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  • Obama’s Nuclear Push Good but Not Enough

    callaway-nuclear2

    President Obama announced $8.3 billion in federal loan guarantees today to commence projection construction on two nuclear reactors in Burke County, Georgia. This is good news. Congress has authorized $18.5 billion in loan guarantees for nuclear energy projects under the Energy Policy Act of 2005, which also provided other subsidies for nuclear power to help mitigate the effect of decades of regulatory risk for approximately the first six nuclear reactors built in the U.S. While the administration should be applauded for finally getting this program off the ground and getting the remaining $10.2 billion issued should be a priority, loan guarantees are not enough to recreate a robust nuclear industry in the United States. Indeed, an expansion of the program could do much more to stifle the industry’s growth than to help it.

    Reuters reports that “A spokesman for Southern [Company] said the loan guarantee would cover up to 70 percent of the company’s portion of the project’s costs.” The money would be paid back if Southern Co. earns back its costs. Loan guarantees can help overcome some near-term financing obstacles, but they are subsidies and should not be expanded. Heritage nuclear expert Jack Spencer writes:

    Expansive loan guarantee programs are wrought with problems. At a minimum, they create taxpayer liabilities, give recipients preferential treatment, and distort capital markets. Further, depending on how they are structured, they can remove incentives to decrease costs, stifle innovation, suppress private-sector financing solutions, perpetuate regulatory inefficiency, and encourage government dependence.”

    Spencer lays out the problems with energy loan guarantees here.

    Instead of expanding the loan guarantee program, the government should focus its attention on implementing policies that create a sustainable nuclear industry and reduce the taxpayer liability of the existing loan guarantees. New nuclear policy should address the problem and create a solution for waste management. The government should not take the geologic repository for nuclear waste, Yucca Mountain, off the table but instead allow the Nuclear Regulatory Commission (NRC) to come to an objective, scientific conclusion on Yucca’s usability.

    It is equally important for Congress to make the regulatory process for permitting new nuclear reactors more efficient, and to equip the NRC for regulating different reactor technologies. Establishing a predictable and effective regulatory structure for the nuclear industry, without compromising safety and security, will do much more to drive a nuclear renaissance than perpetuating the status quo with nuclear subsidies.

    Posted in Energy [slideshow_deploy]

    23 Responses to Obama’s Nuclear Push Good but Not Enough

    1. Ben says:

      Nuclear power is the dirties and costliest form of power generation that exists. Only a fool would pursue nuclear power.

    2. FollowFacts, Dixie says:

      Let's not kid ourselves: Obama has left lots of exit ramps – after the plants have been built:

      Clinton, Hillary Rodham, Edwards, John, and Obama, Barack. “Democrat candidates: Complete debate transcript .” Las Vegas Sun, January 15, 2008.
      http://www.lasvegassun.com/news/2008/jan/15/debat

      Yucca Mountain

      WILLIAMS: … And let’s talk for a moment about Yucca Mountain. …

      OBAMA: I will end the notion of Yucca Mountain because it has not been based on the sort of sound science that can assure the people in Nevada that they’re going to be safe. And that, I think, was a mistake.

      Now, you hate to see billions of dollars having already been spent on a mistake, but what I don’t want to do is spend additional billions of dollars and potentially create a situation that is not safe for the people of Nevada. So I’ve already — I’ve been clear from the start that Yucca, I think, was a misconceived project. We are going to have to figure out how are we storing nuclear waste.

      Nuclear Power:

      OBAMA: Now, with respect to nuclear energy, what I have said is that if we could figure out a way to provide a cost-efficient, safe way to produce nuclear energy, and we knew how to store it effectively, then we should pursue it because what we don’t want is to produce more greenhouse gases. And I believe that climate change is one of the top priorities that the next president has to pursue.

      Now, if we cannot solve those problem, then absolutely, John, we shouldn’t build more plants. But part of what I want to do is to create a menu of energy options, and let’s see where the science and the technology and the entrepreneurship of the American people take us.

      …(discusses intention to implement cap-and-trade, in the current budget as a source of revenue) …

      OBAMA: And if nuclear energy can’t meet the rigors of the marketplace — if it’s not efficient and if we don’t solve those problems — then that’s off the table. And I hope that we can find an energy mix that’s going to deliver us from the kinds of problems that we have right now.

    3. John B. San Diego says:

      This is no serious change in Energy Policy.

      First, Obama and Secretary Chu should invest in grants to research and develop efficient affordable waste disposal similar to methods employed currently by the French. Otherwise every tree-hugger will object, plus there is something to be said for investing in nuclear science the better we understand that science the more efficient and safe we become

      Second,a loan guarantee is no assurance tons of lawsuits will not be filed.

