Nuclear Power Regaining Favor Amid Recession, Climate Concerns

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The Real News Network

Nuclear Power Regaining Favor Amid Recession, Climate Concerns

Industries want the government to co-sign for more than $40 billion in loans

by
Judy Pasternak, Investigative Reporting Workshop

WASHINGTON
- The Obama administration may soon guarantee as much as $18.5 billion
in loans to build nuclear reactors to generate electricity, and
Congress is considering whether to add billions more to support an
expansion of nuclear power.

These
actions come after an extensive, decade-long campaign in which
companies and unions related to the industry have spent more than $600
million on lobbying and nearly $63 million on campaign contributions,
according to an analysis by the Investigative Reporting Workshop at
American University.

Nuclear
power generates about 20 percent of America's electricity, but many
existing reactors are aging. No new plant has been authorized since the
1979 incident at Three Mile Island in Pennsylvania, when small amounts
of radiation were released and authorities feared for days that a huge
surge might escape.


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That's
in part because it can cost as much as $8 billion to build a nuclear
plant, and in part because the problems of nuclear waste and safety
remain unsolved.

But
the problem of global warming remains unsolved, too, and as the nation
struggles to rebound from a deep recession, building new nuclear
reactors increasingly looks to some like a big jobs program. The
industry, capitalizing on both developments, argues that nuclear energy
must be part of any effort to curb heat-trapping carbon emissions.

Its longtime foes - environmentalists, some labor unions, Democrats - increasingly agree.

"This
is nuclear's year," said House Majority Whip Jim Clyburn, D-S.C., who
in recent years has become one of the industry's champions on Capitol
Hill.

Sen.
Barbara Boxer, D-Calif., who chairs the Senate Environment and Public
Works Committee, has pledged that the climate bill that's making its
way through Congress will include new government help for the nuclear
industry. Sen. Lindsey Graham of South Carolina says he would provide a
much-sought Republican vote for the bill if its energy provisions
include help for the nuclear industry.

Some
Republicans, who have historically have friendlier to nuclear power,
are pushing a plan to build 100 reactors over the next 20 years. The
industry considers the forthcoming $18.5 billion in guarantees a down
payment on a more ambitious expansion.

Electric
utilities want more than $100 billion in guarantees for construction
that's expected to cost $200 billion. Those guarantees are considered
crucial to some companies' nuclear plans.

For
example, Dallas-based Energy Future Holdings has applied to add two
reactors to its Comanche Peak nuclear plant near Glen Rose. In a 2008
interview, EFH Chief Executive John Young told the Star-Telegram that the company expected to borrow $12 billion of the Comanche Peak expansion's estimated $15 billion cost.

But
getting the financing will be just about impossible without federal
guarantees, especially for a company in Texas' deregulated electricity
market, where the cost of a nuclear plant cannot be automatically
recouped from ratepayers, Young said at the time.

The
Nuclear Energy Institute contends that the guarantees wouldn't cost
taxpayers a dime because the recipients would pay fees that should
cover the cost of defaults, much the way that auto insurers cover the
cost of accidents with premiums paid by safe drivers. However, the
Congressional Budget Office concluded in 2003 that the risk of default
on a nuclear loan would be "very high - well above 50 percent."

Critics
of nuclear power say these sums would divert resources from other
low-carbon sources of electricity that don't have nuclear's safety or
waste issues. These include wind, solar, biomass and geothermal
generators. The clean energy bank as proposed would "be a big
nuclear-coal slush fund," says Michele Boyd, who lobbies for Physicians
for Social Responsibility. Carbon capture for coal and nuclear
construction are so expensive that there would be little left over for
renewables, she says.

Getting
to this point has taken lots of time and lots of money, and the debate
over the safety and economics of nuclear electricity is far from
settled.

During
the Bush administration, the nuclear industry got more in
electricity-related research and development funding than coal and
other fossil fuels did combined, and Congress approved the loan
guarantees.

More
recently, the industry has been reaching out to newly empowered
Democrats, among them Clyburn, whose state is among the nation's
leading nuclear-power producers. (President Barack Obama's home state
of Illinois is the biggest, and he and some of his closest political
allies have long relationships with Exelon Corp., the country's biggest
nuclear power company.)

The industry has also begun to build strong ties to important labor unions.

Millions on lobbying

In
the first half of last year, when Congress was considering whether to
add nuclear loan guarantees to the economic stimulus package and was
starting to work on the climate change bill, companies and unions
interested in nuclear energy spent more than $55.8 million on lobbying,
the analysis found.

Federal
Election Commission records also show that the Nuclear Energy
Institute, the industry's trade group, donated a total of $99,000 to 63
candidates in the first half of 2009. Sixty percent of the money went
to Democrats. As a group, nuclear interests gave $3.5 million to
congressional candidates in the first six months of last year.

It
hasn't hurt that all these efforts have coincided with a big run-up in
energy prices and growing concern over the effects that coal-fired
power plants have on the buildup in carbon emissions and global warming.

"We
don't believe that nuclear energy is the answer, but as you look at
needs for clean energy and the need to protect the environment, there
isn't a solution without nuclear," Areva spokesman Jarret Adams said.
Areva's reactors would power many of the new plants that are on the
drawing boards.

Still,
many environmental groups worry about the safety of nuclear power. "The
nuclear power industry is always going to remain several minutes away
from serious accident and disaster," said Tom Clements, the
Southeastern Nuclear Campaign coordinator for Friends of the Earth, a
global environmental group.

The
Price-Anderson Act, passed in 1957, limits industry liability for a
nuclear accident. Most recently renewed in 2005, it requires a private
operator to buy the most private insurance possible - currently $300
million - and assesses fees on the industry for a fund to pay out
damages above that amount if necessary. If the fund, which now stands
at more than $10 billion, isn't enough, Congress would decide whether
to require more industry contributions or appropriate public money. The
law is in force through 2025.

Opponents
also question why nuclear power needs federal subsidies. "If nuclear
power is the right path to go down, why can't it pay for itself?"
Clements said. "Nuclear power is going to be dependent on subsidies and
handouts, and we still get nuclear waste and the threat of accident in
return."

The
waste issue remains perhaps the biggest stumbling block. Generating
nuclear power produces huge quantities of radioactive waste, including
plutonium, a key ingredient for nuclear weapons. When many of the
current reactors were put into place, there was an assumption that the
federal government would eventually create a national repository. After
decades of debate, however, that promise appears no closer to being
met, and the plants have become de facto storage facilities.

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