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Bowmanspeech041508

Legislative Conference of the
Building and Construction Trades Department

Admiral Frank L. (Skip) Bowman, USN (Retired)
President and Chief Executive Officer
Nuclear Energy Institute

The Resurgence of Nuclear Power

Washington DC, April 15, 2008


Thank you, President Ayers for your kind introduction and thank you especially for our friendship.  Thank you, Sean McGarvey and all 13 Presidents of the unions affiliated with the Building Trades for inviting me today.  I am proud and honored to speak at this historic conference.

I join you in celebrating the 100th Anniversary of the AFL-CIO Building and Construction Trades Department.  What a great record and what a grand achievement! 

There has been a strong relationship between the Building Trades and the nuclear industry at the worksites.  But today that relationship is particularly strong and trusting. 

President Ayers and these men behind me are the reason why.  In particular, when it comes to our cooperation on Capitol Hill, we are a damn tough team.  Let me mention one recent example: the nuclear industry’s strong and public support for Davis-Bacon federal prevailing wage protections.

Last year on June 15, I was asked if the nuclear industry would support Davis-Bacon for new reactor plants financed under the Title XVII loan guarantee program.  I took it to the NEI Executive Committee, the leaders of the nuclear industry, who voted UNANIMOUSLY to endorse this Davis-Bacon application. 

This is the letter I sent to the most powerful members of Congress.  We have made this Davis-Bacon fight one of our highest legislative priorities. 

I want to talk to you today about the future of the nuclear industry in the United States and how we can work together to build nuclear plants, fuel our economy, and grow new jobs.
 
I strongly believe that the great strength of this country’s energy portfolio is its diversity of energy sources.  Coal, natural gas, hydroelectric, nuclear, wind and solar — each energy source has its advantages, and its corresponding uses, in our electricity generation system.  Taken together, they complement one another.  I know we must have all of them.

I believe we must work really hard at our homes and work places to become more efficient and to conserve energy like never before in our lifetimes.  I believe we must put on line as much wind and solar power as we can.

But clean nuclear energy is a responsible partner with these energy sources, with renewables, with advanced coal, and even with plug-in hybrid cars.  All of these are part of an energy supply portfolio that will be needed to meet growing energy needs and a growing U.S. economy.

Today there is renewed confidence in the nuclear industry.  The nuclear industry is moving smartly toward construction of the first new nuclear power plants in the United States in several decades.

2007 Performance

My focus today is on the future, but let me brag a bit about nuclear power’s performance last year.

I can sum up last year in a word.  It was outstanding — three records!  The 104 commercial reactors operating in 31 states provided an all-time record high electricity production.  U.S. nuclear plants generated 20% of U.S. electricity last year with only 10% of installed capacity. 

Nuclear plants also achieved a record-setting average capacity factor — a standard measure of a power plant’s availability.  The 2007 industry average was 92 %.  This performance reflected excellence in plant management and operations, and management of outages.  By the way, industry outage maintenance performance depends to a large extent on you, the Building Trades — we did it together!

High, efficient output drives economic performance.  Nuclear electricity production cost last year was 1.68 cents per kilowatt-hour — a record low, cheaper than coal and one-quarter the cost of natural gas.  And nuclear’s production costs are stable and not subject to fluctuations like the natural gas or oil markets.
 
Finally, while setting these records, nuclear energy is our country’s only large-scale electricity source capable of producing electricity around the clock while emitting no air pollutants or greenhouse gases during production.  Nuclear plants, in fact, avoid carbon dioxide emissions equivalent annually to the carbon dioxide emissions from virtually all passenger cars in the United States.

And without nuclear energy in the electricity generation mix, volatility in natural gas prices would be even worse.  Using nuclear energy for electricity production makes natural gas more available to those industries like petrochemical and fertilizer production that use gas as a feedstock.  High and volatile natural gas prices have already driven 300,000 U.S. jobs in these industries overseas.  This is economic suicide and it must stop!

New Nuclear Plants: Progress and Expectations

The performance of our operating plants gives us a solid platform to launch the next build cycle.  Let me tell you the plans.

Seventeen companies are preparing license applications for as many as 31 new nuclear reactors.  Nine applications for 15 construction licenses have already been filed with the NRC since October 2007.  This year another seven to 11 license applications are expected.

We look for a “first wave” of four to eight new plants in commercial operation by around 2016. 

If those first plants are working to schedule, within budget estimates, and without licensing difficulties, a second wave could be well under construction as the first wave reaches commercial operation. Optimistically, we could see 20 or more new plants in operation by 2020.

The exact number will, of course, depend on many factors — but one thing’s for sure: we can’t build new plants in most states unless Congress and the Administration deliver a workable loan guarantee program.  That same program that we support Davis-Bacon wages for.  That means Congress must provide loan guarantees that make sense for the cost of these new nuclear plants.
 
What does building a new nuclear plant mean to us in this room?  Well, each new construction will generate thousands and thousands of high paying jobs for several years.  Peak employment during construction could be as many as 3000 jobs or even 4000 jobs depending on man-hours per week, overtime, and other factors.  Those of you in this room represent the kind of workers we want and need.  Thirty new plants could mean a lot of jobs — as many as 100,000 jobs!

And it’s not just about these construction jobs.  Operating a nuclear plant calls for 400 to 700 permanent jobs for three generations of workers.  These are high paying jobs with great pension and healthcare benefits that cannot be sent offshore.  Each plant creates an equal number of additional jobs in the surrounding community, providing goods and services necessary to support that workforce.  And supplemental labor for outages requires over 20 million man-hours of union labor per year.

Building new nuclear plants will also create jobs in the nuclear manufacturing sector, as companies gear up to meet growing demand for the equipment, components and commodities that go into a nuclear plant. 

