February 7, 2010

Obama's Pro Nuclear Power Policy

Obama wants to triple public financing for new nuclear power plants, even as he nixes funds for storing commercial radioactive waste. The policy may be calculated to win votes for climate change legislation, but critics say it's not 'coherent' and carries new security risks.

President Obama has followed up on his support for "a new generation of safe, clean nuclear power plants," laid out Jan. 27 in his State of the Union speech, by proposing to triple public financing for nuclear power.

The Department of Energy recently proposed $36 billion in new federal loan guarantees on top of $18.5 billion already budgeted – for a total of $54.5 billion. That's enough to help fund six or seven new power plants.

It's a full-speed nuclear-power gambit that many say is largely a bid to win votes from pro-nuclear senators for legislation to address climate change. But his strategy is generating a firestorm of opposition, amid warnings that much more is at stake than a political calculus.

From environmentalists to fiscal hawks to nuclear security experts, the Obama plan is sparking near-open revolt. The nuclear-power expansion is not accompanied by any plan to store commercial radioactive waste, they note, and includes a new push by the Department of Energy into spent-fuel reprocessing and small "pocket nuke" reactor research, which they see as a proliferation risk. The Obama nuclear policy is at cross purposes to his nonproliferation goals, they add, and might even cement his energy legacy as the president who revived a moribund industry that hadn't built a nuclear plant in decades because of the financial, environmental, and security risks involved.

"It's ironic, but Obama could end up being the biggest pro-nuclear power president since Dwight Eisenhower," says Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a nuclear deterrence expert who served as deputy for nonproliferation policy in the Department of Defense from 1989-1993 under President George H.W. Bush.
One antidote to global warming?

Among environmentalists, who saw Mr. Obama as a friend of renewable energy, the sense of betrayal is acute.

"Every new nuclear power plant built would be a step backwards when it comes to solving global warming," Anna Aurilio, a spokeswoman for Environment America said a statement. "Clean energy solutions like energy efficiency and renewable energy sources such as wind and solar are far more effective."

Obama's stance won plaudits from the industry, however.

"The administration's initiative will make a meaningful difference in bringing about development of the nuclear energy facilities that our nation needs," Marvin Fertel, president of the Nuclear Energy Institute, said in a statement.

Budget hawks have a different set of concerns. They oppose government "subsidies" to the industry (in the form of federal loan guarantees), saying taxpayers assume a huge risk given the industry's track record of cost overruns – and loan defaults – in the 1980s.

"We didn't have good experience recently with the mortgage industry, and we ought to keep that in mind with nuclear power," says Doug Koplow, president of Earthtrack, an energy consulting firm. "For each power plant, we're talking about something like $8 billion in taxpayer exposure to a single asset owned by a private firm. To me that seems unprecedented."

Various studies and the US Government Accountability Office warn of potential loan default rates on the order of 50 percent. The Department of Energy, though, says safeguards are in place to prevent that.

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