While the new energy bill won’t lower oil prices anytime soon, it will promote construction of nuclear power plants.
The bill’s 20-year extension of federal Price-Anderson Act liability protection in case of accidents will lead to construction of nuclear plants before the end of the decade, President Bush said. A new plant has not been commissioned in more than 30 years, largely due to local opposition to reactors, fears resulting from the Three Mile Island nuclear plant accident in 1979 and the possibility of regulatory delays and litigation.
The new law, however, gives the nuclear industry government money if litigation or regulatory issues delay a plant’s construction. Nuclear plant operators will still have to buy accident insurance, but the entire industry will share the burden if claims are filed, and the bill limits the total amount of liability.
The bill also encourages investments in clean coal technology, wind turbines and lower-pollution coal plants. It provides $14.5 billion in energy tax breaks through 2015, including $2.6 billion for the oil and gas industries.
Congress approved the bill July 29, and President Bush signed it into law Aug. 8 at Sandia National Laboratory in Albuquerque, N.M.
“The bill mandates or subsidizes a variety of energy types – it remains to be seen how many projects will actually go ahead,” said Ken Simonson, chief economist for the Associated General Contractors of America.”
According to the Engineering News-Record, Louisiana, Mississippi and New York have already put in requests for new construction. The Tennessee Valley Authority is still deciding.
“The history of energy subsidies is that they vary greatly in how effective they are in promoting new plants, since swings in the price of competing fuels can swamp the value of a subsidy,” Simonson said.
Environmentalists and bill sponsors are still debating whether it will lower fuel prices and ease the nation’s dependence on other countries for oil.
“It is not a perfect bill,” said Rep. John Dingell, D-Mich., the main crafter of the bill. “But it is a solid beginning to developing an energy strategy for the 21st century.”
The bill calls for doubling the use of corn-produced ethanol in gasoline to 7.5 billion gallons a year by 2012. Sponsors said it would improve the nation’s electricity grid and foster energy conservation as well as production.
About $1.3 billion in tax breaks are set aside for conservation and efficiency programs, including credits for buying hybrid gas-electric vehicles.
A Senate provision that would have required finding ways to reduce U.S. oil demand by 1 million barrels a year by 2025 was abandoned because of strong opposition from House Republicans and the Bush administration, according to CNN.