Memo
To: Nukefree.org, Harvey Wasserman, Bonnie Raitt, Jackson Browne, and Graham Nash
From: Kevin Kamps, Beyond Nuclear
Date: June 30, 2010
Re: Updates on nuclear power industry’s money grabs at taxpayers’ pocketbooks
I wrote a big picture update on nuclear power subsidies in May 2009, giving a brief overview of the first 50 years of atomic power subsidies -- but a lot has happened since that I’ll try to summarize comprehensively below in order to update you.
As you know, we’ve dodged many a radioactive bullet over the past few years – with your involvement and grassroots anti-nuke activism making a big difference against proposed nuclear power subsidies.
Since 2005, despite repeated attempts by industry to stick it to taxpayers, so far the only nuclear power loan guarantees that have gotten through are $22.5 billion worth altogether. In the summer of 2007, it was reported that the nuclear power industry was seeking $50 billion in nuclear loan guarantees on a congressional energy bill. Despite having staved off nuclear power loan guarantees in the 2007 energy bill, just a few days later – and literally the day before Christmas Eve, Dec. 23, 2007, when most Americans were preoccupied with the holidays -- industry lobbyists and their friends in Congress merely shifted the provision onto the 2007 Omnibus Appropriations Bill as a rider and George W. Bush signed it into law. Thus, $18.5 billion for new reactors and another $2 billion for new uranium enrichment facilities were snuck into law, without most Americans knowing about it, despite all of our best efforts to alert the citizenry and the media.
An additional $2 billion for new uranium enrichment facilities, long rumored to be in the works, and just consummated a few weeks ago by the US Dept. of Energy, was simply transferred from “un-committed” energy loan guarantee program funds to the already long- and heavily-subsidized nuclear power industry. Thus, renewables and efficiency have lost out yet again, due to nuclear power stealing away the funding from them.
Despite that initial set back and that more recent one, our “temporary victories” have been numerous, often thanks to intense grassroots efforts.
In June 2008, Sens. Lieberman (I-CT) and Warner (R-VA) proposed a “climate” bill that would have heavily subsidized nuclear power, as well as weakened nuclear safety regulations. Fortunately for us, the Senate Republicans decided to filibuster the bill, because, they say, they don’t believe in the climate crisis. Fortunately, I say, because the first and foremost Republican amendment to the Lieberman-Warner “climate” bill was a mile long wish list to benefit the nuclear power industry. An environmental coalition statement expressing unity by the national environmental movement against nuclear power subsidies on climate legislation helped generate enough pressure to convince Senate leaders that they weren’t going to easily get away with such nuclear power giveaway that day! The bill died a sudden and unceremonious death. Of course, wasting precious time attempting to promote the false solution of nuclear power is dangerous and tragic in light of the worsening climate crisis.
Another near miss came in late summer/early fall of 2008, when a bipartisan “Gang of 10” grew into a “Gang of 20” U.S. Senators, co-sponsoring an “All of the Above” energy bill, which paralleled the “drill baby drill” rhetoric chanted by Sarah Palin at that year’s Republican National Convention. That bill promoted “clean coal,” offshore oil drilling, and most especially nuclear power. The bottom then fell out of the U.S. economy, and the subject was immediately changed away from this dangerous bill, sparing us.
Then environmentalists and taxpayer groups scored a hard won and major victory when grassroots pressure proved enough to fend off $50 billion in nuclear power loan guarantees attached to the economic stimulus bill in February 2009. The provision had been snuck onto the Senate version of the bill by Appropriations Committee Member Robert Bennett, Republican of Utah, but Democratic Appropriations Committee Chairman Daniel Inouye (D-HI) and Democratic Appropriations Subcommittee for Energy and Water Chairman Byron Dorgan (D-ND), let Sen. Bennett get away with it. Again, through intense grassroots pressure, as well as House Speaker Nancy Pelosi (D-CA) and House Appropriations Committee Chairman Dave Obey’s (D-WI) position that nuclear power is not stimulative (jobs would not be created within two years), the $50 billion in additional nuclear power loan guarantees was stricken from the final economic stimulus bill that emerged from the House-Senate conference committee and became law.
That’s a brief summary of a few of our hard won victories of the past couple years.
Currently, we face many threats of expanded nuclear power subsidies as well as nuclear safety regulation rollbacks…
PRESIDENT OBAMA’S RECENT ACTIONS
President Obama declared nuclear power clean and safe in his Jan. 2010 State of the Union speech, and called for its expansion. This was a departure from his presidential campaign rhetoric of 2007 and 2008, when he said nuclear power had to be made safe and clean.
