In the high-stakes world of energy production, nuclear power remains one of the most promising technologies for meeting global demand while minimizing emissions. Yet, as Christopher Koopman and Eli Dourado explain in their Wall Street Journal piece, the Nuclear Regulatory Commission (NRC) has become a regulatory quagmire stifling innovation. The recent lawsuit from Texas, Utah, and Last Energy, aimed at curbing the NRC’s overreach, could mark a turning point for the future of small modular reactors (SMRs)—an innovation too vital to be obstructed by bureaucratic inertia​​.

A Regulatory Regime Frozen in the Cold War Era

The Atomic Energy Act of 1954 was crafted with the foresight to distinguish between different types of nuclear reactors based on their risk profiles. Reactors that could pose significant national security or public health risks would require federal oversight. Yet, this sensible framework was gutted in 1956 when the Atomic Energy Commission, the NRC’s predecessor, decided that all nuclear reactors, regardless of their size or risk, must undergo the same suffocating regulatory process.

This one-size-fits-all approach persists today, resulting in absurdities like the regulation of the teaching reactor at Texas A&M University—a reactor so small it couldn’t even power a single LED bulb. As Koopman and Dourado point out, even the NRC itself concedes that research reactors like these pose no meaningful safety risk. Nevertheless, they are subjected to the same licensing gauntlet as gigawatt-scale power plants​.

The Small Modular Reactor Revolution

Small modular reactors are a game-changer for nuclear power. Unlike the sprawling nuclear plants of the mid-20th century, SMRs are compact, produce a fraction of the energy of traditional plants (around 20 megawatts or less), and are equipped with modern safety features. For instance, Last Energy’s reactor design operates within a 12-inch steel-walled container, making a radioactive release virtually impossible—even in the worst imaginable scenario.

Last Energy’s design operates entirely inside a container with 12-inch steel walls that has no credible mode of radioactive release even in the worst reasonable scenario.

Even in such a scenario, according to the plaintiffs, radiation exposure would be less than a tenth what the NRC has deemed too safe to require regulation in other contexts—and less than 1/800th of a routine abdominal CT scan.

Yet, these remarkable advancements are stymied by the NRC’s outdated and burdensome licensing process. NuScale, another SMR innovator, spent over $500 million and more than two million hours of labor just to get its design certified. That’s before applying for an operational license, which will only multiply the costs​.

The Stakes for States Like Texas and Utah

The timing of this challenge is crucial. Texas and Utah face energy crises as their populations grow. Texas operates its own electrical grid, serving more than 27 million customers. With its rapid population growth and booming economy, the Lone Star State faces an unprecedented need for reliable power. Utah’s “Operation Gigawatt” aims to double its power production over the next decade. Nuclear power could play a crucial role in both states’ energy futures, to say nothing of America’s, if regulatory barriers don’t stand in the way.

Why the NRC’s Overreach Must End

At the heart of this lawsuit lies a simple yet transformative demand: the NRC must adhere to the law. The Atomic Energy Act did not mandate federal oversight for reactors that pose negligible risks. State regulatory authorities are fully capable of ensuring the safe operation of SMRs, freeing federal regulators to focus on reactors with actual public health and security implications.

Washington’s heavy-handed involvement is not just unnecessary—it’s counterproductive. The NRC’s licensing regime is not a regulatory framework; it is a de facto moratorium on nuclear innovation. By requiring exhaustive and often irrelevant documentation, the NRC has turned what should be a decade of progress into a decade of paperwork​.

Unleashing America’s Nuclear Potential

The NRC’s bureaucratic stranglehold on nuclear energy is not merely a hindrance to innovation; it is a threat to the nation’s energy security and economic competitiveness. As the world increasingly turns to renewable and low-carbon energy sources, the U.S. risks falling behind by hamstringing one of its most promising technologies.

Koopman and Dourado’s call to action is clear:

Federal courts should simply require the NRC to follow federal law. Reactors that could affect the nation’s public health and safety should be subject to rigorous federal oversight. But state regulatory authorities are more than sufficient to ensure that small modular reactors operate safely. Washington doesn’t need to be involved.

This lawsuit is more than a legal battle; it is a pivotal moment for reclaiming the promise of nuclear energy. If successful, it could pave the way for states to harness SMRs to meet growing energy demands sustainably and safely, while liberating innovators to do what they do best—innovate​​.

In short, this is not just a fight against overregulation—it is a fight for the future of energy itself.