      Obama and Sec.Holder should come out public and say to Contractors and Sub-contractors that they will absolutely not be held up in court with lawsuits.

      Third, mandate a U.S. manufacturing base will be nurtured and protected from foriegn contractors. We either have to gain the manufacturing capability to fabricate large containment vessels here stateside or build smaller wattage reactors in greater quantity.

      I don't want the United States paying anyone else to build components for Our Electrical Generating Facilities.

      Forth, Obama keeps going down this energy path no one will be satisfied his liberal base will be incensed with his move toward nuclear and free market proponents will scoff at throwing tax payer money at our energy problems. And jobs may be created overseas if he is not careful about implementing this proposal.

      I am not saying Obama can't do anything right he should think this one through.

      Next he will say we can drill offshore and there will be a thousand and one, catch 22’s.

    4. Pingback: Obama and Nuclear Power « The Daily Plunge

    5. Pingback: Obama's Nuclear Push Good but Not Enough | TheUnical Technologies Blog

    6. Kyle says:

      Ben,

      Where exactly did you get your information? You obviously are uninformed and only desire to state unfounded (an untrue) statements. Try comparing nuclear to coal for cleanliness/cost. Try comparing gas turbine plants to nuclear for cost. Unless you have any FACTS, I suggest you keep quiet.

    7. Rick74 says:

      It is amazing that this effort to encourage nuclear power development has taken only 31 years (TMI – 1979).

      Your article states the case well. The need to focus on mitigating carbon emissions and on reducing our dependence on foreign oil and gas should have moved us to this track long ago.

    8. Sam, WI says:

      There are really only two problems with nuclear power. First, the stigma associated with it has resulted is so much red tape that there's hardly been any plants built for a couple decades. The second is that there are so few people who pursue engineering degrees that even if new plants were built it would be very difficult to get enough people to run it.

      As for cost, the United States has not needed to mine Uranium since we started disarming nuclear warheads. About the only thing to do with it is to dilute from weapons grade ,~90% U-235 (U-235 is the isotope used in reactors), to reactor grade ,3-4% U-235. And even when fuel is "spent" it still has some U-235 and so can be reprocessed back up to reactor grade.

      In regards to cleanliness, there isn't even a single spot of soot produced (for obvious reasons), and the people who crew them keep a very close eye on radiation. Ultimately, smokestacks at a coal plant can put out more radiation than a nuclear plant since the coal can contain radioactive isotopes in the form of impurities.

    9. JD, real world says:

      Ben, you're a moron. Nothing is further from the truth. Europe, particulary France, extensively uses nuclear power for cheap, clean energy.

      Let's see…how many nuclear plants could be build with the simulus funds? Easily several hundred. Talk about a jobs program! 100's of thousands of people back to work. Tremendous reduction of foreign oil reliance. Huge decrease in the emission of green house gases. Cheap energy for the whole country.

      Nuclear waste? Well, did you notice that a couple months ago Obama sold the right to dump nuclear waste in the US? ….to the Chinese. So guess he's not really very worried about that is he? http://www.bing.com/images/search?q=chinese+nucle

    10. Tim Az says:

      This is simply spending tax dollars on a project that liberals never intend to see finished. How much of this money will labor unions return to liberals in the form of campaign contributions? This is just more liberal plunder. Laundering tax dollars through unions who will return a portion of the tax dollars in campaign contributions to perpetuate the indirect theft of the peoples money.

    11. Ben C. Ann Arbor, MI says:

      This nuclear program reminds me of the building of railroads from the Atlantic to the Pacific back in the "Old West.". Private enterprise: sucessful. Government enterprise: failure. If you doubt me look it up. But then Congress rarely bothers to study history.

    12. Pingback: Morning Bell: Washington Subsidies Can’t Save Nuclear Power | The Foundry: Conservative Policy News.

    13. Drew Page, IL says:

      J.D., real world — Selling U.S. nuclear waste dumpsites to the Chinese sounds a bit far out. I couldn't confirm or deny this on snopes.com or anywhere else. I would hate to think this was true.

      Nuclear power is the wave of the future, but more needs to be done with respect to reducing the amount of nuclear waste. I've read that only about 5% of the available energy in fuel rods is actually used in powering the reactors, leaving lots of unused energy in the "spent" fuel rods. Ways must be found to reduce the amount of waste by using more of the energy stored in these fuel rods and ways must be found to use the energy left in spent fuel rodfs safely. It can be done, but it's going to take time and effort by our nuclear scientists.

      Years ago, big oil companies began redefining themselves as "energy companies". That being the case, I would suspect that the big oil (energy) companies would own controlling interest in natural gas reserves, coal reserves and patents on alternative energy sources. These energy companies have the financial resources to develop nuclear power generation and to reduce amounts of nuclear waste and store it safely, or find other safe uses for it.

