[NYTr] Incredible Chutzpah: Nuke Industry Wants $50+ Billion to Build New Plants

[All the News That Doesn't Fit]

sent by Mid-Missouri Peaceworks - Jul 31, 2007

This story, which ran in today's NY Times, is amazing. The nuclear
industry has absolutely no shame. They expect the American taxpayers
to roll over and underwrite a whole new generation of economic
lemons. They want $50 billion in loan guarantees just for the next
two years for an established industry.

If, after 50 years the nuclear power industry can't operate profitably
or attract investment capital without massive subsidies, why should
the taxpayers absorb even a dime's worth of risk? (Not to mention
the fact that after all these decades they still haven't figured
out what to do with their waste, or that they still demand
Price-Anderson to shield them from liability in the event of
accidents.)

A couple of points from the Times article that shouldn't be missed:

**  "Michael J. Wallace, the co-chief executive of UniStar Nuclear,
a partnership seeking to build nuclear reactors, and executive vice
president of Constellation Energy, said: 'Without loan guarantees
we will not build nuclear power plants.'"

One of the leading advocates for a so-called "nuclear renaissance"
admits that the tens of billions in taxpayer subsidies already
provided will not coax Wall St. into financing new nukes. It will
take the taxpayers underwriting the entire venture.

**  "But the Bush administration opposes the measure, fearing that
it could prove extremely costly.

"The provision would 'remove appropriate controls over the size of
the program and increase taxpayer liability,' the Office of Management
and Budget wrote in an official position statement on the energy
bill."

Did you catch that? Even the zealously pro-nuclear Bush administration
is opposing this. They have proposed $4 billion in loan guarantees
for all technologies, the nuclear gang wants tens of billions so
they can start building plants that the NYT reports are likely to
cost "about $4 to $5 billion apiece." Clearly, with 28 of these
dinosaurs on the drawing board, even the $50 billion figure is just
a down payment.

If you want to understand why new nukes are such a wasteful place
to squander our limited capital, please read  "Why a Future for the
Nuclear Industry is Risky," By Peter Bradford and David Schlissel
at:
http://www.cleanenergy.org/resources/reports/WhyNewNukesAreRiskyFACTSHEET.pdf

If this concerns you, now is the time to make your voice heard. The
nuclear boys are doing just that.

Thanks for your concern and your action, -Mark Haim

                          ***

The New York Times - Jul 31, 2007
http://www.nytimes.com/2007/07/31/washington/31nuclear.html

Energy Bill Aids Expansion of Atomic Power

By EDMUND L. ANDREWS and MATTHEW L. WALD

WASHINGTON, July 30  A one-sentence provision buried in the Senates
recently passed energy bill, inserted without debate at the urging
of the nuclear power industry, could make builders of new nuclear
plants eligible for tens of billions of dollars in government loan
guarantees.

Lobbyists have told lawmakers and administration officials in recent
weeks that the nuclear industry needs as much as $50 billion in
loan guarantees over the next two years to finance a major expansion.

The biggest champion of the loan guarantees is Senator Pete V.
Domenici of New Mexico, the ranking Republican on the Senate Energy
Committee and one of the nuclear industrys strongest supporters in
Congress.

Senator Jeff Bingaman, Democrat of New Mexico and the energy bills
author, has long argued that nuclear power plants do not need federal
loan guarantees. Mr. Bingaman said that the industry was
over-interpreting the provision and that it would provide loan
guarantees for only the most innovative power plants.

But the provision has the potential to considerably expand the
nuclear industry, which plans to build 28 new reactors at an estimated
cost of about $4 billion to $5 billion apiece. And while the nuclear
industry would be the biggest beneficiary, the provision could also
set the stage for billions of dollars in loan guarantees for power
plants that use clean coal technology and renewable fuels.

The nuclear industry is enjoying growing political support after
decades of opposition from environmental groups and others concerned
about the risks.

An increasing number of lawmakers in both parties, worried about
global warming and dependence on foreign oil, support some expansion
of nuclear power.

But the provision could go much further than many lawmakers had in
mind by giving the Department of Energy the power to approve an
unlimited amount of loan guarantees for clean power generation.
Under legislation enacted in 2005, nuclear power qualifies as a
clean technology because it does not emit carbon gases that contribute
to global warming.

Power companies have tentative plans to put the 28 new reactors at
19 sites around the country. Industry executives insist that banks
and Wall Street will not provide the money needed to build new
reactors unless the loans are guaranteed in their entirety by the
federal government.

The federal government guarantees many billions of loans each year
to help farmers, exporters, small businesses and students. The
government does not actually lend the money but agrees to pay it
back in case the borrower defaults.

