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Nuclear Energy and Loan Guarantees, Part I

Over the past few days, I've run into more than my share of angry and exasperated colleagues here at NEI. The reason: All the attention being given to the musicians who hit town yesterday to attack nuclear energy.

Don't get me wrong, everyone understands that Americans have a right to speak their minds on the issues of the day. But what's bugging us is that -- with a few notable exceptions -- the press is giving these musicians a free pass when it comes to what they're saying about the industry, in particular about nuclear energy and loan guarantees.

Richard Myers is NEI's Vice President of Policy Development. Over the next few days we'll be featuring a series of posts from him that will help cut through the propaganda and misinformation. Part I follows:
We Know What They’re Against,
But What Are They For?


For the last 10 days or so, I’ve watched the anti-nuclear groups (and their rock star friends) attacking nuclear power, and the use of federal loan guarantees to support the financing of new nuclear power plants. They’ve stitched together a story out of half-truths, quotes taken out of context, misinformation and, yes, plain old-fashioned lies.

Enough. It’s time to open the window, let in some fresh air, introduce some facts.

Over the next few days, we’ll talk about what loan guarantees are (and aren’t), why loan guarantees are an appropriate form of investment support for new nuclear plants, why they’re not subsidies and how to think about subsidies. And we’ll talk about what’s really at stake here, because this not about loan guarantees for nuclear power. This is about what kind of country we want to leave to our children.

But today, before we get into all that, let’s stop and reflect on what would happen if the anti-nuclear groups and the rock stars had their way, if the United States did not build new nuclear plants. What does it mean to oppose nuclear power and the use of financing support (like loan guarantees) to enable construction of new nuclear power plants? Quite simply, it means that you are:

Anti-consumer – Residential, commercial and industrial users of electricity will suffer, because loan guarantees allow lower-cost financing, so the nuclear plant will deliver lower-cost electricity than otherwise.

Anti-environment – A growing body of independent analysis and bipartisan commentary demonstrate that any credible program to reduce carbon emissions must include nuclear energy. Not that nuclear energy is the answer by itself. Sensible people recognize that it will take a portfolio of technologies to address climate change. For a factual, well-reasoned, even-handed discussion of this issue, check out The Power to Reduce CO2 Emissions – The Full Portfolio from the Electric Power Research Institute. EPRI shows that we must mobilize all of our resources – efficiency and demand-side management, clean coal with carbon capture and sequestration, renewables, nuclear energy and more – and we must do so aggressively if we hope to reduce greenhouse gas emissions from the U.S. electric sector.

Anti-jobs and anti-labor – American workers will benefit from the loan guarantee program. Each new nuclear plant means 1,400-1,800 jobs during construction on average (with peak employment as high as 2,400 jobs); 400-700 permanent jobs when the plant is operating, and 400-700 additional jobs in the local area to provide the goods and services necessary to support the nuclear plant workforce (like car dealers, dry cleaners, supermarkets, etc.). We’ve done a number of economic analyses that support these numbers.

Anti-manufacturing – American manufacturers will benefit from the loan guarantee program, because construction of new nuclear plants will create demand for commodities like concrete and steel and hundreds of components, large and small. A single new nuclear power plant requires approximately 400,000 cubic yards of concrete (five times as much concrete as in the foundation and floor slabs of the 100-story Sears Tower in Chicago); 66,000 tons of steel; 44 miles of piping, 300 miles of electric wiring, and 130,000 electrical components.

Anti-economic growth – If the United States does not build new nuclear power plants, we will build more gas-fired generating capacity to maintain reliability and sustain economic growth. This will place even more pressure on natural gas supply and prices. Rising natural gas prices will do even more damage to industries like chemicals, plastics, glass and others that use natural gas as a fuel and a feedstock. (We’ve already lost over 100,000 jobs in the chemical industry to other countries over the last five years or so because U.S. natural gas prices are so high.) Industry won’t be the only casualty: Homeowners will also see higher prices for the natural gas they need for heating.

