'Boxer also opened possibility of replacing gas tax with a carbon tax at the source as part of a broader tax reform. The 18.4 cent gas tax is a kind of mini carbon tax, but the last time it was raised was in Clinton admin. Boxer, along with both parties in Congress, has refused to raise gas tax despite an urgent need for highway funds because the gas tax is extremely unpopular. 'There may be a way to do away with the gas tax at the pump if we do a carbon tax,' Boxer said.

Boxer: '...and Congress' main task is to stay out of its way'

Prof. Roger Pielke Jr. translates Boxer's meaning: 'We want no part of that issue, sucker'

'The decision on final approval now rests with the Obama administration. The State Department is expected to decide within the next several months whether to permit the project to go forward -- Heineman's approval puts Obama in a difficult political spot'

'By bringing in God, he's attempting to reframe the issue as one that transcends not only partisanship but the divide between those who believe in science and those who doubt science but believe in God. Left or right, atheist or creationist—either way, Obama is saying, we've got to do something'

Put a final period on the end of 'No Keystone Pipeline' -- 'Accelerate the expansion of clean, safe renewable energy' -- 'Make carbon unaffordable' -- 'Save the Arctic' -- 'Support communities most impacted by climate change'

The 137th edition of the Carnival of Nuclear Energy Bloggers is out. This one, hosted by The Hiroshima Syndrome Blog celebrates the 2013 New Year with stories on a variety of topics.

Stop by and check it out!

Happy New Year!

John Wheeler
This Week in Nuclear

Podcast Episode 115 - Download the mp3 file

 Play the Podcast

My first reaction was “Wow! Did I just read that correctly?!”

It was one of those “ah-ha moments” when a seemingly mundane statement leapt out of the page and whacked me on the forehead.  This time the catalyst was a twitter reply from Chris Pragman (@ChrisPragman) who describes himself as an “Avid Podcast listener, Engineer, Nuclear Power, Fire Protection, and beer geek with a long commute!”

You see, I had posted a tweet earlier in the day about the cost to taxpayers of some “green energy” jobs.  There’s a new wind farm in Oregon called Shepherds Flat that received federal cash grants totaling $490 million under the guise of job creation.  For that grand sum the Shepherds Flat project will create 35 new jobs.  The math is easy; $14 million per “green energy” job. Our tax dollars at work!

This tidbit about Shepherds Flat was part of a larger report by the Energy Tribune that among other things compared the relative size of US government subsidies to various energy industries.  The report by Robert Bryce calculated subsidy dollars per unit energy produced and concluded the renewable energy industry receives 6.5 times more federal government subsidies than the nuclear industry, and 12 times more than the oil and gas industry.  That fact really didn’t surprise me considering the billions of dollars in grants, production tax credits, and favorable depreciation rules the government lavishes upon anything branded with the “renewable” label.  Then Chris asked a great question, “What do they consider nuclear subsidies?”

When I dug into that question I learned the Congressional Budget Office is tasked with tracking the amount the government spends subsidizing various industries, and they publish their findings periodically.  There it was on page 3: $900 million in “subsidies” for the “favorable tax treatment of nuclear decommissioning funds.”  Hmmm. What could that be?

You see, every nuclear plant owner is required by federal law to set aside funds to ensure there’ll be enough money to pay for decommissioning the plant when the time comes.  Typically plant operators add to the fund each year and over time the fund grows until it’s used. The NRC monitors each fund and will require plant owners to make additional payments if they think they’re behind.  These funds are essentially forced savings accounts that add to each nuclear plants annual operating expenses.

So what’s the “favorable tax treatment?”  It turns out Title 26 of the United States Internal Revenue Code requires interest or other investment earnings of nuclear plant decommissioning funds to be taxed at “only” 20%.  Maybe I’m alone in this, but being required by law to set up a fund, then being taxed on that fund’s growth hardly fits the definition of a “subsidy!”  Other sources of energy are not required to set up such funds – they carry the potential future costs of dismantling equipment as liabilities on their balance sheets.  In the case of nuclear plants they’re forced to set aside capitol in government mandated and monitored funds, then the government takes 20% of the fund’s earnings.

