Legislative Update from Beyond Nuclear

Legislative Update from Beyond Nuclear

Thursday, December 20, 2007 Contact: Kevin Kamps, Beyond Nuclear, (301) 270-2209

Congress and White House Grant Nuclear Power Industry Federal Loan Guarantees for New Atomic Reactors

$20.5 billion risk shifted onto taxpayers, but industry had sought over $50 billion
Many of you have actively opposed nuclear loan guarantees, by signing petitions, phoning, faxing, emailing, writing, and even meeting with congressional leaders, as well as your own Members of Congress, or their staff. You’ve also written letters to the editor and op/eds. For all your good work, we thank you from the bottom of our hearts. And we feel it important to give you the latest on the status of the federal loan guarantees for new nuclear reactors.

We succeeded, over the course of several months, in blocking nuclear loan guarantees from being included in the energy bill (signed into law just yesterday, by the way). We also blocked nuclear loan guarantees from being attached to the farm bill. But, unfortunately, we failed to prevent their being attached to the appropriations bill, despite our best efforts.

As many of you may have already learned, both the U.S. House of Representatives and the U.S. Senate passed an Omnibus Appropriations Bill this week that did contain nuclear loan guarantees: $18.5 billion for new nuclear reactors, and an additional $2 billion for new uranium enrichment. This $20.5 billion in nuclear loan guarantees is for both Fiscal Year 2008 and Fiscal Year 2009, whereas the nuclear industry had wanted over $50 billion in nuclear loan guarantees over that time period. In that sense, our hard work has helped block around $30 billion in nuclear loan guarantees from being approved – although $20.5 billion is certainly bad enough.

In addition, nuclear loan guarantee proponents, such as U.S. Senator Pete Domenici (Republican from New Mexico) will almost certainly come back, perhaps in early 2008, with supplemental appropriations legislation seeking yet more nuclear loan guarantees for Fiscal Year 2009. Thus we must remain vigilant, and even re-double our efforts, for this fight will go on.

In addition to the $20.5 billion in loan guarantees for the nuclear energy industry, another $8 billion was approved for coal projects, and $10 billion for renewables and efficiency (although it appears that controversial, large-scale electricity transmission projects may have been lumped in with “renewables and efficiency,” transmission lines that would be needed if giant new atomic reactors are to be added to the grid). Thus, outrageously, nuclear loan guarantees account for more than half the energy loan guarantees. When nuclear power and coal are taken together, the ratio of dirty and dangerous energy projects to clean and safe energy projects is three to one! So much for an energy loan guarantee program that was supposed to support “innovative and clean” projects to address the climate crisis! So much for a Democratic Congress supposedly devoted to clean energy!

The way the nuclear loan guarantees will work – according to rules set by the Bush administration’s Office of Management and Budget, as well as the Department of Energy -- is this: up to 80% of the cost of a new reactor project will be covered by nuclear loan guarantees, backed by the U.S. Treasury (that is, taxpayers). If a new reactor would cost $6 billion (a conservative estimate, for the news media recently reported that a single reactor could cost $9 billion), then 80% of that cost ($4.8 billion) could be covered by federal loan guarantees. Thus, about three to four new reactors could get off the ground thanks to $18.5 billion in nuclear loan guarantees (the other $2 billion is devoted to new uranium enrichment facilities). Wall Street investment firms and banks will now lend money to nuclear utilities pursuing new reactors at a much lower interest rate, because of the presence of the federal loan guarantees. If nuclear utilities default on their loan repayments to the lenders, then U.S. taxpayers will be left holding the bag. This “latent subsidy” is to an industry that has already enjoyed lavish subsidies at the expense of U.S. taxpayers and ratepayers for the past fifty years. These have amounted to hundreds of billions of dollars in research and development support, liability coverage in the event of catastrophic radiation releases, high-level radioactive waste management costs, “stranded cost” transfer of reactor construction debts from highly profitable nuclear utilities onto ratepayers’ electricity bills in some “deregulated” states, and much more.

George W. Bush has not yet signed the omnibus appropriations bill (including nuclear loan guarantees) into law, but he will do so soon. Bush gave an “end of year” press conference today, declaring victory on the omnibus appropriations bill (such as getting war funding out of Congress for Iraq, for example). Responding to a question about why the Bush Environmental Protection Agency had just blocked states, such as California, from setting stronger standards than the federal government on automobile greenhouse gas emissions, Bush said those concerned about global warming should be big supporters of nuclear power. Bush erroneously stated that nuclear power doesn't release one unit of greenhouse gas (he’s ignoring the significant greenhouse gas emissions from the nuclear fuel chain). He congratulated Congress on passing incentives to build new reactors. Bush was referring to the nuclear loan guarantees in the omnibus appropriations bill, and perhaps also to nuclear subsidies contained in the energy bill he signed into law just yesterday – including international expansion of the Price Anderson nuclear liability act, which holds U.S. taxpayers financially responsible for the vast majority of monetary damages caused by a catastrophic atomic accident, potentially into the hundreds of billions of dollars.

