emerge as a global leader in nuclear power, with U.S. government support to help these technologies get off the ground. The opportunity is there, we have the innovation, and the stakes are worth it, she argued.

The following witnesses also testified at the hearing:

  • Jeffrey J. Lyash, President & Chief Executive Officer, Tennessee Valley Authority (testimony can be found here).
  • Chris Levesque, President & CEO, TerraPower (testimony can be found here).
  • Scott Melbye, President, Uranium Producers of America (testimony can be found here).
  • J. Clay Sell, Chief Executive Officer, X-energy (testimony can be found here).

For more information, please contact blog authors.

On Friday, February 26, the Biden Administration’s newly-resurrected Interagency Working Group on Social Cost of Greenhouse Gases (IWG) announced new values for three specific metrics that seek to monetize the environmental impacts of greenhouse gases:  the Social Cost of Carbon, Social Cost of Nitrous Oxide, and Social Cost of Methane.  Collectively these are known as the Social Costs of Greenhouse Gases, or SC-GHG.

Using 2020 as a baseline and a 3% average discount rate (explained further below), the IWG calculated the Social Cost of Carbon at $51/metric ton (mt), the Social Cost of Methane at $1,500/mt, and the Social Cost of Nitrous Oxide at $18,000/mt.  This represents a dramatic reversal in the federal government’s valuation of the impacts of climate change, as under the prior Administration these social costs were set at essentially insignificant levels.

The revised SC-GHG valuations, and the revised calculation of the Social Cost of Carbon (SCC, also SC-CO2) in particular, will have far-reaching impacts on both federal and state-level regulatory actions, including the crucial cost-benefit analyses that government agencies undertake as part of permitting and rulemakings, among other things. The above values are interim measures and further evaluation is expected this year, including the opportunity for public comment, leading to a more comprehensive update to be issued by January 2022.

A return to a higher value for the SCC in particular would make it easier for federal agencies and states to pass regulations and implement programs that help achieve President Biden’s zero-carbon plan for the electricity sector by 2035.  This is because the climate value of clean energy sources—like nuclear—would now receive a significant quantitative value, something that has long been difficult to achieve. As explained further below, the SCC has already been used by states to support the nuclear industry to the tune of hundreds of millions of dollars a year—by compensating at-risk nuclear plants for their zero-emissions benefits based on a value derived in part from the SCC. A return and reinvigoration of the SCC has the potential to similarly incentivize large investments into nuclear energy through credit programs that rely on the use of the SCC.

The Social Cost of Carbon Explained

Although the recent Biden Administration Announcement addresses the entire SC-GHG—and puts prices on emissions of carbon dioxide, methane, and nitrous oxide—this alert focuses primarily on the SCC.  The SCC, as explained below, was created in 2008 and has been used in a variety of agency rulemakings and other actions. The Social Cost of Methane and Social Cost of Nitrous Oxide metrics were formulated in 2016 under the Obama Administration, and created a broader SC-GHG framework.  However, most of the discussion historically and today centers on the SCC, which addresses carbon dioxide, the most prevalent greenhouse gas in our atmosphere today that is linked to human activity.

The SCC is an estimate that attempts to quantify the long-term economic damage that results from a 1 metric ton increase in carbon dioxide in a year, and is established by the IWG. It monetizes the future cost of carbon dioxide and other greenhouse gas emissions, discounted to today’s value, to aid regulatory agencies in their cost-benefit analyses. The SCC has historically been used by both federal and state regulatory agencies to evaluate regulatory options and aid decision-making. Key IWG issuances are the “Technical Support Documents” that set forth the costs of various greenhouse gases under certain discount rates and other factors. The Biden Administration’s recently issued February 26, 2021 Technical Support Document can be found here.

The initial valuation of the SCC came in response to a 2008 Ninth Circuit decision that upheld challenges to the National Highway Traffic Safety Administration’s (NHTSA) fuel economy standards. The Petitioners in that case argued that NHTSA failed to properly assess the costs and benefits of its new standards by failing to consider carbon emissions in its rulemaking. The Ninth Circuit held that, while it may be difficult to place a value on the cost of carbon, there does exist an associated cost and that cost is “certainly not zero.” Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172 (9th Cir. 2008). This case established the regulatory need for, and prompted the development of, the initial SCC valuations.

The Obama Administration established the IWG, which uses various models and data to develop a new methodology to estimate the SCC. The estimate for the SCC was updated three times over the course of the Obama Administration, and was given at roughly $36 per metric ton by the end of his Presidency, presuming a 3% average discount rate.

