Monday, March 12, 2012
U.S. Nuclear Industry Operates as if Fukushima Never Happened
By Press Action
"They shouldn’t build things they can’t control,” -Japanese farmer Muneo Kano, whose farm 28 miles from the Fukushima Dai-ichi nuclear plant has been deemed too contaminated for farming
Both Democrats and Republicans have had a long love affair with commercial nuclear power, and the relationship is showing no signs of losing steam. Since the 1950s, members of both parties have enthusiastically lavished electric utility companies with expensive gifts, ranging from subsidies to protection from liability for disasters to loan guarantees, all underwritten by U.S. taxpayers.
The political calculus is simple: nuclear power enjoys unanimous support in Washington. Try to name one member of the U.S. Senate or House of Representatives who favors shutting down the nation’s 104 commercial nuclear reactors. Federal agencies, from the Atomic Energy Commission to the Department of Energy to the Nuclear Regulatory, have worked diligently through the years to promote nuclear power. At the state level, support for nuclear power also is extremely strong, although there are some politicians—albeit a tiny number—who have publicly called for the closure of certain nuclear plants.
On the one-year anniversary of the start of the nuclear disaster at the Fukushima Dai-ichi nuclear power plant in Japan, one would assume a voice in official Washington would have emerged calling for an end to the nation’s experiment with nuclear power. In Germany, government officials made the decision to phase out nuclear power by 2022 in response to Fukushima. There’s no such sentiment among the ruling elite in the United States. Locating a member of Congress opposed to the continued operation of nuclear power plants is as hard as finding a lawmaker who favors breaking ties with Israel over its mistreatment of Palestinians for the last 60 years. In fact, it’s more than hard, it’s impossible.
It’s very rare to find an issue where there is a noteworthy difference between Democrats and Republicans. When there are differences, they tend to be subtle, although party officials and the corporate media will attempt to sensationalize a slight difference to create an impression that the U.S. political system permits honest and real debate.
On the issue of U.S. wars abroad, for example, Republicans and a huge number of Democrats are willing to pursue their imperial ambitions in full view of the international community, while liberal lawmakers prefer to keep their imperial agenda hidden behind the cloak of multilateralism. The ruling elite prefers to keep the range of permissible debate as narrow as possible. Just take a look at the almost unanimous support among both Democrats and Republicans for the Federal Restricted Buildings and Grounds Improvement Act of 2011, anti-free speech legislation that President Obama signed into law on March 8.
As with their Republican counterparts, every Democratic presidential administration of the last hundred years has been beholden to the interests of Corporate America. Serving the interests of big business often results in incredible handouts to private corporations. Despite his Republican philosophy of a free-market approach, President Dwight Eisenhower, with the blessing of Congress, poured billions of tax dollars into the development of nuclear power. Presidents John Kennedy and Lyndon Johnson, both Democrats, would follow suit with similar levels of support for the industry.
“It was only with government-insurance guarantees, fuel subsidies, and lavish research and development help that commercial atomic power moved ahead,” Harvey Wasserman and Norman Solomon wrote in their 1982 book, Killing Our Own: The Disaster of America’s Experience with Atomic Radiation. “Even at that, private utilities did not become heavily involved until faced with the threat of being squeezed out of business by federal competition in the form of the Tennessee Valley Authority and other government-owned utilities.”
With a few exceptions, electric utility executives were worried about the dangers of a nuclear accident and the risks of sinking so much capital into an untested technology. But the federal government pushed hard for using the knowledge gained from the nation’s atomic weapons program to build a nuclear power program.
Atoms for Peace
Nuclear reactors had been used in the U.S. since the early 1940s, primarily to generate plutonium for use in the atomic bombs dropped on Japan and in later nuclear weapons tests after World War II. As a byproduct, these reactors also generated large amounts of heat. Federal officials recognized that by harnessing this heat to boil water, steam would be created to turn turbines and generate electricity.
In these early years, the government and nascent nuclear industry relied on public relations campaigns to counteract any antinuclear bias generated by groups such as the Emergency Committee of Atomic Scientists, informally known as the Einstein Committee. The group was formed in 1946 by Albert Einstein and other scientists to educate the public about the nature of nuclear weapons and nuclear war. To counter the skepticism of the Einstein Committee and others, the federal government developed public relations campaigns featuring slogans such as President Eisenhower’s “Atoms for peace” and such statements as electricity “too cheap to meter,” coined in 1954 by Lewis Strauss, then head of the Atomic Energy Commission, Alan Herbst and George Hopley explained in their 2007 book, Nuclear Energy Now: Why the Time Has Come for the World’s Most Misunderstood Energy Source.
But it wasn’t only the members of the Einstein Committee that the government was up against. Executives with investor-owned electric utilities were also doubtful about spending huge amounts of capital on a new and controversial technology. Sam Day, former editor of the Bulletin of Atomic Scientists, told Wasserman and Solomon, “The private electric companies did not jump into nuclear power. They were kicked in.”
About 10 years after the war had ended, though, many utility executives began jumping on the nuclear bandwagon when they recognized that the federal government would be willing to give away the farm and more in order to get nuclear power plants built.
“In the mid-1950s, when commercial nuclear power was being debated in Congress, corporate leaders of the prospective nuclear firms testified that before the first stone could be put into place they would need a … limitation on financial liability and assurance that they would not go broke with the first plants,” Ralph Nader and Richard Pollock wrote in an essay that appeared in the 1982 book Nuclear Power: Both Sides. “Their demands were acknowledged: Uncle Sam told the electric utility companies that they initial reactors would be no-risk ventures. Washington would cover the companies’ losses if the atomic reactors proved to be a losing proposition.”
