IB88090
Nuclear Energy Policy
September 01, 2004

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U.S. Department of State

Summary:

Nuclear energy policy issues facing Congress include questions about radioactive waste management, research and development priorities, power plant safety and regulation, terrorism, and the Price-Anderson Act nuclear liability system.

The Bush Administration has stressed the importance of nuclear power in the nation's energy policy. The Administration's FY2005 budget request includes $35 million for a Department of Energy (DOE) effort to develop a new generation of commercial reactors and $9 million for the Nuclear Hydrogen Initiative, a DOE program in which nuclear reactors would produce hydrogen to fuel motor vehicles. Total funding for DOE's Office of Nuclear Energy, Science, and Technology would be $412.6 million, about the same as the FY2004 level. The Housepassed Energy and Water Development Appropriations bill for FY2005 (H.R. 4614, H.Rept. 108-554) would provide $463.8 million for the nuclear energy office.

A conference agreement reached November 17, 2003, on omnibus energy legislation (H.R. 6) would provide tax credits for electricity generated by new nuclear power plants and authorize funding for a demonstration reactor in Idaho to produce hydrogen. The conference agreement also would extend Price-Anderson coverage for new commercial reactors and new DOE nuclear contracts through the end of 2023. The House approved the conference report November 18, 2003, but a Senate filibuster has made the bill's outlook uncertain. The nuclear energy tax credits were excluded from a modified energy bill introduced February 12, 2004 (S. 2095), and the tax provisions of S. 2095 were included in a larger tax bill (S. 1637) passed by the Senate May 11, 2004.

The September 11, 2001, terrorist attacks on the United States raised questions about nuclear power plant security. Reactor security provisions are included in the conference agreement on H.R. 6, as well as in a bill (S. 1043) approved by the Senate Environment and Public Works Committee on May 15, 2003.

Disposal of highly radioactive waste has been one of the most controversial aspects of nuclear power. The Nuclear Waste Policy Act of 1982 (NWPA, P.L. 97-425), as amended in 1987, requires DOE to conduct detailed physical characterization of Yucca Mountain in Nevada as a permanent underground repository for high-level waste. A resolution to allow work at Yucca Mountain to proceed despite state objections was signed by the President on July 23, 2002 (P.L. 107-200).

DOE received $580 million for the waste program for FY2004, and the Administration is requesting $880 million for the program for FY2005, a 50% increase. The Administration also is proposing that $749 million of the FY2005 request be offset by an existing fee on nuclear power, so that the net appropriation would be only $131 million. Because legislation to enact the proposed offset has not been passed, the House voted to provide only the requested $131 million net appropriation for FY2005.

Whether progress on nuclear waste disposal and other congressional action will revive the U.S. nuclear power industry's growth will depend primarily on economic considerations. Natural gas- and coal-fired power plants currently are favored over nuclear reactors for new generating capacity. However, some electric utilities are seeking approval of sites for possible new reactors.