The estimate itself can vary depending on the parameters used in the models, including, for example, whether the impact of carbon dioxide emissions is considered on a global scale or only domestically, what average discount rate is used, and whether intergenerational impacts are taken into account.

The SCC Dismantled under Trump and Reinstated Under Biden

Soon after former President Trump assumed office, he dismantled the IWG and the SCC plummeted to between $1 to $6/mt under his Administration, which meant that it was not a significant factor in agency regulatory activities. The Trump Administration’s analysis focused on domestic climate change implications, largely ignoring effects outside the United States as well as certain effects on future generations. Furthermore, the Trump Administration used a discount rate as high as 7%. The higher the discount rate used, the less society would pay today to avoid future harm associated with carbon emissions.

In one of many Executive Orders issued on his first day in office, President Biden reinstated the IWG. The IWG then published a Technical Support Document on February 26, 2021 that provides justification for using the Obama-era SCC—as well as the Social Cost of Methane and Social Cost of Nitrous Oxide—calculation methodology. Using the Obama-era SCC today results in a $51 per metric ton estimate after inflation adjustments (when using a 3% average discount rate and 2020 dollars, although the reinstated IWG indicated that a 3% discount rate may be too high). The Biden Administration plans to again consider the global implications of federal actions on greenhouse gas emissions and use a lower discount rate than that adopted by the Trump Administration.

How is the SCC Used?

The SCC is a powerful tool that can be used to shape regulatory decision-making for federal and state agencies or to challenge the cost-benefit analyses used to support regulatory actions. It has been used to justify actions across the federal government, including by the Environmental Protection Agency (EPA), the Department of Energy (DOE), and the White House Council on Environmental Quality (CEQ). Some examples of federal rulemaking that have used the SCC estimate include national emission standards for hazardous air pollutants, light-duty vehicle emission standards and Corporate Average Fuel Economy standards, and DOE efficiency standards.

The SCC was also used to justify both the Clean Power Plan (CPP) and its replacement, the Affordable Clean Energy (ACE) Rule. The CPP was a 2015 rule that placed limits on carbon pollution from U.S. power plants, with a goal of cutting 30% of carbon pollution from the power sector by 2030. While the cost of the plan was as much as $8.8 billion annually, the CPP was estimated to provide climate and health benefits of up to $93 billion per year in 2030. To justify the CPP, the EPA used SCC estimates from the IWG to value the benefits of carbon reduction from the plan. However, the Trump Administration repealed this rule and instead enacted the ACE Rule, which relied on the much lower Trump-era CPP estimate. The lower CPP lessened the monetary value of the reduction of carbon pollution and justified a more lenient rule regulating power plant pollution. The U.S. Court of Appeals for the District of Columbia recently vacated Trump’s ACE Rule.

However, the SCC is not just a tool for federal rulemaking, as many states have also applied the estimate to their cost-benefit analyses and regulatory actions. According to a 2019 study by the Government Accountability Office that analyzed states’ use of the SCC, nine states were identified as using the Obama-era SCC estimates, with no states identified as using an alternative valuation. Examples of ways in which states have used the SCC include the California Air Resources Board’s use of the metric when evaluating policy options related to its 2030 CO2 emissions target, and the Minnesota Public Utility Commission’s adoption of a mandate that utilities use an SCC estimate in their integrated resource plans.

The significance of the SCC for states is illustrated by the New York Public Service Commission (NYPSC) Clean Energy Standard (CES) that created a market for carbon dioxide reductions. The CES was established in 2016, as part of setting the goal of obtaining 50 percent of New York State’s electricity generation from renewable sources by 2030. One component of the CES is the Zero-Emissions Credit (ZEC) program, which provides credits to certain nuclear power plants in the state for a period of twelve years to help prevent their shutdown and the resulting increase in carbon emissions. The program recognized the role nuclear generation plays in combating climate change and used the SCC to help determine the credit value of the ZECs. For one nuclear plant, the ZEC program was estimated to pay about $125 million annually, but this figure pales in comparison to the potential benefit of nuclear plants in reducing future carbon emissions when measured using the SCC.

By using the SCC to place a monetary value on carbon dioxide emissions, the NYPSC was able to quantify the value of carbon emissions avoided by nuclear plants. This program was challenged and upheld by the U.S. Court of Appeals for the Second Circuit in 2018. A similar program in Illinois was also upheld in 2018 by the Seventh Circuit.