So .. now we know what the anti-nuclear groups and their rock star groupies are against. I wonder what they’re for?
More to come.

Comments

RobC said…
The problem comes from Congress's decision to keep electricity cheap by allowing high pollution levels from fossil-fired power plants. We look back at the Aztecs with horror because they sacrificed hundreds of people every month to keep the world alive. We sacrifice thousands every month to keep electricity cheap.

From the studies I've seen, if air-quality standards were set at a reasonable level then nuclear energy, renewables, and conservation all would be cheaper than fossil fuels. If Congress insists on allowing lethal levels of pollution, then it's going to take some kind of artificial incentives to encourage other energy forms.
Joffan said…
No doubt you will get to the concept that loan guarantees are not free loans in the same way as mortgage insurance does not mean a free mortgage.

One area I've considered recently is the nuclear waste fund. This big pot of money has been handed to the government to deal with spent nuclear fuel, but it's just sitting in limbo at present. (The "reality" of this fiscal entity is something I don't even have the words to discuss). I see this as a counterweight for the loan guarantess; not necessarily a surety, but a consideration of how the flow of finance is definitely not one-way.

Of course this fund is not taxpayers' money, as sometimes claimed. Importantly, it is not ratepayers' money either, any more than the money I paid last week for groceries is still mine - they have received their electrical value for their rates paid.

---

All this is aside from the large positive contribution that nuclear makes in direct and indirect taxation, of course.
Anonymous said…
The antinuke rock musician group is FOR only one thing....their own careers.

Note well that their supposed "cultural protest" is couched in a purchasable music album.

Since their days of being celebrities in their own right, the music industry has moved on, and moved so far on its road toward pure kinetic (Rap & beyond) performance art, that any offerings from these aged hippies is dull fare indeed, not exciting, devoid of sexuality, passe' to the max, and of no interest to the general music-buying public.

So how does a 60+ year old supposed rock icon cope? EASY! Get a "cause".

Save women & children in Darfur?... Nope.

Save HIV victims in South Africa?.... Nope.

Adopt third world babies, like Madonna & Angelina Jolie?....Nope.

Open healing clinics like Mother Teresa?..... Nope.

Make pilgimage to Mecca to protest Islamic terror acts?..... Nope.

Join with all to end global warming?.... (strangely) Nope!

No, you see, they have long, long ago been fed a pre-cooked agenda, with which they are already "branded". They are pre-advertised as being "Anti-Nuke".

So what, that their information was hogwash thirty years ago when they first got recruited, ITS A KNOWN BRANDING, AND ONCE BRANDED, CELEBS MUST STAY BRANDED.(Just ask their respective publicists).

The problem for these people is that they were controlled, manipulated and lied to by self-promoting antinuke hustlers like Harvey Wasserman thirty years ago,
and now the human race badly needs the single item that Wasserman has hung his negative career upon---- nuclear energy.

No stone must be left unturned, if mankind is to survive.

Wasserman has spent 30+ years trying desperately to sweep the reality of the subatomic realm back under the single rock upon which he stands, and the "rock-icon" cadre are 1000% dependent on his flawed outlook, for their own so-called "reasoning".

So.... they are bereft.

They are FOR nothing.

They, like their guru Wasserman are only against.

And just what are they against?

This is truly laughable.

They are AGAINST the very foundations of modern physics. Against the discoveries of Einstein, Bohr, Fermi, and Heisenberg.

Against the future, as it turns out.

And, as it is turning out now, ...
they are against all mankind.

So what do we do, viewing their charade.. applaud?

Or do we turn our heads away in shame?

Check your own gut, and get back to me later.

Harry Springer
Anonymous said…
"The antinuke rock musician group is FOR only one thing....their own careers.

Note well that their supposed "cultural protest" is couched in a purchasable music album."

Does anyone edit these comments for accuracy?

Far as I know, there is NOT an album onsale. There is a FREE music video on their web site. That's it. There was NO mention of an album at Tuesday's press conference, and you'd think they'd have mentioned it if there were one.

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