And, despite his campaign rhetoric that any nuclear power expansion would have to happen without subsidies paid for by taxpayers, just a few days later, on Feb. 1, 2010, when the Dept. of Energy rolled out its Fiscal Year 2011 budget request, the Obama administration’s support for nuclear power was quantified: a tripling of the new atomic reactor loan guarantee funding was being requested, increasing the funding levels from $18.5 billion to $54.5 billion, a $36 billion expansion. This revealed that the Obama administration is willing to allow 5 to 7 new atomic reactor license applications to move forward, with taxpayers bearing most of the financial risks. This was, of course, an incredible request, since even the “lead” new reactor proposals in the U.S. are plagued with technical design flaws, as well as cost overruns and schedule delays!
On Feb. 26, President Obama made crystal clear just how supportive of nuclear power loan guarantees he is, by personally announcing the award of $8.3 billion in new reactor loan guarantees to Southern Company of Georgia and its business partners, for the building of two Toshiba-Westinghouse Advanced Passive 1000 (AP1000) reactors at the Vogtle nuclear power plant in Burke County, Georgia, just across the Savannah River from the severely radioactively contaminated Savannah River Site nuclear weapons complex. Obama’s choice of the AP1000 as best new nuclear reactor design out there, and most deserving of the first nuclear loan guarantee, was more than a little ironic, given the US Nuclear Regulatory Commission’s announcement just four months earlier that the AP1000 “shield building,” essential to radiological containment, was poorly designed and vulnerable to earthquakes, tornadoes, and hurricanes (not to mention crashing airliners); it was so structurally suspect that NRC even questioned whether it was robust enough to support an emergency cooling water storage tank intended to sit atop it!
On April 21, 2010, watchdog groups released an extensive report detailing yet another major design defect in the AP1000, risking severe radioactivity releases to the environment in the event of an accident combined with degraded containment breaches.
Many environmental groups put out strong statements of protest in response to Obama’s award to Vogtle. Media coverage about Obama’s announcement showed how controversial it was. The tremendous grassroots victory on the very same day -- the Vermont State Senate’s 26 to 4 vote in favor of shutting down the leaking and breaking Vermont Yankee atomic reactor at the end of its 40 year license in 2012, rather than allow it to operate for an additional 20 years – stood in sharp contrast to President Obama’s call for expanding atomic energy with taxpayer subsidies.
Obama’s choice of a Maryland venue for his Georgia nuclear loan guarantee award – with the Governor of Maryland in attendance – seemed a strong sign that the next nuclear loan guarantee would likely be awarded to the French Areva “Evolutionary Power Reactor” (EPR) targeted at Calvert Cliffs, Maryland. Oddly, House Majority Leader Steny Hoyer (D-MD) -- unfortunately a strong advocate for nuclear loan guarantees for the new reactor at Calvert Cliffs in his district – did not attend the award announcement event.
The award to Calvert Cliffs 3 would be incredible as well, given a number of revelations about safety flaws in the Areva EPR design. The nuclear regulatory agencies of Finland, the U.K., and even France itself have warned that the EPR’s routine and emergency Instrumentation and Control systems are too interwoven, threatening common mode failures that could lead to out of control accident scenarios. Just yesterday it was reported that the Nuclear Regulatory Commission has joined the chorus calling for redesign of the EPR.
ATTEMPTS TO MOVE EXPANDED NUCLEAR POWER LOAN GUARANTEES VIA THE U.S. HOUSE APPROPRIATIONS COMMITTEE
While Obama’s Energy Secretary Steven Chu had requested a $36 billion nuclear loan guarantee expansion for the Fiscal Year 2011 budget, a sneak maneuver by the Obama White House, in cahoots with senior House leadership, would rush $9 billion of that expansion into this Fiscal Year 2010’s budget. As scooped by Politico, Obama administration senior officials met with top House Democrats and hammered out a deal in which $9 billion worth of additional nuclear loan guarantees, matched by $9 billion worth of renewable (mostly solar) loan guarantees, would be attached as a rider to the “FY2010 Supplemental Appropriations Bill,” an emergency war funding and disaster relief bill. Taxpayers groups and Members of Congress have objected to such an improper rider on a supplemental appropriations bill, and environmental groups continue to object to the entire idea of expanded nuclear loan guarantees, no matter what bill they are attached to!
