To: ASME Energy Committee From: Robert Rains, Government Relations Representative Subject: Energy Policy Report Update Date: April 1, 2011

Transcription

1 Government Relations 1828 L Street NW, Suite 906 Washington, DC tel fax U.S.A. To: ASME Energy Committee From: Robert Rains, Government Relations Representative Subject: Energy Policy Report Update Date: April 1, 2011 After Japanese Disasters, NRC Chairman is getting to know Capitol Hill The Nuclear Regulatory Commission (NRC) has ordered a review of the safety measures put in place following the 9/11 Terrorist Attacks and to determine if a similar series of disasters, an earthquake, and then a Tsunami, would have a similar effect on the nation s nuclear power plants. This was ordered by President Obama, in part, because the U.S. does not currently have a long-term nuclear repository, and instead stores spent fuel rods on site in dry cask storage as well as in spent fuel pools short-term, up-to five or even seven years. Another closely watched issue is the blackout rule, whereby if the power on the reactor is knocked out, how powerful, and how long, can a backup source of power, likely batteries, last. Finally, the issue of a safe distance for an evacuation for citizens will be examined. 1 The current NRC regulations place this at 10-miles, but Chairman Jaczko has urged the Japanese to evacuate up-to 50 miles. NRC Chairman Gregory B. Jaczko has been recently thrust into the spotlight by Congress as the nation watches the Japanese try to contain spent fuel rods for six nuclear reactors and prevent a meltdown. Chairman Jaczko was in Japan with a team of NRC engineers last week, and returned to Washington for a second meeting of the NRC earlier this week, and to testify before the Senate Appropriations Energy and Water Development Subcommittee on Wednesday. Similarly, Department of Energy Acting Assistant Secretary Pete Lyons has testified before both the Energy and Natural Resources Committee as well as the Appropriations Committee this week. At a recent House Energy and Commerce hearing, Rep. Joe Barton (R-TX) grilled Energy Secretary Steven Chu about the Administration s support for additional reactors, forcing Secretary Chu to whittle his answer down to a yes before moving on with his questions for the secretary. Rep. Bobby L. Rush (D-IL) also reiterated his support for nuclear energy. Chairman Jaczko testified before the Energy and Commerce Committee about The NRC s Severe Accident Program where the NRC predicts the safety of nuclear reactor infrastructure. 2 Chairman Jaczko tried to explain to the Committee that his agency did not require reactors to be designed to meet an earthquake of a certain magnitude, but rather the likely ground-shaking 1 REGULATION: NRC outlines its post-fukushima scrutiny of U.S. nuclear power plants (03/30/2011) 2 Nuclear Regulatory Commission (NRC) Chair Gregory Jaczko Procedures at U.S. plants soon under review Underway/ /

2 motion at their locations. He demonstrated by filling a glass half full of water and thumping his hand on the table to make the water move. Sen. Lieberman Calls for the Brakes to be Applied on Nuclear Construction One voice that has called for a halt to any new reactor construction is Independent Sen. Joseph Lieberman (CT). He spoke to Bob Schieffer of CBS recently, in part, to call on the nation to reassess its nuclear safety and policies. 3 Although Sen. Lieberman was careful to say that he did not advocate that the nation stop building nuclear power plants, he did use the phrase put the brakes on building them until safety could be upgraded to better ensure that the facilities could withstand earthquakes on the scale that Japan experienced. Sen. Lieberman currently chairs the Homeland Security and Governmental Affairs Committee. He is not seeking reelection in 2012 and plans to retire from the Senate. Rep. Markey calls for halting construction of new nuclear and implementation of nuclear pill law Another lawmaker who has been active in the aftermath of this disaster is Rep. Edward Markey (D-MA). Rep. Markey has already written a letter to President Obama requesting clarity regarding the agency response if there were a nuclear crisis on the scale of Japan. 4 Rep. Markey has also called for a moratorium on all new reactors that could be placed in seismically active areas until a top-to-bottom review of design resiliency, emergency response, backup power to prevent a meltdown during long electricity outages, and evacuation plans has been conducted. Rep. Markey has also demanded a safety review of the 31 reactors in the United States that are the same design as those currently experiencing major failure in Japan. Rep. Markey wants the Nuclear Regulatory Commission to delay or suspend a pending approval of the design for the AP 1000 nuclear reactor. 5 Finally, Rep. Markey has called upon the NRC and the Obama Administration to follow the provisions of the nuclear emergency pill provision, a bill that was passed into law in 2002 but has never been implemented. This law directs the government to supply U.S. citizens within 20 miles of a nuclear power facility with radiation emergency pills that can protect the public from radioactive iodine. 6 The NRC is an independent federal agency. The NRC and the Federal Emergency Management Agency (FEMA) are the two Federal agencies responsible for evaluating emergency preparedness at and around nuclear power plants. The NRC is responsible for assessing the adequacy of onsite emergency plans developed by the utility, while FEMA is responsible for assessing the adequacy of offsite emergency planning. The NRC relies on FEMA s findings in determining that there is reasonable assurance that adequate protective measures can and will be taken in the event of a radiological emergency. 7 3 Lieberman: U.S. must reassess nuclear safety March 13, 2011: Markey: Who s In Charge If Nuclear Disaster Hits America? 6 March 14, 2011: Markey Calls on Obama Admin. to Implement Nuclear Emergency Pill Law 7 Consideration of Potassium Iodide in Emergency Planning

