A key agency that isn’t on board with President Trump’s “energy dominance agenda” could hamstring the administration’s efforts to sell more advanced nuclear power plants abroad.
The Overseas Private Investment Corporation, or OPIC, which issues loan guarantees and other funding to help companies cope with the expense of doing business overseas, has avoided changing its policies to promote nuclear exports.
“OPIC works with the nuclear industry to support critical development projects in key countries,” said Laura Allen, a spokeswoman for the agency. “However, OPIC is currently prohibited from financing the production of radioactive material or nuclear reactors.”
Nearly a decade ago, the Obama administration put in place a categorical exclusion on nuclear power plant projects. It did so in accordance with the World Bank’s lending guidelines. In theory, though, the guidance is not part of any law or formal rulemaking and could be reversed as easily as it was implemented.
Nevertheless, the policy against financing nuclear projects will stay in place, Allen said, as OPIC transforms into the much larger International Development Finance Corporation later this year. The Trump administration is aware of this decision but appears to be slow-walking changes so as not to harm the OPIC transition, individuals with knowledge of White House deliberations say. The White House did not respond to requests for comment.
Congress passed legislation at the end of last year, the Better Utilization of Investment Leading to Development, or BUILD, Act, that enacted fundamental changes to OPIC, turning it into the International Development Finance Corporation. The bill places the new corporation under the auspices of the nation’s large international aid agency, the U.S. Agency for International Development. The new combined entity is meant to help the U.S. counter the influence of China and other major rivals in developing countries by assisting in economic development and giving diplomats added “soft power” tools.
Many nuclear advocates are confident the nuclear policy change will be made once the new agency is stood up Oct. 1.
Over $100 billion in exports is at stake, along with thousands of jobs, according to a 2017 report from the Commerce Department on the top markets for the nuclear industry. Increased demand for zero-emission technology will offer even more export opportunities for nuclear plants through 2050. The International Energy Agency estimates countries will need to spend $20 trillion over the next two decades to meet electricity demand.
The smaller size of the U.S. advanced reactors will help outcompete other countries that are only focused on larger plants, which many developing countries’ grids cannot accommodate, according to a recent report from the Atlantic Council.
Trump White House officials want to liberalize the nuclear policy, said Jeremy Harrell, senior policy director at the conservative clean energy group ClearPath, but they have gotten bogged down in trying to implement the agency’s transition. “They want to get it fixed,” he added.
Harrell and many others tracking the nuclear policy change say they are giving the administration time before upping pressure on the White House.
Harrell expects that the person Trump nominates to run the new development corporation will push through the change, a hope shared by others in the industry. “I would be more frantic come October or November and something isn’t moving down the field,” Harrell said.
For now, many in the industry are focused on making sure OPIC meets its Oct. 1 deadline to complete the transition to the new development corporation. A recent progress report sent to congressional authorizing committees indicated that the transition is on schedule, a senior industry official said.
But others in the industry aren’t so patient about eliminating the policy exclusion on nuclear power.
“We don’t think it’s good enough to wait for restructuring. We think it should be eliminated right now,” said David Blee, president and CEO of the U.S. Nuclear Industry Council, a leading business consortium for the nuclear industry that has lobbied OPIC to eliminate the barrier immediately.
Thus far, the response to Blee’s recommendation has been a “deafening silence,” he said.
“I don’t think there is a person in town that thinks this makes sense,” Blee added. “It’s an outdated, outmoded vestige” from the World Bank that is “totally out of step with advanced nuclear.”
The issue went all the way up the chain in the White House and was raised in a meeting between Trump and nuclear utility CEOs in February. Trump directed White House economic adviser Larry Kudlow to oversee the fix, according to individuals privy to the meeting.
However, industry officials present at the meeting say there has been no direct follow-up from the administration. Some of the nuclear companies are having individual follow-up meetings, but there has been nothing to report on impending action.
Blee said his group is getting ready for a renewed push to get the administration and OPIC on board with eliminating the policy ahead of the fall deadline for the new development agency.
“You’re going to be seeing a lot more about this,” he said. “We’re going to keep firing away.”
One possible explanation for the administration’s delay in removing the restriction is the perception that the technology isn’t ready. Despite being hailed as a smarter, safer, and cheaper way to produce nuclear power, many of these small modular reactors are not ready for prime time, said Harrell. Most of them are still making their way through the federal design certification process.
Nevertheless, Ashley Finan, executive director of the Nuclear Innovation Alliance, said that the change in the policy would help advance a “broader government commitment” to competing in the global nuclear energy market.
“I think it is important for the United States to recapture a leadership role in global nuclear energy markets,” said Finan, whose group advocates for advanced nuclear technologies. “We’re making some efforts … but for the most part we’re not present where Russia and China are present.”
