U.S. to nuclear power industry: please take our subsidies
The original rationale for these special benefits was economic. The point was to jump-start a technology that promised to provide energy “too cheap to meter,” in the memorable phrase of Lewis Strauss, who headed the Atomic Energy Commission in the 1950s. In a 1954 advertisement, General Electric predicted that within “five years—certainly within ten,” reactors would be “privately financed, built without government subsidy.”
In 1957, Congress passed a law that effectively indemnified nuclear energy companies from the risks of an accident. That law, known as Price Anderson, was supposed to expire in ten years; that was when, according to plan, the industry would become profitable and start paying for its own insurance. Instead, Price Anderson was repeatedly extended and then, in 1988, made permanent.
Why do so many want to spend so much?
How, then, to explain why taxpayers are still being asked to keep the industry afloat more than half a century later? Why, in a period of deficit-cutting fervor, is so much of official Washington so powerfully inclined to spend more taxpayer money on nuclear power?
Many are drawn to the allure of a quick technological fix. Republicans, according to Ferguson, like the idea that all our energy and environmental problems could be solved by constructing a hundred or more nuclear plants (as Sens. Mitch McConnell and Lamar Alexander have proposed). By and large, Ferguson observes, the Republican Party’s point of view is to favor big power projects unequivocally. He cites the rhetoric: “‘Drill, baby, drill,’ ‘We can be energy self-sufficient,’ ‘We can keep going out in the deep water and getting the oil,’ and ‘We can build the big nuclear plants [and] the big coal plants.’” By contrast, the GOP sees conservation as a frill: “it’s nice, it’s a virtue, but it’s not going to really save us.”
For Democrats, there are a variety of motivations, including, says Sokolski, “an aversion to looking like Jimmy Carter.” Many relish the idea of a policy that appears “muscular” and “green at the same time.” And some, in the view of Robert Alvarez, a senior scholar at the Institute for Policy Studies, probably see their advocacy of loan guarantees as part of a relatively harmless game of “throwing nuclear candy at the Republicans,” since they don’t actually expect many new reactors to be built in any case.
Sokolski, however, argues that support for a loan-guarantee program could prove to be a dangerous gambit for the tag-along Democrats. “When you do loan guarantees on the [theory] that, well, no one will be able to put the collateral together so it’s a sweet way of having your pro-nuclear cake without having to eat it, you’re kidding yourself,” Sokolski says. “Times will change, we may get a price on carbon, you just don’t know,” he adds, and an apparent nuclear consensus might well provide critical mass for very real construction in the long run.
Constructing a nuclear plant on time and budget isn’t easy
Nuclear plant construction expenses have always been high, and though each new generation of reactors has been touted as simpler and cheaper, the capital costs have gone steadily up, not down, in contrast to the trend lines of gas, wind, and solar energy.
The problem is, at heart, one of scale and exactitude, according to Henry Sokolski, who served in the first Bush administration as the Defense Department’s head of nonproliferation policy. “It’s common for us to pour lots and lots of concrete,” Sokolski explained in a phone interview with Remapping Debate. “It’s also common to weld lots of rebar. It’s not common to do these things to super-exacting standards.”
“Then there’s all the specialized nuclear items that have to go inside this structure you build out of concrete, and the many thousands of miles of piping and wiring that has to be laid — not the way you and I would do it for our house, but to exceedingly high quality-assurance standards.” This is work that calls for “people who are certified and trained and do not grow on trees — people who demand a lot of money,” Sokolski continued. “And you need lots of their time.” Building a reactor, he concluded, “is very special, as they would say on Sesame Street.”
The nuclear power industry likes to rest its cost estimates on a concept known as “overnight construction costs,” which eliminates the need to consider the possibility of delay, overruns, and additional financing expense. In the real world, according to industry critics, such extra costs are the rule, not the exception. “Anytime things get delayed, the costs of financing get compounded,” said Doug Koplow, a Boston-based consultant and advocate whose organization, Earth Track, describes itself as dedicated to making environmentally harmful subsidies “easier to see, value, and eliminate.”
Until recently, the French were hailed as exemplars of a more standardized and cost-effective approach that the U.S. could seek to emulate. But France has lost some of its allure as a global model since a French-Finnish effort to build the world’s largest and safest nuclear plant became mired in delays and cost overruns. The project, begun in 2005, has to date gone 2 to 3 billion dollars over budget and remains uncompleted. Some of the missteps involved “things as basic as how they poured their cement,” Koplow said, “We ought to be humble about this stuff. The more complex systems are, the more pieces need to fit together, the more likely something will be screwed up.”