Ironically, the solar and renewables $9 billion in additional loan guarantees may be of little use to the green energy industry. Renewables already have tens of billions of dollars of energy loan guarantees approved, more than they can use in the foreseeable future. Another ironic twist makes these energy loan guarantees difficult to access. DOE is charging renewable energy loan guarantee applicants to pay an up-front 10% of project cost “credit subsidy fee”. Nuclear applicants, on the contrary, are only required to pay a 1% credit subsidy fee – and nuclear lobbyists are striving to get even that 1% fee shifted onto taxpayers. The irony is that significantly more expensive and financially risky nuclear projects are required to pay only 1/10th the rate for credit subsidy fees as are more affordable and financially sound renewable energy projects. The credit subsidy fee application funds are supposed to cover any project defaults on loan repayments, so that taxpayers don’t have to. But the Congressional Budget Office has estimated that a whopping 50% or more of new reactor projects will default on loan repayments – a 49% higher rate than DOE is accounting for with its 1% nuclear loan guarantee credit subsidy application fee. Taxpayers will be left on the hook to cover the other 49% of financial risk, to the tune of several billion dollars per defaulted reactor!
House Appropriations Committee Chairman Dave Obey (D-WI) has indicated that he wants to complete this FY2010 Supplemental Appropriations bill by July 3rd, the day Congress recesses for the Independence Day holiday. Environmental groups have issued numerous alerts, pulling out all the stops to try to block this $9 billion atomic “end run.”
But not satisfied with the $9 billion “advance” on Obama’s request for $36 billion in expanded nuclear loan guarantees, House Appropriations Committee Members have initiated moves to approve the entire package for FY2011. With very little advanced notice, a House Energy and Water Appropriations Subcommittee “mark up session” to approve the $36 billion nuclear loan guarantee expansion request was called for Thursday, June 24th. However, the session was just as suddenly called off. A number of Democratic Members of the subcommittee – namely Chet Edwards (D-TX), Marion Berry (D-AR), and Chaka Fatah (D-PA) – objected that the $36 billion in nuclear loan guarantees was NOT included in the bill. The intense grassroots pressure generated by environmental and even taxpayer groups against the $9 billion “advance” on the nuclear loan guarantee expansion may be causing Members and even leaders of the House Appropriations Committee to reconsider whether the Obama administration’s request is wise and worthy. The $36 billion nuclear loan guarantee mark up session has been postponed for now, but we don’t know for how long. We’ll have to keep fighting against it, as well as against the entire $36 billion expansion push.
ADDITIONAL NUCLEAR POWER SUBSIDY THREATS IN THE HOUSE AND SENATE: “CEDA”
Unfortunately, nuclear power loan guarantees aren’t the only threat. Many additional forms of nuclear power subsidization, as well as regulatory rollbacks, are being proposed in various congressional bills. Especially concerning are proposals to create a “Clean Energy Deployment Administration” (CEDA), or “Green Energy Bank,” from which the nuclear power industry hopes to gobble up most of the taxpayer supplied funding.
Sen. Bingaman's "energy-only" bill -- Senate Bill 1462, the so-called "American Clean Energy Leadership Act" of 2009, or ACELA, passed through the Senate Energy and Natural Resources Committee that Sen. Bingaman chairs in June 2009. ACELA would provide for un-limited nuclear loan guarantees (!) in the DOE administered CEDA. It would also exempt the program from the Federal Credit Reform Act (FCRA, pronounced "Ficrah"), a law meant to protect taxpayers from risky federal financial misadventures. This would mean that congressional appropriations oversight would be waived, and DOE would effectively have a blank check writing authority to approve nuclear loan guarantees. Bingaman’s ACELA would not limit the percentage of CEDA funding that the nuclear power industry could gobble up. Technically, under Senate ACELA's CEDA, the nuclear industry could pocket 100% of "clean energy" subsidies! Sen. Bernie Sanders (I-VT) proposed an amendment in committee on CEDA that would have limited nuclear’s funding levels at 20% of CEDA. He was joined by the likes of Sen. Jeanne Shaheen (D-NH). But the amendment failed by a vote of 13 to 5. Unfortunately, Sen. Shaheen and Sen. Debbie Stabenow (D-MI), regarded as environmental Senators, are still co-sponsors of the un-limited nuclear loan guarantees without congressional oversight version of CEDA!