Although $20.5 billion in nuclear loan guarantees have been approved, it is not entirely clear how easy it will be for the U.S. Department of Energy (DOE) to disburse those loan guarantees. U.S. Representative David Obey (Democrat from Wisconsin), chairman of the House Appropriations Committee, inserted a requirement that 45 days before energy loan guarantees are disbursed, DOE must present its plan to both House and Senate appropriators. Whether or not the appropriations committees’ approval is required before disbursement is less clear. Also, the amount of loan guarantees approved for various energy sectors is included only in the omnibus appropriations act’s report language, but not in its statutory language. This calls into question how much force of law those loan guarantee amounts actually carry. But an alternative explanation for the loan guarantee amounts being only in report language is that it’s an end run around the Federal Credit Reform Act of 1990, which requires that loan guarantees be “scored” by the Congressional Budget Office at 1% of their dollar amount value. That means, in the case of $20.5 billion in nuclear loan guarantees (also known as “funny money”) that congressional appropriators would have to come up with 1% of that amount (or $205 million) in actual, real-world funding. And given record federal deficits and tight budgets, there isn’t $205 million just lying around at the appropriations committees. In short, such wrinkles and complexities could serve as monkey wrenches in the gears of the nuclear loan guarantee program, even opening up possibilities for lawsuits.

What can we do now? Everyone should call or write their U.S. Representative and two U.S. Senators to thank or criticize them, depending upon whether they voted against these nuclear loan guarantees or for them. Sample letters of thanks or criticism to Members of Congress are pasted in below. To see how your House Member voted, go to http://clerk.house.gov/evs/2007/roll1171.xml and find out. “Yeas” voted wrong (in favor of nuclear loan guarantees), while “Nays” voted right (against nuclear loan guarantees). To see how your two U.S. Senators voted, go to http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=1&vote=00441 and find out. Granted, the omnibus appropriations bill contained 11 separate appropriations bills rolled into one (including the energy and water appropriations bill, containing the nuclear loan guarantees), so Members may have decided their yea or nay vote based on a variety of variables in addition to the nuclear loan guarantee issue. But these roll call votes are the only official House and Senate floor votes for or against the nuclear loan guarantees that can be cited (the additional House vote on the omnibus appropriations bill just yesterday had to do with war funding for Iraq).

Another action you can take is to write a letter to the editor, or op/ed, to your local paper, condemning the enactment of nuclear loan guarantees. Again, samples are below which you can use or adapt.

Taking these further actions, on top of all the good work we’ve already done, is important. We must continue to educate and pressure Members of Congress, the news media, and the public about nuclear loan guarantees, for the nuclear industry and its friends in Congress will be back very soon seeking yet more.

Sincerely,

Kevin Kamps
Radioactive Waste Watchdog
Beyond Nuclear


LETTERS OF THANKS OR CRITICISM TO CONGRESS:

Sample thank you letter to Congress for voting against nuclear loan guarantees

Dear U.S. Representative/Senator ____________,

Thank you for voting against the omnibus appropriations bill this week. It contained an objectionable nuclear loan guarantee provision.

Federal loan guarantees for new atomic reactors just approved in the congressional omnibus appropriations bill are a major financial risk to taxpayers. The nuclear industry has obtained $20.5 billion in guarantees, and will likely lobby for more in the near future.

The Congressional Budget Office (CBO) has predicted nuclear utilities will default on new reactor loan repayments more than 50% of the time, leaving taxpayers holding the bag. CBO also reports the U.S. Energy Dept. will likely underestimate the subsidy fee it charges borrowers up front, meaning taxpayers could end up on the hook for tens of billions of dollars in liability when new reactor loans inevitably go bad.

What makes this astronomical nuclear giveaway even more outrageous is that this industry is 50 years old, and has already been very heavily subsidized – to the tune of hundreds of billions of taxpayer and ratepayer dollars.

The climate crisis demands energy subsidies go to the cleanest, safest, least expensive, and quickest options available. Energy efficiency is seven times more cost effective at reducing greenhouse gas emissions than nuclear power. Congress should subsidize efficiency and renewables like wind and solar, but stop co-signing the American taxpayer onto risky nuclear loans.

