As the presidential primary season heats up, an "anti-nuclear renaissance" against loan guarantees for new nuclear power plants will escalate, with the future of American energy policy and global warming hanging in the balance.
In the last days of 2007, grassroots activism ran up a stunning and improbably victory. But the triumph is both partial and tentative, and will be fiercely contested throughout 2008, with the basic direction of US energy policy hanging in the balance.
This latest chapter in the half-century saga of atomic energy began last summer, with an industry attempt to grab a blank taxpayer check for underwriting new reactor construction. The charge was been led by six-term Senator Pete Domenici (D-NM), atomic power's prime Congressional pusher.
Domenici inserted into the Senate version of the national Energy Bill a complex provision meant to allow the Department of Energy to underwrite up to 80% of new reactor construction costs. The nuclear industry envisioned $25 billion in loan guarantees for 2008, $25 billion more in 2009, and what would amount to a blank check into the future. The guarantees would be granted at the DOE's discretion, with no on-going Congressional oversight.
Domenici slipped in the provision without open debate in Congress or the public. It took the form of a single obscure sentence referencing the Energy Bill of 2005. The move only became widely noticed thanks to a front page New York Times article on July 31.
The loan guarantees generated intense grassroots and Washington-based opposition. After the Times article appeared, musicians Bonnie Raitt, Jackson Browne and Graham Nash established the www.nukefree.org website, and joined with the on-going grassroots movement against a "nuclear renaissance" meant to revive an industry whose last successful reactor order was placed in 1973. Raitt, Browne and Nash were joined by Keb Mo and Ben Harper in a music video that spread through the internet, underscoring the costs and dangers of such construction.
The video played into an on-going No Nukes movement. The industry has gone to great lengths to assert that it has widespread "green" support. But no major national ecological organization has endorsed nuclear power, and the core of the movement---including scores of national, grassroots and internet-based groups---rallied to fight the subsidies.
On October 23, nine national groups joined with nukefree.org at a Washington press conference to submit 120,000 signatures against the guarantees. Representatives Ed Markey (D-MA), Shelley Berkeley (D-NV) and John Hall (D-NY) spoke along with representatives from the Sierra Club, League of Conservation Voters, Greenpeace USA, Environmental Working Group, Natural Resources Defense Council, Public Citizen, USPIRG/Association of State PIRGs, the Nuclear Information & Resource Service, and Beyond Nuclear. (Speeches from the press conference can be found at www.nukefree.org, and accessed directly at www.nukefree.freevolt.org).
The petitions were also circulated by MoveOn.org, True Majority and other internet groups, and signed by, among others, Robert Redford, Ozamatli, Patti Smith, System of a Down, Sheryl Crowe, Herbie Hancock, Susan Sarandon, Robert F. Kennedy, Jr., and the council of the Hip-Hop Summit Action Network. The Nuclear Information & Resource Service (NIRS) submitted endorsements from several hundred local and regional grassroots organizations.
The Union of Concerned Scientists circulated a parallel petition opposing the guarantees. Free market advocates joined in from Forbes Magazine and the Cato Institute, which objects to billions in taxpayer funds going to support what Forbes has called "the largest managerial disaster in business history."
Amidst intense public and private pressure, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid pulled the loan guarantees out of the Energy Bill. It was an historic victory for grassroots activism.
In the midst of the campaign, Domenici admitted to suffering from frontotemporal lobar degeneration, a form of dementia. First elected to the Senate in 1972, he announced he would retire at the end of his sixth term, in January, 2008.
Domenici then tried to stick the loan guarantees into the Farm Bill, prompting critics to term them "Domenici's radioactive retirement package." That move failed.
The nuclear industry then attempted to add to a global warming bill, co-authored by Senators Lieberman (D-CT) and McCain (R-AZ), a laundry list of reactor subsidies and regulatory easements. These were removed by Sen. Barbara Boxer (D-CA), chair of the Energy and Public Works Committee.
