Senate appropriators ushered in a series of debates on the fiscal 2012 Energy and Water Development spending bill yesterday by disagreeing over the fate of small modular reactors and thousands of tons of nuclear waste.

Sen. Dianne Feinstein (D-Calif.), chairwoman of the Energy and Water Appropriations Subcommittee, is blocking money for the Obama administration's proposed program to develop and license small, modular nuclear reactors that can be built in factories and assembled on-site. Feinstein said the government should not be in the business of subsidizing financially and technically viable corporations that can afford to pursue licensing approval without federal dollars.

"This is a restricted bid, it doesn't include everybody," Feinstein said. "Can't they afford their own licensing fees?" She went on to criticize all federal subsidies, saying, "I really think that most subsidies by the federal government should just go."

Sen. Lamar Alexander of Tennessee, the ranking Republican on the subcommittee, said he was disappointed the funds were not included because other countries are bound to develop the technology but said he understands Feinstein's reservations.

The arguments mark the beginning of the Senate's debate this week over the $31.625 billion fiscal 2012 Energy and Water Development spending language in the run-up to a looming deadline this weekend when the latest government funding stopgap expires. Lawmakers will tack a new short-term continuing resolution onto a separate spending package that a conference committee is finalizing this week.

The energy and water language, which funds the Energy Department, Army Corps of Engineers and Interior Department water programs, is heavy on spending for national security programs within DOE, but the overall allocation is lower than both last year's funding levels and President Obama's request for the current fiscal year.

Spending for DOE science and technology research programs would remain largely static compared with last year's funding levels under the Senate's spending bill, while water programs would receive a slight boost over last year's levels. The House this summer passed a $30.6 billion spending bill for the three agencies.

Feinstein hopes language included in the bill will address her main concern with new small reactors: the lack of a federal repository for growing amounts of nuclear waste currently being stored at more than 70 reactors across the country.

The appropriations bill directs DOE to develop a strategy for managing spent nuclear fuel within three months of the presidential Blue Ribbon Commission's report, which will be sent to Congress in January. The measure also includes language that finds a "sound federal strategy" will likely require one or more consolidated storage facilities with adequate capacity to be sited, licensed and constructed in multiple regions, independent of the schedule for opening a repository.

The bill also contains more than $2 million for the Blue Ribbon Commission to use -- should Energy Secretary Steven Chu renew the panel's charter -- to craft a revision of federal law based on its recommendations and submit that proposal to Congress by March 30, 2012.

The Senate appropriations bill is also setting the stage for a showdown over Yucca Mountain. Republican Illinois Sen. Mark Kirk plans to introduce language to restore funding for the now abandoned nuclear waste repository in Nevada, a measure that is sure to face stiff opposition from Majority Leader Harry Reid (D-Nev.), a vocal opponent of the project.

Alexander said he hopes key senators including Feinstein can work together to craft a plan for storing nuclear waste within a year but cast doubt over the Yucca Mountain project yesterday,

"It's going to stop for a variety of reasons, some of them political," Alexander said of the Yucca Mountain repository. "For whatever reason, it's stuck."

Energy amendments

At least one amendment to the spending language has been offered up.

Republican Sen. Dan Coats of Indiana yesterday floated an amendment that would require an investigation and report of a $730 million conditional loan guarantee for Russian steel giant Severstal to produce advanced high-strength steel in Michigan.

Coats has already voiced concerns about the conditional loan offered by the Energy Department in July under its Advanced Technology Vehicle Manufacturing Program. He and Sen. Pat Toomey (R-Pa.) last week asked DOE Inspector General Gregory Friedman to investigate the offer (Greenwire, Nov. 8). But Coats said today that the agency's response to his request did not answer his questions.

"The Department of Energy makes it sound like this loan to Severstal will promote a completely new breakthrough technology," Coats said yesterday on the Senate floor. "The problem is that this simply is not true."

Coats said six companies already manufacture the same high-strength steel that Severstal would produce.

"Subsidizing Severstal to a product already being manufactured would undercut competitors because Severstal, of course, will have lower costs due to the nearly three-quarters of a billion-dollar loan guarantee," Coats said. "We have to ask the question: Is it proper to give a company more than three-quarters of a billion dollars for facilities that have already been built and ... for production of a product that is already manufactured in an excess supply in the United States?"

Coats' amendment would require DOE's inspector general to submit a report to Congress on the conditional loan commitment that could be used to determine whether the final loan should be granted.

Coats' concerns come on the heels of a series of bankruptcies at companies that have received federal loan guarantees and grants. Most notable among those bankruptcies is the solar manufacturer Solyndra. Questions surrounding the Obama administration's approval of that loan continues to dominate energy discussions both on and off Capitol Hill.

"The department needs to be more transparent and forthcoming with dollars," Coats said. "We need to use lessons from the disaster that is Solyndra and the costs to the taxpayer."