Anyway, in 2009 the CBO calculated this “favorable tax treatment” to be worth $900 million, and they called that a “subsidy.”  That’s quite a different kind of subsidy from the cash grants, tax credits, and accelerated depreciation enjoyed by the renewable energy industry.  Personally, I have a tough time viewing this as a subsidy at all.

Chris, thanks for asking the question! I learned something new today, and maybe some of you out there did too.

Happy Birthday to This Week in Nuclear!

On Dec 27 This Week in Nuclear will turn seven years old.  I would like to express my heartfelt “thanks” to all of you who have supported and continue to support the blog and podcast!

Happy Holidays!

John Wheeler

This Week in Nuclear

With some time off from my “day job,” I finally had an opportunity to perform a bit of long-overdue maintenance on the TWiN web site. I’ve updated many pages and added a new “Most Popular” feature.

The Most Popular button is at the top of the right side bar and it provides a shortcut to the blog posts that have received the most user attention in the last year. Try it out – you might find an interesting post that you missed the first time around!

Along with some behind-the-scenes tweaks, other noteworthy changes include:

• a new contact form
• updated Podcasting Tips
• eliminated out-of-date pages

Have a great nuclear day!

John

Spain’s electrical supply industry is caught in a decade long death spiral of failed energy policy, over-reliance on imported fuels, and massive debt. Their new taxes on nuclear energy, an attempt to reduce utility debt, are likely to worsen their economy.

Spain imports fuel for about 51 % of their electricity production in the form of coal and natural gas. Payments for these imported commodities contribute to a debilitating trade imbalance. Nuclear energy makes up the lion’s share (47%) of Spain’s domestic energy production. Their eight nuclear energy facilities add tens of thousands of jobs and billions of euros per year to the national economy while reducing the need for imported coal or gas.  At the same time Spain’s nuclear plants provide reliable, predictable energy without greenhouse gas emissions.

The amount of renewable energy generated in Spain has increased considerably over the last several years.  In fact, in 2012 wind energy production exceeded nuclear energy production for brief periods when demand was low, some nuclear plants were out of service, and wind conditions were nearly optimal.  Unfortunately, Spain’s methods of encouraging investment in renewables have contributed to their current financial crises. The Spanish electricity industry is carrying $32 billion of debt, putting serious strain on an already faltering economy.

Spain’s Domestic and Imported Sources of Electricity (2011)

Spain began deregulating their electricity supply system in the late 1990′s.  Their approach was eerily similar to the failed California experiment; they removed price controls to allow power generators to compete among themselves, but they limited rates paid by customers. As wholesale energy prices rose utilities were unable to recover the higher costs through higher rates to customers.  The result was predictable: electric utilities began loosing money on a grand scale.  Since 2005 annual “energy deficits” have been in the billions of euros per year.  With slight-of-hand economics, the Spanish government allowed utilities to “bank” their annual deficits against future earnings.  Unfortunately those future earnings never materialized and deficits ballooned.

A the same time Spain (like California) began a heavily subsidized renewable energy program that included “feed-in tariffs” which guaranteed wind and solar generators above market prices for all of the energy they could produce.  Consequently utilities were forced to buy wind and solar energy at inflated rates, but were not allowed to recover the costs because of those same price controls.  Solar and wind energy investors raked in billions of euros per year while the utility deficit grew even faster.  By some accounts electric utility debt in Spain now stands at $32 billion.

These out-of-whack energy policies cost Spanish workers dearly; for every renewable energy job created more than five existing jobs were lost and unemployment soared to over 20%.  According to the Canada Free Press:

For each megawatt of wind energy installed, 4.27 jobs were lost, and for each megawatt of solar energy installed, 12.7 jobs were lost.

Eventually it became clear the Spanish government would have to act to curtail the exploding debt and rescue the utilities from bankruptcy.  Earlier this year they stopped granting requests for new feed-in tariffs. Beginning in January 2013 they’re implementing a new 6% flat tax on all electricity production.  In addition, they’ve singled out nuclear energy for “special” taxes they are calling a “nuclear waste generation and storage tax.”

