Capital markets are reluctant to invest in nuclear energy projects in the US primarily due to regulatory uncertainty, which increases project completion risk and makes nuclear investments more risky compared to other energy investments; this reluctance can be addressed through streamlined environmental reviews, clearer regulatory standards, and reduced litigation, which would signal to investors that nuclear projects have commensurate impacts with other industrial sites and would benefit from right-sized regulatory processes.
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Cynthia Lummis Asks Nuclear Expert: Are Energy Markets 'Reluctant' To Engage In Nuclear Energy?Added:
I'm [clears throat] going to take the liberty to ask both of you a question.
So, I have a question. I >> [clears throat] >> I don't obey the rules of chairman, and so you'll have to forgive me for being the way I am. Um Senator Kelly and and Dr. White, if a nuclear facility of some sort uh or nuclear-related facility is built on a brown site, does that relieve the initial polluter of liability?
So, >> [clears throat] >> does the liability for cleanup shift entirely to the nuclear facility?
I don't know.
I unfortunately have to say Chairman Lummis, this is a place where I'm but a humble nuclear engineer and not a lawyer, so I'll definitely defer to my colleagues that have a little bit more expertise on the specific legal nuances of liability associated with it.
Okay. Does Do any of our witnesses know the answer?
Chairman Lummis, the liability could or could not be transferred depending on how the mediation plan would be defined.
Oh, okay.
Thank you.
Um and thanks Senator Kelly for your involvement in this topic, and uh I've always enjoyed working with you on this topic. It's a very productive working relationship.
Um and if you choose to come back when your next hearing is completed, we'd love to see you again. While you're gone, I'm going to take the liberty to take more than 5 minutes.
>> [laughter] [clears throat] >> Um again, thanks witnesses for being here.
Uh Mr. Lauras, I'm going to start with you.
Uh one of the goals of the RECHARGE Act discussion draft is to create a strong incentive for private industry to reinvest in retired fossil fuel sites and brownfields instead of leaving those communities behind. In many cases, these communities are already dealing with declining tax bases, stranded infrastructure, and costly cleanup needs. So, how can advanced nuclear development leverage private capital to accelerate site remediation, restore long-term economic activity, and bring new investment into communities that have powered this country for generations?
Well, thank you for the question. Yeah, I think it's critical and there's just given the infrastructure in place, the understanding of what energy means to these communities as well as environmental protection. If you look at, you know, places like Alaska, who very much understand the benefits of energy production as well as environmental protection. A lot of the states in the West and Wyoming. This represents just really critical opportunities to be new hubs of technological growth. And and given the data center demand that we are already seeing, I know there's a lot of skepticism and hesitancy, but the amount of additional revenue that can be generated for tax bases not just from the energy investment itself, but all of the additional investment that comes with it. Loudoun County right outside of here in DC is a tremendous example kind of what that's built because these data centers, while they don't employ a lot of people, they bring in a lot of revenue. And that's almost a sweet spot for a lot of these communities because that that doesn't mean a huge influx of people for the schools, for the roads, but it does mean a lot of investment in the the roads and the schools and all of the businesses. And so, having affordable, reliable, clean energy infrastructure as the kind of driving force for that is really essential. And that's why I think places like Kemmerer, Wyoming, um, and Texas, and other places are are really starting to be and get off the ground for what we can hope to continue to see across the country. Yeah, and it's my experience that the people of Kemmerer, a town that would have dried up, uh, but for uh, TerraPower's uh, involvement in that community, is very supportive of uh, its presence there, and it was very welcoming. And because Wyoming has a history of uranium mining, uh, you don't have some of the same, um, uh, fears of the unknown, because it's a known in Wyoming. And uh, so the reemergence of this new technology is is something that we have a tendency to welcome, especially those of us who are native to Wyoming and have that legacy history, uh, with this industry. So, >> [clears throat] >> Mr. Lorus, um, opponents of permitting reform sometimes argue that additional process automatically produces better environmental outcomes.
