Mark Zaleski/AP/File
The Watts Bar Nuclear Plant near Spring City, Tenn. seen in April, 2015. With weak demand for new US nuclear power plants, the US nuclear industry is increasingly turning abroad – but without Export-Import Bank help, they worry it may be difficult to attract foreign business.

Why the US nuclear industry is eager to save this obscure, government-run bank

The US nuclear industry has looked abroad for business as demand in the US has fallen. But without the Export-Import Bank's backing, some say it would be harder for US companies to seal nuclear deals abroad.

Tucked away in an unassuming building two blocks from the White House is a government-run bank. It helps US companies sell products abroad, supports thousands of jobs, and turns a profit for the government each year.

But this year, Congress is poised to shut its doors. The Export-Import Bank of the United States has become target No. 1 for Republican lawmakers who want to shrink the federal government and combat what they characterize as “crony capitalism.” The bank’s charter expired Wednesday – meaning it’s unable to make new loans, but will continue servicing outstanding loans – and Congress won’t consider reauthorizing it for another couple weeks.

Until recently, the bank was relatively low-profile, providing loans and loan guarantees to help US companies sell their goods abroad. The bank is perhaps best known for aiding Boeing in its efforts to sell airplanes abroad, making US planes competitive with European rival Airbus.

But the Export-Import Bank’s loans and loan guarantees are critical for another domestic industry that has fallen on hard times: US nuclear power. If the bank’s charter isn’t reauthorized, the industry and a host of other business interests say the effects could be devastating for US companies’ overseas prospects.

“You will see layoffs. You will see lost business,” Fred Hochberg, chairman and president of the bank, told reporters at a Monitor-hosted breakfast last month. “We are already seeing foreign governments and foreign companies taking advantage of the uncertainty.”

Nuclear looks abroad

For years, the US nuclear industry has struggled domestically. Cheap natural gas and coal have largely crowded the low-carbon power source out of the market. The recession also put a damper on demand for new US power generation. Safety concerns have made matters worse for US nuclear, and those worries flared up anew after Japan’s Fukushima disaster in 2011.


With scant demand for new nuclear power at home, the US industry has looked overseas to countries like China; in short, to countries looking to expand their atomic footprint just as nuclear largely retrenches in the US.

Worldwide, there are 66 new nuclear power plants under construction, with another 165 in the late planning stages, according to the Nuclear Energy Institute, an industry group. The US Department of Commerce pegs the value of that market at as much as $740 billion over the next ten years – and US nuclear companies want a piece of that $740 billion.

“The market for new nuclear generation is going to be international for about the next five to ten years,” says James C. Stouch, vice president of business development of Precision Custom Components (PCC), a York, Penn.-based company that makes parts for nuclear power plants and often ships them abroad. “That’s where the action is.”

And that’s also where the Export-Import Bank comes in. For a US nuclear company like PCC or Westinghouse to secure a contract in, say, Japan, the US company must prove financing is available. The Export-Import Bank offers a convenient and credible way for US businesses to do just that; getting financing from a commercial bank would be harder.

Countries like China and France provide financing for their nuclear companies, Mr. Stouch notes, but those countries’ nuclear companies are often government owned in the first place. US nuclear companies say that foreign-government-backed financing puts American nuclear at a disadvantage, and Ex-Im is necessary to level the playing field so that US nuclear projects are competitive with Russian- and French-backed rivals.

Conservative – and environmental – objections

For conservatives, though, there’s no excuse for the government distorting markets – even if it’s to help US companies sell products abroad. The Export-Import Bank disproportionately helps giant corporations like GE and Boeing, they say. In 2012, for example, 82.7 percent of Ex-Im loan guarantees went to Boeing, as Tim Carney has reported in the Washington Examiner.

“My hope is that the Battle of Ex-Im will be the first in a long war that will unwind other instances of corporate welfare and crony capitalism,” writes Michael Strain, a scholar at conservative Washington-based think tank the American Enterprise Institute. “For its symbolic importance alone, the bank should not be reauthorized.”

Supporters of the bank – including those with ties to the US nuclear industry – call ending the bank charter absurd. The bank pays down the deficit, comes at no cost to taxpayers, and helps US businesses, they say.

“For the US to even be thinking about it is almost unfathomable,” says Ron Kirk, a former US trade representative in the Obama administration, who co-chairs CASEnergy Coalition, a nuclear energy industry group. “Frankly, even our competitors can’t believe we would do that, particularly since the bank is self-financing.”

But in Congress, conservatives who hope to end the bank question the doomsday predictions coming from bank supporters. Conservative opponents of the bank argue that letting it fizzle will have positive effects.

“The sky will not fall. The seas will not rise. In fact, in my view, and in the view of many economists, quite the opposite will happen,” Rep. Jim Jordan (R) of Ohio said in a statement last month. “The expiration of the Bank’s charter will mean that companies doing business overseas will reorient themselves away from Washington and towards market signals. The Bank’s absence will make our economy stronger.”

Even some environmentalists question whether it’s a good idea to reauthorize the bank, which has in the past financed emissions-heavy coal plants in developing countries. In 2013, the bank adopted a policy against financing overseas coal projects without pollution controls. Sen. Joe Manchin (D) of West Virginia, a major coal state, has made reversing that policy a top priority.

Sens. Heidi Heitkamp (D) of North Dakota and Mark Kirk (R) of Illinois have introduced bipartisan legislation that would re-open the bank. But their bill – co-sponsored by Mr. Manchin – includes a provision that would prevent Ex-Im from discriminating against any form of energy, including coal.

“In a desperate attempt to reauthorize the agency, some Ex-Im Bank proponents are threatening to change the Bank’s policies in a way that would throw the environment and communities under the bus,” Doug Norlen, an economist at Friends of the Earth, an environmental group, wrote in a blog post Monday.

Waiting game

For Stouch, who works at the Pennsylvania company that makes nuclear parts and employs 260 people, it’s shocking that Congress would let the bank’s charter lapse – and he’s a self-identified fiscal conservative.

“Potentially we’ve got over 100 jobs at stake, linked to either our or our customers’ ability to export these products,” Stouch says, listing instances where his company was able to seal deals only with backing from the Export-Import Bank.

Often companies end up not needing the bank’s assistance, Stouch says. Ex-Im backing is just necessary to convince foreign countries to go with US companies in the first place, particularly since foreign, government-owned nuclear companies have their countries’ financial backing.

“Your competition, in essence, is many times a government that has access to – at least on paper – limitless backing,” Stouch says.

There’s a chance that reauthorization of the Export-Import Bank could be tied to a highway bill later this summer, as the Monitor reported last month. Senate Majority Leader Mitch McConnell (R) of Kentucky has said he thinks the bank has the votes to pass.

But now that the charter has expired, anything could happen.

“Once it closes shop, I think it becomes increasingly difficult to revive it," Sen. Dick Durbin (D) of Illinois has said.

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