A $50 Billion Nuke Power Bomb Is Dropping Toward Obama's Stimulus Package

by Harvey Wasserman

The desperate, dangerous nuclear power industry has dropped a $50 billion stealth bomb meant to irradiate the Obama Stimulus Package.

It comes in the form of a mega-loan guarantee package that would build new reactors Wall Street wouldn't finance even when it had cash. It will take a healthy dose of citizen action to stop it, so start calling your Senators now.

The vaguely worded bailout-in-advance provision was snuck through the Senate Appropriations Committee in the deep night of January 27. It would provide $50 billion in loan guarantees for "eligible technologies" that would technically include renewable sources and electric transmission. But the handout is clearly directed at nukes and "clean coal."

The Stimulus Package is explicitly meant to create jobs within the next two years. But according to sources at the Nuclear Regulatory Commission, no new reactors could be licensed for construction within that time. Nor could any new coal plants. And thus the funds in this rider are to "remain available until committed." That means their "stimulus" might not go into effect for many years.

But the nuclear industry does have the ability to spend large sums of money on "site preparation" and other busy work prior to being licensed. Though the guarantees could technically be used for truly green sources such as wind and solar, the provision's backers, including Senators Robert Bennett (R-UT) and Thomas Carper (D-DE), have made it clear that this money is meant to go for new reactor construction.

In late 2007, nuclear power's Congressional Godfather, then-Sen. Pete Domenici (R-NM), stuck a similar $50 billion loan guarantee package into that year's energy bill. A grassroots uprising, joined by virtually all national environmental organizations, helped defeat the package. Among other things, the fight inspired a music video from Bonnie Raitt, Jackson Browne, Graham Nash, Keb Mo and Ben Harper (www.nukefree.org).

In late 2008 the industry came back again with a blank check package that went down in flames along with the stock market.

Still unable to get private financing, the industry is back yet again. In the interim, the projected cost of building new reactors has soared to more than $10 billion each, and continues to climb steadily. Many of the previous generation of reactors came in hugely over budget. According to the Nuclear Information & Resource Service, one DOE study places the overall average overruns at 207%. But reactor projects such as Seabrook, in New Hampshire, New York's Shoreham, Pennsylvania's Beaver Valley, California's Diablo Canyon, and many others, far exceeded that.

The Congressional Budget Office now predicts that half the nuclear utilities using such a loan program will go into default. Some $18.5 billion in loan guarantees has already been approved, apparently for such use. But its legality is being hotly disputed, and the money has not been distributed by the Department of Energy.

Washington insiders believe this latest attempt at a pre-arranged bailout has again come from Domenici, who has stayed in Washington to lobby for his radioactive benefactors after apparently retiring from the Senate in January.

This guarantee package was not part of the Stimulus Package that passed the House. Its secretive, late night inclusion on the Senate side is reminiscent of how former Vice President Dick Cheney did business for the fossil/nuclear corporations that funded much of the Bush Administration. The reappearance of this kind of back door dealing has not been well received, especially in the House.

Numerous national groups, including the Nuclear Information & Resource Service (www.nirs.org) are providing sign-ins for sending e-mails to the Senate. They also urge that you call your Senator at 202-224-3121.

Time is fast slipping by for the nuke power industry. As the popularity of renewables and efficiency escalates, the most obvious source of new jobs and prosperity has become truly green technologies. Atomic power has long since been priced out of the market. Only massive federal and ratepayer subsidies could bring it back, to the direct detriment of the revolution in renewables.

Defeating this latest money grab will help drive another nail in the coffin of the 20th century's most expensive failed technology. It is an essential step toward a truly green-powered future.

Harvey Wasserman's SOLARTOPIA! Our Green-Powered Earth, is at www.harveywasserman.com. He edits the NukeFree.org web site, and is senior editor of www.freepress.org, where this article first appeared.

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February 3, 2009

Dear Senator,

We [the undersigned ___ environmental, consumer, religious organizations and businesses] are writing to express our dismay and anger over the inclusion by the Senate Appropriations Committee of a provision in the economic stimulus bill to provide up to $50 Billion in additional taxpayer loan guarantees that could be used for construction of new nuclear reactors and "clean coal" plants.

This loan guarantee program is already highly controversial and loaded with money for polluting technologies like nuclear power and "clean coal." Adding more money to this program would have absolutely no stimulative effect on our economy, since no nuclear reactors or "clean coal" plants can be built over the two year period supposed to be covered by this bill.

But adding more money to the loan guarantee program would greatly increase the risk to taxpayers. The Congressional Budget Office already has predicted a 50% default rate for utilities using this program to build new nuclear reactors. Indeed, this program appears to be nothing more than a pre-emptive bailout of the nuclear power industry--one taxpayers would likely to be paying for many years.

We also note that the structure of the program is such that the most expensive and riskiest nuclear projects--those where the utility seeks the maximum 80% of project costs--would be financed not by private capital, which will not invest in nuclear power--but directly from the U.S. Treasury through the Federal Financing Bank. We are not willing to be bankers for new nuclear reactors or "clean coal" boondoggles.

At a time when we still don't have a safe and scientifically-defensible solution to the radioactive waste produced by the first U.S. nuclear reactor, which has been closed for years, nor for any nuclear reactor that has followed it, it is unconscionable for the Senate to be using taxpayer money to support the production of still more deadly radioactive waste in our communities.

Congress should be focused on supporting those technologies--like wind, solar, geothermal and energy efficiency--that can be installed quickly and will help meet our electricity needs cheaper, safer and cleaner than nuclear power, without the economic and safety risks associated with the nuclear fuel chain.

We urge you to remove this provision from the stimulus bill, and to work to prevent any further taxpayer support for the failed, obsolete nuclear power industry.