But under the RECHARGE framework, we're specifically incentivizing private investment into already disturbed industrial sites and brownfields, instead of pushing development onto undeveloped land.
Um, [snorts] and one of the things I've seen with TerraPower, for example, is their initial permitting process, uh, was completed in 19 months, rather than the projected 27 months, uh, which which I saw as a a an indication that uh, permitting is working.
Uh, but others I think fear that uh, because uh, the time spent on that initial phase of evaluation was shortened, that maybe steps were missed. Um, so how can we assure people that um permitting that is expedited uh can still produce uh a complete, thorough, safe permit process?
Yeah, well, it has to for these projects to have a a a opportunity to move forward. And and you see what companies do um with pre-application processes and as Dr. White mentioned, you know, it's incumbent upon not just industry, but also the permitting process to uh assure the public, to engage communities for sure. Uh we just can't get into a system of kind of analysis paralysis or subject these projects to endless litigation and these kind of litigation doom loops that all uh energy projects of all stripes face. And so, I think that there is a kind of Goldilocks scenario here where yes, you can have uh the public engagement, uh you can ensure that we're not duplicating efforts if there is a reactor technology that's already been uh reviewed by the Department of Energy or the NRC, or there's these brownfield sites that there's opportunities to just make a more efficient process. And and also again, rein in kind of some of this excessive litigation that we've seen.
And sometimes it's just a few bad apples that can upset the cart. And we've seen this again, not just with nuclear, but with energy projects across the board and and even more industrial projects.
One example in New York with a semiconductor fab, this is uh in in more upstate New York had acceptance from the community, uh the public, uh a lot of investment and jobs were coming, but there were six people in the community who didn't want it um resulting in in trying to litigate it out of existence.
And so, yes, we can have more efficient processes and reduce duplication, but we also need processes that allow these projects to move forward once the community accepts them, once the investment is there.
Are there currently overlapping federal reviews and in the case of brownfields remediation processes?
Yes, I I and I think just with the the process generally, I think that's one of the hopes of reforming the National Environmental Policy Act or or NEPA is to reduce some of the redundancies, not just at the federal level, but also with the federal and state level and then not allow for some of the abuses of these laws for litigation. So, looking at kind of what previous analyses have already done, what previous engagements with communities and tribes have already been accomplished, that those are things that we can learn from and we should build upon. So, so we're not doing it over and over again. Well, as we all know, >> [clears throat] >> reforming the way NEPA is implemented transcends so many sectors.
And so, hopefully that can benefit this sector as well.
Again, um Mr. Loris, does codifying a clear rule-making standard provide more certainty for regional manufacturers and fabricators and construction firms than otherwise uh might cause them not to participate in nuclear projects because of that kind of regulatory ambiguity? It does and and Dr. Stein talked about this in his remarks that you know, that the NRC already has the ability for permitting commercial grade concrete, steel, rebar, but based on the NRC's report to Congress after the ADVANCE Act, it does seem like this is complex, it's unclear for both the developers of the power plant, but also for these companies. And so, having the NRC provide just more simplicity and more clarity about what can be done and what can't be done opens up that opportunities for more local manufacturers, construction firms to participate and engage with nuclear companies, not be kind of frozen out thinking that because they're they don't want to go through the you know, the quality assurance checks or or there's a a constrained supply.
If there's more clarity on that, that's going to open up this for more opportunities and that ultimately means more competition, more choice and lower prices.
Thank you. So, you mentioned Dr. Stein and Dr. Stein, I I'm sorry I missed your opening statement, but I I understand that you've noted that the NRC is beginning to adopt right-sized environmental reviews in cases where impacts are limited. So, what would it signal to private capital markets if Congress codified that kind of streamline review for redevelopment on previous energy sites?
It would be a signal that one, the history of building nuclear power projects shows that the impacts are commensurate to other industrial sites and therefore disturbing the same land that has already been disturbed would not increase and may actually leave the site better than found.
