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  • The Debate on Nuclear Loan Guarantees

    The debate over nuclear power in recent months has revolved around taxpayer backed loan guarantees for new nuclear projects. Not only has the President announced $8.3 billion in federal loan guarantees for a two-reactor project in Burke County, Georgia, his budget proposal includes tripling the nuclear loan guarantee program from $18.5 billion to over $54 billion.

    Unfortunately, some groups have used this debate to disguise their anti-nuclear agenda in anti-loan guarantee rhetoric. The basic construct of their argument is that nuclear energy is so risky and so expensive that using government backed financing subjects the taxpayer to unreasonable risk. The problem is that they often not only misrepresent facts about loan guarantees and what risks they pose, but also about nuclear energy broadly to make their case. Misrepresenting the facts not only undermines the legitimacy of their argument but takes away from a very important debate over whether or not loan guarantees are an appropriate tool for financing new nuclear (or any other energy source) projects.

    While The Heritage Foundation is opposed to expanding the nuclear loan guarantee program, we believe that it is critical that the debate be informed by facts. The Nuclear Energy Institute’s 13-page report in response to some of the misleading rhetoric helps do exactly that. By answering in detail many of the unfounded criticisms used to advance the anti-nuclear agenda, NEI sets the stage nicely for where the debate should be: on the efficacy of loan guarantees.

    The Heritage Foundation Position on Loan Guarantees

    The Heritage Foundation has not opposed limited loan guarantees (those already authorized under the Energy Policy Act of 2005). If limited, the subsidy can provide a mechanism to establish predictability after years of erratic regulatory hurdles and government-imposed risk. Expanding government intervention into capital markets beyond current authorizations would simply distort long-term market integrity. 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.

    If the loan guarantee program is to be expanded, it should be conditioned on: ending further loan guarantees, ensuring that recipients pay the full cost of the subsidy, making recipients privately refinance within five years of project completion, limiting guarantees to no more than two plants of any reactor design and limiting two thirds of the loan money to supporting a single technology.

    The loan guarantee debate should not be a rehash of old arguments over nuclear power. That is largely over. The real debate should be whether or not the loan guarantee program ought to be expanded. We strongly believe the answer to that is no. However, we also believe that it is a debate worth having and one that should be based on facts.

    Posted in Energy [slideshow_deploy]

    14 Responses to The Debate on Nuclear Loan Guarantees

    1. Pingback: Even USA’s Right Wing is Worried About Nuclear Loan Guarantees! « nuclear-news

    2. John B. San Diego says:

      All this Administration accomplishes on our new energy technologies is throwing money around at every problem.

      Obama wants little or no nuclear energy constructed let alone Up & Running.

      His Administration drools at the thought of six or seven dollar per gallon gasoline.

      High conventional energy costs and threats of disruption in the flow of energy empower his "Climate Change Initiatives”…

      I agree with the non-toxic environment cause, however why throw the economy under that L.N.G. Bus? It's clean burning!

      He offers subsidies as bi-partisan olive branch; watch for out for that nod ‘n’ wink.

      All the time he orders D.O.E. and D.O.J.; “I have no intentions of streamlining the process or eliminating nuisance lawsuits.”

      He will claim; see we invested in nuclear, "It Went No-Where" he is no liar he is just a master of deception and owns the bully pulpit. He is beholden to lobbyist and his loyal far left voting base, our economic recovery seems the farthest issue on his mind.

      Cap and Trade are huge taxes with implications of greatly increased costs for all products and services.

      Less investment in an obvious hostile tax atmosphere applied to an already volatile business world is a certainty. Ya/La subsidy.

      A dream come true for others, but that dream doesn’t include most of “The American People.”

    3. Pingback: USA: Right Wing Conservatives Opposing Obama’s Nuclear Loan’s Policy « Antinuclear

    4. Lloyd Scallan - New says:

      John B. hit the nail on the head. Obama wants no part of any nuclear power

      plans for this country. His only reason for his $54 BIllon in nuclear loan guarantees is to waste $54 Billon on a project he knows full well will never be completed, thus continue his destruction of our economcial system. Any plans for a nuclear power system will be tied up in our court system for generation by the so called "environmentalist" movement. It's just more Cloward & Piven type

      strategy to "overload' the system.

    5. Drew Page, IL says:

      Let private industry develop our nuclear power plants for generation of electricity, under the supervision and regulation of the NRC. There should be absolutely no loan guarantees or subsidies of any power generation sources by the government. The government is already involved way too much in private industry at the expense of the tax payers.

      Government subsidies, loans and bailouts of private industry provide an all-too-comfortable environment in which any business can be unproductive, too costly and ultimately fail, because the "Nanny State" will be there to rescue them with our tax money. If private enterprise fails then it should fail and not be propped up by our tax dollars. That goes for Fannie and Freddie, the banks, the brokerage houses, G.M. and Chrysler.

    6. Jan Rose says:

      The last count I read from the Goverment Acct. Office GAO was 27 agencies gave out loans and grants with taxpayer guarantees. President Clinton pushed this hardly and now it is taken as a matter of fact action to the point local business people don't seem to mind. Bankers and brokers dealers really like the arrangement because the risk goes to any taxpayer anywhere. The money is never pinpointed to the politician or beaucrat- no accountability. Do you see any REAL FINANCIAL security and exchange reform-ha!?

    7. Jim, Maine says:

      The devil is in the details. It sounds good to have the government pick up some of the risk, in this case through loan guarantees, but the unforeseen consequences can knock the car off the track quickly.

      It reminds me of the early years of EPA, when certain hazards were identified, asbestos, for example, and insurers suddenly could not determine the risk, so underwriters excluded that coverage from contractors. For a while, it shut many construction sites down, and fostered lawsuits and claims.

      For any level of government to assume any part of the risk, usually ends up like trying to trim a leg on a table. The more you attempt to adjust things, the more out of balance it becomes, and a lot of people end up in court.

      I doubt many lawyers will be concerned about it, though.

    8. Robert Augeri says:

      At one time I supported nuclear power plants. When I learned that if a nuclear power plant has a melt down of a partial melt down or a release into the atmosphere and land or property around the nuclear power plant becomes contaminated, all electric companies do not carry enough insurance for the cost of the contaimated property or homes to cover the loss. I will oppose anything nuclear. Look at what happened at Three Mile Island. Too this day they deny any release and the lives around this power plant became so infected with lukemia. Mostly childern and birth defects.

    9. Pingback: The Energy Net » Top 100 Energy Stories March 8th-14th 2010

    10. Richard Fletcher, Sa says:

      I supportp the Nuclear loan program but I have written Pres. Obama and strongly recommended that the direct energy sector Chu to examine the technology developed by:


      Simply scroll down until you see the section on Bill Gates and nuclear power.

      Then view the video that they have developed.

    11. Richard Fletcher, Sa says:

      I support the Nuclear loan program but I have written Pres. Obama and strongly recommended that he direct Energy Sec. Chu to examine the technology developed by:


      Simply scroll down until you see the section on Bill Gates and nuclear power.

      Then view the video that they (intelligent ventures laboratory) have developed.

    12. Marcia Greenshields, says:

      The requirement of millions of gallons of water per day for each nuclear power plant (water that evaporates and goes who knows where?) is reason enough not to have nuclear power. The water itself should be our source of energy.

    13. Pingback: Automatic Content Cash - Did not the auto industry just receive 25 billion from the Democrat led congress?

    14. Pingback: Americans High On Nuclear, Low On Global Warming | Tech News, Reviews, Business, Health News and More

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