Late on January 27, the Senate Appropriations Committee passed the economic stimulus bill with a new provision that would allow up to $50 Billion more in taxpayer-backed loan guarantees for the construction of new nuclear reactors across the U.S.
It appears that neither Senate nor House leadership were aware this provision would be considered by the Appropriations Committee.
The provision would more than triple the amount of money authorized for new nuclear reactor construction under the highly controversial loan guarantee program. Congress authorized $18.5 Billion for new reactors in 2007. None of that money has been spent.
The provision was apparently inserted at the request of Sen. Robert Bennett (R-Utah). In a remarkable display of hypocrisy, having now worked for massive pork spending for his friends in the nuclear industry, Bennett has announced that he will vote against the stimulus bill anyway.
“This is nothing more than a pre-emptive bailout of the nuclear power industry,” said Michael Mariotte, executive director of Nuclear Information and Resource Service (NIRS). “It would have no stimulative effect on the economy and would create no new jobs, since no reactors will be licensed or can even be started in the two-year period the bill addresses. And if new reactors are built later, we will only add to the growing radioactive waste burden in communities across the country.”
“Moreover,” continued Mariotte, “the loan guarantee program was intended for the development of ‘advanced’ nuclear technology, with the idea that the government would support a few projects to jumpstart the industry. But none of the reactor designs utilities are proposing are ‘advanced’ technology. Instead, it has become clear thathaving failed to entice any private investment for new reactors–the industry wants taxpayers to serve as their private bank for any nuclear project it can dream up.”
NIRS noted that few realize that the loan guarantee program is structured so that taxpayers would not only be providing guarantees for loans for multi-billion dollar nuclear reactors, taxpayers would be providing the actual funds, through the Federal Financing Bank. Department of Energy rules require all utilities seeking the maximum amount of loan guarantees (80% of project cost) to go through the Federal Financing Bank rather than private investment banks, on the grounds that the projects are just too risky and the costs too high for private banks. Indeed, the Congressional Budget Office has predicted a 50% default rate on nuclear construction loans. Taxpayers would be in the absurd position of providing funds to the nuclear industry for projects private banks could not and would not fund, and then guaranteeing that the industry would pay the money back to taxpayers.
“There was a huge, controversial national debate over the idea that taxpayers would provide $25 billion in loan guarantees to the automakers,” said Mariotte. “Yet automakers are far more important to our economy and provide far more jobs than the nuclear power industry, especially per dollar spent. Even the Nuclear Energy Instituteinfamous for overstating nuclear power’s alleged benefitsacknowledges it costs about $1.5 million per job created by nuclear power. This would probably be the most expensive job creation program in recorded history. The Senate Appropriations Committee and Sen. Bennett knew they would lose a debate on this issue in the light of day, so they chose to sneak this provision in late at night, without any public awareness.”
“NIRS calls on the Senate to reject this provision. And if it fails to do so, we call upon the House to ensure this provision is removed from the bill during Conference Committee. Fortunately, no such provision was included in the House-passed stimulus bill,” said Mariotte.