Obama's Atomic Blunder

As
Vermont seethes with radioactive contamination and the Democratic Party
crumbles, Barack Obama has plunged into the atomic abyss.

In
the face of fierce green opposition and withering scorn from both
liberal and conservative budget hawks, Obama has done what George W.
Bush could not---pledge billions of taxpayer dollars for a relapse of
the 20th Century's most expensive technological failure.

Obama has announced some $8.3 billion in loan guarantees for two
new reactors planned for Georgia. Their Westinghouse AP-1000 designs
have been rejected by the Nuclear Regulatory Commission as being unable
to withstand natural cataclysms like hurricanes, tornadoes and
earthquakes.

The Vogtle site was to originally host four reactors at a total cost of $600 million; it wound up with two at $9 billion.

The
Southern Company which wants to build these two new reactors has cut at
least one deal with Japanese financiers set to cash in on American
taxpayer largess. The interest rate on the federal guarantees remains
bitterly contested. The funding is being debated between at least five
government agencies, and may well be tested in the courts. It's not
clear whether union labor will be required and what impact that might
have on construction costs.

The Congressional Budget Office and other analysts warn the likely
failure rate for government-back reactor construction loans could be in
excess of 50%. Energy Secretary Stephen Chu has admitted he was unaware
of the CBO's report when he signed on to the Georgia guarantees.

Over the past several years the estimated price tag for proposed
new reactors has jumped from $2-3 billion each in some cases to more
than $12 billion today. The Chair of the NRC currently estimates it at
$10 billion, well before a single construction license has been issued,
which will take at least a year.

Energy experts at the Rocky Mountain Institute and elsewhere
estimate that a dollar invested in increased efficiency could save as
much as seven times as much energy than one invested in nuclear plants
can produce, while producing ten times as many permanent jobs.

Georgia has been targeted largely because its regulators have
demanded ratepayers put up the cash for the reactors as they're being
built. Florida and Georgia are among a small handful of states taxing
electric consumers for projects that cannot come on line for many
years, and that may never deliver a single electron of electricity.

Two Florida Public Service Commissioners, recently appointed by
Republican Governor Charlie Crist (now a candidate for the US Senate),
helped reject over a billion dollars in rate hikes demanded by Florida
Power & Light and Progress Energy, both of which want to build
double-reactors at ratepayer expense. The utilities now say they'll
postpone the projects proposed for Turkey Point and Levy County.

In 2005 the Bush Administration set aside some $18.5 billion for
reactor loan guarantees, but the Department of Energy has been unable
to administer them. Obama wants an additional $36 billion to bring the
fund up to $54.5 billion. Proposed projects in South Carolina, Maryland
and Texas appear to be next in line.

But the NRC has raised serious questions about Toshiba-owned
Westinghouse's AP-1000 slated for Georgia's Vogtle site, as well as for
South Carolina and Turkey Point. The French-made EPR design proposed
for Maryland has been challenged by regulators in Finland, France and
Great Britain. In Texas, a $4 billion price jump has sparked a
political upheaval in San Antonio and elsewhere, throwing the future of
that project in doubt.

Taxpayers are also on the hook for potential future accidents from
these new reactors. In 1957, the industry promised Congress and the
country that nuclear technology would quickly advance to the point that
private insurers would take on the liability for any future disaster,
which could by all serious estimates run into the hundreds of billions
of dollars. Only $11 billion has been set aside the cover the cost of
such a catastrophe. But now the industry says it will not build even
this next generation of plants without taxpayers underwriting liability
for future accidents. Thus the "temporary" program could ultimately
stretch out to a full century or more.

In the interim, Obama has all but killed Nevada's proposed Yucca
Mountain nuclear waste dump. He has appointed a commission of nuclear
advocates to "investigate" the future of high-level reactor waste. But
after 53 years, the industry is further from a solution than ever.

Meanwhile, the Nuclear Regulatory Commission has reported that at
least 27 of America's 104 licensed reactors are now leaking radioactive
tritium. The worst case may be Entergy's Vermont Yankee, near the
state's southeastern border with New Hampshire and Massachusetts. High
levels of contamination have been found in test wells around the
reactor, and experts believe the Connecticut River is at serious risk.

A furious statewide grassroots campaign aims to shut the plant,
whose license expires in 2012. A binding agreement between Entergy and
the state gives the legislature the power to deny an extension. US
Senator Bernie Sanders (I-VT) has demanded the plant close. The
legislature may vote on it in a matter of days.

Obama has now driven a deep wedge between himself and the core of
the environmental movement, which remains fiercely anti-nuclear. While
reactor advocates paint the technology green, the opposition has been
joined by fiscal conservatives like the National Taxpayer Institute,
the Cato Institute and the Heritage Foundation.

Reactor backers hailing a "renaissance" in atomic energy studiously
ignore France's catastrophic Olkiluoto project, now $3 billion over
budget and 3 years behind schedule. Parallel problems have crippled
another project at Flamanville, France, and are virtually certain to
surface in the US.

The reactor industry has spent untold millions lobbying for this
first round of loan guarantees. There's no doubt it will seek far more
in the coming months. Having failed to secure private American
financing, the question will be: in a tight economy, how much public
money will Congress throw at this obsolete technology.

The potential flow of taxpayer guarantees to Georgia means nuclear
opponents now have a tangible target. Also guaranteed is ferocious
grassroots opposition to financing, licensing and construction of this
and all other new reactor proposals, as well as to continued operation
of leaky rustbucket reactors like Vermont Yankee.

The "atomic renaissance" is still a very long way from going tangibly critical.