The Big Pay Off of Investing in Nuclear Energy
February 22nd, 2011
This piece was originally posted on The Huffington Post.
In the midst of talk about government shutdowns and budget showdowns, it seems like there is not any room for bipartisan agreement in the Nation’s Capital. One of the all too rare glimmers of hope comes from reviving America’s nuclear energy industry. President Obama supports it. So do Republican leaders, Senator Mitch McConnell and Speaker John Boehner. The question is how we get there.
The President’s budget preserves bipartisan funding for nuclear energy that is critical to help secure the financing and develop the next generation of reactors that would lead to a renaissance. This includes $36 billion in funding for loan guarantees that would help utilities secure the private capital they need to build new nuclear reactors. An additional $67 million would go to easing the regulatory hurdles that stand in the way of deploying small modular reactors. This emerging technology could play a critical role in replacing conventional energy and revive domestic manufacturing.
Unfortunately, the House proposal does not do the same. Instead, it decimates the loan guarantee authority to help construct new nuclear facilities. House Appropriations Chairman Hal Rogers has claimed that these budget cuts will “help our economy grow and our businesses create jobs.” This thinking is the equivalent of someone living in a log cabin who decides to burn down his house to keep it warm.
Ground was broken for the construction of the first new nuclear plant in a generation, in Georgia, thanks in part to a federal loan guarantee that helped Southern Company secure private financing. This is expected to create about 3500 construction jobs and lead to 800 permanent jobs to operate the plant. On-time and on-budget completion of this plant will help put nuclear energy on a path toward financing without government support. As the next 5 to 10 plants are built with loan guarantees, it would help diversify our nation’s energy portfolio, create new jobs building and operating power plants and provide markets for domestically-manufactured nuclear components. It would also make clear whether the industry is viable to compete on its own.
Eliminating the loan guarantees would pull the rug out from under financing nuclear power plants. This would make it much less likely that new reactors would get built and much more likely that the United States becomes dependent on one source of fuel to generate electricity. Whether it’s a stock portfolio or an energy portfolio, diversification is critical to protect against unanticipated changes. On their own, markets do not always take that into account. They also do not consider the importance of creating jobs, as we’re seeing now in Georgia, or the businesses that could grow from the right energy policy.
Investing in an American nuclear renaissance should be easy. Leaders of both parties say they want it. It creates the jobs the American people so desperately need. It helps protect the American economy from the dangers that come from overreliance on any one energy source.