Companies supplying components for the nuclear power industry are located throughout the United States, including a number in Maryland. These manufacturing firms have developed businesses providing components and equipment required for the maintenance and upkeep of the 104 operating reactors in the U.S. Unfortunately for them, the domestic market is expanding at a very low rate. Currently in the U.S., ground has been broken for five new reactors.
These supplying firms would benefit if allowed to participate in the growing international market. However, presently they have difficulty engaging in the growing international market for nuclear power — and part of the problem lies within our own government.
Domestic electricity demand is expected to grow by 28 percent by 2040. Safe, reliable nuclear power can supply electricity more than 90 percent of the time without emitting air pollutants and carbon dioxide, but the economics are challenged. The current low natural gas prices pose obstacles to the viability of nuclear, solar and wind energy.
When gas prices increase, the economics of nuclear power will become more favorable. But that might not happen for quite some time. Until then, what are U.S. nuclear manufacturers to do?
Growth in nuclear plant construction has shifted to fast-growing economies in China, India and the Middle East. Worldwide, 68 nuclear plants are under construction, with the majority of these in Asia. In addition, 150 reactors are planned in countries ranging from Argentina to South Africa. Furthermore, more than 340 additional units are proposed. That is in addition to the world's 435 operating nuclear plants, including the 104 in the United States.
The international market is very large; its size is estimated to be $500 billion to $740 billion over the next decade, according to the U.S. Department of Commerce. If U.S. companies, located in all 50 states, were to get a quarter of that business, it would generate billions of dollars in tax revenues and create or sustain up to 185,000 American jobs, according to the Nuclear Energy Institute.
Unfortunately, there is simply no way for U.S. companies to compete for international business when nuclear suppliers in other countries, principally France, Russia, South Korea and Japan, are able to obtain export licenses in less than a month, because U.S. companies must wait a year or longer to obtain the required export licenses. The competition for nuclear power business is fierce, and these delays put U.S. companies at an overwhelming disadvantage.
U.S. nuclear export licensing procedures can be needlessly difficult. They are increasingly complex, restrictive and time-consuming for companies to navigate. The U.S. process for getting the appropriate export licenses is divided among three departments (State, Commerce and Energy). Furthermore, the Nuclear Regulatory Commission administers four different sets of associated regulations. By contrast, comparable export licensing in most other countries is handled by one agency.
A faster, straightforward licensing process would give American nuclear companies a chance to compete for this rapidly growing international business. It is not too late to make a change, but something needs to be done now. The potential reward (in economic value, job creation and protection, and tax revenue) makes the international nuclear power business too important to U.S. vital interests to neglect.
Dan Ervin is a professor of finance at Salisbury University's Perdue School of Business. His email is firstname.lastname@example.org. This article does not represent the official position or views of Salisbury University.