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US Congress threatens to cut support for nuclear power
The Trump administration wants increased investment, but proposed legislation could undermine it
9 minute read
Ed Crooks
Vice Chair Americas and host of Energy Gang podcast

Ed Crooks
Vice Chair Americas and host of Energy Gang podcast
Ed examines the forces shaping the energy industry globally.
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One of the best-known sayings of the celebrated free-market economist Thomas Sowell is: “There are no solutions. There are only trade-offs.” The Trump administration has faced a sharp demonstration of that point over its policy on nuclear power.
President Donald Trump last week signed four executive orders aimed at delivering the often-promised “nuclear renaissance” for the US. Trump administration officials, including Chris Wright, the energy secretary, have made it clear that they see increased nuclear generation as essential for US national security.
But the budget legislation currently being negotiated in Congress includes several measures that would hold back the growth of nuclear power in the US.
The One Big Beautiful Bill Act, which was passed by the House of Representatives last week and is now before the Senate, meets many of the administration’s overall goals for tax and spending policy.
But among its wide-ranging impacts on the energy industry are changes that the US nuclear industry has flagged as concerns. In particular, the bill confirms the phase-out for the 45U tax credit for existing nuclear plants that was created in the 2022 Inflation Reduction Act, bringing it forward by a year to the end of 2031.
It also accelerates the phase-out of the 48E technology-neutral investment tax credit for zero-carbon energy. Under the bill passed by the House, nuclear projects would have to start construction by the end of 2028 to be eligible. That is not much time to get a new project underway.
The House also proposed cutting funding for the Department of Energy’s Loan Programs Office (LPO). The office has supported nuclear investments, including the two AP1000 reactors built at the Vogtle plant in Georgia and the restart of the Palisades reactor in Michigan.
The administration plans to use the LPO to support investments that will restart closed nuclear power plants, increase the output of operating plants, build new advanced reactors, and strengthening the US nuclear fuel supply chain.
But the House budget bill withdraws any funding for the LPO that has not already been committed. It has been reported that nearly 60% of the office’s staff could be leaving.
The final version of the bill that emerges after negotiations with the Senate could be significantly different from the version passed in the House. The nuclear industry is still arguing its case. Maria Korsnick, CEO of the Nuclear Energy Institute, said earlier this month: “We’re facing some headwinds, and the actions we take today will define what the future looks like.”
In contrast to the bad news coming out of Congress, President Trump’s executive orders have been welcomed by the industry. The most significant of those orders will expedite approvals by the Nuclear Regulatory Commission (NRC), setting a new deadline of 18 months for a final decision on an application to construct and operate a new reactor of any type.
Scott Strazik, chief executive of GE Vernova, said in an interview that the first new NRC approvals for small modular reactors (SMRs) could be granted by 2027, creating a “credible shot” of having the first plants on stream by late 2030 or 2031.
There is also financial support available for SMRs. The Department of Energy recently reissued a US$900 million funding program for Generation III+ light-water SMRs, originally set up under the Biden administration.
But there are questions over how far expedited approvals and support for demonstration projects will drive investment in new nuclear, if the fundamental economics are unfavorable.
Bipartisan support for nuclear power is strong in the Senate. But it remains to be seen how far senators will push for pro-nuclear provisions in the bill, given all the other pressures they face to deliver tax cuts and limit the increase in the budget deficit.
The Wood Mackenzie view
Despite the threats posed by the proposed legislation, Wood Mackenzie analysts still think the US nuclear industry has a bright long-term future. Both commercial and policy imperatives point to the need to develop and deploy new reactors.
The Trump administration’s energy policies reflect a view that the US should not try to compete with China in electric vehicles, solar power and energy storage. Chinese manufacturers generally dominate these global supply chains so it will be difficult to displace them.
But in new nuclear technologies such as SMRs, the competition is less intense, says Prakash Sharma, Wood Mackenzie’s head of scenarios and technologies. There is still room for the US to innovate and scale up to out-compete China.
For US companies planning to increase their electricity consumption, particularly data centre operators aiming to bring new capacity online, new nuclear plants could be important.
The time taken to develop and build new reactors means they will be able to make only a marginal contribution for the next 10 years at least. But in the long term, new nuclear plants could make a significant contribution to increasing US electricity supply.
Nuclear power is particularly attractive for tech companies that need dispatchable power to keep their data centres running 24/7 and have set ambitious goals for cutting greenhouse gas emissions. Only a handful of technologies are available for providing zero-carbon baseload electricity, and nuclear is one of them.
