Will Obama Guarantee a New Reactor War?

Amidst
utter chaos in the atomic reactor industry, Team Obama is poised to
vastly expand a bitterly contested loan guarantee program that may cost
far more than expected, both financially and politically.

The
long-stalled, much-hyped "Renaissance" in atomic power has failed to
find private financing. New construction projects are opposed for
financial reasons by fiscal conservatives such as the Heritage
Foundation and National Taxpayers Union, and by a national grassroots safe energy campaign that has
already beaten such loan guarantees three times.

New reactor
designs are being challenged by regulators in both the US and Europe.
Key projects, new and old, are engulfed in political/financial uproars
in Florida, Texas, Maryland, Vermont, New Jersey and elsewhere.

And
53 years after the opening of the first commercial reactor at
Shippingport, Pennsylvania, Department of Energy Secretary Steven Chu is
now convening a "Blue Ribbon" commission on managing radioactive waste,
for which the industry still has no solution. Though stacked with
reactor advocates, the commission may certify the death certificate for
Nevada's failed Yucca Mountain dump.

In 2005 George W. Bush's
Energy Bill embraced appropriations for an $18.5 billion loan guarantee
program, which the Obama administration now may want to triple. But the
DOE has been unable to minister to a chaotic industry in no shape to
proceed with new reactor construction. As many as five government
agencies are negotiating over interest rates, accountability, capital
sourcing, scoring, potential default and accident liability, design
flaws and other fiscal, procedural and regulatory issues, any or all of
which could wind up in the courts.

In 2007 a national grassroots
uprising helped kill a proposed addition of $50 billion in guarantees,
then beat them twice again.

When Obama endorsed "safe, clean
nuclear power plants" and "clean coal" in this year's State of the
Union, more than 10,000 MoveOn.org members slammed that as the
worst moment of the speech.

The first designated recipient
of the residual Bush guarantees may be at the Vogtle site in Waynesboro,
Georgia, where two reactors now operate. Georgia regulators have ruled
that consumers must pay for two proposed new reactors even as they are
being built.

But initial estimates of $2-3 billion per unit have
soared to $8 billion and more, even long before construction begins.
Standardized designs have not been certified. On-going technical
challenges remind potential investors that the first generation of
reactors cost an average of more than double their original estimates.

The
Westinghouse AP-1000 model, currently slated for Vogtle---and for
another site in South Carolina---has become an unwanted front runner.

Owned
by Japan's Toshiba, Westinghouse has been warned by the Nuclear
Regulatory Commission of serious design problems relating to hurricanes,
tornadoes and earthquakes.

The issues are not abstract.
Florida's Turkey Point plant took a direct hit from Hurricane Andrew in
1991, sustaining more than $100 million in damage while dangerously
losing off-site communication and power, desperately relying on what
Mary Olson of NIRS terms "shaky back-up power." Ohio's Perry reactor was
damaged by a 1986 earthquake that knocked out surrounding roads and
bridges. A state commission later warned that evacuation under such
conditions could be impossible.

Long considered a loyal industry
lap-dog, the NRC's willingness to send Westinghouse back to the drawing
board indicates the AP-1000's problems are serious. That they could be
expensive and time-consuming to correct means the Vogtle project may
prove a losing choice for the first loan guarantees.

South Texas
is also high among candidates for loan money. But San Antonio, a
primary partner in a two-reactor project there, has been rocked by
political fallout from soaring cost estimates. As the San Antonio city
council recently prepared to approve financing, it learned the price had
jumped by $4 billion, to a staggering $17-18 billion. Angry debate over
who-knew-what-when has led to the possibility that the city could pull
out altogether.

In Florida, four reactors have been put on hold
by a plummeting economy and the shifting political aims of Governor
Charlie Crist. Crist originally supported two reactors proposed by
Florida Power & Light to be built at Turkey Point, south of Miami,
and two more proposed near Tampa by Progress Energy. State regulators
voted to allow the utilities to charge ratepayers before construction
began, or even a license was approved.

But Crist is now running
for US Senate, and has distanced himself from the increasingly unpopular
utilities. With votes from two new appointees, the Public Service
Commission has nixed more than $1 billion in rate hikes. The utilities
have in turn suspended preliminary reactor construction (though they say
they will continue to pursue licenses).

At Calvert Cliffs,
Maryland, the financially tortured Constellation Energy has committed to
the French AREVA's European Power Reactor, now under serious challenge
by regulators in France, Finland and Great Britain. An EPR under
construction in Finland is now at least three years behind schedule, and
more than $3 billion over budget.

Meanwhile, at Entergy's
30-year-old Yankee reactor In Vermont, a series of radiation and
information leaks have severely damaged prospects for re-licensing. The
decision will soon be made by a deeply divided state legislature. "It
would be better for the industry to let Vermont Yankee die a quiet death
in the Green Mountain state," says Deb Katz of the grassroots Citizens
Awareness Network. "With radioactive leaks, lies and systemic
mismanagement, Entergy is no poster child for a new generation of
nukes."

Meanwhile, New Jersey may require operators of the aging
Oyster Creek reactor to install sizable towers to protect what's left
of the severely damaged Barnegat Bay, which the plant uses for cooling.
Though the requirement may not be enforced for as much as seven years,
the towers' high cost could prompt a shut-down of the relatively small
plant.

This unending stream of technical, financial and
political downfalls could doom the "reactor renaissance" to history's
radioactive dump heap. "President Obama needs to remember what Candidate
Obama promised: no more taxpayer subsidies for nuclear power," said
Michael Mariotte, executive director of the Nuclear Information and
Resource Service. "Renewables and energy efficiency provide both greater
carbon emissions reductions and more jobs per dollar spent than
nuclear. Unlike nuclear power, they are relatively quick to install, and
are actually safe and clean."

Indeed, despite Congressional and
White House support for these latest proposed loan guarantees, the
grassroots fight over both old and new nukes grows fiercer by the day.

In
the long run, this alleged "nuclear renaissance" could prove to be
little more than a rhetorical relapse.