Let’s get this straight: Spain’s national energy policies enriched wind and solar energy investors while bankrupting utilities and contributing to massive job losses.  Now they’re calling on nuclear energy operators, their largest source of domestic energy to foot the bill!  Not only is this course of action irrational and unfair, it punishes the domestic energy production and job creation they desperately need and it perpetuates favoritism for expensive renewables that created the problem in the first place.

The first victim has already fallen to the anti-nuclear tax; the Santa María de Garoña nuclear plant is being forced out of business. Garoña is a 446 MW BWR that began commercial operation in 1971. The plant’s owner says the new 153 million euro tax that will go into effect in January is more than ten times the plant’s annual profit.  They have no choice but to shut the plant down for the last time on Sunday, December 23.  Hundreds of jobs will be lost at the plant and in surrounding communities.  Since Garoña provides about 1.4% of Spain’s electricity, utilities will be forced to import more coal and natural gas to make up for lost base load generation.

With lost jobs, lost revenues, and rising energy imports Spain’s energy death spiral continues.

John Wheeler

This Week in Nuclear

Mis oraciones por mis amigos de Garoña. Buena suerte en el Año Nuevo, y le deseo todo lo major.

Last week a group of Buddhist monks joined the protest against San Onofre Nuclear Plant.  The local press made a big show of the spectacle as if the presence of members of a Seattle monastery somehow added stature to the demonstration and validity to their claims.

The monks said they also want to call attention to what they believe are the global dangers of nuclear power.  “We need to shut down the San Onofre,” Gyosen Sawada of Los Angeles, who said he was born in Fukushima, Japan, told the group before beginning a three-hour walk from Dana Point Harbor. “No more Hiroshima. No more Nagasaki. No more Three Mile Island. No more Fukushima. No more San Onofre.”

As is so often the case with anti-nuclear activists, these monks toss all things nuclear into one evil pile; in their minds atomic bombs and nuclear energy facilities are equally vile.  Funny how they avoided mention of CT scans, diagnostic x-rays, and nuclear medicine which account for virtually all of the man-made radiation exposure we receive (even for members of the public around the damaged Fukushima nuclear plant).

I guess they missed the memo from the Dalai Lama who, after the events at the Fukushima Daiichi nuclear plant went on the record in support of nuclear energy. The Tibetan Buddhist leader said he supports nuclear energy as a way to bridge the socioeconomic gap in developing nations and in the absence of more efficient alternative energy sources. That’s a pretty insightful view from a leader who understands the causes of human suffering and the connection between access to energy and poverty.  He also recognizes alternatives like wind and solar energy will be difficult to expand on the scale needed to alleviate global poverty.

We might expect these monks to hold similarly informed views, after all they come from a Japanese Shingon monastery.  This set of Buddhist teachings falls under the Vajranaña school, which also includes Tibetan Buddhism.  On the other hand, one of the monks described himself as a “homey from the projects in New York City.”  Perhaps he’s been more influenced by the misguided energy policies of NY Governor Andy Cuomo than by the teachings of the renown Tibetan spiritual leader.

Activists, medical practitioners and politicians who have demanded moratoriums [on uranium mining] may have various reasons for doing so, but their claims that the public and environment are at risk are fundamentally wrong.

That about sums up the facts on the safety of uranium mining and the validity of motives of those who oppose it.  What’s particularly noteworthy about this statement is its source: Michael Binder, the President of the Canadian Nuclear Safety Commission.  It’s impressive to see this level of leadership from the Canadian equivalent of the US Nuclear Regulatory Commission.

It’s also in stark contrast with the actions of former NRC Chairman Gregory Jaczko who remained silent last year when the US Department of Interior banned uranium mining for 20 years across 4000 square km of Arizona.  Their excuse was “protecting the Grand Canyon,” but the area in question is outside both the Grand Canyon and the buffer zone that protects the park.

It would be great to see new NRC Chairman Allison Macfarlane following Mr. Binder’s lead to dispel the myths around uranium mining and take a first step in overturning the arbitrary ban.