And this is just the start. Under the new Administration, the SCC is expected to be an important factor in every agency action that requires a cost-benefit analysis and involves an environmental impact. As the SCC becomes a routine part of federal decision-making, courts and states will likely turn to it more in evaluating environmental impacts of planned actions and in evaluating climate programs.

What Can We Expect Next?

When the Obama IWG first developed the SCC, some argued that the integrated assessment models the IWG relied upon were flawed and based on too many uncertainties. They argued that changing certain assumptions (e.g., discount rate, climate sensitivity, time horizon, etc.) in the models would result in drastically different results, demonstrating excessive malleability in the SCC determination. Additionally, there was concern that the IWG failed to follow the OMB discount rate guidelines for the cost benefit analysis.

On the other hand, some argued that Obama’s SCC metric did not go far enough and failed to consider the full range of effects of climate change, including impacts related to extreme weather such as forced migration. The New York State Department of Environmental Conservation issued guidance last year that set the SCC at $125 per metric ton. These same arguments, and others, are likely to resurface as the Biden Administration considers its next steps and as federal agencies begin to promulgate rules and regulations using the SCC.

We can expect litigation challenges from both those who believe the SCC has been set too high and those who believe it has been set too low. These challenges will likely arise in disputes over the validity of regulations that rely on the SCC in their cost-benefit analyses. It may be difficult for the courts to displace the judgments of the experts as to exactly where the SCC should be set, but the IWG is both engaging climate experts and inviting public comment.

Since the SCC will likely be used in shaping a wide range of regulatory actions across different agencies and sectors, interested stakeholders should consider providing input. We can expect that all aspects of the SCC—as well as the Social Costs of Methane and Nitrous Oxide—will be on the table for the January 2022 update, including discount rate, methodologies for calculating the cost, and how the estimates should be used by agencies and other stakeholders. The notice detailing requests for public comment will be published in the Federal Register soon.

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For more information, please contact the blog authors.

On February 16, the Nuclear Innovation Alliance (NIA) and the Partnership for Global Security (PGS) issued a report to help guide the Biden Administration in its support of nuclear amidst the President’s ambitious climate agenda. The report, U.S. Advanced Nuclear Energy Strategy for Domestic Prosperity, Climate Protection, National Security, and Global Leadership, provides detailed recommendations to promote advanced reactor development that could garner bipartisan support if implemented. It discusses federal, state-level, and international goals for advancing nuclear.

The next day, February 17, the American Nuclear Society (ANS) published a report on Public Investment in Nuclear Research and Development that requests an additional $10.3B by 2030 in funding for demonstration reactors and projects aimed to streamline commercialization of advanced nuclear. While the NIA and PGS report establishes a roadmap for advanced reactor development, the purpose of the ANS report is to make a case for increased federal investment in nuclear.

Here are some of the recommendations from the NIA/PGS report:

  • The executive and legislative branches should coordinate to prioritize advanced reactors. Legislative action should ensure sufficient appropriations for U.S. Department of Energy (DOE) activities, fund demonstration projects with the goal of commercialization, provide incentives for first-of-a-kind nuclear plants (e.g. tax credits, grants, loan guarantees), prioritize research and development (R&D) funding, and support university research.
  • Industry should develop business models applicable to nuclear energy (e.g. direct power sales, project financing, etc.), strengthen the workforce through diversity and inclusion and create attractive job positions, work on providing lower costs for consumers, and ensure that reactors follow global security requirements.
  • The U.S. Nuclear Regulatory Commission (NRC) should aim to develop a final rule for Part 53 by October 2024 and in doing so, ensure that licensing for advanced reactors is affordable and timely. The NRC should also address challenges for certain non-electric applications.
  • Congress and regulating agencies should provide support of High-Assay Low-Enriched Uranium (HALEU) fuel and its associated commercial capabilities, while addressing impacts of uranium mining.
  • States can include advanced nuclear energy in their renewable portfolio standards and eliminate restrictions that prevent advanced nuclear power plant construction.
  • The U.S. should engage with the international community to coordinate multinational deals and develop an export control framework that ensures non-proliferation commitments. It should also assess Russia and China’s nuclear portfolios in order to identify challenges and lessons learned.
  • Congress should eliminate the foreign ownership, control, or domination (FOCD) provision in the Atomic Energy Act for U.S. allies to encourage foreign investment in American nuclear energy.

