Nuclear Socialism?

As mentioned earlier [ Obama gives green light to new reactors ] Obama is pandering to visions of pie in the sky and offering what author Michael Grunwald terms "nuclear socialism". This is by no means a done deal and is already drawing criticism. [See second article.]

"Why Obama's Nuclear Bet Won't Pay Off"

by

Michael Grunwald

February 18th, 2010

Time

If you want to understand why the United States hasn't built a nuclear reactor in three decades, the Vogtle plant outside Atlanta is an excellent reminder of the insanity of nuclear economics. Its original cost estimate was less than $1 billion for four reactors. Its eventual price tag in 1989 was nearly $9 billion for only two reactors. But now there's widespread chatter about a nuclear renaissance, so the Southern Co. is finally trying to build the other two reactors at Vogtle. The estimated cost: $14 billion. And you can be sure that number is way too low, because nuclear cost estimates are always way too low.

That's why no Wall Street moneyman in his right mind would finance a new reactor. But President Obama has located an alternative financier: you. On Tuesday, he announced an $8.33 billion loan guarantee for the new Vogtle reactors, the first step in the Administration's push to jump-start the nuclear construction industry. Obama also urged Congress to set aside political differences and triple the budget for nuclear loan guarantees. "On an issue that affects our economy, our security, and the future of our planet, we can't keep on being mired in the same old stale debates between the left and the right, between environmentalists and entrepreneurs," Obama said.

But the President is ignoring a much fresher debate: between theory and reality. Even if Obama were correct that a nuclear rebirth is needed to address the climate crisis — and he isn't correct — the fact is that the rebirth isn't happening. Despite the prospect of new taxpayer guarantees — and the cradle-to-grave subsidies that already promote this 50-year-old industry at the federal and state level — utilities keep scrapping or delaying plans for new reactors.

In January, for example, after a Florida commission denied requests for dramatic electricity rate hikes, plans for two new reactors in the Keys were suspended, and plans for two more reactors outside St. Petersburg were delayed. Last August, the Tennessee Valley Authority scrapped plans for three new reactors in Alabama, and delayed a fourth by at least four years. Other reactors have been cancelled in Texas, Missouri and Idaho; license applications have been suspended in Mississippi, Louisiana and New York. Peter Bradford, a former member of the Nuclear Regulatory Commission, has calculated that of the 26 new applications submitted to the NRC since 2007, nine have been cancelled or suspended indefinitely, and ten more have been delayed by one to five years. Utilities like Exelon, Duke Energy and FPL have ditched or scaled back their nuclear ambitions.

In his speech Tuesday, Obama did acknowledge "some serious drawbacks with respect to nuclear energy," but the drawbacks he mentioned — waste disposal and reactor safety — are not the real obstacles to a rebirth. It would be nice to have a permanent Yucca Mountain-style repository for spent nuclear fuel, but for now plants have been storing their waste on-site without major problems. And the nuclear industry's safety record has improved dramatically in the 30 years since the Three Mile Island meltdown, although there are still occasional blips like a recent radioactive leak at a Vermont plant. The NRC is not exactly a hostile regulator, but sometimes it does show teeth; in October, it identified problems with the Westinghouse AP 1000 reactor design, which could create additional delays for nearly half the proposed new reactors, including the ones at Vogtle.

But waste disposal problems, safety issues and regulatory delays do create a much more serious obstacle to a nuclear comeback: They jack up the already exorbitant cost of construction. That is the truly serious drawback of nuclear energy. Recent studies have priced new nuclear power at 25-30 cents per kilowatt-hour, about four times the cost of producing juice with new wind or coal plants, or ten times the cost of reducing the need for electricity through investments in efficiency. Atomic energy is much cleaner than coal, and it provides baseload power when the wind isn't blowing and the sun isn't shining, so it sounds like a sensible way to accommodate increasing electricity demand. But it's not nearly as sensible or feasible or affordable as decreasing electricity demand altogether.

Meanwhile, nuclear costs keep spiraling out of control; last year, the estimates for several reactors doubled, and for one Pennsylvania reactor more than tripled. This is why credit rating agencies keep downgrading utilities with nuclear ambitions, which increases their borrowing costs and makes their projects even more expensive. Even with the federal guarantees, the new reactors at Vogtle are expected to boost local electricity bills by 9% — and like most nuke-friendly states, Georgia has enacted a law ensuring that ratepayers won't get their money back if the utility fails to complete the plant.

Nuclear power really is emissions-free, so we're fortunate that 20% of our electricity comes from existing nuclear plants. But even if they weren't spectacularly expensive, additional nukes couldn't come on line quickly enough to solve our climate problems; the industry dream of 45 new plants by 2030 would barely replace its aging plants scheduled for decommissioning. And nuclear energy may be the least cost-effective way to reduce greenhouse gases, which is why private investors are pouring billions into efficiency, wind, solar and other renewables instead. Taxpayers would get more bang for their energy bucks if their elected representatives made similar choices.

But nuclear energy is popular with the public, and wildly popular on Capitol Hill. Obama's push to expand the loan guarantees was one of the only bipartisan applause lines in his State of the Union address. New nukes are a priority for unions as well as utilities; the Vogtle project, while not exactly shovel-ready, is expected to create 3500 well-paying jobs if dirt starts moving next year. Meanwhile, Republican politicians who don't believe in global warming and didn't even want the word "French" in their fries can't stop talking about French nuclear plants that slash French emissions and produce 80% of French electricity. They tend not to mention that those plants were financed by the French government.