On top of this, each year, the average nuclear plant generates approximately $430 million in sales of goods and services in the local community and nearly $40 million in total labor income.

And then there’s total state and local tax revenue of almost $20 million from every plant to benefit schools, roads, and other state and local infrastructure — more jobs.  And annual tax payments of roughly $75 million are paid to the federal government.

So you get the picture … jobs, jobs, jobs … income to the community … lower taxes for us … and lots of electricity and clean air.  That’s us — you and me. 

I suspect some in this room could tell us first hand about the recent construction and operational experience on a five year, $1.8 billion project at the Browns Ferry 1 plant in northern Alabama.  That project demonstrated that the nuclear industry can complete projects as complex as building a new plant on budget and on schedule.  And this was a project completed by a union workforce.  Browns Ferry resumed commercial operation in May 2007, on schedule and only five percent over the original budget estimate, a signal achievement during a period of rapidly escalating commodity costs.  So don’t let people tell you we aren’t ready and can’t execute to schedule and cost.
 
Challenges

Browns Ferry 1 demonstrated what we can achieve working together.  And we must continue to work together if we hope to deliver on the nuclear renaissance.

Most Americans support nuclear power.  Many of our political leaders — including Senate and House members that you will see this week — recognize that nuclear power must be on the table.

But as you make the rounds on Capitol Hill, you will find some who cling to myths about nuclear power.  Some of these are the ones who learned about nuclear power from Jane Fonda and her movie, “The China Syndrome.” 

I spent 38 years in the military and I expect to deal with facts, so I have some difficulty with folks in this town and around the country who traffic in lies and misinformation.

I mentioned earlier how important the loan guarantee program is, how we cannot finance the next plants without financing support from the federal government, and likely from state governments as well.  You’ll run into people who will tell you that loan guarantees are a subsidy.  That’s nonsense.  There is no taxpayer money involved.  The industry pays all the costs associated with loan guarantees.  If workers like you can build these new plants on time — and I’m confident you can and will — then none of these projects will default and nuclear loan guarantees will not cost taxpayers one dime!

Loan guarantees will ensure the cost of a new power plant is competitive with other forms of power generation and will reduce the cost of electricity to the consumer!

The federal government manages a $1.1 trillion loan guarantee portfolio that has benefited affordable housing, student loans, transportation infrastructure, exports of American-made goods, and other national needs.  I put new electricity generation in the same category of things like these that we really need and need more of.  Again, tell these people that the law requires the companies building new nuclear power plants to pay all of the costs associated with the loan guarantees.  No taxpayer dollars.

 
You’ll run into Congressmen who’ll tell you that they’d like to support nuclear power but they’re concerned about safety.  Tell them we’ve created operating practices and oversight institutions that ensure the highest standards and allow us to achieve the performance I mentioned earlier.  Tell them about the records we set in 2007 in production, cost and efficiency — that couldn’t happen if we were unsafe and having to shutdown often.

Tell them our reactors are designed to withstand earthquakes, tornadoes, hurricanes, floods, tsunami, without loss of capability to perform safety functions.  Tell them about the dedicated, talented, and professional workforce that operates and maintains the plants.  Tell them about the comprehensive and rigorous training.  Remind them that we have an independent regulator in the Nuclear Regulatory Commission, with the power to impose fines for lapses in performance and to shut down operations on the spot.  Tell them NRC conducts a minimum of 2000 man-hours of inspections each year.

As you work the Hill, you’ll run into people who tell you that nuclear power is great – except for the used nuclear fuel.  They’ll try to scare you with stories about how much there is.  You can tell them they don’t know what they’re talking about. 

Consider this: if all of your individual electricity needs for a 70-year lifetime were supplied by nuclear generation, your 70 years of nuclear waste would weigh two pounds and fit into a coke can.  In fact, all of the commercial used fuel in storage today from all the nuclear plants that have ever operated in America would cover one football field seven yards deep.  That’s it — a trivial volume of material.

You can tell them that used nuclear fuel is easy to manage.  It’s a solid material encased in steel alloy rods, stored in water-filled steel vaults or concrete and steel containers and effectively monitored and managed by the individual nuclear plant sites.

They’ll try to tell you we don’t know what we’re going to do with this used fuel.  That’s another myth.  We do have a plan.  In fact, we have two of them.  One plan is Yucca Mountain and the other is to defer Yucca Mountain until we develop recycling methods.

And finally, you can tell them that America needs the jobs necessary to operate and maintain our existing plants and build, operate and maintain new nuclear plants.  And tell them that American labor is doing its part.  Your joint labor/management apprenticeship and training programs are exactly what the nuclear industry needs!  Your Helmets to Hardhats and Wounded Warriors programs are growing the skilled workers we need.  Keep these initiatives going!

So here’s what everybody here can do to help.  We must build these nuclear plants.  We can’t let old prejudices stop what’s right for the country.  We can’t allow people to get away with lies and misstatements and half-truths.  Dispel the “myths” to your brothers and sisters, your neighbors and Congress. 

Today ask Congress to support loan guarantees and Davis-Bacon’s application to them.  To build new nuclear plants, we must win this fight.  Tell them you don’t agree with turning America’s lights off and exporting American construction and manufacturing jobs.  Tell them we are safe and set three records last year.  Tell them to learn the facts about used fuel.

Tell them nuclear power is the only proven technology available on a large scale to provide baseload electricity, 24/7, with zero air emissions.  Tell them if we are going to be environmentally responsible, for my grandkids and your grandkids, and  produce the baseload electricity required to drive modern economic growth, nuclear power has to be a part of the future energy portfolio of the United States and the world.

Thank you again for inviting me here today.