The real bottleneck to nuclear progress in America isn’t a lack of federal financing.
Energy Secretary Chris Wright declared on June 9 that taxpayer-backed loans are the “best way to get shovels in the ground” for new nuclear projects. The soundbite is part of the administration’s campaign to convince Congress to maintain his department’s enormous financing subsidiary, the Loan Programs Office — but it misses the mark. The real bottleneck to nuclear progress in America isn’t a lack of federal financing. It’s federal regulation that strangles the “nuclear renaissance” sought by President Trump.
The Loan Programs Office is an odd choice for Republicans to rally around. The LPO was famously responsible for the failed loan to Solyndra, the green-energy darling that went belly-up in 2011 to much GOP angst. More recently, the office was one of the Biden administration’s favorite tools for subsidizing clean energy. Supercharged by the Inflation Reduction Act, the office now boasts over $400 billion in lending authority. In the most recent reconciliation text, Senator Mike Lee smartly suggested reducing this by 85 percent to approximately $33 billion in lending authority at most.
That the program isn’t entirely stripped out likely reflects that the Trump administration wants to keep it to fund nuclear power. But all the money in the world won’t matter if nuclear companies can’t get projects permitted, licensed, or connected to the grid.
That’s the problem facing nuclear today: too much bureaucracy imposed from D.C. A new reactor design now takes years to even begin the licensing process, and when projects do move forward, they arrive billions over budget and years behind schedule. Fundamentally, current rules treat all reactors the same. This forces smaller, safer designs to spend years in regulatory limbo — NuScale spent nine years and more than $500 million just to get its design certification approved. It took 2 million hours of labor and millions of pages of documentation just for the first step. That’s too much of a burden even for the bigger reactors that have dominated the industry for more than 50 years. In the 1960s, Connecticut Yankee was built in just five years and for about $1 billion in current dollars. That would be impossible today, despite major advances in nuclear technology, including safety.
Keeping federal financing won’t speed up anything, and in any case, the Loan Programs Office is busy considering whether to fund foreign companies that have already failed. Orano, the French state-owned nuclear company, is competing for part of a $2.7 billion in government funding through the Department of Energy to support uranium enrichment facilities. Orano is the rebranded successor to Areva, which was offered a $2 billion LPO guarantee in 2010 for a project in Idaho that never materialized. After Areva’s financial collapse, it was effectively nationalized by France. Why are American taxpayers backing the sequel? And why are we flirting with sending money overseas to support the French government’s competition with private U.S. companies?
The federal government should, to say the least, be very reluctant to underwrite a firm that failed in its last American venture, nor should it be so focused on loans as a whole. There’s no good evidence showing the LPO works. A 2021 review in the journal Climate Policy concluded, “The scholarship on loan guarantee programs is surprisingly thin.” And in May, the Government Accountability Office suggested that DOE may not be identifying truly innovative projects — the point of the entire financing operation.
The LPO’s defenders still say that taxpayer financing is essential to getting costly reactors off the ground. They point to the Vogtle plant’s cost overruns as proof: seven years late and $17 billion over budget. But in a classic case of moral hazard, federal support may have contributed to these soaring costs. If you think the taxpayer has got you covered, why not run up the tab and draw out the process?
To be clear, public financing can play a role — especially in sectors where private capital is skittish due to long timelines or novel risks. But private capital isn’t skittish with nuclear projects. Meta, Google, Amazon, and Microsoft all have ongoing nuclear efforts. At least $2.5 billion has been invested in advanced nuclear projects since 2021.
These private investments are driven by optimism about advanced reactors, new enrichment technologies, and the need to power AI data centers. And the number would likely be even higher — even by an order of magnitude — if the bureaucratic roadblocks to nuclear projects weren’t so steep.
Money flows to opportunity, and more of it would flow if the Nuclear Regulatory Commission made permitting easier. That’s where the Trump administration should focus its efforts. If our national leaders want more shovels in the ground, they should make it easier to put them there, not dig a deeper fiscal hole by doling out taxpayer-backed checks to foreign companies and potentially failed projects. The real path to a nuclear renaissance is to get Washington out of the way, neither propping the industry up with subsidies nor strangling it with red tape.
Christopher Koopman is CEO of the Abundance Institute, where Josh T. Smith is energy policy lead.