President Obama’s fiscal year 2012 budget outlines a plan for reviving the country’s nuclear power industry, calling for $36 billion in government-backed loan guarantees for new nuclear reactors and setting aside more than $800 million for nuclear energy research.
Obama has said that nuclear power is a key component of the country’s energy future. In his State of the Union speech last month, he outlined a plan to generate 80 percent of the country’s electricity from low-carbon sources including nuclear by 2035.
But the prospect of reviving a U.S. nuclear energy industry faces significant obstacles. The country has not seen the completion of a new nuclear reactor for decades and projects have been hobbled by high costs. Nuclear energy also has its fair share of opponents, who cite concerns about cost and safety.
Republicans, for their part, have put a so-called “nuclear renaissance” in the United States at the top of their agenda, outlining plans to streamline regulatory oversight at the Nuclear Regulatory Commission and build a series of scaled-down, “mini-nukes” that would cost less and take less time to build.
Obama’s FY2012 budget request, which was sent to Congress Monday, revives a similar provision in Obama’s fiscal year 2011 budget request that would provide $36 billion in additional loan guarantee authority for nuclear power. This would add to the $18 billion in nuclear loan guarantee authority the Department of Energy already has. The budget also calls for loan guarantees for energy efficiency and renewable energy.
Obama also laid out plans to conduct research on “mini-nukes”. His budget sets aside $853 million for nuclear energy research. A White House fact sheet on the proposal says the research will focus in part on “mini-nukes,” known as small modular reactors.
More broadly, the DOE budget request provides a $29.5 billion for the Department of Energy, a slight increase from the president’s fiscal year 2011 budget request, which was never enacted. The figure represents a 12 percent increase when compared to the budget enacted in 2010. A large portion of the overall DOE budget goes to efforts by the department to secure and clean up nuclear materials and radioactive waste.
The budget request sets aside $5.4 billion for DOE’s Office of Science to conduct clean energy research. This includes $2 billion for basic scientific research, $457 million for solar research and $341 million for biomass research.
The budget also includes $550 million for the Advanced Research Projects Agency-Energy (ARPA-E), which focuses on high-risk, high reward energy research. Obama’s FY2011 budget request, which was never enacted, called for $5.1 billion for DOE’s Office of Science and $300 million for ARPA-E.
The budget, as expected, also outlines specific proposals for reaching Obama’s key clean energy policy goals, including putting 1 million electric vehicles on the road by 2015 and making commercial buildings 20 percent more energy efficient by 2020. The budget calls for a establishing a loan guarantee program for energy retrofits at hospitals and universities. It also calls for establishing a consumer rebate of up to $7,500 for the purchase of new electric vehicles.
But the budget makes significant cuts as well. It calls for eliminating a series of oil and gas industry tax breaks. The Department of Energy estimates that such a repeal will save $3.6 billion in fiscal year 2012 and a total of $46.2 billion during the next decade.
It also calls for cutting $70 million in hydrogen energy research and $418 million, or about 45 percent, of the department’s fossil energy budget.