The following are some highlights from the ANS report:

  • The report recommended doubling of nuclear R&D funding to enable advanced reactor development. It noted that the recommended funding ($10.3B over 9 years) requested  is only 0.6% of President Biden’s climate plan.
  • Nuclear should receive further funding for its promise of clean energy, national security, and job creation. Nuclear power plants generate 54.8% of carbon free-electricity and prevent 505.8 metric tons of CO2 emissions. Nuclear also adds $60 billion to the GDP and contributes $42.4B a year to the U.S. national security.
  • Federal funding is necessary to lower costs, speed up deployment, and further encourage private investment, which has already increased due to a market demand for zero-carbon energy. Nuclear power is the only energy source that can fit in utility companies’ energy portfolios and still maintain grid reliability and affordability.
  • Market opportunities for advanced nuclear energy is growing. For example, nuclear reactors can be a source of hydrogen production and DOE is currently exploring this option.
  • The U.S. would fall behind countries like Russia and China if there is a lack of appropriate funding. Russia and China are leading in nuclear reactor exports and the U.S. has no foreign orders in a market valued at $500-740 billion over the next decade. Without additional funding that capitalizes on U.S. private-public partnerships, the U.S. risks losing its voice in global nuclear safety and nonproliferation norms.
  • Nuclear energy also drives a number of other industry sectors like the medical industry that relies on radioisotopes to treat cancer, and NASA which uses microreactors in space exploration.
  • Every phase of nuclear R&D must be funded, including innovation (e.g. advances in technology, research on economics and societal acceptance of nuclear, etc.), development (e.g. providing necessary data for fuels to be used commercially), demonstration (e.g. identifying opportunities for cost reductions, answering regulatory questions, etc.), and deployment (e.g. providing support for HALEU).

Both of these reports highlight the important role nuclear plays in today’s energy sector, which thrives on diversification of sources, grid reliability, and the goal of a zero-carbon future.

For more information, please contact the blog authors.

President Biden ran on an energy and environmental platform calling for a carbon-free power sector by 2035 and net-zero carbon emissions by 2050. In pursuit of this clean energy plan, he also called for a modernized energy infrastructure that supports advanced nuclear commercialization. Advanced nuclear technology is capable of generating power with net-zero emissions and can help the new Administration achieve its goals concerning climate change.

On January 27th, the Biden Administration has hit the ground running on climate initiatives with the following Executive Orders and other measures to address climate change and scientific integrity.

  1. Executive Order on tackling the climate crisis at home and abroad

This Executive Order (EO) takes a number of steps to place climate change at the forefront of U.S. policymaking, embolden domestic energy sources, and grow American jobs.

  • Focus on climate change: The EO aims to ensure that climate change is a central element of U.S. foreign policy and national security. It takes a “whole-of-government” approach, creating the White House Climate Policy Office to coordinate domestic climate policy. The EO also establishes a National Climate Task Force (Task Force), chaired by National Climate Advisor Gina McCarthy and comprising representatives from 21 federal agencies and departments (including the Energy, Interior, Transportation, Defense, and Treasury Departments and the Environmental Protection Agency). The Task Force’s broad objectives include helping to increase U.S. climate resilience and promoting conservation, environmental justice, and job creation.

The EO also directs the creation of a plan within 90 days to use existing government procurement authorities to develop a carbon pollution-free electricity sector by 2035 and provide clean and zero-emission vehicles for government use.

Promises made by President Biden on his first day in office are carried through by the EO, such as rejoining the Paris Agreement and reviewing the rollback of certain Trump Administration air and water standards. It also directs the United States to develop its emissions reduction target under the Paris Agreement prior to the Leaders’ Climate Summit in April, which the President will host.

The EO also takes various national security-related actions, such as creating a Special Presidential Envoy for Climate on the National Security Council and ordering a National Intelligence Estimate on the security implications of climate change.

On environmental justice, the EO establishes the White House Environmental Justice Interagency Council to provide recommendations for reform, as well as establishes an EPA advisory council to monitor and enforce environmental justice issues. It also calls for the establishment of environmental justice offices at the Department of Justice and Health and Human Services.

  • Emphasis on clean energy: On January 20, 2021, the Department of Interior (DOI) issued an order that placed a 60-day moratorium on new fossil fuel permits. The EO effectively extends this timeline and pauses any new oil and natural gas leases on public land and offshore water until a review can be conducted of all existing leases. This review will include consideration of climate impacts and a review of the current oil and gas permitting practices and royalty rates. The EO also eliminates federal fossil fuel subsidies and directs the Office of Management and Budget to eliminate these subsidies from the FY2022 budget request.

