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Analysis
of Bush Administration’s energy task force report released
on May 17, 2001, by Cena Swisher, Program Director. Taxpayers
for Common Sense
Following
is an analysis of the Administration’s Energy Task Force
Report.
If the recommendations are enacted, this report proposes
more giveaways to
profitable and mature energy industries. For more information,
please call
me at (202) 546-8500 x108.
Please
select a topic from the list below:
Coal
Clean
Coal Technology: The Bush Administration has already made
a new round of Clean Coal Technology projects a priority for
the next ten years. In DOE’s budget highlights for fiscal
year 2002, the Administration requested $150 million for the
program. DOE and Secretary Abraham have also stated the
Administration has a ten year commitment to this program.
The intended
purpose of the program would be to eventually develop and
demonstrate
advanced clean coal technologies for coal-fired power plants.
In 1984,
Congress authorized an up-front appropriation of $2 billion
for the
first Clean Coal Technology Program. The current CCTP encourages
private
companies to develop cleaner burning coal technologies by
providing matching
federal funds (up to 50 percent) for projects designed mainly
for existing
power plants. The problem is that CCTP projects waste millions
of taxpayer
dollars each year on research that has already been done and
that the coal
industry should conduct with private funding. The coal industry
is capable
of supporting its own research and development costs. According
to the
Energy Information Administration, 1.04 billion tons of coal
was consumed in
the U.S. in 1998, while the net income of coal companies in
1998 was $500
million.
The “Clean
Coal “ technology program is fraught with waste, fraud
and
abuse. The General Accounting Office (GAO) has released over
seven studies
documenting the waste and mismanagement within the CCTP. In
fact, a GAO
report from March 2000, found that eight ongoing CCTP projects
“had serious
delays or financial problems.” Two of the eight projects
are in bankruptcy
and are unlikely to be completed, and the other six are seriously
behind
their original completion schedules. The first CCTP is still
authorized to
receive appropriations and the Administration has requested
$82 million for
FY 2002 for the old program. The Administration is proposing
this new round
of Clean Coal projects that will cost taxpayers at least $2
billion over 10
years.
Provide tax breaks for developing clean coal technologies:
These proposals could allow companies that use clean coal
technology to receive tax credits for research and development.
This means that not only will companies participating in the
Clean Coal Technology Program (CCTP) receive the spending
subsidy for developing the clean coal technology, but they
will also receive tax breaks for using the technology -- in
effect, a double subsidy. The Administration supports in this
effort the permanent extension of the R&D tax credit.
(TOP)
Nuclear
Speed
up process to ensure disposal of nuclear waste: Reprocessing
is a vestige of the Clinch River Breeder Reactor killed in
1983, and the Advanced Light Metal Reactor that Congress killed
in 1994. Both were enormously expensive nuclear reactor systems
that would have produced and run on plutonium-based fuel.
The cancellation of both the CRBR and ALMR led to DoE advocating
the technology of reprocessing or Pyroprocessing separately
from these reactor systems as a way to reduce the volume of
nuclear waste. However, Pyroprocessing simply produces different
kinds of nuclear wastes that will not obviate the need for
a nuclear waste repository.
The federal
government has already spent $9 billion to develop breeder
reactors, and spending more taxpayer money on components of
this wasteful
and inefficient technology will not help alleviate our country’s
energy
woes. Furthermore, according to the CRS, the commercial nuclear
power
industry received $66 billion in R&D subsidies from 1948
through 1998, not
including money for the Price-Anderson Act. More taxpayer
money should not
be thrown at an industry that has proven economically inefficient
and
ineffective. In fiscal year 2000, the federal government appropriated
over
$70 million for both nuclear research and development programs,
such as
Nuclear Energy Research Initiative and programs that include
pyroprocessing
activities.
Reauthorize
law that limits industry liability from a nuclear accident:
The Price-Anderson Act was initially passed as an amendment
to the Atomic Energy Act in 1957 after a vice president from
General Electric told Congress that his company and others
would not build nuclear power reactors unless they could be
shielded from full liability in the event of a major nuclear
accident. Since no private insurance companies would insure
the reactors, Congress stepped in by passing the Price Anderson
Act. In 1988, it was modified again and extended for another
15 years. By 2003, President Bush will have to decide whether
to grant another extension.
Price-Anderson
limits the liability of the nuclear power industry in the
event of a nuclear accident. Without this insurance subsidy,
the nuclear power industry would not exist. As of August 1998,
Price-Anderson capped the insurance coverage for any single
nuclear accident at $9.4 billion, which is not sufficient
to pay for human health and property damages that could result
from such an accident. Taxpayers would inevitably have to
make up the difference. In 1999 dollars, the estimated subsidy
for all 110 nuclear power plants operating in 1991 was $3.6
billion. (TOP)
Other Tax Incentives:
Expansion
of Section 29 tax credit for non-conventional fuel source
production: The report recommends that the Administration
work with Congress to expand the Non-conventional fuel source
tax credit to new landfill methane
projects. Currently, Section 29 of the Internal Revenue Code
allows oil and
gas companies to take a production tax credit for fuels produced
from
non-conventional sources. The JCT estimates that this credit
costs
taxpayers approximately $7 billion over five years, and $12
billion over ten
years. Congress has separately proposed to extend the life
of the credit
through 2008 and then phase it out by 2013.
This program
is a remnant of the Carter Administration’s “synfuels”
program,
and was instituted to decrease American dependence on foreign
oil. However,
it has not lead to major increases in alternative fuel production
and has
not helped to decrease our reliance on foreign oil. (TOP)
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