The House version of CEDA is better than Bingaman’s Senate version, but still very troubling. House CEDA is contained in the “American Clean Energy and Security Act” or ACES (H.R. 2454). President Obama actually mentioned this House bill in his BP/Gulf of Mexico oil catastrophe Oval Office speech a couple weeks ago. Thus President Obama was actually promoting nuclear power subsidization to the tune of up to 30% of “clean energy deployment” funding, without coming right out and saying so. This bill passed the House Energy and Commerce Committee in spring 2009. It then passed the House floor, by the narrowest of margins, in June 2009. This bill would allow the nuclear power industry to grab up to 30% of CEDA funding, but would retain and preserve congressional oversight on such awards. Thus, that’s a somewhat better version than the Bingaman Senate version, but still very troubling. The amount of funding that could be poured into CEDA under the House version is currently not limited. 30% of infinity is still infinity. That’s our concern.
Of course, it’s preposterous, absurd, and outrageous that nuclear power and “clean coal” are included in the realm of “clean energy” to begin with – Orwell’s spinning so fast in his grave, he should be connected to the electric grid (to plagiarize Rep. Ed Markey)!
In April, 2010, the nuclear power “powers that be” attempted to jump start CEDA’s enactment, by attaching it to a House Ways and Means Committee FY2011 budget bill. Again, grassroots concerned citizen pressure on House Ways and Means Committee members seems to have nipped this “end run” in the bud!
ADDITIONAL NUCLEAR POWER SUBSIDY THREATS IN THE SENATE: KERRY-LIEBERMAN “AMERICAN POWER ACT”
The Kerry-Lieberman "American Power Act" also contains a mile long nuclear power industry wish list, to be provided at taxpayer expense and risk, as well as significant nuclear safety regulation rollbacks. A number of excellent analyses have been published by environmental watchdogs:
Natural Resources Defense Council's analysis is viewable at:
http://switchboard.nrdc.org/blogs/cpaine/packing_the_nuclear_pork_barre.html
Physicians for Social Responsibility’s analyses are viewable at:
http://www.psr.org/resources/apa-nuclear-subtitle-2page-summary.pdf (2 pages)
http://www.psr.org/resources/apa-nuclear-subtitle-summary.pdf (8 pages)
Friends of the Earth’s (Doug Koplow’s Earthtrack) analysis of the Kerry-Lieberman APA’s tax incentives and tax breaks for nuclear power is viewable at:
http://www.foe.org/billions-new-nuke-giveaways-kerry-lieberman-bill-exposed
Sen. Kerry has recently expressed much optimism that his bill will be brought to the Senate floor for passage this summer, perhaps even before the August congressional recess.
But this bill is short on climate protection, and long on taxpayer subsidies and regulatory rollbacks that benefit dirty, dangerous, and expensive energy industries, including coal and nuclear and incredibly, despite the ongoing catastrophe in the Gulf of Mexico, offshore oil drilling! President Obama’s request for expanded nuclear loan guarantees amounting to $54.5 billion is included in the legislation.
Regarding safety regulation rollbacks, several experts warned just last week that such short cuts on safety could lead to a radioactive version of BP’s worst-case scenario oil catastrophe in the Gulf of Mexico.
ADDITIONAL NUCLEAR POWER SUBSIDY THREATS IN THE SENATE: BURR-CHAMBLISS NATURAL GAS/NUCLEAR POWER BILL
The Washington Post has reported that Sens. Richard Burr (R-NC) and Saxby Chambliss (R-GA) have introduced legislation, for which “they had already sought out reaction from the nuclear industry, but had not begun trying to build support from other Senators,” which would expand nuclear power loan guarantees, shift costs for licensing atomic reactors onto taxpayers, further “streamline” licensing of reactors, establish regional “parking lot dumps” for high-level radioactive waste, and deploy high-level radioactive waste reprocessing (plutonium extraction) facilities. “Parking lot dumps” will likely be targeted at already radioactively contaminated DOE sites, or else Native American reservations, often in violation of social and environmental justice. Reprocessing risks nuclear weapons proliferation, astronomical costs for taxpayers, and severe environmental contamination and worker/public health damage wherever it is carried out.
ActNow! to prevent these atomic risks and costs! Sign Beyond Nuclear’s online petition urging President Obama and Members of Congress to block all funding for new nuclear facilities, phase out existing reactors, and conduct a full investigation of the NRC! Call the White House (202-456-1111) and your U.S. Senators and Representative (via the Capitol Switchboard, 202-224-3121) with the same message!
July 11, 2010