The EO also requires that DOI conduct a review to increase renewables on public lands and offshore, including a target of doubling offshore wind by 2030. It sets ambitious land and water conservation goals of conserving 30 percent of public lands and waters by 2030, referred to as the “30 x 30” initiative.

  • Creation of jobs and opportunities in the new clean energy economy: During his campaign, President Biden announced his intention to create over 10 million well-paying jobs in the clean energy sector. In recognition of the potential adverse impact on jobs in the fossil fuel sector, this EO directs the establishment of a plan to counter those job losses with an offsetting program of job creation.

The EO directs DOI and the Department of Agriculture to create a Civilian Climate Corps Initiative for conservation jobs and training opportunities. DOI is further tasked with reviewing permitting on public lands and offshore waters and developing potential steps to create new jobs in this area. The order also aims to create “clean energy” jobs in certain sectors (such as manufacturing and engineering) for a broad range of demographics.

The EO also identifies infrastructure development as an area for job growth. On the other hand, the EO emphasizes that federal investments and permitting reviews must consider greenhouse gas emissions and climate impacts.

Finally, the executive order establishes an interagency working group to coordinate the delivery of federal resources to “revitalize” communities that are economically dependent on fossil fuels, in part by creating jobs that can help revitalize brownfield properties, curb carbon emissions, and generally improve air and water quality in various ways.

  1. EO on the President’s Council of Advisors on Science and Technology

This EO reestablishes the President’s Council of Advisors on Science and Technology (PCAST), which was originally established by President George W. Bush and reestablished by President Obama. The PCAST is co-chaired by the White House Science Advisor and brings together various presidentially-appointed experts in science, technology, and innovation from outside the federal government.

The PCAST will assume an advisory role and inform the President on a wide range of policy issues touching on science and technology. The PCAST is instructed to solicit information from stakeholders in the private sector, universities, national labs, non-federal governments, and nonprofits. The Department of Energy is tasked with providing funding and support to the group, as needed.

  1. Memorandum on restoring trust in government through scientific integrity and evidence-based policymaking

This memorandum directs federal agencies to prioritize evidence-based policymaking using best-available science and data. The Director of the Office of Science and Technology Policy is tasked with ensuring scientific integrity across federal agencies in part by preventing “[i]mproper political interference” and “suppression or distortion” of scientific or technological data and findings.

The memorandum directs agencies involved in research to designate a Chief Science Officer and requires that all agencies employ a Scientific Integrity Official to implement science-integrity processes. The memorandum establishes a Task Force on Scientific Integrity to review relevant policies across agencies developed since the 2009 Memorandum for the Heads of Executive Departments and Agencies.

What’s next?

President Biden’s climate change-focused EO and related actions are a sharp contrast from the previous Administration, both in terms of their immediate national objectives and active international engagement. At the same time, they set the tone for an Administration that continues the trend of using executive authority to achieve policy and regulatory goals. Whether far-reaching legislation can be passed, particularly given the razor-thin Democratic majority in the Senate, will be a major factor in determining whether the President will achieve long-lasting success in these areas.

The fossil fuel industry will face several regulatory and other hurdles, including regulatory rollbacks of Trump Administration initiatives, possible future legislation, and other executive actions. Litigation challenging certain Biden initiatives is already underway. In contrast, the renewables industry and advanced nuclear will see new opportunities for industry growth, so long as that growth is consistent with the Administration’s increased emphasis on environmental and wildlife protection and climate change.

The year 2020 is surely to be remembered for the pandemic that swept the globe and affected the lives of millions of people and touched practically every industry sector. Despite the hardships faced, the nuclear industry has thrived with its promise of coupling American innovation and a zero-carbon energy solution. This blog post will highlight some of the most notable 2020 activities in nuclear.

Nuclear Regulatory Commission

The Nuclear Regulatory Commission (NRC) boasts a number of accomplishments that sets the stage for advanced nuclear technology.