Ultimately, the U.S. may be heading toward a similar brand of nuclear socialism. Obama talks about massive nuclear subsidies as just one part of his larger clean-energy agenda, but he hasn't made them contingent on GOP support for that larger agenda. So the nuclear subsidies are sure to pass, while the larger agenda is likely to stall. Eventually, extravagant government largesse might create a nuclear rebirth of sorts — but it might end up strangling better solutions in their cribs, or prevent them from ever being born.

"Environmental Advocates Are Cooling on Obama"

by

John M. Broder

February 18th, 2010

The New York Times

There has been no more reliable cheerleader for President Obama’s energy and climate change policies than Daniel J. Weiss of the left-leaning Center for American Progress.

But Mr. Obama’s recent enthusiasm for nuclear power, including his budget proposal to triple federal loan guarantees for new nuclear reactors to $54 billion, was too much for Mr. Weiss.

The president’s embrace of nuclear power was disappointing, and the wrong way to go about winning Republican votes, he said, adding that Mr. Obama should not be endorsing such a costly and potentially catastrophic energy alternative “as bait just to get talks started with pro-nuke senators.”

The early optimism of environmental advocates that the policies of former President George W. Bush would be quickly swept away and replaced by a bright green future under Mr. Obama is for many environmentalists giving way to resignation, and in some cases, anger.

Mr. Obama moved quickly in his first months in office, producing a landmark deal on automobile emissions, an Environmental Protection Agency finding that greenhouse gases endanger public health and welfare, a virtual moratorium on oil drilling on public lands and House passage of a cap-and-trade bill.

Since then, in part because of the intense focus on the health care debate last year, action on environmental issues has slowed. The Senate has not yet begun debate on a comprehensive global warming bill, the Interior Department is writing new rules to open some public lands and waters to oil drilling and the E.P.A. is moving cautiously to apply the endangerment finding.

Environmental advocates largely remained silent late last year as Mr. Obama all but abandoned his quest for sweeping climate change legislation and began to reach out to Republicans to enact less ambitious clean energy measures.

But the grumbling of the greens has grown louder in recent weeks as Mr. Obama has embraced nuclear power, offshore oil drilling and “clean coal” as keystones of his energy policy. And some environmentalists have expressed concern that the president may be sacrificing too much to placate Republicans and the well-financed energy lobbies.

Erich Pica, president of Friends of the Earth, whose political arm endorsed Mr. Obama’s candidacy for president, said that Mr. Obama’s recent policy emphasis amounted to “unilateral disarmament.”

“We were hopeful last year; he was saying all the right things,” Mr. Pica said. “But now he has become a full-blown nuclear power proponent, a startling change over the last few months.”

Mr. Obama said in his remarks on the nuclear project this week that he knew his policies were alienating some environmentalists.

“Now, there will be those that welcome this announcement, those who think it’s been long overdue,” Mr. Obama said of the new nuclear loan guarantee. “But there are also going to be those who strongly disagree with this announcement. The same has been true in other areas of our energy debate, from offshore drilling to putting a price on carbon pollution. But what I want to emphasize is this: Even when we have differences, we cannot allow those differences to prevent us from making progress.”

Mr. Obama has long supported nuclear power, as a senator and as a candidate for president. Employees of the Exelon Corporation, the Chicago-based utility that is the largest operator of nuclear plants in the United States, have been among Mr. Obama’s biggest campaign donors, giving more than $330,000 over his career, according to the Center for Responsive Politics.

In response to criticism of some of its energy policies, the White House points to its clean energy investments, including $80 billion in stimulus spending on energy-related projects, and its continuing support for comprehensive climate and energy legislation. But critics in the green movement say they wish the president would play a more active role in the climate debate.

“I think we all had higher hopes,” said Bill Snape, senior counsel for the Center for Biological Diversity. “We expected a lot in the first year, and everyone agrees they didn’t quite live up to it. But there is recognition that he and the whole administration will get another stab at it.”

Mr. Snape said his group was particularly disappointed that the administration did not designate the polar bear as endangered by global warming and that it could not push a climate change bill through Congress.

“You can’t get anything right,” he said, “unless you get the polar bear right.”

Frances Beinecke, president of the Natural Resources Defense Council, one of the administration’s most stalwart supporters up to now, also expressed disappointment in the president’s new focus on nuclear power and his mention in the State of the Union address of “clean coal technologies.”

Mr. Obama was referring to the prospect of capturing and storing carbon dioxide emissions from coal-fired power plants, an as-yet-unproven technology. He was sending a signal to members of Congress from states that are dependent on mining coal or that burn it for electricity that any legislation he supported would accommodate their concerns.

“N.R.D.C. knows there is no such thing as ‘clean coal,’ ” Ms. Beinecke wrote in a blog post after the State of the Union address. “Every single step in the coal power cycle is dirty, from the profoundly destructive mountaintop removal mining to the smokestack emissions, which are responsible for 24,000 deaths a year.”

Eric Haxthausen, the United States climate policy director for the Nature Conservancy, has generally supported the administration’s goals and actions on energy and environment, although he said they fell short of what was needed to address global warming.

He said that Mr. Obama’s pledge at the United Nations conference in Copenhagen on climate change to reduce American emissions by 17 percent by 2020 compared with 2005 levels had raised the stakes. The United States government is now on record promising the world that it will take major steps to reduce greenhouse gas pollution, Mr. Haxthausen said.

“What’s needed to give this process life is a binding agent,” he said, “some force to bring these things together, and the White House has to be intimately involved. The reality is there’s a bit of a bully pulpit role that’s needed, and the question is, will the administration deliver.”