Yesterday, President Obama announced that the Energy department will provide an $8.3 billion loan guarantee to the Southern Co. for its proposed nuclear power plant near Augusta, GA. "The loan guarantee program for new nuclear power plants not only will further the nation's commitment to clean energy, Obama said, "but also will assist in creating jobs in American communities." Unfortunately, nuclear energy isn't safe or clean and it's too costly for the nation.
News coverage has been mostly supportive and, in some cases, bordering on cheerleading. In his blog for the Atlantic magazine, Editor Daniel Indiviglio laid out "five reasons to cheer Obama's ambition." Let's take a closer look at these "five reasons."
Reason #1: "Nuclear power is a known quantity. The U.S. has been successfully using this energy source for a very long time."
Nuclear power is certainly well known to Wall Street, which despite its recent debacles, has refused to fund power reactors for more than 30 years because of their financial risks. Reactor construction costs climbed as high as 380 percent above expectations during the boom period for nuclear in the 1970s. Nuclear investors eventually wrote off about $17 billion. Consider the 1979 Three Mile Island Accident, in which TMI investors lost about $2 billion in about an hour, when the reactor core started to melt. Nuclear energy has depended primarily on the financial burden being born by the tax payer and rate payer. This is hardly a success story.
Reasons #2 & #3: Semi-Shovel ready, Jobs now -- Jobs later
A new nuclear reactor might provide 800 near-term jobs and as many as 3,500 new construction jobs later. This is comparable to the number of home weatherization jobs created in State of Ohio last year. Unlike energy conservation, in which jobs are created relatively quickly, nuclear reactor construction jobs may take several years to come about.
Reason #4: Probably not very costly
Costs for nuclear power have nearly doubled in the past five years. Currently reactors are estimated to cost about $8 to $10 billion. Moreover, the Congressional Budget Office and the Government Accountability Office estimate these loan guarantees have more than a 50-50 chance of failing -- something Energy Secretary Chu told the news media yesterday he was unaware of before signing off on them. Because of the way the $54.5 billion in loan guarantees are structured, the Federal Financing Bank (otherwise known as the U.S. Treasury) will provide the loans. Guess who will be left holding the bag if things go south?
Reason #5: Preparing for America's Energy future
Assuming that all $54.5 billion in nuclear loan guarantees being sought by Obama are successful -- this will provide less than one percent of the nation's current electrical generating capacity. Replacing the existing fleet of 104 reactors which are expected to shut down by 2056 could cost about $1.4 trillion. Add another $500 billion for a 50% increase above current nuclear generation capacity to make a meaningful impact on reducing carbon emissions. This means the U.S. would have to start bringing a new reactor on line at a rate of once a week to once a month for the next several decades.
Meanwhile, Obama has pulled the rug out from under the nuclear industry by terminating funds for the Yucca Mountain nuclear waste disposal site in Nevada. After nearly 30 years of trying, disposal of high-level radioactive waste is proving to be extremely difficult. So Obama has convened a "blue ribbon" panel of experts to go back to the drawing board and recommend what to do two years from now.
The accumulation of spent power-reactor fuel is expected to double at reactor sites and poses new safety issues, which will be the reality for several decades to come. Spent fuel pools currently contain about four times what their original designs envisioned and may be more vulnerable to terrorist attacks than reactors. In 2004, a National Academy of Sciences panel concluded that drainage of water from a spent fuel pond by an act of malice could lead to a catastrophic radiological fire. One thing is certain. Republicans and Democrats do not want to restart a national radioactive waste dump selection process that's guaranteed to anger voters before the 2012 elections and beyond.
Nuclear Energy is an intriguing idea until you start to think about it.