Greenpeace

Within hours of President-elect Obama's victory, the nuclear industry was at it again: spinning nuclear power and attempting to put the best light on the industry's prospects after the loss of their favorite candidate, Sen. John McCain. The President of the Nuclear Energy Institute (NEI), Skip Bowman, congratulated President-elect Obama and Vice President-elect Biden on their victory and then he proceeded to mischaracterize their position on nuclear power.

I wrote all about it over on Huffington Post -- check it out!

Just as Americans are being asked to back the biggest bailout in U.S. history, Senator McCain would again put the American taxpayer on the hook for yet another corporate giveaway.

Senator McCain wants to build 100 more nuclear reactors in the U.S., 45 by 2030. But there’s an important detail that the Senator and his campaign fail to mention.  The economics of nuclear power are so abysmal that many nuclear CEO’s will not construct reactors unless the American taxpayer guarantees they wont lose money.

But the good senator and his campaign should know better.  Senator McCain has been around long enough to actually remember the implosion of the nuclear industry.  If his recollection has failed, his economic advisor Douglas Holtz-Eakin could refresh his memory. When the notion that the American taxpayer should guarantee loans to nuclear corporations was introduced in the Senate, the non-partisan Congressional Budget Office (CBO) then headed by Senator McCain’s economic advisor Holtz-Eakin found that:

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources.  http://www.cbo.gov/ftpdocs/42xx/doc4206/s14.pdf

Senator McCain’s support for nuclear loan guarantees can not be justified by the nuclear industry’s past performance.  According to the Department of Energy, the first 75 reactors built in the U.S. experienced cost overruns totaling over $100 billion and that was before the meltdown at Three Mile Island sent the nuclear industry even further into a tailspin.   

U.S. Nuclear Power Plant Construction Cost Overruns

Construction Started	Estimated Overnight Costs	Actual Overnight Costs	Percent Overrun
1966-67	$ 560/kWe	$1,170/kWe	209%
1968-69	$ 679	$2,000	294%
1970-71	$ 760	$2,650	348%
1972-73	$1,117	$3,555	318%
1974-75	$1,156	$4,410	381%
1976-77	$1,493	$4,008	269%

                                                                                                                                              (Joskow, Massachusetts Institute of Technology, The Economics of Investment in New Nuclear Power Plants in the U.S, EIA Midterm Energy Outlook Conference, April 12, 2005. Note: Figures are in 2002$/kWe )

It was this economic track record that doomed nuclear power in the U.S. and led Forbes magazine to declare that the "failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster of monumental scale." Really, who in their right mind would guarantee loans to an industry with this track record?  Obviously, not Wall Street!

Last July, six major U.S. Banking institutions (some of which have been bought or are now bankrupt) including Citigroup, Credit Suisse, Lehman Brothers, Goldman Sachs, Merrill Lynch & Morgan Stanley sent a letter to the Department of Energy (DOE).  The bankers told DOE that unless the U.S. Taxpayer backed 100% of the debt incurred by nuclear corporations that they would have difficulty “accessing capital markets.”

We believe many new nuclear construction projects will have difficulty accessing the capital markets during construction and initial operation without the support of a federal government loan guarantee.  Lenders and investors in the fixed income markets will be acutely concerned about a number of political, regulatory and litigation-related risks that are unique to nuclear power, including the possibility of delays in commercial operation of a completed plant or “another Shoreham”. We believe these risks, combined with the higher capital costs and longer construction schedules of nuclear plants as compared to other generation facilities, will make lenders unwilling at present to extend long-term credit to such projects in a form that would be commercially viable.  http://www.lgprogram.energy.gov/nopr-comments/comment29.pdf

 
The U.S. General Accounting Office (GAO) has also weighed in on these loan guarantees to the nuclear industry. The GAO recently found that the Bush Administration’s DOE does not have the oversight in place to adequately manage the loan guarantee program.  But rather than address the inadequacies identified by the GAO, the Bush administration has accelerated the loan guarantee program.  http://www.gao.gov/new.items/d08750.pdf

Senator McCain has already been warned by the CBO, the GAO and Wall Street that building new nuclear power plants is an economic meltdown waiting to happen. Even a subsidiary of Warren Buffet’s corporation Berkshire Hathaway has rejected a new nuclear reactor as economically unsound.  

Senator McCain has abandoned his straight talk when it comes to nuclear power.  The Senator needs to  explain why the American taxpayer should be put on the hook for new nuclear plants that the industry would never build if they and their stockholders had to bear the risk.

--Jim Riccio

This post was originally published April 26, 2008:

As American nuclear corporations move toward constructing new reactors in the U.S., it’s important that we remember the downside of the nuclear industry on this 22nd Anniversary of the Chernobyl Disaster.

The fact is that none of these corporations would ever construct another reactor if they were held liable for the consequences of the catastrophic accident that could occur. Less than a month after the disaster, NRC Commissioner James K. Asselstine testified to Congress that,

While we hope that their occurrence is unlikely, there are accident sequences for U.S. plants that can lead to rupture or bypassing of containment in U.S. reactors which would result in the off-site release of fission products comparable or worse than the releases estimated by the NRC staff to have taken place during the Chernobyl accident.

That is why the Commission told Congress recently that it could not rule out a commercial nuclear power plant accident in the United States resulting in tens of billions of dollars of property losses and injuries to the public.

The nuclear industry and their propagandists would like the public to forget or ignore this nuclear disaster.  But those who forget history are condemned to repeat it.  

Unfortunately, former Greenpeace activist Patrick Moore is now one of these pro-nuclear propagandists downplaying the consequences of this disaster. In the wake of the Chernobyl disaster,  and prior to pulling a paycheck from the Nuclear Energy Institute and forming CASEnergy, he issued a document entitled:

 “SOME FACTS ABOUT THE CHERNOBYL NUCLEAR DISASTER”
by Patrick Moore, Ph. D.
Greenpeace Foundation of Canada

 

 

Mr. Moore went on to conclude that:

 

The facts concerning the Chernobyl disaster haven’t changed and neither has the nuclear industry. Nuclear power is a dangerous technology that would never be built if corporations bore the true cost and liability for the potential consequences. However, it seems Mr. Moore has either forgotten the facts about Chernobyl or has been paid to ignore them. Neither of which is acceptable.  

For more information on the Chernobyl Accident and reactor risks:

American Chernobyl: Nuclear “Near Misses” at U.S. Reactors Since 1986.
Greenpeace 2007.

Risky Business: The Probability and Consequences of a Nuclear Accident
Greenpeace

CHERNOBYL: Some Lessons  and Implications for Lower Quality Electric Utilities,  Donaldson. Lutkin & Jenrette Securities Corporation, 1986


For additional information on Mr. Moore & his current activities see:

Spinning the Atom in Mother Jones Magazine