John Kane, the chief Washington lobbyist for the Nuclear Energy Institute, has been trying to sell Americans on a kinder, gentler nuclear power that is safe, cheap and environmentally sound. Until recently, Americans weren’t buying. Now, even he is amazed at the success the industry has had in rebuilding its public image. “The analogy I like to use for what has happened with us is Cinderella,” he says. “Poor Cinderella toiled unappreciated and abused for a long time. Finally, somebody took a look at her and she got a chance to go to the dance.”
Nuclear energy–poor, abused nuclear energy–is indeed finally at the dance. Nuclear power plants are selling for record prices. The most pro-nuke administration since that of Richard Nixon is in the White House. A recent AP poll found that half of all Americans now say they support nuclear power. And stock in the nation’s largest nuclear holding company has doubled in value in the past year and a half.
It all amounts to a remarkable turnaround for an industry once so politically untouchable it spent the greater part of two decades in duck-and-cover mode–pronounced dead not just by environmentalists but also by investors stung by its high costs and risks, and the fear that the government subsidies that have kept it afloat would eventually dry up.
But the truth is, nuclear power, like the waste it produces, never really went away. America remains the world’s largest generator, churning out more atomic power than the two runners-up, France and Japan, combined. And output will almost certainly grow in coming years. Global-warming concerns and the energy crunch in California have helped, allowing the industry to cast itself as the ozone-friendly supplier of limitless energy. The new slogan of the Nuclear Energy Institute (NEI), “Nuclear: the clean air energy,” is a definite step up from the old, “Nuclear: more than you ever imagined.” The economic outlook for the industry has also brightened because of political inroads in Washington that have helped the industry tame federal regulators and insure renewal of the crucial subsidies.
The change of leadership in the Senate will hurt, especially because it means a demotion for the industry’s most important Congressional advocate in modern history, Republican Pete Domenici of New Mexico. Domenici, who once delivered a speech in Russia claiming nuclear power was essential for the “protection of vital freedoms,” has preached the gospel of nuclear power so fervently–and kept the nuclear pork flowing so flawlessly–that he is affectionately known as “St. Pete” at his state’s many nuke facilities. But even Congressional foes of nuclear power say the most important pieces of the industry’s agenda will move forward because of boosters in both parties. Besides, while the advocates of nuclear power may have lost their patron saint in Domenici, in George W. Bush they think they have the Second Coming.
To understand the Administration’s quick embrace of nuclear power, one need look no further than Thomas Kuhn, a close friend of Bush and the industry. Kuhn is the former president of the American Nuclear Energy Council, forerunner of the NEI, where his official bio says he “represented virtually all of the companies in the commercial nuclear power industry.” Today Kuhn heads the powerful Edison Electrical Institute, representing companies that generate 80 percent of America’s power. The Kuhn-Bush friendship dates back to their days at Yale, where they were classmates. Early in the 2000 campaign, the Washington Post noted that Bush’s effort to garner support from trade groups was led by Kuhn, whose “drive to wire the corporate side of Washington has generated significant fund-raising commitments and endorsements.” Soon after the election, a news brief in the December 22 Wall Street Journal Washington Wire mentioned Kuhn as a “Bush buddy” who “gets courtesy calls from several hopefuls to head the Environmental Protection Agency.”
The Administration was touting Kuhn himself as a possible nominee to head the Department of Energy. He didn’t get that job, but he told ABC News that the man who did, former Michigan Senator Spencer Abraham, was “just who we need to deal with the difficult energy issues we are facing today.” Abraham at first seemed a curious choice. He had no background in energy, and he once sponsored a bill calling for the elimination of the entire department. He was, however, a friend of the energy industry, including the nuclear industry.
Together, Bush and Abraham have brought the executive branch’s nuclear policy in line with what nuke advocates tout as a “pro-nuclear Congressional consensus” that was checked only by Bill Clinton’s veto pen.
The early 1990s can properly be described as nuclear power’s dark ages. Public support was at its lowest. But largely out of the public eye, important regulatory battles were under way. In 1992, rules changes made it harder for nuclear opponents to use the courts to block or delay the siting of new power plants–insignificant at the time since no new plant had been built since 1973. And throughout the 1990s, Domenici skillfully used his chairmanship of the Senate’s powerful Budget Committee (and reputation for bipartisanship) to steer an enormous number of federal dollars to the nuclear-industrial complex, from both budget appropriations and a slew of little-noticed legislation. But his biggest gift was probably his taming of the Nuclear Regulatory Commission (NRC), long targeted by the industry as an overzealous watchdog and blamed for the high costs of nuclear power.
In 1998 Domenici threatened cuts in the NRC’s budget that officials warned would force the firing of 500 safety inspectors. He eventually backed off, but the NRC was clearly shaken. “The NRC was already fairly worthless before any of this happened,” complains one Congressional staffer who works for an anti-nuke Democratic representative. “After Domenici got through with them, they became totally worthless. They flipped out when they thought the money was going to be cut off. Basically the NRC had to promise they wouldn’t regulate anymore.”