Domenici then moved to attach the guarantees to the Appropriations Bill used to fund the government's operations. By late December, bickering over this $500 billion bill deteriorated into intense partisan warfare. Domenici's back-door move angered House Appropriations Chair David Obey (D-WI) and the battle intensified, with opposition signatures continuing to pour in.
The Appropriations Bill finally passed both houses of Congress in late December. But the legislative standing and ultimate outcome for the loan guarantees is murky at best, with legal and procedural experts still debating over what exactly has been done.
Ostensibly, the DOE has been authorized to grant $18.5 billion in reactor loan guarantees over the next two years, plus another $2 billion for uranium enrichment. There is also some $10 billion for renewable energy projects (though the definition of exactly what "renewable" means in the eyes of the Bush DOE remains to be seen). And there is apparently money for coal liquification and gasification. The DOE is also required to submit the specific guarantees to Congress for review 45 days before they can be authorized.
But there agreement ends. Based on the 2005 Energy Act, the $18.5 billion can be seen as just a benchmark number, with the DOE technically capable of issuing all the guarantees it wants. Long-standing Congressional procedures may also be used to interpret the submission requirement as merely informational, granting Congress no power to stop the DOE from issuing the guarantees once they're reviewed.
But Robert Alvarez, a former long-time employee of the Energy Department, now Senior Scholar at the Institute for Policy Studies, says the nature of the provision leaves the legal standing of the guarantees in limbo and could "paralyze (some say strangle) the loan program."
Among the problems Alvarez cites are unresolved disputes over the previous Energy Policy Act of 2005, "scoring" procedures required by the 1990 Federal Credit Reform Act to determine the true cost of a spending package, the authorization of a two-year guarantee program in a one-year Appropriations Bill, disputes surrounding Congressional approval processes, and more. "Instead of clearing up the growing mess" over the loan guarantees, says Alvarez, this legislation "has magnified the major hurdles."
Further muddying the waters is the fact that no proposed American reactor project is likely to obtain an actual construction license within at least the next two years. Michael Mariotte of NIRS questions whether loans can "really be obtained for projects with no official approval to proceed."
Critics also point out that while the industry claims new reactors can be built for $4-5 billion each, independent observers put the likely real costs far higher. A "new generation" reactor in Finland is some $2 billion over budget and two years behind schedule after just two years of construction. The US industry continues to submit a steady stream of significant modifications to its so-call "standard" construction blueprints. Thus what actually constitutes 80% of what it would cost to build a new reactor is very much a moving target.
But nobody doubts that as Congress reconvenes, Pete Domenici will be resuming his efforts to get as much more money as possible for new reactors. His time in office will be limited. And the political, legal, procedural, technical and financial disputes surrounding the actual nature of the guarantee program are certain to stretch through Congress and the courts for years to come.
Meanwhile, Wall Street has made it clear that it will not fund new reactors without these guarantees. This sharp vote of financial no confidence means that fifty years after the 1957 opening of the first commercial reactor at Shippingport, Pennsylvania, atomic energy still cannot pay for itself. Nor can it compete with the booming revolution in renewable technologies.
Thus what's at stake could not be more critical. With the guarantees, reactor builders will be insulated from all that, and could simply build as many plants as the Congress is willing to underwrite. That the Congressional Budget Office has predicted a 50% default rate on these proposed loans, may be of no consequence to them. They could simply suck as much available capital into new reactors as the DOE will underwrite.
But without those guarantees, the pro-nuclear renaissance will die in a puff of radioactive hype. As fossil fuels diminish in supply, and are curtailed due to global warming, no new reactors will be built here. All available capital for new energy supply must flow instead to renewables and efficiency.
According to the National Renewable Energy Laboratory, some $6 billion in new wind farms are currently under construction in this country. Billions more are pouring in solar, bio-fuels, ocean thermal, wave, tidal and other forms of green power.
Indeed, if this tuneful victory over Pete Domenici's single-sentence insertion into the Energy Bill of 2007 holds through the end of 2008, it may someday be remembered as a landmark step toward a green-powered Earth.