Obama Pledges Billions for 20th Century's Most Expensive Technological Failure -- Nuclear Power

As Vermont seethes with radioactive contamination and the Democratic Party crumbles, Barack Obama has plunged into the atomic abyss.

In the face of fierce green opposition and withering scorn from both liberal and conservative budget hawks, Obama has done what George W. Bush could not---pledge billions of taxpayer dollars for a relapse of the 20th Century’s most expensive technological failure.

Obama has announced some $8.3 billion in loan guarantees for two new reactors planned for Georgia. Their Westinghouse AP-1000 designs have been rejected by the Nuclear Regulatory Commission as being unable to withstand natural cataclysms like hurricanes, tornadoes and earthquakes.

The Vogtle site was to originally host four reactors at a total cost of $600 million; it wound up with two at $9 billion.

The Southern Company which wants to build these two new reactors has cut at least one deal with Japanese financiers set to cash in on American taxpayer largess. The interest rate on the federal guarantees remains bitterly contested. The funding is being debated between at least five government agencies, and may well be tested in the courts. It's not clear whether union labor will be required and what impact that might have on construction costs.

The Congressional Budget Office and other analysts warn the likely failure rate for government-back reactor construction loans could be in excess of 50%. Energy Secretary Stephen Chu has admitted he was unaware of the CBO’s report when he signed on to the Georgia guarantees.

Over the past several years the estimated price tag for proposed new reactors has jumped from $2-3 billion each in some cases to more than $12 billion today. The Chair of the NRC currently estimates it at $10 billion, well before a single construction license has been issued, which will take at least a year.

Energy experts at the Rocky Mountain Institute and elsewhere estimate that a dollar invested in increased efficiency could save as much as seven times as much energy than one invested in nuclear plants can produce, while producing ten times as many permanent jobs.

Georgia has been targeted largely because its regulators have demanded ratepayers put up the cash for the reactors as they're being built. Florida and Georgia are among a small handful of states taxing electric consumers for projects that cannot come on line for many years, and that may never deliver a single electron of electricity.

Two Florida Public Service Commissioners, recently appointed by Republican Governor Charlie Crist (now a candidate for the US Senate), helped reject over a billion dollars in rate hikes demanded by Florida Power & Light and Progress Energy, both of which want to build double-reactors at ratepayer expense. The utilities now say they'll postpone the projects proposed for Turkey Point and Levy County.

In 2005 the Bush Administration set aside some $18.5 billion for reactor loan guarantees, but the Department of Energy has been unable to administer them. Obama wants an additional $36 billion to bring the fund up to $54.5 billion. Proposed projects in South Carolina, Maryland and Texas appear to be next in line.

But the NRC has raised serious questions about Toshiba-owned Westinghouse’s AP-1000 slated for Georgia’s Vogtle site, as well as for South Carolina and Turkey Point. The French-made EPR design proposed for Maryland has been challenged by regulators in Finland, France and Great Britain. In Texas, a $4 billion price jump has sparked a political upheaval in San Antonio and elsewhere, throwing the future of that project in doubt.

Taxpayers are also on the hook for potential future accidents from these new reactors. In 1957, the industry promised Congress and the country that nuclear technology would quickly advance to the point that private insurers would take on the liability for any future disaster, which could by all serious estimates run into the hundreds of billions of dollars. Only $11 billion has been set aside the cover the cost of such a catastrophe. But now the industry says it will not build even this next generation of plants without taxpayers underwriting liability for future accidents. Thus the “temporary” program could ultimately stretch out to a full century or more.