    14. Damon S. McClure, Le says:

      His union thugs will get these huge jobs $$$$$$ and we will spend it (TAX-MONEY) But that does not mean we will fire them up!

    15. Pingback: Washington Subsidies Can’t Save Nuclear Power: Obama – Carter Colossal Failure. « Political Vel Craft

    16. Thomas Crimmins, Fre says:

      I think the nuclear power subsidy needs further review by Heritage. The 2005 Act calls for a loan guarantee in the event that there is a delay in loading fuel or starting the plant up due to governmental or intervenor tardiness or interference. The cost of this delay (financing costs are at their maximum) was one of the single most damaging costs that have impacted and threatened past nuclear power plant development. The Nuclear Regulatory Commission significantly refined the licensing process to decrease this risk. A separate public hearing is no longer required when the construction is complete, to obtain an operating license. The initial licensing process before construction begins results in a Construction Permit and an operating license as long as the plant is built in accordance with the application.

      This last criteria still presents a possible source of delay either by the regulator or the public through the courts, but that is expected to be much more difficult than the intervening in the public hearing process. Being delayed at that stageis still a financial risk, albeit a reduced one, and the loan guarantee is designed to reduce that risk for the owner and the mortgagor. It is a contingent subsidy and may apply in the situation of total default as well. But it is not a giveaway for the construction of a power generator as are the subsidies for windmills and solar panels.

      This needs to be clarified.

      Furthermore, this type of contingent subsidy does not enhance the likelihood of Cap and Trade legislation being passed. Nuclear plants are a solution to gas emissions by coal, gas and oil generation, but the subsidy is not linked to greenhouse gas reduction, but rather to a financial risk that other forms of generation are not likely to be confronted with.

      Subsidies for wind and solar have been around for at least 40 years because these forms of electricity generation cannot compete in the marketplace with the traditional power generation methods. They have not worked in the past, and unless they are extremely lucrative, will not work in the future.

      I would be pleased to help in this clarification should Heritage contact me.

      Tom Crimmins

    17. Cliff, North Little says:

      Obama's credibility has all but evaporated in practically every major area

      of our Nation's economic and job creation front, security and military strength/morale, constructive and transparent health care negotiations with ALL of Congress AND the American people, lobbyists, earmarks,

      unionism, czars and exectutive orders that are a bit spooky as well.

      We now are going to "trust" his "tip-of-the-ice-berg" assessment of this nuclear deal just as the "man-made-global-warming-hoax" gets to cookin' ???? ouuuupps !!! …I mean … COOLIN' !!!

      This is likely a BAIT-N-SWITCH … shell game arrangement, that is embedded in what this administration does best … SHOW. Make no mistake, he ain't givin' up on GREEN !!!

    18. Matt, Reno, NV says:

      "come to a scientific conclusion on Yucca’s usability."

      That sounds like vaguely familiar….

      "We will restore science to its rightful place"

      I wonder who said that?

    19. Pingback: Don’t Be Fooled by Obama’s Offshore Drilling Announcement | Step Down Obama

    20. Pingback: Morning Bell: Don’t Fall For Obama’s Energy Shell Game | The Foundry: Conservative Policy News.

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    23. satellitejam, FL says:

      Nuclear power plants have a life-time carbon footprint. At first, there is the construction of the plant, service roads, and the new power lines. This construction phase, which may take many years, is carbon intensive. There is much carbon-based fuel used to transport, manufacture and build the plant and the supporting infrastructure. Then there is the nuclear fuel mining and production, and radioactive waste transportation and storage, which continues through the working life of the plant. Finally, there is the decommissioning/dismantling waste transportation, security and storage, all of which can exceed the life of the plant by hundreds of years.

      All nuclear power plants routinely release radioactive gases and radioactive liquids into the environment as a part of their normal operations. These planned releases are part of the operation of each plant. (1) The emissions contain radioactive materials that are known to cause cancer and birth defects. While the amount of radioactivity in the emissions might be small, this does not mean that it is safe. This is true because living organisms absorb and store the radiation. Over time, certain radioactive elements will be found in the life forms at a higher concentration than will be found in the air, soil and water. (2)

      1) nrc.com

      "Radioactive Effluent Reports".

      (2 )http://toxics.usgs.gov/definitions/bioaccumulation.html

      Concerning the tax-payer funded federally-backed loans available to build nuclear power plants:

      [ The Congressional Budget Office] considers the risk of default on such a loan guarantee to be very high–well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings.

      Please see

      The Congressional Budget Office Cost Estimate Report May 7, 2003.
      http://www.cbo.gov/doc.cfm?index=4206&type=0

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