President Barack Obama is going nuclear. He announced the initial $8 billion in loan guarantees for construction of the first new nuclear power plants in the United States in close to three decades. Obama is making good on a campaign pledge, like his promises to escalate the war in Afghanistan and to unilaterally attack in Pakistan. And like his “Af-Pak” war strategy, Obama’s publicly financed resuscitation of the nuclear power industry in the U.S. is bound to fail, another taxpayer bailout waiting to happen.
Opponents of the plan, which includes a tripling of existing nuclear plant construction-loan guarantees to $54.5 billion, span the ideological spectrum. On its most basic level, the economics of nuclear power generation simply doesn’t make sense. The cost to construct these behemoths is so huge, and the risks are so great, that no sensible investor, no banks, no hedge funds will invest in their construction.
No one will loan a power company the money to build a power plant, and the power companies refuse to spend their own money. Obama himself professes a passion for the free market, telling Bloomberg BusinessWeek, “We are fierce advocates for a thriving, dynamic free market.” Well, the free market long ago abandoned nuclear power. The right-wing think tank Heritage Foundation remarked, “Expansive loan guarantee programs ... are wrought with problems. At a minimum, they create taxpayer liabilities, give recipients preferential treatment, and distort capital markets.”
Amory Lovins of the Rocky Mountain Institute, a longtime critic of the nuclear power industry, told me, “If you buy more nuclear plants, you’re going to get about two to 10 times less climate solution per dollar, and you’ll get it about 20 to 40 times slower, than if you buy instead the cheaper, faster stuff that is walloping nuclear and coal and gas.”
In his 2008 report “The Nuclear Illusion,” Lovins writes, “Nuclear power is continuing its decades-long collapse in the global marketplace because it’s grossly uncompetitive, unneeded, and obsolete—so hopelessly uneconomic that one needn’t debate whether it’s clean and safe; it weakens electric reliability and national security; and it worsens climate change compared with devoting the same money and time to more effective options.”
The White House Office of Management and Budget, in the same statement announcing the $54.5 billion for nuclear power, also listed a “credit subsidy funding of $500 million to support $3 [billion] to $5 billion of loan guarantees for energy efficiency and renewable energy projects.” Thus, just one-tenth the amount for nuclear is being dedicated to energy efficiency and renewable energy technologies. At the same time, the Obama administration plans to cancel funding for the hugely unpopular Yucca Mountain nuclear waste storage facility. Edwin Lyman of the Union of Concerned Scientists told The Christian Science Monitor the Obama administration “doesn’t have a plan for [storing] radioactive waste from a new generation of nuclear power plants. That is irresponsible.”
The waste from nuclear power plants is not only an ecological nightmare, but also increases the threats of nuclear proliferation. Obama said in his recent State of the Union address, “We’re also confronting perhaps the greatest danger to the American people—the threat of nuclear weapons.” Despite this, plans that accompany what Obama has proposed, his “new generation of safe, clean nuclear power plants,” include increased commercial “nuclear fuel reprocessing,” which the Union of Concerned Scientists calls “dangerous, dirty and expensive,” and which it says would increase the global risks of both nuclear proliferation and nuclear terrorism.
Both Lovins and the Union of Concerned Scientists debunk the myth that nuclear energy is essential to combat global warming. Lovins writes, “Every dollar invested in nuclear expansion will worsen climate change by buying less solution per dollar.” Obama said that this first tranche of public funding, which will benefit the energy giant Southern Co., “will create thousands of construction jobs in the next few years, and some 800 permanent jobs.” Yet investment in solar, wind and cogeneration technologies could do the same thing, quickly creating industries here in the U.S. that are thriving in Europe. What’s more, the risks of failure of a windmill or a solar panel are minute when compared with nuclear power plant disasters like Three Mile Island and Chernobyl.
From economics, to the environment, to the prevention of nuclear threats, Obama’s nuclear loan guarantees fail on all counts.
Denis Moynihan contributed research to this column.