US-backed loans to expand nuclear power: a boon for overseas jobs?

A report released Thursday finds that all 18 firms lining up for tens of billions in US-backed loans for new nuclear power plants would use overseas jobs to build most of them.

By , Staff writer

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    A Nov. 3, 2008 file photo showing one of Pacific Gas and Electric's Diablo Canyon Power Plant's nuclear reactors in Avila Beach, California. Firms trying to get US-backed loans to build more nuclear power plants might create overseas jobs.
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Nuclear power opponents and taxpayer groups on Friday took fresh aim at new nuclear reactor projects, hopping aboard a movement in Congress to oppose taxpayer support for power projects that might benefit foreign companies and overseas jobs.

While activists have long claimed Congress and the White House would be fiscally irresponsible to grant loan guarantees for new nuclear power reactor construction due to projected high default rates, the groups for the first time Thursday released a report citing the loan guarantees' bolstering of foreign jobs and overseas ownership.

As it turns out, all 18 corporate applicants seeking permits for new US nuclear power reactors – and lining up for tens of billions in federal loan guarantees – plan to use foreign manufacturers and labor to build major parts of those reactors.

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That's according to a new report by the Nuclear Information and Resource Service, based in Takoma Park, Md., citing data gleaned from filings with the Nuclear Regulator Commission. The service, with the Association of Concerned Taxpayers and the Alliance for Generational Equity, said a few utilities now seeking US loan guarantees for nuclear projects were also largely foreign-owned.

“Nuclear power is US-made power only in the same way that a shirt made in China is ‘American’ because you buy it at a Wal-Mart in this country," said NIRS executive director Michael Mariotte in a teleconference. "If American taxpayers were upset about bailing out US banks and car companies, they should be furious about being put at risk in order to fatten the bottom line of overseas nuclear companies.”

The NRC filings, he said, show that all 18 pending reactor projects in the US feature reactors designed by French and Japanese companies. "Nearly all of the immediate employment benefits of the loan guarantees will flow to non-US workers, since virtually all major reactor components are made outside of the United States by foreign companies," Mr. Mariotte said.

Most of the nuclear reactors' massive parts would be built by majority-owned foreign companies such as GE Hitachi, AREVA, and Westinghouse (Toshiba) in their overseas factories.

Two of three reactor projects now on a US Department of Energy short list for taxpayer-backed loan guarantee bailouts – Calvert Cliffs Unit 3 in Maryland and South Texas Project Units 3 and 4 in Texas – have substantial foreign ownership involving French and Japanese companies. Another reactor project not in line to get quick funding – Nine Mile Point, Unit 3 in New York State – also has substantial foreign ownership.

Sen. Charles Schumer (D) of New York this spring pleaded with the Obama administration not to spend federal stimulus funds on renewable energy projects when most wind and solar manufacturing was conducted overseas. Sens. Robert Casey (D) of Pennsylvania, Sherrod Brown (D) of Ohio, and Jon Tester (D) of Montana supported Senator Schumer's bill to put "Buy America" provisions on renewable-energy projects supported by taxpayer financing.

In response to the senators' objections, an agreement was hammered out last month between the American Wind Energy Association and the United Steelworkers union to source more components from US suppliers. It's not clear if the senators will make similar requirements for loan guarantees for nuclear power. Calls and e-mails to the offices of three of the senators were not returned.

"Senator Brown believes that US tax dollars should be used to finance energy projects where the work is done in the United States," said Meghan Dubyak, a spokeswoman for Senator Brown, in response to e-mailed questions. "He is working to build a domestic supply chain for clean energy components – as a result of his intervention on the wind turbine sourcing issue."

The Nuclear Energy Institute (NEI), the trade group representing the nuclear power industry, dismissed the new study as full of "myths" about nuclear job creation. It noted that reactors built using loan guarantees to foreign-owned utilities would still create US jobs.

"Yes, the ultra-large forgings [for reactor vessels] can only be sourced from Korea and Japan," says Leslie Kass, senior director of business policy and programs for the NEI in Washington. "But the lion's share of the worker jobs created by reactor construction are thousands of construction jobs that have to happen here."

The French nuclear company AREVA and Northrop Grumman Shipbuilding, she noted, are building a new manufacturing facility in Newport News, Va., that will make reactor vessels, steam generators, and pressurizers, creating about 500 local jobs. Another manufacturing site in Port of Lake Charles, La., began assembling structural, piping, and equipment modules for new nuclear plants last year. That site will employ between 700 and 1,400 local workers at full capacity.

Southern Co., which received the first government loan guarantees, has said that about 80 percent of the funds spent on components and labor used in building two reactors at Plant Vogtle in Georgia will come from US sources.

Such arguments are no solace to David Herman, vice president of The Alliance for Generational Equity (AGE), who joined NIRS in a teleconference unveiling the activists' study. He noted that he and his group are not opposed to new nuclear power reactors, but are opposed to federal loan guarantees for them.

"If these companies controlled by French and Japanese interests want to finance new reactors and find investors who want to support that, they have our blessing," he told reporters. "But we are not prepared as US taxpayers to allow seniors and other Americans to be ripped off by yet another multibillion-dollar bailout for another industry.”

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