In testimony before Congress in 1999, Nader said the nuclear power industry “is completely a product of U.S. government research and development.” Having emerged from massive government investments, “the nuclear industry has never cut its umbilical cord tie to the government,” he said.
Unable to Purchase Insurance in the Normal Way
Because of the uncertainty about the safety of nuclear power and the possibility of a major accident causing considerable loss of life and potentially billions of dollars in property damage, insurance companies were reluctant to provide nuclear power plants with coverage sufficient to deal with such a disaster. Congress came to the rescue. In 1957, the Price-Anderson Act was signed into law and has since been renewed several times. The law was considered necessary as an incentive for the private production of nuclear power.
“The industry has gone through a full life cycle, but somehow it never outgrew the need for a federal insurance scheme and liability cap,” Nader said in his congressional testimony. “The result has been a massive subsidy to nuclear power companies.”
Harry Henderson argued in Nuclear Power, a book published in 2000, that the federal government offered an incentive that amounted to “no-fault insurance” for nuclear plant operators. Antinuclear activists strongly objected to the insurance program because they “believe it represents an unwarranted government subsidy to an industry that should not be allowed to operate if it is not safe enough to acquire insurance in the normal way,” Henderson wrote.
The Energy Policy Act of 2005 extended the Price-Anderson Act’s liability coverage for a period of 20 years. The Energy Policy Act passed Congress with overwhelming support from both Democrats and Republicans, including President Obama when he was a senator from Illinois.
Aside from giving the Price-Anderson Act another extension, the Energy Policy Act provided several new financial incentives for the nuclear power industry. The act provided loan guarantees, risk insurance for nuclear developers and production tax credits for “new build” advanced nuclear plants, defined as those including a reactor design approved after December 1993 by the NRC.
“Some critics of this plan describe the incentive package signed into law, which exceeds $8 billion in value as ‘corporate welfare’ for various Fortune 500 corporations and assert that the industry would never consider building new nuclear units without the U.S. taxpayer taking on the associated risk,” Alan Herbst and George Hopley wrote in their 2007 book, Nuclear Energy Now: Why the Time Has Come for the World’s Most Misunderstood Energy Source.
Herbst and Hopley, both supporters of nuclear power, argued in the book that “to reawaken the industry and ultimately to construct a new generation of nuclear reactors will require direct involvement from the federal government.”
A Radioactive Presidency
President Obama is doing what he can to continue to promote the construction of new nuclear power plants. In 2010, the Obama administration awarded Southern Co. and its partners a total of $8.33 billion in loan guarantees to support the proposed construction of two new units, Vogtle 3 & 4, at the company’s Vogtle nuclear plant near Waynesboro, Ga. The U.S. Energy Department’s loan guarantee program, created under the Energy Policy Act, received at least $122 billion in applications for total of 21 new reactors.
In February, the NRC, in a split vote, voted to grant the developers of the Vogtle expansion project a combined construction and operating license. In the lone dissenting vote on the five-member commission, NRC Chairman Gregory Jaczko said: “I cannot support issuing these licenses as if Fukushima had never happened.” Jaczko was referring to the debate over how to implement lessons learned from the Fukushima Dai-ichi nuclear disaster in Japan.
Federal loan guarantees for new reactors are essentially a taxpayer bailout of the nuclear industry. Wall Street considers investment in nuclear reactors too risky, making it difficult for utilities to finance these high capital projects. So the government continues to step in and shift the risk to taxpayers.
“Subsidies were originally intended to provide temporary support for the fledgling nuclear power industry, but the promised day when the industry could prosper without them and power from nuclear reactors would be ‘too cheap to meter’ has yet to arrive,” the Union of Concerned Scientists said a 2011 report titled “Nuclear Power Subsidies: The Gift that Keeps on Taking.” “It is unlikely to arrive any time soon, as cost estimates for new reactors continue to escalate and the nuclear power lobby demands even more support from taxpayers. Piling new subsidies on top of existing ones will provide the industry with little incentive to rework its business model to internalize its considerable costs and risks.”
Aside from the efforts of the federal government to spur a “nuclear renaissance,” many states are giving nuclear-owning utilities permission for early cost recovery of proposed nuclear power projects. In the four states in the Southeast where funds are being collected from ratepayers under new advanced cost recovery for nuclear reactor construction, each individual nuclear reactor project costs $15 billion to $20 billion, according to a new report authored by Mark Cooper, senior fellow for economic analysis at the Institute for Energy and the Environment at the Vermont Law School. Over $4 billion has already been approved for advanced cost recovery, yet it appears increasingly unlikely that the most of reactors will ever be built, the report said.
“In addition to the dismal economics of nuclear power, the primary reason that the practice is limited to a very few states is that advanced cost recovery is fundamentally flawed, placing ratepayers at extraordinary risk for an excessive and unnecessary cost burden that runs into the billions of dollars.” Cooper wrote in the February report, “Nuclear Socialism Comes to the Heartland of America: Early Cost Recovery for New Nuclear Reactors in Iowa and the Return of Electricity Rate Shock.”
Cooper also argued that in order to build new nuclear reactors, utilities are demanding the suspension of the regulatory rules and financial market mechanisms that protect ratepayers and balance the interests of consumers and utility shareholders.
“Major nuclear incidents require the authorities responsible for oversight of the nuclear industry to re-examine the technology,” he said. “If the accident at Fukushima causes them to abandon early cost recovery as a subsidy for nuclear reactors consumers will be a lot better off.”Share