Forty-four has a big smile on his face these days. His gigantic subsidy of 30 million new customers for the private health insurance industry was finally passed without help from the wholly owned GOP. Passage of so-called health care reform will no doubt allow him a second term in office since he accomplished what no other Democratic president was able to do in the last century. The next subsidy on the list of corporate America is the $1 trillion in loan guarantees to the nuclear power industry. A large part of the administration's energy plan to replacing fossil fuels relies on revitalizing a moribund nuclear power plant industry. As
US Person has reported before, the administration and its allies in Congress want to build 100 new nuclear generating stations in the United States
{"nuclear renaissance"}. Currently the Nuclear Regulatory Agency is reviewing applications for 21 new reactors. The major problem with this approach is that construction of new plants has flat lined since the early 1980s because of the ballooning construction costs of complex nuclear reactors. Utilities are reluctant to undertake the risk of expensive nuclear projects without federal subsidies in the form of loan guarantees. The Alexander-Webb bill (S.2776) proposes up to $1 trillion in new guarantees and places the risk of default, estimated at 50% by the CBO, in the form of subsidy costs on the taxpayer. Current legislation requires the utility to pay subsidy costs. It also removes an important protection for the taxpayer who is providing the capital. Under the Energy Policy Act of 2005, the United States has first lien rights in the case of a loan default and the assets are sold to satisfy debts. The new legislation requires that the US share liquidated assets with other investors, often foreign companies. The loan application review period is truncated to six months from the date of submission, a short time to approve loans of such complexity, and in most cases before the reactor design is finalized or realistic cost estimates are available.
All of the administration's accelerated emphasis on making nuclear power affordable ignores the fact that a basic problem of nuclear power generation has not yet been permanently solved. The only national high level waste depository at Yucca Mountain, Nevada has been denied budgeting and is no longer slated to go into operation. All high level waste in the US is stored above ground at nuclear facilities, a temporary solution that is vulnerable from a security standpoint. The way around this problem is a bureaucratic word game worthy of Wonderland. The Nuclear Regulatory Agency has a rule which basically says they will assume for planning and regulatory purposes that a permanent national repository will be operating by 2025.
No other repository site is currently under consideration to replace Yucca Mountain. The rule is called inappropriately, the "Waste Confidence Rule". The proposed legislation will codify this rule, thereby prohibiting the NRC from rejecting a nuclear plant project for lack of capacity to dispose of radioactive waste in "a timely manner".
Another $4 billion in direct subsidies to the nuclear industry are proposed for such things as workforce training, research on extending the life of current reactors, and a program for developing
small, fast reactors. Most governments and companies have had negative experiences with developing
small reactors since they do not achieve economies of scale. In contrast to this largess for an expensive, dirty mode of power production, the bill proposes only $6 billion over 10 years for clean alternative energy sources such as liquid biofuels, solar electricity, improved batteries, and carbon capture technology. The reason for these misplaced priorities are many, but the prime driver is that because nuclear power plants are expensive to build, the industry uses political influence to
collect a lot of utility rate payer and government money to socialize the risks of construction and operation. It is a strategy familiar to Wall Street.
[photo: legalplanet.wordpress.com]
