Obama's Nuclear Con

Update:  Forty-four announced the first federal loan guarantee for building a nuclear power plant this week. Incredibly the $8.3bn guarantee is for a reactor in Georgia that does not meet federal safety standards. Southern Company's Vogtle plant is a two unit project using Westinghouse AP 1000 reactors, a new design never built before. Two pressurized water reactors, Units 1 and 2, are already in operation at Vogtle [photo, courtesy NRC].  The Nuclear Regulatory Commission rejected the plans for the new units as not meeting minimum engineering standards for the containment building.  The loan guarantee is contingent upon Westinghouse submitting designs that can be approved by regulators.  However, the lack of approved design plans puts the eventual cost of the project into question.  The most recent company estimate is $14bn, but Vogtle has a history of cost-overruns.  The first two units were estimated to cost $1bn each, but by the time they were built in the 1980s they cost $9bn each. That history is typical of the price escalation experienced by the industry as a whole. About 100 projects were abandoned during planning or construction in that era and there has been no new projects since then. If the plant owner defaults on the construction loans, the money will come out of the taxpayer's pocket.  Most utility construction financing comes from the little known Federal Financing Bank. The industry's poor track record did not stop the Georgia legislature from passing a law requiring rate payers to begin paying for the plants even thought they will not produce a watt of power until 2017 or later depending on construction delays. The administration in its push for more nuclear power has yet to explain why federal money is not better spent retrofitting existing coal plants, and promoting cleaner burning sources of energy such as abundant domestic natural gas. Critics point to the infamous case of the Shoreham Nuclear Plant which took 20 years to build, cost $6bn and never went into commercial operation.  Long Island rate payers are still paying for that plant's construction. $3.3bn in debt remains unpaid. The Fulton County Taxpayer's Foundation and the Southern Alliance for Clean Energy are suing the Georgia PUC to challenge the constitutionality of the law which allows utilities to collect the costs of plant construction in advance.

{first post 2.8.10} More nuclear power is what Forty-four wants now that he is enjoying comfortable digs on Pennsylvania Avenue. Needless to say the policy does not square with what he was saying during his campaign. He may be the biggest pusher of the energy source once touted as "too cheap to meter" since Eisenhower. Tell that to the City of San Antonio. Its municipal utility contracted to build two nuclear plants at an estimated $5.8bn with partner NRG Energy in 2007. The project quickly became eligible for loans from Secretary Steven Chu's Energy Department. Dr. Chu, a physicist from the Livermore Lab at the University of California, Berkeley said recently that the administration is "aggressively pursuing nuclear energy."[1] The $18.5bn loan guarantee program is supposed to finance up to ten new plants. But the major reason new plant construction has flatlined in recent years is the burgeoning cost of new construction {12.31.07}. The chances of default on government insured loans is well above 50% according to the Congressional Budget Office. When the City of San Antonio discovered that an independent report from the Texas Office of Public Utility Council pegged the project's cost as high as $22bn, it backed out of the deal and is now suing NRG and Toshiba, claiming they misrepresented the true cost of the plants.  San Antonio is not experiencing sticker shock alone{6.17.09}.  The average cost of a new nuclear facility is currently estimated to exceed $12bn. Wall Street refuses to back new ventures without government loan guarantees.

Support for nuclear power is consistent with Obama's previous public record.  As a freshman Senator from Illinois he authored a bill requiring nuclear plant operators to report leaks, even small ones (Nuclear Release Notice Act of 2006).  Illinois residents were upset that Exelon Corporation did not disclose tritium leaks at one of its plants[2]. But Obama was careful to keep the industry in the loop.  He weakened the bill's language considerably in response to Republican and industry criticisms.  The compromises got the bill out of committee, but it died on the Senate floor. Since 2003 employees of Exelon have contributed at least $227,000 to Forty-fours' campaigns for Senate and president. Two top company officials are among his largest fund raisers, and the company's chairman, John W. Rowe, is also the head of the nuclear power industry lobby group based in Washington.  Exelon's financial support of Obama exceeded its support for any other presidential candidate. Overall, the industry has poured money into lobbying efforts. Between 1999 and 2009 it spent $63 million on campaign contributions

Environmentalists who saw Forty-four as a friend of green energy, are experiencing an acute sense of betrayal.  The administration is hoping to sell nuclear power as a 'silver bullet' solution to global warming, perhaps to entice some conservatives into supporting global warming legislation. The centerpiece of the pending Senate climate bill is $100bn in loan guarantees with $38bn designated for nuclear projects.  But the administration is pushing nuclear power while ignoring the unsolved problems of permanent waste disposal and security. A spokesman for the Union of Concerned Scientists said the administration's nuclear power plans "are no longer coherent".  The only national waste depository, Yucca Mountain, Nevada is slated for shut down with no viable replacement.  Currently, high level wastes are being stored above ground at plant sites, a condition widely considered to be a security risk.
[1] the so-called 'nuclear renaissance' began in the early naughts when an MIT study drastically underestimated the cost of building nuclear power plants.{Too Expensive to Use, 7.24.09}; {Too Expensive to Meter, 10.29.08} The University of California was Obama's largest campaign contributor.
[2] the tritium leak at Braidwood, Illinois was so large that Exelon was required to by a new municipal water system for a nearby town. Embrittlement of building materials from intense radioactivity is a common problem for aging nuclear plants. www.counterpunch.org/wasserman02112010.html