Romney plan ditching federal subsidies for swift project reviews sparks industry debate

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Republican presidential nominee Mitt Romney seems to offer an implicit tradeoff to the renewable and nuclear energy sectors whose prospects are closely tied to federal policy.

The former Massachusetts governor calls for the elimination of financial aid while also proposing to speed up regulatory reviews that can delay construction of new reactors, wind turbines or solar arrays.

 

But some question the fairness of that approach.

 

While sidestepping the issue of financial support, Romney is calling for easing regulation of energy development on public lands, by reforming environmental rules, setting deadlines for regulatory reviews and limiting activists’ ability to sue to block projects that will apply to all sources of energy.

 

“Overregulation, permitting delays, endless reviews, and senseless litigation interfere with all forms of energy production, from oil and gas drilling to nuclear and coal power generation to the construction of wind farms and solar plants,” the Romney plan says.

 

But streamlining regulations and reviews for new reactors, windmills, solar plants and other projects won’t address the larger challenges facing the industry, analysts and lobbyists say.

On the nuclear front, Romney wants to “revitalize” the industry by equipping the Nuclear Regulatory Commission to approve and license new reactor designs on approved sites within two years. It currently takes about a decade to get a new reactor approved, according to industry sources.

 

In his 2010 book, “No Apology: The Case for American Greatness,” Romney complains that NRC’s lengthy review of new projects is “cumbersome and restrictive” and stifles innovation and drives up prices at home while reactors are moving forward in countries like China and France.

 

The federal government’s insistence on “interminable permitting, regulatory and legal delays” is what makes plants economically infeasible here, he said, and regulations should be retooled to focus on nuclear safety rather than giving anti-nuclear activists tools to block new construction.

 

“Update the regulations and nuclear will take off,” Romney wrote.

 

But Rob Walther, a senior policy adviser with Third Way, said Romney’s plan fails to acknowledge what is really thwarting the construction of new plants — competition from a surge of cheap natural gas, upfront capital costs and a crawling recovery for power demand. The industry, he said, needs a financial jump-start.

 

“[Romney] says ‘revitalize’ nuclear power, but this plan won’t cut it,” Walther said. “It takes capital to build out nuclear and unfortunately, nowhere in the energy plan, not in one place, does Romney say he supports loan guarantees, subsidies, grants or anything else that will help the nuclear industry access the money it needs from the government or private capital markets.”

A wind industry lobbyist seconded that sentiment.

 

“We welcome that [streamlining of regulatory reviews], but I don’t think that makes up for the loss of a tax credit,” said the lobbyist, who requested anonymity because he was not authorized to speak publicly. “If natural gas remains low next year, it probably wouldn’t make renewables cost-competitive just because we have streamlined siting.”

 

But not everyone believes the energy sector should receive federal cash.

 

Jack Spencer, a fellow at the conservative Heritage Foundation, said Romney’s plan would allow consumers and producers to decide what technologies survive in the market and streamline regulations, instead of subsidizing industry.

 

“I would argue that subsidies, whether for renewables or nuclear or anything, [are] bad for the long-term prospects of any technology,” Spencer said. “It’s better to address the underlying problems and allow technology’s real value to determine its success in the marketplace.”

 

(Greenwire, Sept. 5, 2012)