Policy: Environment & Energy

Former U.S. trade representative talks nuclear

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Climate Change,EPA,PennAve,Energy and Environment,Zack Colman,Nuclear Power,Greenhouse Gases,Trans-Pacific Partnership,Trade

Until the beginning of 2013, Ron Kirk was the United States' chief salesman abroad as the U.S. Trade Representative, which takes the lead on trade negotiations and exports. Nowadays, he's promoting nuclear power, with an eye toward drumming up domestic support while looking at overseas opportunities.

He is now co-chairman of the CASEnergy Coalition, a group of environmental organizations, medical professionals, academics and industry groups that promote nuclear power as a way to provide bulk electricity and address climate change.

Kirk is making the rounds in Washington following the Environmental Protection Agency's proposed rule for power plant emissions, which gave states with nuclear power a 6-percent credit toward meeting individual carbon-reduction goals by 2030. The move was designed to prevent nuclear reactors, which produce zero carbon emissions and account for 20 percent of U.S. electricity, from shutting down because of gloomy financial prospects.

Kirk, the Democratic former Dallas mayor, said the credit ultimately could incentivize growth in large, next-generation reactors as well as small modular reactors that are still about a decade away from potential commercialization.

"I think the practical applicability of it would be large-scale reactor," Kirk told the Washington Examiner. "But, in the future, if we can deploy a smaller reactor that can go in a rural community or can be deployed more easily in, you know, other kinds of emerging economies that don't have a sophisticated grid system for delivering that, that's going to have great applicability as well."

The conversation touched on a variety of other topics, including environmental provisions in the ongoing negotiations on the Trans-Pacific Partnership free-trade agreement with Asian nations, the role of exports for the U.S. clean energy industry, and energy and environmental commitments the Obama administration has struck through trade deals. Here are some excerpts:

Washington Examiner: Are there states in the United States that you believe are ripe for more nuclear?

Certainly you would look at an area, the region around the Tennessee Valley Authority that disproportionately benefits from nuclear. I think that this could be a really powerful tool for them that sort of further validates the decision they've made to bring what will be the first new nuclear reactor into operation and maybe get them to look at that investment even more. I would hope [the EPA proposed rule] would get some other states that haven't deployed nuclear, or maybe where you've had particularly industries that have been under competitive pressure that were thinking about maybe decommissioning those to maybe revisit that consideration given these twin factors that are going on now.

Examiner: Did the way that the EPA proposed rule was structured surprise you in any way?

The part of me that has been a mayor and has been in the administration, frankly, I was very impressed with the thought and care that, frankly, the EPA put into this. Now, I'm not here as a defender or spokesperson for the administration. And believe me, in my past life as a mayor I've joined the Mayors Conference and others screaming at the EPA. But a lot of people I think are pleasantly surprised at how muted some of the opposition [has been].

Examiner: Do you see any more federal role for [supporting nuclear power]?

We are basically devolving into a nation of city-states. Because the practical reality — and I think it's a horrible reality — is that people just don't expect this Congress to be able to make decisions to address anything. ... Even though I could sit here and make a compelling case why we ought to put more in the loan guarantees or the production tax credits, I don't know that there's anyone in Washington who would look at you and believe that's going to come out of Congress. So I think you're going to see the debate shift more to what states can do, and even their regulatory structures — particularly on rates and what can be baked into the systems.

Examiner: And that's exactly the question. If you're devolving to the states, especially for this [proposed EPA] rule, then you're going to be talking about utilities talking to utility commissioners. And no doubt utilities will be able to pass a lot of what they need to do to meet this rule off into the rate structure. But, when you're talking about big baseload generation, this is multi-billions of dollars that you're talking about. Is that a feasible option in the near term?

If you believe it's important — that's a question you have to confront. Now, the other thing is, OK, how can you reduce that from $15 billion to maybe $10 billion? And that's why I say I think it's still got to be a holistic approach of not just saying OK the answer is let's bake it into the rate structure and put it all in.

If you can look at everything from lessons learned from transitioning from a dual permitting process to a singular permitting process, to post-Fukushima changes we've made in safety, and put all of that into a more streamlined process that says, you know what, we know know enough now — these are the most regulated, inspected, safely designed, constructed facilities in the world. If you can contract whatever the construction period is from seven years, 10 years to build one to three, what does that do to your cost?

Examiner: Now, when you were [U.S. Trade Representative], as far as energy issues, when you would go on missions, when you would go talk to other countries, what energy technologies were the most talked about?

We don't get credit for it, but the year that we hosted [Asia-Pacific Economic Cooperation], the Asia-Pacific economic summit out in Hawaii I think in 2011 ... one of the things we proposed was a sort of voluntary tariff reduction on what we called environmentally -- on certain environmental goods and services. And we got 21 countries to sign off on that and we are now in the process of developing that list. ...

All of us are cognizant of the fact that no matter what economic model you look at, all of the projections are centered around the BRICS -- Brazil, Russia, India, China and South Africa. And sort of hand-in-hand with that conversation is how are they going to build the energy infrastructure to fuel their growth over the next half century? And how do they do it in a way that's compatible with the goals that the leaders of the G-20 and others are trying to do on the environment? And in all those, I think it's a much more open environment to the discussion of the role nuclear can play in. ...

I would make the argument that one of the ways we address the big cost factor you're talking about for producing nuclear here is if they have the certainty that they can go and compete for the — there's about 72 reactors planned or currently on the books around the world, some estimate that number could go as high as 300 to 350. If we can capture a quarter of that, all of that relieves to some degrees some of the cost pressures on the industry for what they construct and design here. Because then you're amortizing all of that cost, all of that infrastructure, over a broader market.

Examiner: Is having the strongest possible climate change and environmental safeguards in these [Trans-Pacific Partnership] trade negotiations we're talking about — we've seen some leaks out of the TPP — is that a key driver for nuclear trade?

We didn't have an environmental or a labor chapter in NAFTA. Now we wouldn't do a trade agreement that doesn't have the strongest labor, environmental, intellectual property rights. These are living, breathing documents, and we've learned. ... That has been a central element of every trade agreement we've negotiated over the last 10 to 15 years, and that's a good thing. But, the difficulty, and people have to understand that in many cases, particularly on the environmental provisions, we're always the demander. And it is typically us against everybody else. But the good thing is we're at least seeking to elevate, raise the bar, raise the level of awareness. We're in this to raise the level of environmental standards to the highest level we can.

Examiner: But this deal, if you're not demanding the strongest standards, if they don't get baked in, this has a very large potential for — I mean, you have China looking to get into it, and at some point they could.

To our credit, I would say if you look at the totality of everything we've done, and again, I don't know where the landing point is going to be on the environmental chapter in TPP — I would assure you there are going to be environmental groups that say, "Oh my God, the U.S. caved in yet again" — it'll be better than if we had gotten nothing at all. But you have to look at that and match that against, again, also what the administration is doing with the 21 members of APEC on the environmental goods and services provision that does cover China and others.

Examiner: So aside from China, which obviously has an interest in nuclear, what are some of the other hotspots abroad for nuclear?

I think -- and we don't know how it will play out -- it will be fascinating to me to see where we end up in the Ukraine, in Europe, post Ukraine-Russia a year from now, in particular. I know Germany's made a decision post-Fukushima to decommission I think half of their reactors. But you've already seen the cost of electricity in Germany go up, you've had businesses concerned about how they're going to replace and, given the tension and the inherent unease about their dependence on Russia -- it will be curious for me to see if other countries so quickly abandon nuclear, or if you have countries that double down on it in the way France has done.

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