Perhaps the most dramatic effect was the commission’s surprise cancellation of the NRC’s Operational Safeguards Response Evaluation (OSRE) program, which tests the nation’s nuke plants’ ability to defend themselves from small groups of terrorists. Since the program began in 1991, a consistent 47 percent of the tests have resulted in mock-terrorists seriously damaging a nuclear facility, a persistent embarrassment for the industry. The NEI was never happy about the program. “I imagine economic pressure is part of it; [plant operators] are trying to hire fewer people and spend less money,” says Dave Orrik, head of OSRE since its creation and a former director of the nuclear weapons program of the Naval Sea Systems Command. “In their opinion, the fewer security requirements, the lower the cost of nuclear power. Unfortunately, the NEI lobbyists seem to have more access to [NRC] commissioners than I do.”
OSRE is still around, thanks to the intervention of Representative Ed Markey. But industry executives are happy with the way the commission has “adjusted to the new climate” in Washington, says Craig Nesbitt, director of communications for Chicago-based Exelon, one of a group of emerging companies devoted exclusively to nuclear power.
The relaxed regulatory climate, along with improvements in efficiency and the rising price of natural gas, has made the price of nuclear energy competitive again. Exelon and companies like Duke and Southern have taken advantage of the situation, buying up older plants and proving they can turn a profit. Exelon has in fact become the nation’s largest operator of nuke plants and the world’s largest privately owned nuclear company. With $12 billion in revenues, it has changed the face of an industry long dominated by utility giants like the Tennessee Valley Authority. Since the beginning of 2000, stocks in these new nuke companies have boomed, leading the San Diego Union-Tribune to write recently that nuke stocks were becoming “Wall Street’s hottest fad.”
Investors are betting on two things: that the price of fossil fuels will rise, which is certain, and that the price of nuclear power will not, which is almost as certain. That’s because Congress shows no signs of phasing out the subsidies that make nuclear power competitive. In fact, Republicans, joined by a host of Southern Democrats, are preparing to push one of the most important pieces of nuclear energy legislation to come along in decades, the Nuclear Energy Electricity Supply Assurance Act.
Since it was introduced by Domenici in April, the NEESAA has picked up seventeen co-sponsors, including three pro-nuke Southern Democrats. Opponents say that while they don’t expect the legislation to pass in its entirety, they do expect most of its important elements to survive as part of some kind of compromise. The bill is a lobbyist’s dream, with proposals that would have seemed fantastical even in the atom’s heyday of the 1960s.
First, like most any legislation bearing the word nuclear, there are subsidies, nearly $406 million in R&D and other programs. The industry likes to throw out numbers showing the price of nuclear power as comparable to coal and natural gas. These are misleading because they ignore both the costs of nuclear plants (which have already been paid off) and, more important, the huge federal subsidies. A feature on nuclear power in the May 19 Economist found it impossible to estimate the labyrinthine network of research subsidies, although it noted that an Organization for Economic Cooperation and Development report found the cost of research and development alone in the world’s developed countries to have totaled $159 billion just between 1974 and 1998. And that doesn’t include the expense of mining and milling nuclear fuel and the ongoing cost of taking care of the waste (imagine if the Feds decided to foot the bill for all oil drilling and waste disposal).
But the biggest subsidy of all is the Price Anderson Act, capping the industry’s liability in case of an accident at $7 billion. The renewal of the act is clearly the most important clause of Domenici’s bill–and everyone expects the clause to pass in some form. Nuclear supporters say the chances of a serious accident are minuscule and that the safety record of plants has steadily improved since the days of Three Mile Island. But critics say plants are getting less safe as unused emergency equipment deteriorates from age. As for the NRC, the last time it ventured an estimate, in 1985, it found the chance of some kind of meltdown occurring at a US nuke plant over the next twenty years to be 45 percent. The last NRC estimate of fatalities from a catastrophic accident, in 1982, predicted that an absolutely-worst-case nuclear accident at one plant near Philadelphia could kill 74,000 people within a year, in addition to thousands of long-term deaths from cancer.
Even the costs of a much smaller accident would be huge. According to the Russian government, the Chernobyl disaster cost between $283 billion and $358 billion, which, as a Wall Street Journal editorial noted, “suggests the Soviet Union may have been better off if it had never begun building nuclear reactors in the first place.” In their annual quest for Price Anderson renewal, industry experts themselves routinely tell Congress that without the caps no insurance company will insure them. They say the same of their supposedly “meltdown free” pebble-bed reactor, for which they are now seeking licensing.
Which leaves the final pillar of the pro-nuke argument, environmentalism. In 1997, a public relations avenue opened up for nuclear power in the form of the Kyoto accords restricting greenhouse-gas emissions. The NEI launched a new PR campaign touting nuclear power as a clean alternative to dirty coal or gas.