3 Sen. Boxer Suggests NRC Consider Shutting Down Older Nuclear Power Plants This hearing took place on the heels of a report issued by the Union of Concerned Scientists that categorized the NRC s enforcement of safety rules as not timely, consistent, or effective. The report also cited 14 near-misses at domestic plants last year. In these events, a combination of broken or impaired safety equipment and poor worker training typically led operators of nuclear plants down a pathway toward potentially catastrophic outcomes, the study said. 8 Senate Environment and Public Works Committee recently, Chairwoman Barbara Boxer (D-CA) suggested to Chairman Jaczko that the NRC consider shutting down some older plants until more is known about the shortcomings of the reactors in Japan and the dimensions of the crisis. 9 Sen. Boxer also pointed out that both of California's nuclear facilities, in San Onofre and at Diablo Canyon, are located on the ocean and near earthquake faults. 10 Sen. Boxer also seemed particularly concerned that the NRC could not successfully predict what level of disaster, or attack, the reactors could withstand after it was noted that this was not required data by the NRC. Both California Senators have penned a letter to Chairman Jaczko that states, in part: to conduct a comprehensive investigation of all nuclear facilities in the United States to assess their capacity to withstand catastrophic natural or man-made disasters including scenarios that may be considered remote like the recent events in Japan. These domestic nuclear reactors must be fully evaluated to ensure that they are as safe and resilient as possible, that worst case scenarios are examined and addressed, and that personnel training and equipment for emergency responses are in place and up-to-date. Special and immediate attention should be given to those U.S. nuclear reactors that share similar characteristics as the failing reactors in Japan, including similar designs or located near a coastline or seismic fault line. 11 Next Steps for the NRC: 90-Day Review of All Plants At an NRC hearing this week, the NRC received updates from the NRC stakeholders regarding the nuclear meltdown in Japan and any possible effects it could have on the U.S. The N.R.C. approved a plan to conduct a 90-day study of the significance of the Japanese events for American reactors, Chairman Jaczko, said, with updates after 30 and 60 days. The "quick-look" 90-day review of the country's nuclear power plants will help the NRC determine if immediate changes in emergency preparedness are needed in the wake of Japan's ongoing nuclear crisis. A second, long-term safety review will be conducted after U.S. officials know the outcome at the Fukushima Daiichi plant, where workers have been struggling to cool overheating reactors and spent fuel in the aftermath of a 9.0-magnitude earthquake and tsunami on March 11. The 8 Democrats step up pressure on nuclear regulators over disaster preparedness 9 Nuclear Agency Tells a Concerned Congress That U.S. Industry Remains Safe 10 Congress discusses U.S. nuclear plant safety 11 Senators call on NRC to vouch for safety of U.S. nuclear plants

