By CAPAF’s Daniel J. Weiss and Richard Caperton.
On Friday, December 3, Senator Lamar Alexander (R-TN), the Senate Republican Conference Chair, plans to release the Senate GOP’s agenda for 2011. According to Roll Call, Alexander will say that it will focus on “jobs, debt and terror.” There is at least one big problem with his proposed agenda – it includes his call to build 100 new nuclear power plants. This plank would create fewer jobs relative to its huge cost, add billions of dollars to the deficit, and increase the risk of terrorists getting radioactive material. In short, Alexander’s proposal would nuke his own jobs, debt, and terror agenda.
Alexander will call for investment in clean-energy-technology development and the nation’s transportation system, as well as for the construction of 100 nuclear power plants. While such spending proposals were staples of the platforms of conservative and libertarian leaders about 20 years ago, they have fallen out of favor with many conservatives today.
Alexander’s 100 nukes proposal would require a federal expenditure of at least $6 billion (see below for more details), and certainly would create jobs. However, investing this same amount of federal money in clean energy could create three times more jobs. An analysis by the University of Massachusetts’ Political Economy Research Institute projects that an investment of $1 million in nuclear energy creates roughly one-third of the direct and indirect jobs compared to investing $1 million in wind and solar energy, or building efficiency retrofits. In other words, the public and private funds required to build 100 power plants would create three times more jobs if invested in clean energy. The Alexander plan carries a significant employment opportunity cost.
Another study found that nuclear power does create more jobs than wind power per gigawatt of new electricity generation capacity. This research falls short because it does not consider a full suite of clean energy investments such as energy efficiency, which is very labor intensive. Right now job creation is a top priority, but the government has only limited funds to invest in it. Therefore, it should maximize the jobs created per dollar of investment rather than focus on other criteria.
Alexander’s plan to build 100 new nuclear power plants would double the number of U.S. plants. Private investors, however, are very reluctant to invest in new plants because they are such a risky investment. The Energy Policy Act of 2005 established a federal loan guarantee program to back stop 80 percent of investment in each project so that taxpayers would pick up the tab if borrowers default. So far, only one loan guarantee has been issued, for a plan to build two reactors in Georgia. Another proposed loan guarantee for a reactor in Calvert Cliffs, Maryland is on hold because the credit cost of the loan guarantee was too high based on the plant’s cost and the risk of loan default.
The cost of a new nuclear reactor is extremely uncertain because no new reactor has been built in the United States since the 1970s. However, given the history of cost overruns in nuclear construction in the US, and examples of dramatic cost overruns for plants currently under construction in other nations, a new reactor could be expected to cost at least $8 billion. This estimate is very optimistic. The Calvert Cliffs plant’s price tag is $10.5 billion. In 2009, the government of Ontario put its plan to build a new plant on hold after the price more than tripled to $26 billion.
Under the existing loan guarantee program, the financing of 100 plants would require loan guarantees of at least $640 billion. By law, the Department of Energy will collect credit fees from investors to cover the federal governments risk exposure. For instance, DOE estimated that the credit cost of Calvert Cliffs plant would be 11.8 percent of the total loan guarantee. CAP estimates that the credit fee would be about 10 percent of the total loan guarantee for a typical plant.
The Congressional Budget Office, however, projects that DOE will underestimate the actual prospects for default on the loan guarantee, and therefore collect fewer dollars than necessary to protect taxpayers from financial risk. CBO warns that
fees paid by borrowers would be at least 1 percent lower than the amount needed to cover the costs of the guarantee.
This would require an appropriation of $6.4 billion for 100 plants at $8 billion each, which would be added to the deficit.
Alexander’s nuclear plan would add $6.4 billion to the deficit – and that assumes no spike in the cost of nuclear plant construction. This is an ineffective use of scarce financial resources at time when the Republican Pledge to America promises to
Cut government spending to pre-stimulus, pre-bailout levels saving at least $100 billion in the first year alone.
There are many more beneficial uses of these funds. For instance, $6 billion could retrofit over one million homes to make them more energy efficient, save owners’ money, and cut pollution. Or they could pay for 120,000 college scholarships.
Existing nuclear reactors produce approximately 20-30 tons of high level nuclear waste per reactor per month. The operation of 100 new nuclear power plants would dramatically increase this waste by millions of pounds. This additional waste would dramatically increase the risk to public health and the environment. The Nuclear Regulatory Commission describes the threat.
High-level wastes are hazardous to humans and other life forms because of their high radiation levels that are capable of producing fatal doses during short periods of direct exposure. For example, ten years after removal from a reactor, the surface dose rate for a typical spent fuel assembly exceeds 10,000 rem/hour, whereas a fatal whole-body dose for humans is about 500 rem (if received all at one time). Furthermore, if constituents of these high-level wastes were to get into ground water or rivers, they could enter into food chains. Although the dose produced through this indirect exposure is much smaller than a direct exposure dose, there is a greater potential for a larger population to be exposed.
Currently, there is no long term storage plan for existing nuclear waste, which remains radioactive for 10,000 years. Sen. Alexander proposes to address the waste problem by reprocessing it to reuse as fuel in reactors. The Union of Concerned Scientists describes the danger of this approach.
From the perspective of terrorists seeking a nuclear weapon, reprocessing changes plutonium from a form in which it is highly radioactive and nearly impossible to steal to one in which it … could be stolen surreptitiously by an insider, or taken by force during its routine transportation.
This situation is made worse by the fact that the theft of enough plutonium to build several nuclear weapons could remain undetected for many years at a reprocessing facility.
Some reprocessing advocates claim that a new generation of so-called “proliferation-resistant” reprocessing technologies now under development would resolve the proliferation concerns of conventional reprocessing. However, there is little evidence that these technologies would be significantly more secure.
Reprocessing high level nuclear waste increases the risk of proliferation, and its use by terrorists. One hundred more nuclear power plants dramatically increases the risk of fissible material falling into the hands of terrorists or exposing Americans to highly toxic radioactive waste.
John Rowe is the Chairman of Exelon, the nation’s largest nuclear plant operator. His company does not plan to build any new reactors right now. He said recently that
his company would not break ground until the price of natural gas was more than double today’s level and carbon emissions cost $25 a ton.
Sen. Alexander and nearly all of his caucus opposed action on global warming in the 111th Congress. And all but one of his newly elected GOP colleagues are climate science deniers, further decreasing prospects for putting a price on carbon pollution that is the essential condition that makes build more nuclear power plants economically viable. They refuse to create a market that values nuclear power’s most beneficial characteristic – its low carbon pollution. Instead, GOP Senators have blocked the one action that would make building more nuclear reactors viable.
Senator Alexander’s nuclear proposal would add relatively fewer jobs compared to clean tech, add to the budget deficit, and create opportunities for terrorists. In short, his “Blueprint for 100 Nuclear Plants” would blow his own agenda to pieces.
– Daniel J. Weiss and Richard Caperton