  • Part 53 framework: In April 2020, the NRC proposed to develop the 10 CFR Part 53 rulemaking for licensing and regulating advanced nuclear reactors, and potentially fusion systems. Part 53 is intended to be a technology neutral, risk informed framework that could provide an alternative to the traditional 10 C.F.R. Parts 50/52 route for advanced reactors. A few months later, NRC staff was directed to publish a final rule by October 2024. In furtherance of this goal, the NRC posted a request for comment so stakeholders can provide input to the proposed rule language that will be developed on an ongoing basis.
  • New guidance for non-light water reactor technologies: In June 2020, the NRC issued a new approach to licensing non-light water reactor (non-LWR) technologies using a “technology-inclusive, risk-informed, and performance-based methodology.” The new guidance is applicable to entities applying for approvals under 10 CFR Part 50 and 10 CFR Part 52.
  • NuScale Power small module reactor: After a safety evaluation report, the NRC approved the first small modular reactor design in August 2020, which boasts a 12-module design with each module producing 50 megawatts of electricity. NuScale plans to apply for a 60 megawatt version of the design in 2022 as well.
  • Submission of Oklo application: In April 2020, Oklo Inc. submitted a first of its kind application for a combined license to construct and operate a non-LWR. The design utilizes a fission battery capable of producing 1.5 MW of electrical power and operates without the use of cooling water or the need for constant refueling.

Department of Energy

Likewise, the Department of Energy (DOE) Office of Nuclear Energy and other cross-sectional offices made the most of 2020 to provide incentives for nuclear innovation and a platform for nuclear technology to be utilized across industries.

  • Advanced Reactor Demonstration Program: The DOE launched the Advanced Reactor Demonstration Program (ARDP), which provides funding partnership opportunities for industry stakeholders looking to demonstrate advanced nuclear reactors. With an initial budget of $230 million, the DOE has already funded various projects through this program. In October 2020 it awarded $80 million each to X-energy and TerraPower for advanced nuclear reactor demonstration. In December 2020 it awarded five teams $30 million for Risk Reduction Future Demonstration projects. It also awarded $20 million to three teams to help companies in the initial phases of advanced reactor designs.
  • Hydrogen in Nuclear: In October 2020 DOE announced two funding opportunities under its ARDP program related to hydrogen production. One award of over $13 million was granted to Xcel to integrate dual projects within the regular operations of a light-water reactor nuclear power plant. One aim for the project is to develop a “fully-functional hydrogen plant” that can function as a hybrid system to test electrolysis technologies. The second reward of $12.5 million was granted to FuelCell Energy Inc. for a project that will “demonstrate how nuclear-hydrogen production operations can help nuclear plants diversify and increase their profitability.”
  • Versatile Test Reactor Project: In September 2020, DOE approved the next step in the process of developing and building the Versatile Test Reactor (VTR) project. The VTR will allow testing of advanced fuel designs for fast neutron reactors and other advanced nuclear technologies. This step, known as Critical Decision 1, evaluated among other things the design, costs and potential alternatives for the project. The next step in the process will be preparing an Environmental Impact Statement.
  • Nuclear Propulsion Technology: NASA and DOE signed a memorandum of understanding (MOU) to solidify its partnership for space exploration and on the concept of using nuclear power in space by way of nuclear propulsion systems. This MOU followed a February 2020 Executive Order that added the Secretary of Energy to the membership list for the National Space Council.
  • Mars 2020 Perseverance Rover: The rover is equipped with a DOE Multi-Mission Radioisotope Thermoelectric Generator fueled by plutonium-238 produced in the U.S. It launched in July 2020 from the Kennedy Space Center to locate signs of life and collect rock samples.
  • Uranium Reserve: In April 2020, the DOE published the Restoring America’s Competitive Energy Advantage report, which prioritized establishing a uranium reserve to “restore the viability of the entire front-end of the nuclear fuel cycle.” The report facilitates a plan for the direct purchase of uranium from U.S. mines and a reserve to limit dependence on imported uranium.
  • Accident Tolerant Fuel (ATF) Program: The year ended with the first commercially operated Accident Tolerant Fuel samples being delivered to Oak Ridge National Laboratory (ORNL) in December. The ORNL will test the samples that completed a 24-month fuel cycle at a nuclear plant in Georgia for data that could lead to greater future fuel performance.

Congress

Finally, Congress took two important steps with bipartisan support to ensuring a strong future for nuclear infrastructure and development.

