| November 1, 2007 |  |
Congress Should Cut Nuclear Energy Loan Guarantee Provisions From Energy Bill, Advocacy Groups Say
Congress Must Protect Taxpayers By Restoring Oversight On Risky Nuclear Loan Programs
WASHINGTON (November 1, 2007) — More than a dozen environmental, science and public interest groups today called on Congress to oppose a provision in pending energy legislation that would put U.S. taxpayers at risk for billions of dollars in nuclear power loan guarantees and undermine congressional oversight of the energy loan guarantee program.
In a letter sent to Congress, the groups criticized the provision slipped into the Senate version of the energy bill (H.R. 6) by Sen. Pete Domenici (R-N.M.) that would provide a multibillion dollar taxpayer subsidy to the nuclear power industry.
"Now that energy bill negotiations are underway, lawmakers need to know about this provision that would allow the nuclear industry to devour as much as $50 billion of the loan guarantees that are supposed to be for 'innovative technologies,'" said Jon Block, manager of the Nuclear Energy and Climate Change Project at the Union of Concerned Scientists (UCS), one of the groups that signed the letter. "Nuclear power already has eaten up billions of taxpayer dollars over the last four decades, and it's time for the industry to stand on its own. This provision would shortchange truly innovative, clean technologies, such as solar and wind, that don't have the safety, security and financial risks associated with nuclear power."
The groups, which also include the Natural Resources Defense Council, Public Citizen and the Sierra Club, urged members of Congress "to reject this controversial provision that would allow the Department of Energy to provide a blank check signed by the taxpayers to such high-risk energy projects as nuclear at the same time that it removes congressional oversight from the loan guarantee program. It is not only fiscally irresponsible, but also bad energy policy." The groups noted that the Bush administration also opposes the provision.
The 13 organizations that signed the letter were Beyond Nuclear, Clean Water Action, Co-op America, Friends of the Earth, Greenpeace, Natural Resources Defense Council, Nuclear Information and Resource Service, Physicians for Social Responsibility, Public Citizen, Sierra Club, SUN DAY Campaign, UCS and U.S. Public Interest Research Group. Yesterday, three taxpayer groups, Taxpayers for Common Sense, the National Taxpayers Union and Council for Citizens Against Government Waste, also sent a letter to lawmakers urging them to delete the Domenici provision.
The biggest cost associated with nuclear power is the billions of dollars it takes to build a plant. Just this week an industry spokesman told the radio show "Marketplace" that nuclear plants "are expected to cost between $3 [billion] and $5 billion each." Earlier this month, Moody's Investment Service projected that the plants will cost $5 billion to $7 billion.
In any case, construction costs historically have been dramatically underestimated. The first round of U.S. nuclear plants built between 1966 and 1977 experienced 200 percent to 380 percent cost overruns, according to the Energy Information Agency. These cost overruns—approximately $100 billion for the first 75 nuclear reactors—were among the factors that led to cancellation of nearly half of U.S. reactor construction projects. After reviewing that history, a 2003 Congressional Budget Office report concluded that the risk of utilities defaulting on loans for new nuclear plants is still "very high—well above 50 percent."
"There is no reason to believe the industry has reformed," said Block. The cost overruns in the 1960s and 1970s were largely due to the lack of skilled labor, difficulties with concrete pours and welding, and evolving designs during construction, he pointed out. "Today these same issues are dogging new reactor construction in Finland, Taiwan and China."
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
