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Thursday, December 31, 2009

Nuclear Energy Policy

Mark Holt
Specialist in Energy Policy


Nuclear energy issues facing Congress include federal incentives for new commercial reactors, radioactive waste management policy, research and development priorities, power plant safety and regulation, nuclear weapons proliferation, and security against terrorist attacks.

Significant incentives for new commercial reactors were included in the Energy Policy Act of 2005 (EPACT05, P.L. 109-58). These include production tax credits, loan guarantees, insurance against regulatory delays, and extension of the Price-Anderson Act nuclear liability system. Together with higher fossil fuel prices and the possibility of greenhouse gas controls, the federal incentives for nuclear power have helped spur renewed interest by utilities and other potential reactor developers. Plans for as many as 31 reactor license applications have been announced, although it is unclear how many of those projects will move forward.

The EPACT05 Title XVII loan guarantees, administered by the Department of Energy (DOE), are widely considered crucial by the nuclear industry to obtain financing for new reactors. However, opponents contend that nuclear loan guarantees would provide an unjustifiable subsidy to a mature industry and shift investment away from environmentally preferable energy technologies. The total amount of loan guarantees to be provided to nuclear power projects has been a continuing congressional issue. Nuclear power plants are currently allocated $18.5 billion in loan guarantees, enough for two or three reactors.

DOE’s nuclear energy research and development program includes advanced reactors, fuel cycle technology and facilities, and infrastructure support. The FY2010 Energy and Water Development Appropriations Act (P.L. 111-8) provides $786.6 million for those activities, $10 million above the Obama Administration request and about $5 million below the FY2009 level.

Disposal of highly radioactive waste has been one of the most controversial aspects of nuclear power. The Nuclear Waste Policy Act of 1982 (P.L. 97-425), as amended in 1987, requires DOE to conduct a detailed physical characterization of Yucca Mountain in Nevada as a permanent underground repository for high-level waste. DOE submitted a license application for the Yucca Mountain repository to the Nuclear Regulatory Commission (NRC) on June 3, 2008, with the repository to open by 2020 at the earliest.

The Obama Administration has decided to “terminate the Yucca Mountain program while developing nuclear waste disposal alternatives,” according to the DOE FY2010 budget justification. Alternatives to Yucca Mountain are to be evaluated by a “blue ribbon” panel of experts convened by the Administration.

The FY2010 budget request of $198.6 million for DOE’s Office of Civilian Radioactive Waste Management provides only enough funding to continue the Yucca Mountain licensing process and to evaluate alternative policies, according to DOE. The request is about $90 million below the FY2009 funding level, which was nearly $100 million below the FY2008 level. All work related solely to preparing for construction and operation of the Yucca Mountain repository is being halted, according to the DOE budget justification. The FY2010 Energy and Water Development Appropriations Act includes the requested cuts in the waste program and provides $5 million for the blue ribbon panel. A draft of the DOE FY2011 budget request indicates that Yucca Mountain licensing is to be halted by the end of 2010.

Date of Report: December 10, 2009
Number of Pages: 28
Order Number: RL33558
Price: $29.95
Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.

Wednesday, December 30, 2009

Liquefied Natural Gas (LNG) Import Terminals: Siting, Safety and Regulation

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Adam Vann
Legislative Attorney

Liquefied natural gas (LNG) is a hazardous fuel shipped in large tankers to U.S. ports from overseas. While LNG has historically made up a small part of U.S. natural gas supplies, rising price volatility, and the possibility of domestic shortages have significantly increased LNG demand. To meet this demand, energy companies have proposed new LNG import terminals throughout the coastal United States. Many of these terminals would be built onshore near populated areas.

The Federal Energy Regulatory Commission (FERC) grants federal approval for the siting of new onshore LNG facilities under the Natural Gas Act of 1938 and the Energy Policy Act of 2005 (P.L. 109-58). This approval process incorporates minimum safety standards for LNG established by the Department of Transportation. Although LNG has had a record of relative safety for the last 45 years, and no LNG tanker or land-based facility has been attacked by terrorists, proposals for new LNG terminal facilities have generated considerable public concern. Some community groups and governments officials fear that LNG terminals may expose nearby residents to unacceptable hazards. Ongoing public concern about LNG safety has focused congressional
attention on the exclusivity of FERC’s LNG siting authority, proposals for a regional LNG siting process, the lack of “remote” siting requirements in FERC regulations, state permitting requirements under the Clean Water Act and the Coastal Zone Management Act, terrorism attractiveness of LNG, the adequacy of Coast Guard security resources, and other issues.

LNG terminals directly affect the safety of communities in the states and congressional districts where they are sited, and may influence energy costs nationwide. Faced with an uncertain national need for greater LNG imports and persistent public concerns about LNG hazards, some
in Congress have proposed changes to safety provisions in federal LNG siting regulation. Legislation proposed in the 110th Congress addressed Coast Guard LNG resources, FERC’s exclusive siting authority, state concurrence of federal LNG siting decisions, and agency coordination under the Coastal Zone Management Act, among other proposals. Provisions in the Coast Guard Authorization Act of 2010 (H.R. 3619), passed by the House on October 23, 2009, would require additional waterway suitability notification requirements in LNG siting reviews by FERC (Sec. 1117). The Maritime Hazardous Cargo Security Act (S. 1385), introduced by Senator Lautenberg and three co-sponsors on June 25, 2009, would require a national study to identify measures to improve the security of maritime transportation of liquefied natural gas (Sec. 6).

If Congress concludes that new LNG terminals as currently regulated will pose an unacceptable risk to public safety, Congress may consider additional LNG safety-related legislation, or may exercise its oversight authority in other ways to influence LNG terminal siting approval. Alternatively, Congress may consider other changes in U.S. energy policy legislation to reduce the nation’s demand for natural gas or increase supplies of North American natural gas and, thus, the need for new LNG infrastructure.

Date of Report: December 14, 2009
Number of Pages: 29
Order Number: RL32205
Price: $29.95
Document available electronically as a pdf file or in paper form.
To order, e-mail congress@pennyhill.com or call us at 301-253-0881.