4 country's 104 nuclear plants are safe, Bill Borchardt, the NRC's executive director for operations, told the commission Monday at its meeting in Rockland, Md. 12 To date, the NRC has sent 11 staff members to Tokyo, where they are helping American Embassy officials to understand what is happening and, as commissioners put it, interacting with their counterparts at the Japanese nuclear safety agency and executives at Tokyo Electric Power Company. 13 Chairman Jaczko said last week that there were no plans to send the N.R.C. staff members to Fukushima itself, where Japanese engineers are working to keep spent fuel rods cooled in order to prevent a meltdown. The Department of Energy has dispatched two experts to Japan in order to advise on reactors and provide other technical feedback. Commission officials said that two more N.R.C. groups would travel to Japan this week. Many in and around Capitol Hill believe that after the dust settles in Japan, Chairman Jaczko may seek tighter safety restrictions on the existing fleet of nuclear power plants, particularly spent fuel storage. At one time, Chairman Jaczko was a staff person for Senate Majority Leader Harry Reid (D-NV), and a legislative aide to Rep. Edward Markey as well. There are about 100 similar storage pools at about 60 sites in the U.S., said Robert Alvarez, a senior scholar at the Institute for Policy Studies and a former policy adviser to the U.S. Energy Department. 14 Administration Seeks Roll Back of Oil Imports and Stumps for Clean Energy Standard (CES) President Obama gave a speech recently at Georgetown University on energy in light of the recent flurry of activity examining the nation s fleet of nuclear power plants; the President assured nuclear advocates that he still supports nuclear energy, while also assuring energyindependence sirens that he hears their cries as well. President Obama has introduced a bevy of policies designed to seek to reduce oil imports by about a third by The speech was timed to coincide with a report issued by the Department of the Interior that concluded that more than two-thirds of active offshore leases in the Gulf of Mexico and more than half of onshore leases on federal lands are neither producing nor under active exploration by oil and gas companies. 15 Oil and gas advocates have countered that the moratorium on offshore drilling prevented companies from conducting exploration. President Obama, in addition to announcing that the entire federal vehicle fleet will be switched to hybrid vehicles, also reiterated his Administration s support for the Advanced Research Projects Agency-Energy (ARPA-E) program Two state nuclear plants to get 'quick look' by NRC 13 No Urgent Changes Seen for U.S. Nuclear Plants 14 Jaczko s Call on Fukushima Radiation Plucks U.S. Regulator From Obscurity 15 ENERGY POLICY: Obama urges expanded U.S. energy production, expresses confidence in nuclear (03/30/2011) 16 FACT SHEET: America s Energy Security

5 That report was panned by industry groups that blame the Obama administration for slowing down the myriad activities -- including mapping, testing and building infrastructure -- that must take place before oil or gas can be produced on a federal lease. Predictably, response from the Republican Party from the Senate was skeptical. 17 Senate Energy and Natural Resources Working on CES bill Meanwhile, Sen. Jeff Bingaman (D-NM) is using the traditional bipartisan relationship he has enjoyed within the Energy and Natural Resources Committee to advance a clean energy standard that would seek to implement the President s goal of 80 percent clean energy sources by 2035 and that would also provide a capstone to a storied career in energy policy development for the departing Senator. 18 Readers will recall that the Senate Energy and Natural Resources Committee successfully advanced the Clean Energy Leadership Act (CELA) in 2009 on a bipartisan vote, but were unsuccessful in bringing the bill to the floor of the Senate for a vote. Bipartisanship is back, for ending Ethanol Subsidies In the backdrop of a budget deficit of historic proportions, and with a reinvigorated spirit for identifying and eliminating (some) forms of waste within the federal government, a discussion that began with the stroke of President Bush s pen in signing the Energy Policy Act (P.L ) in 2005 and continued until now about the virtues of the ethanol blenders tax credit and tariff for imported ethanol has crept back into discussions related to energy policy. The blenders tax credit costs the federal government about $6 billion per year. Midwestern lawmakers wholeheartedly support, and protect the credit because of the proliferation of biofuels plants throughout this part of the country. 19 Sen. Tom Coburn (R-OK), nicknamed Dr. No for his disinclination to support legislation that he views as unnecessary, recently introduced an amendment to small business legislation being considered in the Senate that would seek to do away with the credit. He is joined by Sen. Ben Cardin (D-MD) in this effort. 20 In a March 27 opinion piece in the Washington Examiner, Coburn described the subsidy as nothing more than corporate welfare not-so-cleverly disguised as a tax break. 21 Sen. Sen. Chuck Grassley (R-IA) traditionally a big supporter for ethanol due to his state s resource advantage has indicated that he will fight to defeat the amendment should it be brought to the floor of the chamber for a vote. 22 Recently, a letter was circulated by Sen. Dianne Feinstein (D-CA), and John Kyl (R-AZ). The 15 co-signers included John McCain (R-AZ), and Sen. Coburn. Joining them were also Senate 17 Obama Urges Reduction in Oil Imports html?pos=adp 18 ENERGY POLICY: Bingaman optimistic about CES despite limited time for Senate action (03/30/2011) 19 Corn Belt Senators Defend Ethanol Subsidies 20 Senators Coburn, Cardin Introduce Bill to Eliminate Ethanol Subsidy 21 Conservatives for corporate welfare? 22 Ethanol Subsidy May Split Senate Republicans Split-Senate-Republicans html

