Tear Sheet self-sustaining private industry. Federal participation in meeting this objective has cost the taxpayer an estimated $12.1 billion since 1950. (See p. 12.) While the Federal Government has been active in a large number of nuclear areas, its major support to the commercial nuclear industry has been in the following areas. --Nuclear research, development, and demonstration. --Nuclear regulation to protect the public's --Enriching uranium so that it is usable --Indemnifying powerplant owners and others From its inception, the Atomic Energy Com- The Atomic Energy Commission was solely responsible for regulating the nuclear industry to protect the public's health and safety from 1946 through 1974. The Energy Reorganization Act of 1974 (Public Law iii 93-438) separated nuclear power development and promotional functions from regulatory functions and created the Nuclear Regulatory Commission. Today, the Nuclear Regulatory Commission regulates the design, construction, and operation of all commercial nuclear power plants and plays a major role in regulating all commercial fuel cycle phases except mining and enrichment. This regulatory function has cost $1.2 billion from fiscal years 1960 through 1978. (See p. 14.) Uranium enrichment is a process which helps prepare uranium for use as a nuclear reactor fuel. The Federal Government's three large enrichment facilities--Oak Ridge, Tennessee; Paducah, Kentucky; and Portsmouth, Ohio-represent the major source of free world enriched uranium. Originally these enrichment plants were used to enrich uranium for the Nation's nuclear weapons program. Today, they provide enrichment services mainly to domestic and foreign utilities. (See p. 15.) The Atomic Energy Act of 1954 (Public Law 83-703), as amended, requires the Department of Energy to price its uranium enrichment services to recover all Federal costs over a reasonable period of time. The Federal Government, however, has incurred costs, and provided what could be considered as subsidies, for uranium enrichment that have not yet been repaid by private industry. These costs and apparent subsidies, which totaled $1.2 billion through fiscal year 1978, include --a price difference between the Government's current enriching charge and what it would cost if a commercial enriching facility provided the service and --imputed interest on the Government's investment in uranium feed. (See p. 16.) During fiscal years 1976, 1977, and 1978, quantifiable Federal costs for nuclear power-in addition to those borne by industry-were equal, based on assumptions described Tear Sheet in the report, to 0.51 cents, 0.57 cents, respectively. Federal subsidies in the mining and indemnification areas surely stimulated the nuclear industry but, to our knowledge, no one has attempted to fully quantify these subsidies. (See p. 19.) It is important to note that, while this report addresses only the costs--both apparent and hidden--of nuclear power, other energy sources receive Federal subsidies. Therefore, before one can compare the full cost of nuclear power to other energy sources, such as coal or oil, the full cost of other sources should also be calculated. Such a comparison is beyond the scope of this report. AGENCY COMMENT GAO submitted this report for comment to the Department of Energy and the Nuclear Regulatory Commission. The Department of Energy officials indicated general agreement with the report except where it (1) includes Federal expenditures for the liquid metal fast breeder reactor as a cost of nuclear power and (2) shows the Federal cost of nuclear power in terms of cents per kilowatt-hour. GAO believes that the fast breeder reactor The NRC staff also commented on a draft of this report. Their comments were generally similar to DOE's. Mr. OTTINGER. I want to thank all of you for your help. This is one of those days when I have had to be in at least two places at once. I would like to thank the gentleman from Tennessee for chairing the hearing. We will welcome suggestions either within the framework of the hearings or outside, as to the next steps that we can next profitably take. Mr. Ritter? Mr. RITTER. I would like to thank the panel for their excellent presentations today. I would like to mention that I am on the Domestic Monetary Policy Subcommittee of the Banking Committee that has had responsibility for bringing the solar bank legislation forward. I would like to get some brief comments from you on how you feel about the solar bank. Has this been covered previously in testimony this morning? Mr. ADLER. I talked about it briefly, Mr. Ritter. I testified earlier-I guess it was last month-on behalf of the association for the bill. The association supports the bill with some amendments that we talked about, such as including commercial credits that were not in the original draft of the bill. Mr. RITTER. What is your feeling about the encompassing nature of the solar equipment that is referred to? We are going to have problems in delineating what is eligible in a construction project for these subsidies. I am concerned about how we delineate the interest subsidy, and how we choose among solar equipment. Do you have any ideas along those lines? Mr. ADLER. I think the area of passive is where you are going to have greatest difficulty. Solar active hardware is fairly easy to identify. Mr. RITTER. Where would you draw the line on solar passive? Mr. ADLER. I think that would take a couple of hours for us to sit down and draw up a list. Mr. RITTER. I would like to have your comments as well as those of the Solar Energy Industry Association on solar passive because it is coming now before the Housing Committee of the Banking Committee, which I also serve on. I have one question for Mr. Wilham on the jobs creation. How do you come to your figures on jobs creation in the solar business? Mr. COSEL. The only number we put forth, Mr. Ritter, is that a normal, typical system would require about 30 days of labor to train a sheetmetal worker. We just multiplied it out to get a total number. We did not take into consideration the labor involved in creating the basic units. We looked at it strictly from our point of view. Mr. OTTINGER. I am sorry, Mr. Ritter, we have one of our witnesses who is going to have to leave us. Mr. RITTER. Could I make one final comment on that? Solar is labor intensive; in that sense it does provide for a variety of construction-oriented jobs. I would like to emphasize, however, that it is not a substitute for other forms of energy which may be highly productive in their output; but rather it is a complement to other energy forms. We need every bit of energy that we can get from every possible angle. I think, that for this group, we should understand that while eight people actually work in a central electric powerplant, the actual productivity of energy per individual is providing energy for perhaps thousands of people working in construction jobs, plants, and factories, and in our industries. Mr. OTTINGER. The gentleman will be allowed to revise and extend. Mr. RITTER. Thank you, Mr. Chairman. We are going to a panel that consists of Prof. Duane Chapman, of the Department of Economics, Cornell University; Dr. Thomas B. Johansson, Environmental Studies Program of the University of Lund, Helgonavagen, Sweden; Mr. Herb Epstein of the Solar Lobby; Mr. Herbert Wade of the Missouri State Solar Office; and Dr. John Gibbons, the new director of the Office of Technology Assessment. I want to congratulate him on his new role. Because of his time constraints, we are going to ask Dr. Gibbons to go first. With respect to all of the witnesses, we will put your statements in the record. Dr. Gibbons, it is good to have you with us. We will start off with you. PANEL II-ENERGY SUBSIDIES AND THE GOVERNMENT ROLEPROF. DUANE CHAPMAN, DEPARTMENT OF ECONOMICS, CORNELL UNIVERSITY; DR. THOMAS B. JOHANSSON, ENVIRONMENTAL STUDIES PROGRAM, UNIVERSITY OF LUND, HELGONAVAGEN, SWEDEN; HERB EPSTEIN, SOLAR LOBBY; HERBERT WADE, MISSOURI STATE SOLAR OFFICE; AND DR. JOHN GIBBONS, DIRECTOR, OFFICE OF TECHNOLOGY ASSESSMENT, ACCOMPANIED BY HENRY KELLY, ASSISANT DIRECTOR, OFFICE OF TECHNOLOGY ASSESSMENT [The biography and prepared statement of Dr. Gibbons follow:] |