How did the 1970s energy crisis impact the commercial nuclear industry?

by 0nlydans_

Researching for a story about a lobbyist for private atomic industries beginning on Earth Day and ending around Three Mile Island.

Any examples you can provide pertaining to specific companies/products/services would be incredible. I know that globally proliferation emerged in a big way but I’m trying to focus on industries in the domestic US.

Also whatever resources you might suggest is welcome.

Thank you kindly for your input

restricteddata

This is a super interesting question and the answer is longer and more complicated than one might intuitively suspect.

For the domestic US nuclear power industry, there were two "peaks" of plant construction, one centered on 1968, and another centered on 1974. This particular graph just shows actual constructions begun, and not orders or purchases, which were even higher. Not all of that is because of the energy crisis (the OPEC embargo was not until October 1973); some of it was driven by technological improvements (the reactors were getting more standardized, and increasing in electrical output, which made them seem like better long-term investments), some of it was driven by environmental concerns (air pollution was becoming a much more visible issue and that made it a bigger public policy concern), some of it was driven by economic projections about the increasing demand for electricity (which, when paired with environmental concerns, favored nuclear both for its lack of effluent output and its relatively small footprint per plant per megawatt). By early 1973 (again, before OPEC!), the Atomic Energy Commission was projecting that there would be around 1,000 nuclear plants in the US by the year 2000. There was a real feeling in the nuclear industry that it was the way of the future and that fossil fuels would eventually be non-competitive (despite the fact that 85% of the US energy production was produced by fossil fuels at that time).

So that's the situation pre-OPEC embargo. The OPEC embargo led to some high-level attempts to encourage nuclear power. Nixon started "Project Independence" in November 1973, which was meant to encourage US energy independence, which could mean a lot of policies (including investment in domestic fossil fuel acquisition), but it also meant expanding nuclear power.

However, the net effect of the energy crisis ended up being to damage the domestic nuclear industry. For one thing, the utilities that ran nuclear power had most of their investments in fossil fuels as well, and took a big hit as a result of the costs of operation going up. They found themselves stretched too thin for the high-capital costs (mostly up-front costs) that nuclear power required, and needed a faster return on investment than nuclear provides (nuclear power plants must be run for decades to turn a real profit). Additionally, the rising inflation rate meant that capitalizing these projects got suddenly much more expensive than it had before. The demand for electricity also declined due to higher unemployment, reducing their perceived need for more plants. So of 191 new nuclear projects under development in 1974, 131 of them were deferred or cancelled by the end of 1975. New orders dropped dramatically (between 1975 and 1978, only 11 new plants were ordered).

At the same time (the early-to-mid-1970s), the anti-nuclear movement, which had been pretty obscure and fringe previously, began to be more mainstreamed. There were serious concerns being raised nationally that the nuclear industry was not well-regulated and had serious potential issues with both waste disposal and plant accidents. Prior to this, all nuclear promotion, development, and regulation had been done by the same agency (the Atomic Energy Commission), but it was rapidly becoming a consensus viewpoint that the same agency could not both promote and regulate an industry. In the wake of the energy crisis, led to the Atomic Energy Commission being split into two agencies in 1974: the Energy Research and Development Administration (ERDA) and the Nuclear Regulatory Commission.

All of which is to say, one might assume that this all was going to work out in favor of nuclear power, but as the initial graph makes clear, by 1978 the industry was pretty much in a slump. There were still many plants in development, but no new orders were coming in, for the first time since 1961. It's possible that, as economic winds shifted, they might have reinvigorated the industry... but in 1979, the Three Mile Island accident happened, and that led both the public, the politicians, and the electrical utilities to take a sharp turn from nuclear, on the perception that it was too risky, both in terms of accident and long-term profit. I emphasize the latter because there is a predilection, especially in geeky places like Reddit, to attribute all of the decline of nuclear power to anti-nuclear sentiments. But the reality is that it is a complicated mix of political and economic forces that led to this situation, and that in an industry where profit is the primary motive for investment, the economics ultimately play the biggest role. But it is not just as simple as convincing people that they are wrong in their ideas about nuclear power; you have to convince the utilities that they are good investments!

Of course, the economics and political and the public are interlinked. One of the consequences of Three Mile Island was increased regulatory scrutiny, increased public scrutiny, and increased legal challenges to nuclear power plant construction and operation. As a result, of the 53 nuclear power plants that were ordered before Three Mile Island that weren't cancelled outright, the time to operation got ridiculously long. If you were a utility, looking at this graph, you would not come away thinking that this was a smart investment, especially as fossil fuel prices dropped dramatically over the next few decades.

Anyway — I hope this is useful. Much of this is drawn from J. Samuel Walker's excellent book, Three Mile Island: A Nuclear Crisis in Historical Perspective (University of California Press, 2004), esp. chapter 1. Walker's book is one of my favorite resources because it is extremely even-handed and clear-eyed about both the issues with the nuclear power industry and the accident; it doesn't fall victim either to being an anti-nuclear polemic or a pro-nuclear screed. Highly recommended. The data from my graphs comes from the Nuclear Regulatory Commission (I pulled them from slides I use when I teach on the history of nuclear power).

Separately, for your own purposes, if you want ready-made resources on what a nuclear lobbyist at any given time might have thought and said, a few of the main trade journals at the time were Nucleonics, Nucleonics Week, and Nuclear Industry. I don't know of any place off the top of my head where you can easily find back issues of these online (Nucleonics Week is in Factiva, but only from 1985 forward), but depending on where you are located, there may be library copies.