While the nuclear industry says it will need $25 billion in loan
guarantees in 2008 and $50 billion over the next two years, President
Bush had proposed a far smaller amount  $4 billion  in new loan
guarantees next year for clean electric power technologies, which
include plants that run on so-called clean coal technologies and
renewable fuels.

Many experts fear that the proposed subsidies could leave taxpayers
responsible for billions of dollars in soured loans.

Such projects, by their nature, pose significant technical and
market risks, the nonpartisan Congressional Budget Office warned
last month in an analysis of the provision. Studies of the accuracy
of cost estimates for pioneering technologies have found that
estimates are consistently low.

Michael J. Wallace, the co-chief executive of UniStar Nuclear, a
partnership seeking to build nuclear reactors, and executive vice
president of Constellation Energy, said: Without loan guarantees
we will not build nuclear power plants.

The little-noticed provision in the Senate bill subtly refines and
expands the loan guarantee program that Congress passed in the
Energy Policy Act of 2005.

As before, the Department of Energy would be allowed to guarantee
100 percent of the loans and up to 80 percent of the total cost to
build a reactor.

But the bill essentially allows the department to approve as many
loan guarantees as it wants for both new reactors and plants that
use other clean technologies.

That is a big change. Under current law, the government is only
allowed to guarantee a volume of loans authorized each year by
Congress. Last year, Congress limited the government to awarding
just $4 billion in loan guarantees for clean energy projects during
the 2007 fiscal year.

Mr. Domenici, who has been pushing the Energy Department to move
much more aggressively in approving loan guarantees, has argued
that there is no need for limits on the loan volume because power
companies will be required to pay an upfront fee to cover the
estimated cost of the guarantee. In essence, the credit subsidy
payments would be used as a kind of insurance premium that could
be used to cover the cost of any defaulted loan.

It is very clear that this is a self-financing program, Mr. Domenici
told James Nussle, Mr. Bushs nominee to become the White House
budget director, at Mr. Nussles confirmation hearing last week.
There should already be $25 billion to $30 billion in the loan
guarantee fund.

But the Bush administration opposes the measure, fearing that it
could prove extremely costly.

The provision would remove appropriate controls over the size of
the program and increase taxpayer liability, the Office of Management
and Budget wrote in an official position statement on the energy
bill.

Michele Boyd, legislative director of the consumer advocacy group
Public Citizen, said the measure would subsidize plants with
conventional technology.

None of these so-called advanced nuclear reactors deal with the
fundamental flaws of nuclear power, such as dangerous radioactive
waste, vulnerabilities to air attack and excessive cost, said Ms.
Boyd, whose staff began investigating the provision shortly after
the Senate passed the bill last month.

Mr. Bingaman, the bills primary architect, said that he was aware
of the provision but believed that it would apply only to reactors
with fundamentally new technology.

I would be amazed if this generic loan program applied to most of
the plants that are being proposed, either for the nuclear industry
or coal industry, Mr. Bingaman said Monday night. The idea of this
is not just to help an industry build plants. Its to demonstrate
new technology that meets the nations energy needs.

But industry officials say the measure would directly affect the
reactors on the drawing board.

I think we can say that with all the projects moving forward on the
schedule they are now on, that there could be a need for $20 to $25
billion in loan guarantees, said Richard Myers, vice president for
policy development at the Nuclear Energy Institute, a trade
association.

The House is hoping to pass its own energy bill this week. But
leading House Democrats have made it clear they oppose any kind of
loan guarantees for nuclear reactors.

The House recently passed an appropriations bill for energy and
water programs that included $7 billion in loan guarantees for
projects involving renewable energy and specifically excluded nuclear
plants.

Representative Peter J. Visclosky, Democrat of Indiana and chairman
of the House Appropriations Committees panel on energy and water,
said last month that the nuclear industry had estimated a need of
$25 billion in guaranteed loans for next year and more than that
in 2009.

The industrys request, Mr. Visclosky warned, overwhelms what the
committee had been willing to offer the entire energy industry.

Still, nuclear industry executives say they hope the Senates loan
guarantee provision will be adopted by House lawmakers.

[ends]

-----------------------------------------------------------
Mid-Missouri Peaceworks 804-C E. Broadway Columbia, MO 65201
573-875-0539

E-mail: mail at midmopeaceworks.org Web site: www.midmopeaceworks.org
Check out our News Blog http://www.midmopeaceworks.org/articles.php

"Here in America we are descended in blood and in spirit from
revolutionists and rebels - men and women who dare to dissent from
accepted doctrine. As their heirs, may we never confuse honest
dissent with disloyal subversion."  --  Dwight David Eisenhower