  • American Nuclear Infrastructure Act of 2020: The American Nuclear Infrastructure Act of 2020 (ANIA) was introduced on November 16, 2020, following a hearing on the discussion draft version of the bill in August, where blog author Amy Roma testified. ANIA contains a number of provisions aimed at streamlining the NRC licensing process and supporting the competitiveness of the U.S. nuclear industry against global competition. Since the bill was pending when the new Congress convened on January 3, 2021, it will need to be reintroduced in the Senate.
  • Energy Act of 2020: The provisions in the pandemic relief and spending bill related to nuclear are housed within the Energy Act of 2020 located in Division Z of the bill. These provisions authorized funding for a wide range of nuclear programs and awards, including fusion energy research and advanced nuclear technology and fuel. For a deeper dive on the nuclear provisions in the bill please visit our previous post.

2020 has been a busy year for your blog authors. In addition to our work, and various working groups on nuclear law and policy, we authored the following:

2020 Blog Posts

2020 Papers Authored

 

On Monday evening, Congress passed a $900B omnibus spending bill, which contains, most importantly, relief measures related to the COVID-19 pandemic, but also various authorizations and appropriations for FY2021, including $1.5 billion for fission and fusion energy programs. Title II of the Energy Act of 2020 (located at “Division Z” of the spending bill) features a variety of programs to support U.S. innovation in fission and fusion, many of which are discussed below.

The bill currently awaits President Trump’s signature. Although President Trump has threatened a veto of the bill, there is a fair chance the provisions discussed below will have traction in Congress. They may survive into future legislation should this bill not make it through the veto process, and we wanted to make sure the community was aware of the current legislative considerations.

Below are some of the major provisions relevant to nuclear fission and fusion:

  • Fusion Energy Research (Sec. 2008):  The legislation provides a total authorization of $996M in FY2021 for Department of Energy (DOE) to establish a research and technology development program aimed at building the scientific and engineering capabilities and knowledge necessary to build a cost competitive fusion power plant and fusion industry in the United States.

Most  notably perhaps, DOE is instructed to create a “milestone-based development program” that would award participants funding to support the R&D to enable construction of new full-scale fusion systems “capable of demonstrating significant improvements” in performance within 10 years of the legislation’s enactment. Projects will be evaluated by their scientific, technical, and business merits through a peer-review process involving the private sector, investment community, and fusion experts. Authorizations for this program are a combined $325M for FY 2021-2025. The fusion industry has long sought a public-private partnership program to support commercialization of new, high-performing fusion concepts.

The legislation also authorizes $50M in FY2021 to support R&D partnerships with universities, the National Labs, and others related to developing alternative and enabling fusion energy concepts, including:

    • Advanced stellarator concepts
    • Non-tokamak confinement configurations operating at low magnetic fields
    • Magnetized target fusion energy concepts
    • High magnetic field approaches facilitated by high temperature super-conductors
    • Liquid metals to address issues associated with fusion plasma interactions with the inner wall of the encasing device
    • Advanced blankets for heat management and fuel breeding
    • Advanced scientific computing activities

In addition, the bill reauthorizes the Innovation Network for Fusion Energy (INFUSE) program with $50M per year for FY2021-2025.  There is also support for R&D for the development of inertial fusion (e.g. ion beam, laser, and pulsed power fusion systems), with $25M allotted in FY2021 out of the total authorization.

ITER Reauthorization: The legislation reaffirms U.S. participation in ITER to the tune of $374M in FY2021 and $281M for each of FY2022-25. Located in southern France, and a collaborative project among several countries, ITER is the world’s largest tokamak, a magnetic fusion device, under construction. In addition to the United States, the other ITER Members are China, the European Union, India, Japan, Korea, and Russia.

  • Advanced Nuclear Reactor Technology (Sec. 2003): DOE is authorized to carry out a program of research, development, demonstration, and commercial application in support of advanced reactors, up to $55M for each of FY2021-25. The program prioritizes designs that are “proliferation resistant” and “passively safe,” and designs that, compared to currently-operating reactors, are: (1) economically competitive, (2) have improved on metrics such as efficiency, cost, environmental impact, resilience, and safety, (3) use proliferation-resistant fuels and have reduced high-level waste per unit of output, and (4) use advanced instrumentation and monitoring systems.

Notably, Congress reauthorized DOE’s Advanced Reactor Demonstration Program (ARDP), which provides for cost-sharing opportunities with industry, with an authorization of $405M for FY2021. DOE recently granted $20M in awards for ARDP’s ARC-20 program to propel advanced reactor designs, building on nearly $200M in funding support for advanced reactor demonstration projects earlier in the year. For information on previous ARDP project awards, please see our previous blog post.

