Obama's nuclear power policy: a study in contradictions?

Obama wants to triple public financing for new nuclear power plants, even as he nixes funds for storing commercial radioactive waste. The policy may be calculated to win votes for climate change legislation, but critics say it's not 'coherent' and carries new security risks.

By , Staff writer

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    This June 9, 2009 photo shows dry cask nuclear waste storage units at the Vermont Yankee nuclear power plant in Vernon, Vt. In his State of the Union speech, President Obama has proposed tripling public financing for nuclear power.
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President Obama has followed up on his support for "a new generation of safe, clean nuclear power plants," laid out Jan. 27 in his State of the Union speech, by proposing to triple public financing for nuclear power.

The Department of Energy recently proposed $36 billion in new federal loan guarantees on top of $18.5 billion already budgeted – for a total of $54.5 billion. That's enough to help fund six or seven new power plants.

It's a full-speed nuclear-power gambit that many say is largely a bid to win votes from pro-nuclear senators for legislation to address climate change. But his strategy is generating a firestorm of opposition, amid warnings that much more is at stake than a political calculus.

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From environmentalists to fiscal hawks to nuclear security experts, the Obama plan is sparking near-open revolt. The nuclear-power expansion is not accompanied by any plan to store commercial radioactive waste, they note, and includes a new push by the Department of Energy into spent-fuel reprocessing and small "pocket nuke" reactor research, which they see as a proliferation risk. The Obama nuclear policy is at cross purposes to his nonproliferation goals, they add, and might even cement his energy legacy as the president who revived a moribund industry that hadn't built a nuclear plant in decades because of the financial, environmental, and security risks involved.

"It's ironic, but Obama could end up being the biggest pro-nuclear power president since Dwight Eisenhower," says Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a nuclear deterrence expert who served as deputy for nonproliferation policy in the Department of Defense from 1989-1993 under President George H.W. Bush.

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Among environmentalists, who saw Mr. Obama as a friend of renewable energy, the sense of betrayal is acute.

"Every new nuclear power plant built would be a step backwards when it comes to solving global warming," Anna Aurilio, a spokeswoman for Environment America said a statement. "Clean energy solutions like energy efficiency and renewable energy sources such as wind and solar are far more effective."

Obama's stance won plaudits from the industry, however.

"The administration's initiative will make a meaningful difference in bringing about development of the nuclear energy facilities that our nation needs," Marvin Fertel, president of the Nuclear Energy Institute, said in a statement.

Budget hawks have a different set of concerns. They oppose government "subsidies" to the industry (in the form of federal loan guarantees), saying taxpayers assume a huge risk given the industry's track record of cost overruns – and loan defaults – in the 1980s.

"We didn't have good experience recently with the mortgage industry, and we ought to keep that in mind with nuclear power," says Doug Koplow, president of Earthtrack, an energy consulting firm. "For each power plant, we're talking about something like $8 billion in taxpayer exposure to a single asset owned by a private firm. To me that seems unprecedented."

Various studies and the US Government Accountability Office warn of potential loan default rates on the order of 50 percent. The Department of Energy, though, says safeguards are in place to prevent that.

"Regulatory changes and contractual changes implemented in this round of nuclear construction lay the foundation for the US to deliver on time and on budget," Jennifer Lee, a DOE spokeswoman says in an e-mail response to questions. "Each loan is specifically structured to protect the taxpayer against cost over-run risk."

Nuclear strategy not 'coherent'

The president's new budget also proposes to eliminate funding for the controversial Yucca Mountain nuclear-waste repository. He has appointed a blue-ribbon commission to look into other options, which many say would likely include fuel reprocessing.

"I'm reluctant to say this, because I admire the Obama administration, but its nuclear strategy no longer appears to be coherent," says Edwin Lyman, an expert on nuclear power with the Union of Concerned Scientists. "It doesn't have a plan for [storing] radioactive waste from a new generation of nuclear power plants. That is irresponsible."

Even nuclear power advocates are upset by the absence of a waste-storage plan.

"There is a significant regulatory and waste-management risk with building a nuclear power plant today," says Jack Spencer, research fellow at the Heritage Foundation and a nuclear power advocate. "This tells me he's just not as serious about nuclear power as he says he is, because appointing a blue-ribbon commission is just kicking the can down the road."

Such criticism is unwarranted, says the Obama administration.

"The Administration is committed to addressing our used fuel and nuclear waste management needs," writes the DOE's Ms. Lee. "We have established a Blue Ribbon Commission on America's Nuclear Future to bring together leading experts to provide recommendations for developing a safe, long-term solution to managing the Nation's nuclear fuel and its waste."

A risk of spreading nuclear know-how

Meanwhile, the White House has grudgingly agreed that the Department of Energy can push ahead with research into "pocket nukes" – small nuclear reactor designs – and spent-fuel reprocessing. Both areas could lead to the spread of nuclear know-how to many small developing countries, say nuclear security experts.

When crafting the new White House budget plan, the Office of Management and Budget had actually slashed money for reprocessing and small reactor research. But in a Dec. 22 letter, Energy Secretary Steven Chu argued for restoring funding for both. The White House blinked. Funding was restored.

The president's latest moves are at odds with his earlier focus on leading "an international effort to secure all vulnerable nuclear material around the world within four years," and on securing new arms-reduction deals with the Russians, say other nuclear security experts.

"None of this makes any sense from a security or economic standpoint," says Mr. Sokolski. "I served on a bipartisan committee that just recommended that the US put a moratorium on commercial reprocessing of spent nuclear fuel."

The DOE's research program for spent fuel reprocessing "is a long-term science-based research and development program," says Lee, noting that "advancements in the area of non-proliferation are an integral part" of it. Concerning pocket nukes, she notes: "Without a U.S. program on small-modular reactors, the world would default to small-modular reactor systems from other countries which may not integrate advanced non-proliferation technologies into their design."

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