This is where the NEESAA breaks truly new ground. It would classify nuclear energy as an “environmentally preferable” product, giving it an advantage in government contracts. The bill would also bar all federal funds from domestic or international organizations that exclude nuclear energy from consideration in projects they support, a move that should help revive the fortunes of a global industry that has been on the defensive since Germany’s decision to phase out nuclear power.
The green pro-nuke argument is that nuclear energy doesn’t produce CO
But even then, the dangers to the environment and to human beings far outweigh any reduction in CO
Then there is the long-term problem of where to put all those fuel rods. Nevada’s Yucca Mountain is supposed to be the solution, but even if doubts about its ability to withstand an earthquake are solved, there are still concerns about a transportation scheme that calls for nuclear waste, primarily from the nuclear-dependent East Coast, to be trucked across the country to a state that seems to have been chosen because it had one of the least powerful Congressional delegations at the time. Based on DOE maps, Public Citizen’s Critical Mass Energy Project estimates that the roughly 10,000 deliveries of nuclear waste each year would pass within a half-mile of 50 million Americans. The plan is beginning to look less like a done deal with the Democratic takeover of the Senate, since Senator Harry Reid of Nevada, the Democratic whip, is now positioned to be an important enemy.
If the facility is eventually built, the only thing everyone involved in the dispute can agree upon is that it will be too small to hold all the nation’s waste by the time it is completed. One option would be sending the waste to Russia, which is seeking customers as it transforms itself into a sort of international nuclear dumping ground. The industry also has a domestic backup plan that has received remarkably little attention outside of Utah and Nevada. In 1997 a consortium of nuclear utilities signed a contract to dump 40,000 tons of the nation’s high-level nuclear waste onto Utah’s Skull Valley Goshute Reservation for at least forty years, when the contract would come up for renewal. Tribal critics doubt the plan is really temporary.
“Look, this is a small reservation, full of an impoverished people with a small tribal council,” says Sammy Blackbear, a Goshute litigant in one of two lawsuits seeking to stop construction of the facility. “It doesn’t take a genius to figure out that we would be a prime target for them to put this waste.” Nobody yet knows how much money was involved; details of the agreement, negotiated by chief Leon Bear, have not been made public. The plan faces some big hurdles, since virtually every political figure in the state is against it. But if it is stopped, Blackbear doesn’t think the industry will be stymied. “They’ll just move a little down the road to the next reservation,” he says.
While the waste continues to mount at existing plants, the Bush Administration and Congressional allies are flirting with the idea of letting utilities resume reprocessing, allowing them to get more use out of nuclear fuel, generating more power out of existing stocks. Even many Congressional opponents of nuclear power seem willing to consider reprocessing as a way of reducing–and getting some use out of–the waste stockpile. But reprocessing poses big risks, creating what physicists call “bomb grade” material, easy to handle and use, including by terrorists. Eighteen pounds of plutonium, about the size of an orange, is enough to construct the most sophisticated nuclear weapons around.
Today the biggest proponents of reprocessing are the natural-resource-strapped French and Japanese. France has been one of the world’s most committed nuclear powers; the post-World War II Gaullists having embraced nuclear energy, in the word’s of Ted Taylor, director of natural resource studies at the Cato Institute, “for the same reasons conservatives in this country have supported it, because of its visceral nationalist appeal.” But lawsuits from neighboring countries have caused even the French to begin rethinking its commitment to reprocessing, because it produces huge volumes of hard-to-handle, low-level liquid waste that has a propensity to blow up, as the Russians found out in 1957 at their reprocessing site in Chelyabinsk. Japan’s main problem is its huge and growing stockpile of weapons-grade plutonium, which could be turned into an enormous arsenal in a matter of weeks. This hasn’t been lost on the Chinese and North Koreans, and could surpass even National Missile Defense in devastating already shaky efforts to curb proliferation in East Asia.
Whatever eventually happens to the US waste, it is the problem of the federal government, not the industry. The courts have already ruled that Washington will be held responsible for all costs of disposal, because it promised to build a permanent depository by January 1, 1998. The only remaining legal question is how much that will be; the industry has already floated a figure of $15 billion. In a way, the waste situation mirrors the remarkable position of the industry as a whole. All of nuclear energy’s flaws–waste storage, fuel supply, safety–are problems borne not by the industry but by the federal government. And they will be for the foreseeable future.
Public opposition, while not insurmountable–particularly in the Deep South, where there is a history of public approval of nuclear power–will prove a tough obstacle to expansion and the building of new power plants. Still, Exelon has been talking to the NRC about siting new plants, the first time anyone has done so in over a decade. But even without new plants, the industry will expand, either by placing new reactors next to old ones or by expanding generation at existing plants.
Given the human and financial costs of nuclear power and the industry’s sorry safety record to date, one would think that the political debate in the United States would be revolving around the vast subsidies that have kept nuclear energy afloat, as is the case in Germany, Sweden and Taiwan. Instead, the question being asked is how much to expand nuclear energy’s role. “Nuclear energy isn’t an issue anymore,” says Exelon’s Nesbitt. “It is a possibility.”