Congress also authorized $60M per year for FY2021-2025 for DOE to develop a program to research advanced fuel cycles, including a variety of options for nuclear fuel storage, use, and disposal. In addition, the legislation authorized $125M for each of FY2021-2025 to create a program for advanced fuel research and commercial application on next-generation light water reactor and advanced reactor fuels.

  • Advanced Nuclear Fuel (Sec. 2001): Congress authorized $31.5M for FY2021 for the DOE to establish a program to support the availability of High-Assay Low-Enriched Uranium (HALEU) for civilian research, development, demonstration, and commercial use.

This program includes developing criticality benchmark data to assist the Nuclear Regulatory Commission in licensing and regulation of special nuclear material (SNM) fuel fabrication and enrichment facilities under 10 CFR Part 70, and certification of transportation packages under 10 CFR Part 71. The Secretary of Energy will also conduct R&D and provide financial assurance to assist commercial entities in designing and licensing canisters and other packages for the transport of HALEU compositions.

The legislation also establishes a consortium of entities across the nuclear fuel cycle, which would partner with DOE to support availability of HALEU by sharing information, making purchases of HALEU, and carrying out demonstration projects. DOE must also conduct biennial surveys of industry regarding HALEU requirements.

Note, these program discussed above had been authorized—but not appropriated—meaning they must rely on future appropriations from Congress to move forward.

The Energy Act of 2020 is an important piece of legislation for the U.S. fission and fusion industry that features federal aid and partnerships, across a range of technologies in different development stages—from fusion R&D to support for eventual demonstration and commercialization of facilities.

For additional information on this bill please reach out to blog authors.

On December 7, the Nuclear Regulatory Commission (NRC) published a Proposed Evaluation Policy Statement (the “Proposed Policy Statement”) that seeks public comment regarding the NRC’s use of evidence for many non-adjudicatory agency actions such as licensing, oversight, rulemaking, and others.

The Proposed Policy Statement is driven by a statutory mandate from the 2018 Foundations for Evidence-Based Policymaking Act, which aims to improve government evidence-collection activities and ensure that agency actions have an adequate technical basis. The Proposed Policy Statement is intended to help the NRC navigate through various agency activities using widely-accepted evaluation standards as opposed to potentially subjective, and non-systematic standards. While the Proposed Policy Statement uses relatively generic language, the statement and accompanying comment period nonetheless represent an opportunity to help ensure the NRC makes regulatory decisions based on evidence, and acts in a risk-informed manner (and comments could stress certain areas of interest).  At the same time, the Proposed Policy Statement also needs to avoid creating a bureaucratic layer that impedes a move towards performance-based and flexible regulation and acceptance of innovative technologies.

The NRC is specifically seeking comments that “address the extent to which the Proposed Evaluation Policy Statement will facilitate the agency’s review of new and novel technologies and the agency’s efforts to improve internal performance.” However, stakeholders can submit any comments of relevance.

Comments are due January 7.

For more information, please contact blog authors.

We want to raise to our readers that one of the blog authors, Amy Roma, in her personal capacity spoke out in support for the American Nuclear Infrastructure Act (ANIA) in the latest Atlantic Council blog post, entitled The American Nuclear Infrastructure Act provides bipartisan support for nuclear innovation in the United States.

The ANIA is currently pending before the full Senate.

Today U.S. Senators John Barrasso (R-WY), Sheldon Whitehouse (D-RI), Mike Crapo (R-ID), and Cory Booker (D-NJ) introduced the American Nuclear Infrastructure Act (ANIA) 2020.  The provisions of ANIA are intended to help ensure that the U.S. is competitive with countries like Russia and China on nuclear technology advancement and project development abroad. Among other things, the bill empowers American agencies with jurisdiction over nuclear power, addresses the revitalization of the existing nuclear fleet, and removes barriers so advanced nuclear technology can flourish. For additional details on the bill, please read our previous blog post.

This bill is a result of hard work and persistent efforts on the part of the Senators involved as well as various Senate staff, stakeholders, and industry experts. The Senate Committee on Environment and Public Works (EPW) held a hearing on the discussion draft bill in August, during which blog author Amy Roma testified in support of the legislation’s provisions supporting nuclear innovation. Her testimony relied on and referenced several policy papers that the blog authors have written, including the following:

In her testimony, Amy discussed the current state of traditional nuclear reactors, and potential regulatory considerations for advanced nuclear. Her testimony praised ANIA for providing support for the development of nuclear technology as a source of clean, carbon-free power. It also underscored the importance of U.S. leadership on the international nuclear arena.

For more information, please contact the blog authors.