President Obama announced Tuesday that the Department of Energy is awarding $8 billion in taxpayer dollars towards loan guarantees to build the United States' first nuclear reactors in nearly thirty years. This move may be politically expedient, but for the public, it's a raw deal.
As a candidate, Obama expressed openness to new reactors, but said, "Before an expansion... is considered, key issues must be addressed including: security of nuclear fuel and waste, waste storage, and proliferation."
President Obama should heed candidate Obama's advice. These issues have not been addressed. If anything, the challenges facing the nuclear industry have grown worse.
With Yucca Mountain a no-go, there is still nowhere to put the radioactive waste piling up across the country. New reactors would only add to the waste problem and could increase pressure to reprocess spent fuel, a dangerous and costly scheme that would increase waste streams.
There's also still no way to ensure reactors' safety. Reports of Homer Simpson-like lapses by staff at reactor sites abound, and the FBI has called nuclear facilities "target rich" environments for terrorists. More reactors also mean more weapons-usable material, increasing the risk of proliferation.
The fiscal implications of President Obama's position are alarming. For decades, the industry has depended on taxpayer support. Investing in emerging technologies that can eventually thrive on their own makes sense, but the nuclear industry doesn't fit the bill. After more than 50 years as one of the biggest recipients of federal subsidies, the industry should sink or swim on its own.
Many on Capitol Hill complain that within the climate debate, the nuclear industry isn't getting its fair share of attention. Some, like Senators Lamar Alexander (R-Tenn.) and Jim Webb (D-Va.) propose to remedy this with a new, hundred-billion dollar subsidy plan.
But the premise that the industry has been given short-shrift is false. Nuclear reactors have received more preferential treatment than any other source of electricity. Even today, the industry is slated to receive more federal loan guarantees, a host of tax credits for nuclear power production, and insurance subsidized through the Price Anderson Act, which was renewed for 20 years in 2005.
Investments in nuclear plants are deemed too risky by private industry (even before the financial crisis, Wall Street banks refused to grant loans for reactors, which tells you something), so the nuclear industry relies on loan guarantees from the federal government for new construction. The Congressional Budget Office has estimated that the risk of default on such loans is "very high -- well above 50 percent." President Obama's new budget dedicates more than $50 billion to nuclear loan guarantees. Taxpayers could be left on the hook for a massive bailout.
The firms angling to profit from new reactors, including Westinghouse, General Electric and Exelon, as well as electric utilities, are some of the wealthiest corporations in the country. Especially now, with deficits running so high, they should not become the beneficiaries of new government largess.
Nuclear industry lobbyists love to point to France to argue that having lots of reactors can work. But France has not solved its waste problem, and it faces a host of challenges from its nuclear facilities, such as a radioactive leak that recently forced the closure of two rivers. In the U.S., three times the legally safe amount of radioactive tritium, a cancer-causing carcinogen, has been detected in the groundwater along the Connecticut River in Vermont, leaking from pipes in the Vermont Yankee reactor. This news comes on the heels of the admission by the owner of the reactor that it willfully deceived lawmakers about its safety. And when it comes to the laudable goal of reducing carbon emissions, there are speedier and more affordable options. Truly clean options, including efficiency and wind and solar power, should be the focus.
In his remarks in Maryland on Tuesday, President Obama appealed to an international "race to... command growing energy industries" and invest in new technologies. But nuclear power is as old as the hula hoop, and is just as technologically advanced. President Obama should ditch this failed industry and take the lead on investing in truly clean, safe, and financially viable solutions to our energy crisis, rejecting the industry's rhetoric and abandoning this false solution.