Event Report: Seminar on Economics of Nuclear Power
Global Green USA’s Washington office hosted the fourth seminar, "The Economics of Nuclear Power," in its ongoing Seminar Series, "Energy Futures: Nuclear Power, Global Warning, and Nonproliferation." The program featured talks by Benjamin Schreiber, a Climate and Energy Tax Analyst at Friends of the Earth, and Michele Boyd, the Director of the Safe Energy Program at Physicians for Social Responsibility. Videos of the event please are on our YouTube channel.
The event opened with introductory remarks by Dr. Paul Walker, the director of the Security and Sustainability Program at Global Green USA. He underscored the significance of the current moment for shaping the next decade of nuclear energy policy in the United States and abroad. The recent tragedy at the Fukushima Daiichi nuclear power plant in Japan has lessened calls for a “nuclear renaissance” in the United States. Nonetheless, nuclear industry lobbying continues to press for continued federal subsidies in this year’s budget. Dr. Walker therefore counseled that, to fully understand the issue’s complexity, it is vital to examine closely and objectively the environmental, economic, and security aspects of nuclear power.
Benjamin Schreiber gave the first presentation, entitled “The True Cost of Nuclear Power.” He explained that nuclear energy poses a host of unique and daunting challenges in terms of cost, waste, safety, security, and proliferation. Since the technology was developed over 65 years ago, the U.S. government has gifted more than $300 billion to the nuclear industry. These contributions have taken the form of mining assistance, financial incentives, tax breaks, loan guarantees, as well as research and development and waste-management costs. He maintained that nuclear power could not remain economical without this massive assistance from states and the federal government. The Price-Anderson cap on accident liability, which sets a ceiling at which a power plant operator is no longer liable for post-accident damages, was underlined as particularly unwise. If a Fukushima-style meltdown (which may ultimately cost upwards of $300 billion to remediate) were to occur in the United States, the U.S. Treasury would foot the bill. He concluded that further government aid for nuclear energy was unjustifiable when business leaders were questioning if nuclear energy remained a profitable and competitive enterprise.
Michele Boyd delivered the second presentation, which indicated that vast federal and state subsidies have distorted the clean energy market dramatically. She zeroed in on the loan guarantees and advance cost recovery (also called Construction Work in Progress or CWIP) schemes that shield the nuclear industry from financial loss by placing the burden of default on the American taxpayer and ratepayer. She described the federal Title XVII Loan Guarantee Program and ratepayer-funded CWIP arrangements (which repay utilities' construction costs before construction even begins) as crucial for an industry in which construction projects are estimated to default over half the time. Moreover, the estimated cost of new reactors has quadrupled in the last decade and these costs will inevitably increase after Fukushima due to improvements in safety. President Obama's FY 2011 budget nonetheless requests a nearly threefold increase in nuclear loan guarantees to $54.5 billion in spite of the fact that U.S. companies are now pulling out of projects in states such as Texas and Maryland. Ms. Boyd concluded that President Obama and Congress would do better to reallocate funds away from new reactor construction. Putting this money in renewable forms of energy production, she said, would give a better return on investment.
The speakers made a strong collective case that, beyond the ever-present risk of a catastrophic meltdown, nuclear power is, at present, an uncompetitive source of future energy without significant government subsidies. The panel accordingly concluded that the billions currently designated for nuclear energy would be better directed at renewable energy, infrastructure, and efforts at energy conservation and efficiency.
Global Green USA’s Security and Sustainability Program’s Seminar Series, “Energy Futures: Nuclear Power, Global Warming, and Nonproliferation” will continue in the coming months with talks on uranium enrichment, spent fuel reprocessing, mixed oxide fuel (MOX), and spent fuel storage, transportation, and security. The series has already organized seminars on uranium mining and on the 25th anniversary of the Chernobyl nuclear power plant meltdown in 1986.