Senate proposes legislation to promote global cooperation in civil nuclear exports

On December 7, the Senate Foreign Relations Committee passed the bipartisan International Nuclear Energy Act (“INEA”), which aims to support the United States’ civil nuclear export strategy and promote international cooperation in nuclear energy investment.

If officially signed into law, INEA would promote US engagement with ally and partner nations to develop a civil nuclear export strategy, which will help make the US a competitive alternative to Russia and China while also supporting lower global emissions, the US economy, and energy security and independence.

One of the most important elements of INEA that could immediately support investment in nuclear power—including for both operating and advanced reactors in the US—is the removal of the foreign ownership, control, or domination (“FOCD”) restriction in the Atomic Energy Act.

Removing the FOCD provision has been long overdue. As blog author, Amy Roma, stated in testimony before the Senate Energy and Natural Resource committee back in 2020:

“Updating the FOCD provision aligns the 1950s with modern times, including the global nuclear marketplace and new national security reviews from the Committee on Foreign Investment in the United States (‘CFIUS’). . .The FOCD Provision was established at the start of the Cold War, when only a few countries were nuclear powers, and thus foreign involvement in nuclear power was viewed with great skepticism. This restriction was not a problem in the early history of US nuclear power, as reactors were built and owned by local utilities, with limited direct foreign involvement. However, today international partners play a key role in the US nuclear industry and have large stakes in US-based reactor designers and fuel cycle companies. . .Foreign investment from our allies, far from being viewed with skepticism, is instead critical for the US civilian nuclear industry to succeed. US allies are interested in supporting US advanced reactor vendor tolerances, and often have higher tolerances for these investments than their US counterparties. However, instead of safeguarding American interests, the FOCD provision is more likely to push advanced reactor developers out of the country to demonstrate their technologies and will stifle investment in those that remain, harming US nuclear technology leadership, US nuclear export prospects (as there will be fewer US-designed and built plants to thereafter export abroad), and overall nuclear security.”

We also authored a paper published by the Nuclear Innovation Alliance about the FOCD restriction and recommendation to eliminate the provision, titled US Nuclear Innovation in a Global Economy: Updating an Outdated National Security (Jul. 2020). Revisiting the Atomic Energy Act’s FOCD provisions was also the subject of a July 28, 2020 letter submitted to the Senate Energy Natural Resources Committee and the House Energy and Commerce Committee signed by 10 former NRC Commissioners urging Congress to remove the FOCD provision, as well as the subject of a paper written by Dr. Matt Bowen, at Columbia Center on Global Energy Policy, which is available here.

We walk through some key provisions of the INEA in more detail below. Notably, if passed into law in its current form, INEA would do the following:

• White House Office Focused on International Nuclear Energy Policy. Supports the establishment of the White House “Office of the Assistant to the President and Director for International Nuclear Energy Policy” to serve as a “focal point within the White House. . .for coordination on issues” related to “developing and implementing. . .a cohesive policy with respect to international efforts related to civil nuclear energy”, including civil nuclear exports strategy; establishing financing relationships; promoting regulatory harmonization; enhancing safeguards and security; promoting standardization of licensing framework; and creating a nuclear exports working group. See INEA Sec. 3.

• Cooperation with Allies or Partner Nations. Promotes the cooperation with ally or partner nations on advanced nuclear demonstrations and research for civil nuclear energy. Lake Sec. 6. Specifically, within two years, the Secretary of State, in coordination with the Secretary of Energy and the Secretary of Commerce, should conduct bilateral and multilateral meetings with at least five ally or partner nations, with the aim of enhancing nuclear energy cooperation among others those ally or partner nations and the United States. This will help develop collaborative relationships with respect to research, development, licensing, and deployment of advanced nuclear reactor technologies for civil nuclear energy.

• Programs to Facilitate International Cooperation. Creates programs to facilitate international nuclear energy cooperation to develop financing relationships, training, education, market analysis, safety, security, safeguards, and nuclear governance required for a civil nuclear program. Lake Sec. 8. Specifically, within 120 days, the Secretary of State, in coordination with the Secretary of Energy shall launch an international initiative to provide financial assistance to, and facilitate the building of technical capacities by, countries new to civil nuclear energy for activities relating to the development of civil nuclear energy programs via awarding financial grants for assistance.

• Cabinet-level Summit. Requires a cabinet-level biennial summit focused on nuclear safety, security and safeguards, and to enhance cooperative relationships between private industry and government. Lake Sec. 9. Specifically, the President, in coordination with international partners, will hold a biennial conference on civil, nuclear safety, security, safeguards, and sustainability. Each conference should — (1) be a forum in which ally or partner nations may engage with each other for the purpose of reinforcing the commitment to — (A) nuclear safety, security, safeguards, and sustainability; (B) environmental safeguards; and (C) local community engagement in areas in reasonable proximity to nuclear sites; and (2) facilitate the development of — (A) joint commitments and goals to improve nuclear safety, security, safeguards, and sustainability; environmental safeguards; and local community engagement in areas in reasonable proximity to nuclear sites; (B) stronger international institutions that support nuclear safety, security, safeguards, and sustainability; (C) cooperative financing relationships to promote competitive alternatives to Chinese and Russian financing.

• Eliminates the FOCD provision. As noted above, INEA would amend section 103d of the Atomic Energy Act of 1954 (“AEA”), as amended, to remove the foreign ownership, control and domination (“FOCD”) restrictions applicable to nuclear reactor owners and operators. Lake Sec. 11.

• Establishes a Strategic Infrastructure Fund Working Group. This group is to determine how to best structure a fund to finance projects critical to national security. Lake Sec. 12. Specifically, under INEA, the working group would provide direction and advice with respect to the establishment of a Strategic Infrastructure Fund to be used— (A) to support those aspects of projects relating to— (i) civil nuclear technologies; (ii) rare earth elements and critical minerals; microprocessors; and (B) for strategic investments identified by the working group.

While this legislation has only passed out of committee, and therefore has a number of additional steps before it could become law, it sends a strong signal of support from Congress for US competitiveness overseas and the importance of working with allies and partner nations on new nuclear developments. INEA still awaits a full vote in the Senate. A companion bill has been introduced into the House and is under review by a subcommittee within the House Energy and Commerce Committee. We will continue to monitor the legislative progress.