Nuclear Double Whammy: Biased Waste Commission; and $56 Billion in High-Risk Loan Guarantees

Jan. 29, 2010 Dave Kraft, NEIS (773)342-7650

CHICAGO-President Obama wasted little time in advancing his new-found pro-nuclear energy agenda as the Dept. of Energy today announced formation of its nuclear waste study group, and leaks from the Administration state that over $54 billion will be made available in tax-payer guaranteed construction loans for new nuclear reactors in the next budget.
$54.5 billion in high-risk loan guarantees:
The Administration intends to add an additional $36 billion to the already approved $18.5 billion set aside to help jump-start new nuclear reactor construction.
"This could well become the nuclear power industry version of the Goldman-Sachs windfall," observes David Kraft, director of Chicago-based Nuclear Energy Information Service, a nuclear power watchdog group. A 2003 Congressional Budget Office analysis concluded that the default rates for such risky loans could exceed 50%. Costs of the defaults would be borne by the U.S. taxpayers, Kraft explained.
"Certainly, if the Obama Administration is going to engage in energy-by-government-fiat like in China, Belarus and Iran, the least they could do is allocate an equal amount to true renewable energy sources like wind and solar," Kraft says. "There is no rational reason for this kind of preferential backing of the energy resource least likely to have a meaningful effect on the climate disruption situation," Kraft notes.
Things could be worse though, Kraft observes. The same day as President Obama's pro-nuclear State of the Union Address, pro-nuclear cheerleader and Senate Energy Committee Chairman Jeff Bingaman (D.-NM) circulated a "Dear Colleague" letter in the Senate seeking support for his proposal for instituting a "Clean Energy Development Administration," which would allow for unlimited taxpayer-backed loan guarantees for construction of new nuclear reactors and "clean coal" projects, without provisions for Congressional or public oversight.
"We've been down this path before," Kraft points out. "The bailout mania that enriched Goldman Sachs last fall is about to be lavished on the nuclear industry," he says. "With this kind of securitization, renewables - which have the same upfront high capital cost problem as nuclear -- will be deliberately priced out of the market. Without market share and economies of scale to reduce costs, renewables will simply not get built," Kraft predicts. "Obama's ‘green economy' is already turning a rotten brown."
DOE's Blue Ribbon Commission on America's Nuclear Future:
In another unsurprising move, the Dept. of Energy (DOE) announced the formation of the national panel which is alleged to "provide recommendations for developing a safe, long-term solution to managing the Nation's used nuclear fuel and nuclear waste," according to the DOE press release.
Formation of the Panel was Energy Secretary Dr. Steven Chu's response to the Administration's cancelation of the flawed and controversial Yucca Mt. high-level radioactive waste disposal project. The Panel will be co-chaired by former Congressman and 911-Commission member Lee Hamilton; and former National Security Advisor and retired Air Force General Brent Scowcroft.
"The deck is already stacked," observed NEIS' Kraft. "In Washington circles, Lee ‘Whitewash' Hamilton is known as the go-to guy you send controversial issues to get sanitized, not thoroughly investigated," according to Kraft.
Kraft also notes that Scowcroft's statements have already shown prejudice towards a pre-determined outcome. "When Scowcroft speaks of ‘a long-overdue expansion of nuclear energy,' as he did in the DOE press release, he cannot be taken seriously as an unbiased participant. He will force the square nuclear peg down the round hole of public acceptance at all costs. It is worse that such bias has already emanated from a Panel co-chair," Kraft asserts.
"While we would like to believe that the members of this Panel will perform a thorough and honest study of this issue, this already obvious bias, and the composition of this Panel cast that outcome in serious doubt," Kraft states. "Regrettably, this appears to be a ‘study for show,' not a ‘study to know.'"
Kraft notes that, while some members of the Panel have commendable scientific credentials, others are clearly old industry boosters, such as former Sen. Pete Domenici (R.-NM) ("who never met a nuclear project he didn't like," Kraft says); John Rowe, Chairman of Exelon Corporation, the nation's largest nuclear utility; and former NRC Commissioner Dick Meserve, whose nomination, unlike those of the rest of his colleagues on the Panel, was actively opposed by many safe-energy organizations who had to deal with his pro-industry stance as NRC commissioner ("NRC - stands for ‘not-really-concerned,'" Kraft states.)
"Where are the representatives of the communities already severely and negatively impacted by nuclear waste? Do they not have valuable input to share in this process? Does their experience count for nothing? Where is their voice in this Panel?" Kraft asks.
"By showing such a pro-nuclear bias and abandoning true renewable energy, the Obama Administration will soon learn that the half-life of ‘hopium' is extremely short, and may already have run out," Kraft warned.
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