6 Environment and Public Works Committee Chair Barbara Boxer (D-CA) and Jack Reed (D- R.I.). In part, the letter reads: The data overwhelmingly demonstrate that the costs of the current ethanol subsidy and tariff far outweigh the benefits. According to a July 2010 study by the Congressional Budget Office, ethanol tax credits cost taxpayers $1.78 for each gallon of gasoline consumption reduced, and $750 for each metric ton of carbon dioxide equivalent emissions reduced. The Center for Agricultural and Rural Development at Iowa State University recently estimated that a one-year extension of the ethanol subsidy and tariff would lead to only 427 additional direct domestic jobs at a cost of almost $6 billion, or roughly $14 million of taxpayer money per job. 23 Federal policies currently provide for a tariff of 54 cents a gallon on ethanol imports and a subsidy of 45 cents a gallon for blending ethanol into gasoline. Federal law mandates that oil companies use 12 billion gallons of renewable fuels such as ethanol in this year, rising to 15 billion gallons by As a result, Treasury will pay out at least $31 billion to refiners over the next five years if the blending subsidy is renewed. Under the provisions contained in the Energy Independence and Security Act (P.L ), the ethanol mandate will rise to 36 billion gallons per year by In November 2010, Agriculture Secretary and former Governor of Iowa Tom Vilsack called for an extension of the credit, arguing that it will forestall job losses for an industry that was hard hit during the recession. 25 In the meantime, the Administration is doing what they can for the industry, too, including several new Obama administration initiatives intended to boost biofuels production, including a plan to provide matching federal funds for 10,000 pumps and storage systems that can handle higher amounts of biofuels blended in gasoline over the next five years. 26 Last year, the House Ways and Means Committee was looking at a reduced two-year extension for the credit at 36 cents per gallon. The departure of some long-standing advocates for this credit, such as Rep. Stephanie Herseth-Sandlin (D-SD), Rep. Earl Pomeroy (D-ND), and Sen. Blanche Lincoln (D-AK) made the industry nervous about the extension. 27 A quick tally of the membership within the House now suggests that Sen. Coburn s amendment could have a sympathetic audience; although passage would be far from certain given that this issue breaks on regional lines. Pew Center Says U.S. Takes a Back Seat to China, Germany in Energy Technology China spent $54.4 billion last year on clean energy technology research. The U.S. came in third 23 Senators Feinstein, Kyl Lead Bipartisan Letter Calling for Ethanol Tariffs and Subsidies to Expire 24 End Ethanol Subsidies, Senators Say 25 Vilsack urges continuation of biodiesel, ethanol tax credits 26 Vilsack calls for 'fiscally responsible' ethanol tax credit extension wire/ vilsack-calls-for-financially-responsible-ethanol-tax-credit-extension 27 Biofuels May Struggle in Lame-Duck Congress, Stallman Says 04/biofuels-may-struggle-in-lame-duck-congress-stallman-says.html

7 to Germany s $41 billion, with $34 billion total. 28 In federal research, the U.S. spends about $5 billion per year. It isn t all doom and gloom, however, as the U.S. still enjoys an advantage as the top country for venture capital. Still it echoes a growing sentiment that the Chinese are outpacing the West in energy technology development. Former California Governor Arnold Schwarzenegger has used this opportunity to again promote a bipartisan solution for energy research, which he believes will create new jobs and industries U.S. Falls Further Behind in clean-energy projects, report says 29 Energy Ideas Democrats and Republicans Agree On