It would also signal that the process should be scaled relative to the size. An environmental impact statement, as Mr. Lauris mentioned, does become disrupted by litigation at times, but having an environmental assessment when environmental impact statement is not necessary because the site impacts would be minimal, would also streamline the entire overall process and reduce NRC resources that would be necessary to complete such a study.
Are there capital markets that are reluctant to engage in nuclear projects in the US. Is it is it a problem? Is it hard to get money?
Absolutely.
And is it because it it's nuclear?
It is in part because it's nuclear, yes.
The capital markets understand that the cost for nuclear materials alone because of regulation or because of uh siting costs, because of regulatory uncertainty, all increases the uncertainty of the project being completed. And that puts their capital at risk. That would be more at risk simply due to regulatory risk than it would be to invest in other projects.
Thank you. Um you emphasized that credible nuclear development depends on a credible fuel strategy and reduces exposure to foreign supply chains. The US has long-standing uranium resources in places like Wyoming, yet domestic production is not consistently translated into fuel security. So, uh again, Dr. Stein, from your perspective, what is the missing link between domestic uranium resources and a fully resilient nuclear fuel supply chain?
That's an interesting question. I think there are a few missing links. The first would be a clear, streamlined process for licensing fuel facilities and enrichment facilities and conversion facilities. The standards that we currently have are more restrictive than even licensing for reactors that utilize that those facilities.
Instead of commensurate to the risk of the fuel facility itself. And this is in part because they were last modified many, many years ago with deterministic standards that now need to be reconsidered.
The second is the cost of uranium production in the US is simply much higher than in some other countries where the uranium is easier to get to than in the United States.
And the therefore the market itself exposes the developer to more risk.
But to have national security and energy security, we need to have and prioritize further exploration of uranium production in the US. So we can move away from other countries that put the entire supply chain at risk.
Uh Madam Chairman has arrived and uh I'm going to ask one more question of Dr. Stein.
Uh and I have questions for Dr. White, but I will postpone those so our chair has a chance to ask questions. I have had the wicked indulgence of being having this entire witness panel to myself and so I have asked more I've used more time than that to which I am entitled, but I'm going to take >> [laughter] >> another question with uh Dr. Stein before you before you ask your questions.
>> Okay.
Okay.
Um Dr. Stein in your testimony, you outlined a number of reforms that are already underway with NRC processes and rulemaking. So where do you see the remaining friction points that are sitting outside the agency's control, the NRC's control? And how does today's hearing fit into addressing those constraints?
Thank you for that question.
>> There are several constraints, particularly inside the Atomic Energy Act, that are outside the agency's control and the agency's current responses, even to modernize their own regulations, are confined by what they can accomplish under the act.
One example would be a enrichment facility is required to have an environmental impact statement in the Atomic Energy Act, which is unique and exceptional compared to other industrial or even other nuclear facilities.
The Advisory Committee on Reactor Safeguards is required to review every license application where instead if we had for instance 100 applications under review in a year, that would simply become a bottleneck. Yeah. I believe that the Advisory Committee on Reactor Safeguards is important but should focus on new novel constraints instead of reviewing the 10th or 70th of the exact same license.
Yeah.
I also believe as Senator Kelly mentioned earlier while you were out that we should not necessarily require a hearing for a license where nobody requests a hearing. Mhm. That was a remnant of the transition from the Atomic Energy Commission AEC to the Nuclear Regulatory Commission in the 70s.
It should be reconsidered as well. And there is a definition between a research and test reactor and a commercial or industrial reactor between section 103 and 104 and it is unclear why that the basis used there where that line is is the line in the sand and why research and test reactors under that are subject to only the regulations necessary to protect the health and safety of the public and the environment but commercial and industrial facilities can be required to have regulations far beyond what is necessary to adequately protect the health and safety of the public and the environment.
Uh I want to thank the witnesses and now uh Madam
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