Beyond Nuclear Denounces President Obama’s Decision to Transfer Financial and Safety Risks of New Reactors to US Taxpayers TAKOMA PARK, MD - February 16 - Beyond Nuclear today denounced President Obama’s granting of a conditional loan guarantee to Southern Nuclear Operating Company for the construction of new atomic reactors at its Vogtle Nuclear Power Plant site in Waynesboro, Georgia. Two new Westinghouse-Toshiba Advanced Passive (AP) 1000 reactors are proposed at Plant Vogtle. President Obama’s award comes despite an announcement by the U.S. Nuclear Regulatory Commission (NRC) in October of a major safety flaw with the AP1000 design.
An NRC media release dated October 15, 2009 documents that the AP1000 shield building, as currently designed, is vulnerable to severe weather such as tornadoes and hurricanes, and natural disasters like earthquakes. This raises the concern that the design is also vulnerable to terrorist attacks such as intentionally crashing airliners. Thus, the shield building’s intended protection of the reactor’s primary radioactivity containment is questionable, as is its ability to provide radiation shielding during normal operations as well as to support a large emergency cooling water supply tank.
“It is utterly irresponsible of President Obama to risk public safety and the environment by financing the incomplete and flawed AP1000 design at Vogtle and, worse still, at taxpayers’ financial risk,” said Kevin Kamps of Beyond Nuclear. “Even if ultimately fixed, the AP1000’s major design flaw risks delays in construction and cost overruns, the same problems that delivered death blows to scores of atomic reactors three decades ago.”
The Congressional Budget Office has predicted that over half of new reactor owners will default on their loan repayments. The federal nuclear loan guarantees would finance up to 80% of the total project cost for a new reactor. Cost estimates for certain proposed new reactors in the U.S. have already surpassed $10 billion. The two new reactors at Vogtle are currently estimated by proponents to cost $14.5 billion, a figure expected by critics to significantly increase.
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http://www.commondreams.org/newswire/2010/02/16- Energy Sec Unaware That Nuclear Loans Have 50 Percent Risk of Default — By Kate Sheppard
| Tue Feb. 16, 2010 11:08 AM PST.The Obama administration on Tuesday announced a loan guarantee for the first new nuclear reactor to be built in the US in decades—part of a planned $54.5 billion program to kickstart a nuclear revival using government-backed loans. Yet Chu said he was not aware of a Congressional Budget Office study showing that the chances of default on these loans are "very high—well above 50 percent."
"I don't know of the CBO report," Chu told reporters during a conference call on Tuesday. "We don't believe the chance of default is 50 percent. We believe it's far less than that." The first loan guarantee, worth $8.33 billion, was awarded to two proposed reactors to be built by Southern Company at Plant Vogtle in Burke, Georgia.
As Mother Jones has reported, the proposal to encourage nuclear construction via massive federally backed loans represents a major risk for the US taxpayer. While the nuclear industry as recently as 2005 claimed the price tag for a reactor was $2 billion, independent estimates now put the cost as high as $12 billion.
In fact, the economics of the nuclear industry look so dicey that Wall Street banks—no strangers to high-risk investments—have for several years balked at financing new plants unless the government underwrites the deal. "There will be no nuclear renaissance beyond what the government is willing to underwrite," Peter Bradford, a former member of the Nuclear Regulatory Commission who is now a professor at Vermont Law School, told Mariah Blake in a recent piece for Mother Jones. And the nuclear industry has not been shy about announcing its reliance on the taxpayer. "Without loan guarantees we will not build nuclear power plants," Michael J. Wallace, co-chief executive of UniStar Nuclear and vice president of Constellation Energy, told the New York Times in 2007. That means the government would assume almost all the risk.
"Even Wall Street traders say these reactors are too risky to invest in, and that tells you something," said Ben Schreiber, climate and energy tax analyst for Friends of the Earth. "There's a 50 percent or greater risk of default. Why should taxpayers bear that risk?"
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http://motherjones.com/blue-marble/2010/02/chu-not-aware-nuclear-default-rates Obama's Nuclear Optionby Amy Goodman
No one will loan a power company the money to build a power plant, and the power companies refuse to spend their own money. Obama himself professes a passion for the free market, telling Bloomberg BusinessWeek, “We are fierce advocates for a thriving, dynamic free market.” Well, the free market long ago abandoned nuclear power. The right-wing think tank Heritage Foundation remarked, “Expansive loan guarantee programs ... are wrought with problems. At a minimum, they create taxpayer liabilities, give recipients preferential treatment, and distort capital markets.”
Amory Lovins of the Rocky Mountain Institute, a longtime critic of the nuclear power industry, told me, “If you buy more nuclear plants, you’re going to get about two to 10 times less climate solution per dollar, and you’ll get it about 20 to 40 times slower, than if you buy instead the cheaper, faster stuff that is walloping nuclear and coal and gas.”
In his 2008 report “The Nuclear Illusion,” Lovins writes, “Nuclear power is continuing its decades-long collapse in the global marketplace because it’s grossly uncompetitive, unneeded, and obsolete—so hopelessly uneconomic that one needn’t debate whether it’s clean and safe; it weakens electric reliability and national security; and it worsens climate change compared with devoting the same money and time to more effective options.”
The White House Office of Management and Budget, in the same statement announcing the $54.5 billion for nuclear power, also listed a “credit subsidy funding of $500 million to support $3
to $5 billion of loan guarantees for energy efficiency and renewable energy projects.” Thus, just one-tenth the amount for nuclear is being dedicated to energy efficiency and renewable energy technologies. At the same time, the Obama administration plans to cancel funding for the hugely unpopular Yucca Mountain nuclear waste storage facility. Edwin Lyman of the Union of Concerned Scientists told The Christian Science Monitor: “ doesn’t have a plan for radioactive waste from a new generation of nuclear power plants. That is irresponsible.”
The waste from nuclear power plants is not only an ecological nightmare, but also increases the threats of nuclear proliferation. Obama said in his recent State of the Union address, “We’re also confronting perhaps the greatest danger to the American people—the threat of nuclear weapons.” Despite this, plans that accompany what Obama has proposed, his “new generation of safe, clean nuclear power plants,” include increased commercial “nuclear fuel reprocessing,” which the Union of Concerned Scientists calls “dangerous, dirty and expensive,” and which they say would increase the global risks of both nuclear proliferation and nuclear terrorism.
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http://www.truthdig.com/report/item/obamas_nuclear_option_20100216/?ln
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