Senate Attempts to Waste up to $50 Billion in Stimulus Funds on Preemptive Bailout for Nuclear Industry

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Nick Berning, 202-222-0748

Senate Attempts to Waste up to $50 Billion in Stimulus Funds on Preemptive Bailout for Nuclear Industry

Friends of the Earth slams proposed bailout, which would have no significant stimulative effect, as ‘unconscionable’

WASHINGTON - Senate appropriators voted yesterday to add a preemptive, up-to-$50-billion bailout for the nuclear industry to economic stimulus legislation.

The move was strongly criticized by Friends of the Earth President Brent Blackwelder.

“The nuclear industry has given millions of dollars to politicians, an investment that appears to be paying off,” Blackwelder said. "Senators are supposed to be fixing the economy but instead they’re offering the nuclear industry a $50 billion gift that will create virtually no near-term jobs. It's unconscionable. Lobbyists are probably popping champagne corks as we speak.”

This stealth, preemptive bailout comes in the form of a $50 billion expansion of federal loan guarantees for “advanced low-carbon technology,” much of which would likely go to helping energy firms secure financing for reactor construction. The industry has been unable to secure substantial financing from the private sector in the absence of these guarantees.

Nuclear industry executives admit nuclear power is so financially risky that federal loan guarantees are the only way new reactors will get built. For example, Michael J. Wallace, the co-chief executive of UniStar Nuclear, told the New York Times in 2007 that “without loan guarantees we will not build nuclear power plants.” Unfortunately, the Congressional Research Service says such guarantees threaten to leave taxpayers with “potentially large losses.” The Congressional Budget Office estimates that the risk of default on a nuclear loan guarantee is “very high—well above 50 percent.”

“Now is not the time for another bailout boondoggle,” Blackwelder said. “Nuclear power is the most expensive form of energy there is. It takes 10 years or more to build a reactor, so it is impossible to claim with a straight face that this preemptive bailout has anything to do with creating jobs. Senate appropriators’ decision to include such wasteful spending in the stimulus is an example of Washington at its worst.”

The Senate appropriators’ vote does not mean that this nuclear industry bailout will take place. Stimulus language being considered by the House of Representatives does not include this bailout, and the disparity will be resolved in conference committee after each house passes its own legislative language.

This fall, Friends of the Earth released an ad opposing a preemptive bailout for the nuclear industry. That ad can be viewed here: http://action.foe.org/t/6545/content.jsp?content_KEY=4633.

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Friends of the Earth is the U.S. voice of the world's largest grassroots environmental network, with member groups in 77 countries. Since 1969, Friends of the Earth has fought to create a more healthy, just world.

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