In addition to nuclear power’s financial risks, there are also: the safety and security risks; routine intentional releases of radioactivity into the environment, as well as accidental leaks that harm human health and ecosystems; the 65-year-high and still growing mountain of radioactive waste that has no safe, sound solution; and the risk of nuclear weapons and “dirty bomb” (radiological weapons) proliferation that goes hand in hand with nuclear power’s expansion.

Thanks again for opposing the omnibus appropriations bill and the outrageous nuclear loan guarantees it contains. I strongly urge you to oppose any further nuclear loan guarantees in the future.

Sincerely,

Sample letter of criticism to Congress for voting in favor of nuclear loan guarantees

Dear U.S. Representative/Senator ____________,

I am writing to express my displeasure at your vote in favor of the omnibus appropriations bill this week, for it contained an objectionable nuclear loan guarantee provision.

Federal loan guarantees for new atomic reactors just approved in the congressional omnibus appropriations bill are a major financial risk to taxpayers. The nuclear industry has obtained $20.5 billion in guarantees, and will likely lobby for more in the near future.

The Congressional Budget Office (CBO) has predicted nuclear utilities will default on new reactor loan repayments more than 50% of the time, leaving taxpayers holding the bag. CBO also reports the U.S. Energy Dept. will likely underestimate the subsidy fee it charges borrowers up front, meaning taxpayers could end up on the hook for tens of billions of dollars in liability when new reactor loans inevitably go bad.

What makes this astronomical nuclear giveaway even more outrageous is that this industry is 50 years old, and has already been very heavily subsidized – to the tune of hundreds of billions of taxpayer and ratepayer dollars.

The climate crisis demands energy subsidies go to the cleanest, safest, least expensive, and quickest options available. Energy efficiency is seven times more cost effective at reducing greenhouse gas emissions than nuclear power. Congress should subsidize efficiency and renewables like wind and solar, but stop co-signing the American taxpayer onto risky nuclear loans.

In addition to nuclear power’s financial risks, there are also: the safety and security risks; routine intentional releases of radioactivity into the environment, as well as accidental leaks that harm human health and ecosystems; the 65-year-high and still growing mountain of radioactive waste that has no safe, sound solution; and the risk of nuclear weapons and “dirty bomb” (radiological weapons) proliferation that goes hand in hand with nuclear power’s expansion.

Again, the nuclear loan guarantees contained in the omnibus appropriations bill are an outrage, and I am displeased that you voted in favor of them. I strongly urge you to oppose any further nuclear loan guarantees in the future.

Sincerely,

SAMPLE LETTERS TO THE EDITOR AND OP/ED:

Below are two sample Letters to the Editor on loan guarantees for new reactors, as a risk to taxpayers, or a foreign coup d’etat and raid on the U.S. Treasury. Why all this focus on financial risks to taxpayers? Because, incredibly, many Members of Congress see “anti-nuclear” as a dirty word, despite nuclear power’s many other risks—safety and security risks; routine intentional releases of radioactivity into the environment, as well as accidental leaks that harm human and ecosystem health; the 65-year-high and still growing mountain of radioactive waste that has no safe, sound solution; and the risk of nuclear weapons and “dirty bombs” proliferation that goes hand in hand with nuclear power’s expansion; etc. Thus, focusing on risks to taxpayers is probably one of the most effective ways to criticize this $20.5 billion boondoggle that just got approved on Capitol Hill.

Of course, if you want to write letters to the editor opposing nuclear loan guarantees because of the risks to public health, safety, security, and the environment, we would cheer you on—we need to educate Congress, the media, and the public that nuclear power is a nightmare for the planet, not just our pocketbooks!

Sample Letter to the Editor on federal loan guarantees for new atomic reactors as risk to American taxpayers:

(198 words)

Dear Editor,

Federal loan guarantees for new atomic reactors just approved in the congressional omnibus appropriations bill are a major financial risk to taxpayers. The nuclear industry has obtained $20.5 billion in guarantees, and will likely lobby for more in the near future.

The Congressional Budget Office (CBO) has predicted nuclear utilities will default on new reactor loan repayments more than 50% of the time, leaving taxpayers holding the bag. CBO also reports the U.S. Energy Dept. will likely underestimate the subsidy fee it charges borrowers up front, meaning taxpayers could end up on the hook for tens of billions of dollars in liability when new reactor loans inevitably go bad.

What makes this astronomical nuclear giveaway even more outrageous is that this industry is 50 years old, and has already been very heavily subsidized – to the tune of hundreds of billions of taxpayer and ratepayer dollars.

