Nuclear power regaining favor amid recession, climate concerns
BY JUDY PASTERNAK
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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.
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.
Story Transcript
JUDY PASTERNAK: They come in different shapes and sizes, but 104 nuclear reactors around the United States are all rooted in the same basic science. They split unstable atoms of uranium to unleash massive amounts of energy, heating water and turning turbines enough to make about one-fifth of the country’s electricity. But this fleet of reactors is aging, and even if their licenses are extended, they will start going dark by 2060. No new units have been authorized since 1979. That was the year that small amounts of radiation were released from Three Mile Island in Pennsylvania, and authorities feared for days that a huge surge might escape from the plant. Protesters had already been organizing anti-nuke rallies to call attention to the risks of radiation, and though no one died at Three Mile Island, the close call was frightening to the public. Seven years later, 31 people died immediately after an explosion at Chernobyl, then in the Soviet Union. That disaster spread radiation over an area the size of Denmark and led to the resettlement of hundreds of thousands of people. Now, though, there is another peril to take into account: climate change caused in large part by burning fossil fuels like coal or gas. Fossil fuels produce nearly 70 percent of America’s power. The nuclear energy industry argues that their kind of electricity has to be part of any solution to global warming because it delivers large amounts with very little carbon. Increasingly, others are beginning to agree. Many headlines and speeches have called this time the nuclear renaissance. With several Republicans in the Senate pushing a plan for 100 new nuclear reactors, spurred by incentives launched under President Bush, the first applications in 25 years started arriving in 2007. Already, utilities are seeking enough expansion to increase capacity.
SCOTT BURNELL, NUCLEAR REGULATORY COMMISSION: The last time that the NRC had an application in-house for a new reactor prior to 2007 was back in 1979, and that particular application was withdrawn later on after the events of Three Mile Island. Given the increase in interest that the NRC knew was coming, we have expanded our workforce by about 600 people, most of that here at headquarters.
PASTERNAK: Yet the renaissance is far from assured. Safety and waste issues remain. And the biggest obstacle of all is money. Decades have passed without accidents, and public fear about another Three Mile Island or Chernobyl has ebbed. What to do with radioactive waste from nuclear plants is another stumbling block.
ELLEN VANCKO, UNION OF CONCERNED SCIENTISTS: We have to constantly be vigilant, not only from existing reactors, from new reactors as well. The new reactor designs are not significantly different than the ones we have in operation today, and people need to understand that.
PASTERNAK: The federal government assumed responsibility for finding a long-term repository. After decades of study, the choice, Yucca Mountain in Nevada, has been placed on hold by the Obama administration.
BURNELL: The Department of Energy did submit an application for that site in 2008. The staff has been reviewing it. There are questions going forward regarding the budget resources that will be available for the Department of Energy to continue to pursue that application. But at this point, from the NRC standpoint, we continue to look at Yucca Mountain. We’ll determine whether or not that’s acceptable. If it is, that would become the nation’s repository.
PASTERNAK: Most pressing of all is the question of who will pay to build all the new nuclear reactors being proposed. Nuclear power plants are relatively cheap to operate, but building a reactor can cost $5-$8 billion. Utilities can’t afford to pay for construction on their own, and huge cost overruns and delays in the past make private financing unlikely.
VANCKO: Well, pronouncements by Wall Street, nuclear power executives, and the nuclear industry’s lobbying arm all point to is the fact that nuclear power cannot get built without massive federal subsidies, price protections, as well as protections from risk and operational problems. So the reality is, without all of this public support, nuclear power is not a viable option. The question is: what is that public support going to cost the US taxpayer?
PASTERNAK: In 2005, Congress authorized loan guarantees of $18.5 billion, and in 2009 the Energy Department picked four finalists for the program. Already, though, the finalists are asking the department to put together as much as $40 billion in guarantees for their projects.
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REP. ZACH WAMP (R-TN): Where’s the loan guarantee commitment, both in bills we’ve already seen and the upcoming bill, to show that the administration wants to see more than a handful of reactors built in order to increase that 20 percent of electricity from nuclear?
STEVEN CHU, SECRETARY OF ENERGY: The loan guarantee, there are discussions ongoing, active discussions with four of the applicants. We have $18.5 billion. We’re proceeding as fast as possible. Hopefully sometime this summer we can make announcements. That $18.5 billion can cover three or four, and no more. There are other applicants, and so in order to proceed ahead with more, we would essentially need more money for authorizing appropriate [inaudible]
WAMP: And you’ll be pursuing that in future years, future bills, future options?
CHU: Yes. Yes, I think that makes sense.
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PASTERNAK: The industry would like to see the total go even higher, to as much as $100 billion, and that number is getting serious consideration in Congress. But some say that nuclear power has had plenty of time to prove itself, and other forms of energy, like wind and solar, need more of a helping hand.
VANCKO: While nuclear power cannot be taken off the table as a potential solution to climate change, at the present time there are faster, safer, and cheaper ways of reducing greenhouse gas emissions than through new nuclear power plants. This includes energy efficiency and presently available renewable resources that are ready to be put on the ground today at a much lower cost, much more quickly, and with much less risk to the environment, and from a cost standpoint.
