Nuclear Energy and Loan Guarantees, Part I

Over the past few days, I've run into more than my share of angry and exasperated colleagues here at NEI. The reason: All the attention being given to the musicians who hit town yesterday to attack nuclear energy.

Don't get me wrong, everyone understands that Americans have a right to speak their minds on the issues of the day. But what's bugging us is that -- with a few notable exceptions -- the press is giving these musicians a free pass when it comes to what they're saying about the industry, in particular about nuclear energy and loan guarantees.

Richard Myers is NEI's Vice President of Policy Development. Over the next few days we'll be featuring a series of posts from him that will help cut through the propaganda and misinformation. Part I follows:

We Know What They’re Against,
But What Are They For?

For the last 10 days or so, I’ve watched the anti-nuclear groups (and their rock star friends) attacking nuclear power, and the use of federal loan guarantees to support the financing of new nuclear power plants. They’ve stitched together a story out of half-truths, quotes taken out of context, misinformation and, yes, plain old-fashioned lies.

Enough. It’s time to open the window, let in some fresh air, introduce some facts.

Over the next few days, we’ll talk about what loan guarantees are (and aren’t), why loan guarantees are an appropriate form of investment support for new nuclear plants, why they’re not subsidies and how to think about subsidies. And we’ll talk about what’s really at stake here, because this not about loan guarantees for nuclear power. This is about what kind of country we want to leave to our children.

But today, before we get into all that, let’s stop and reflect on what would happen if the anti-nuclear groups and the rock stars had their way, if the United States did not build new nuclear plants. What does it mean to oppose nuclear power and the use of financing support (like loan guarantees) to enable construction of new nuclear power plants? Quite simply, it means that you are:

Anti-consumer – Residential, commercial and industrial users of electricity will suffer, because loan guarantees allow lower-cost financing, so the nuclear plant will deliver lower-cost electricity than otherwise.

Anti-environment – A growing body of independent analysis and bipartisan commentary demonstrate that any credible program to reduce carbon emissions must include nuclear energy. Not that nuclear energy is the answer by itself. Sensible people recognize that it will take a portfolio of technologies to address climate change. For a factual, well-reasoned, even-handed discussion of this issue, check out The Power to Reduce CO2 Emissions – The Full Portfolio from the Electric Power Research Institute. EPRI shows that we must mobilize all of our resources – efficiency and demand-side management, clean coal with carbon capture and sequestration, renewables, nuclear energy and more – and we must do so aggressively if we hope to reduce greenhouse gas emissions from the U.S. electric sector.

Anti-jobs and anti-labor – American workers will benefit from the loan guarantee program. Each new nuclear plant means 1,400-1,800 jobs during construction on average (with peak employment as high as 2,400 jobs); 400-700 permanent jobs when the plant is operating, and 400-700 additional jobs in the local area to provide the goods and services necessary to support the nuclear plant workforce (like car dealers, dry cleaners, supermarkets, etc.). We’ve done a number of economic analyses that support these numbers.

Anti-manufacturing – American manufacturers will benefit from the loan guarantee program, because construction of new nuclear plants will create demand for commodities like concrete and steel and hundreds of components, large and small. A single new nuclear power plant requires approximately 400,000 cubic yards of concrete (five times as much concrete as in the foundation and floor slabs of the 100-story Sears Tower in Chicago); 66,000 tons of steel; 44 miles of piping, 300 miles of electric wiring, and 130,000 electrical components.

Anti-economic growth – If the United States does not build new nuclear power plants, we will build more gas-fired generating capacity to maintain reliability and sustain economic growth. This will place even more pressure on natural gas supply and prices. Rising natural gas prices will do even more damage to industries like chemicals, plastics, glass and others that use natural gas as a fuel and a feedstock. (We’ve already lost over 100,000 jobs in the chemical industry to other countries over the last five years or so because U.S. natural gas prices are so high.) Industry won’t be the only casualty: Homeowners will also see higher prices for the natural gas they need for heating.

So .. now we know what the anti-nuclear groups and their rock star groupies are against. I wonder what they’re for?

More to come.