The climate crisis demands energy subsidies go to the cleanest, safest, least expensive, and quickest options available. Energy efficiency is seven times more cost effective at reducing greenhouse gas emissions than nuclear power. Congress should subsidize efficiency and renewables like wind and solar, but stop co-signing the American taxpayer onto risky nuclear loans.

Sincerely,

Sample Letter to the Editor on federal loan guarantees for new nuclear reactors as a foreign coup d’etat and raid on the U.S. Treasury:
(199 words)

Dear Editor,

Federal loan guarantees for new nuclear reactors included in the congressional omnibus spending bill risk tens of billions of American taxpayer dollars to benefit foreign corporations and workers. The nuclear industry has obtained $20.5 billion in guarantees thus far, but the U.S. Chamber of Commerce sees this as “an apparent advantaging of foreign commercial technologies over domestic technologies.”

French and Japanese atomic companies, already heavily subsidized by their own governments, would be the major beneficiaries of our subsidies. Most major equipment, such as reactor pressure vessels and steam generators, cannot be built at U.S. factories, but must be outsourced to Asian and European firms. Thus, most nuclear manufacturing jobs paid for by American subsidies would go overseas.

For example, the nuclear firm Areva is 80% owned by the French government. Its prototype new reactor, under construction in Finland, is $2 billion over budget and 2 years behind schedule. Yet, nuclear utilities hope to build five Areva reactors here. Any loan defaults due to cost over runs or schedule delays would be paid back at U.S. taxpayer expense.
American taxpayer investment in efficiency and home-grown, clean renewables like wind and solar would achieve genuine energy independence and provide U.S. jobs.
Sincerely,

Sample Op/Ed piece
(496 words)

Dear Editor,

Federal loan guarantees for new nuclear reactors in the congressional omnibus appropriations bill will be a major financial risk to the American people, and represent a foreign raid on the U.S. Treasury.

The nuclear industry has already obtained $20.5 billion in guarantees, and will likely seek more next year. The Congressional Budget Office (CBO) has predicted nuclear utilities will default on new reactor loan repayments more than 50% of the time, leaving taxpayers holding the bag. CBO also reports the U.S. Energy Dept. will likely underestimate the subsidy fee it needs to charge to borrowers up front, meaning taxpayers could end up on the hook for tens of billions of dollars in liability when new reactor loans inevitably go bad.

What makes this astronomical nuclear giveaway even more outrageous is that this industry is 50 years old, and has already been very heavily subsidized – to the tune of hundreds of billions of taxpayer and ratepayer dollars – every step of the way.

Wall Street had turned its back on investing in nuclear power for several decades because of the huge cost overruns and construction delays of the 1970s and 1980s, when some reactors came in 380% over budget. The last reactor built in the U.S. took 23 years to complete, at a cost of over $7 billion. The nuclear industry and its friends in Congress have now transferred the grave financial risks onto taxpayers, in order to entice private investors.
These new reactor loan guarantees would risk tens of billions of American taxpayer dollars to benefit foreign corporations and workers. The U.S. Chamber of Commerce sees this as “an apparent advantaging of foreign commercial technologies over domestic technologies.”

French and Japanese atomic companies, already heavily subsidized by their own governments, would be the major beneficiaries of our subsidies. Most major equipment, such as reactor pressure vessels and steam generators, cannot be built at U.S. factories, but must be outsourced to Asian and European firms. Thus, most nuclear manufacturing jobs paid for by American subsidies would go overseas.

For example, the nuclear firm Areva is 80% owned by the French government. Its prototype new reactor, under construction in Finland, is $2 billion over budget and 2 years behind schedule. Yet, nuclear utilities hope to build five Areva reactors here. Any loan defaults due to cost overruns or schedule delays would be paid back at U.S. taxpayer expense.

American taxpayer investment in efficiency and home-grown, renewable sources of electricity, like wind and solar, would achieve genuine energy independence and would provide American workers with jobs. The climate crisis demands energy subsidies go to the cleanest, safest, least expensive, and quickest options available. Energy efficiency is seven times more cost effective at reducing greenhouse gas emissions than nuclear power. Congress should subsidize efficiency and renewables like wind and solar, but stop co-signing the American taxpayer onto risky nuclear loans. Given the accelerating climate crisis, we cannot afford to squander tens of billions of taxpayer dollars on a risky nuclear relapse.

Sincerely,


Beyond Nuclear at NPRI
6930 Carroll Avenue, Suite 400
Takoma Park, MD 20912
Tel: 301.270.2209 Fax: 301.270.4000
Email: info@beyondnuclear.org
Web: www.beyondnuclear.org