All that said, the version of the budget bill passed by the House does pose some threats to the US nuclear industry in the short to medium term. But Wood Mackenzie’s Sharma says there is still time for the Senate to fight for more pro-nuclear measures in the legislation.
“The final version of the bill might look more acceptable and amenable to the industry and investors,” he says.
Supreme Court ruling tightens scope of US environmental reviews
The US Supreme Court has issued an important ruling on environmental approvals that could help remove obstacles to infrastructure development. The court ruled in favour of a group attempting to build an 88-mile railway line from the Uinta Basin oil province in Utah to connect to the national rail network. Environmental groups and a county in Colorado had been fighting against the project. They had success in lower courts with the argument that the environmental impact statement for the railway required by the National Environmental Policy Act (NEPA) had not considered all the relevant issues, even though it was 3,600 pages long.
The Supreme Court rejected that view in a unanimous decision. Lower courts had accepted the argument that the environmental impact statement should take into account activities connected to the project. So if the new rail line would allow increased oil production in the Uinta Basin, and increased consumption of oil products refined from that crude, the resulting increase in emissions should be factored into the decision on whether to approve the project.
The Supreme Court disagreed, ruling that only the direct impacts from the rail line should be considered. The decision could have wide-ranging implications for other energy projects that need approvals under NEPA, such as LNG plants, potentially blocking off some tactics that have been used by environmental groups to obstruct development.
In brief
Most of President Trump’s new tariffs were blocked by the US Court of International Trade, but then reinstated, at least for the time being, by an appeals court. The trade court had ruled that the president had overstepped his legal authority in announcing such sweeping tariff measures. The appeals court put a stay on the lower court’s decision until it had had a chance to consider the arguments from both sides.
The US Constitution specifies that it is Congress that has the power “to lay and collect taxes, duties, imposts, and excises”, although legislation has given the president a range of opportunities to impose tariffs in emergencies and other specified circumstances. The dispute is now likely to head to the Supreme Court for a ruling.
Ministers from the OPEC+ countries agreed at a meeting on Wednesday to leave their production levels unchanged. The eight members of the group that have been unwinding their voluntary output cuts, including Saudi Arabia and Russia, will be discussing their plans for further increases over the weekend. Brent crude was trading at about US$64 a barrel on Friday morning, close to its level at the start of the week.
BYD, the Chinese car company that is the world’s largest manufacturer of EVs, has announced steep price cuts ranging up to 34% for some models. The move has raised fears about the profitability of China’s vehicle industry.
Other views
Global economic outlook: trade tensions bite – Peter Martin
Trading cases: Tariff scenarios for taxing times – Peter Martin and others
What comes after the Permian for IOCs? – Simon Flowers and David Clark
Geothermal: the next North American goldrush? – Annick Adjei
How Chinese companies are expanding their global footprint – Robert Liew
Can we afford large-scale solar PV? – Brian Potter
Quote of the week
“By removing these barriers that have held back our economy, we will unleash a new era of growth that will ensure we don't just survive ongoing trade wars but emerge from them stronger than ever. It will enable Canada to become the world's leading energy superpower in both clean and conventional energy. To build an industrial strategy that will make Canada more globally competitive, while fighting climate change.”
King Charles III, giving a speech in Canada’s Senate for the opening of the new session of Parliament, set out the agenda for the government led by Prime Minister Mark Carney. The king’s words, delivered in French, highlighted the priorities set out by the new government.
Tim Hodgson, the energy and natural resources minister, used similar language recently, saying the government was committed “to making Canada an energy superpower”.
Chart of the week
This comes from our new Horizons report, Trading cases: Tariff scenarios for taxing times. The volatility of US tariff policy means it is impossible to derive forecasts for energy and commodities over the next few years and stick to them with any confidence. In response, we have developed three scenarios, essentially reflecting low, moderate and high tariffs, and then modelled the outlooks for our key sectors in those scenarios.
The chart here shows projections for oil demand in those three cases. In “trade truce” and “trade tensions”, or low and moderate tariff scenarios, the world economy continues to grow and, hence, so does oil demand. In the “trade war”, we have a global recession, resulting in significantly lower oil demand and prices.
Take a look at the full report for details on the exact specifications of the scenarios and more analysis of their implications for oil, gas, power and metals.
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