hen the White House released a budget proposal in February calling for $54 billion worth of federal loan guarantees for the construction of nuclear power plants, part of the idea was to woo the other side of the aisle. Congressional Republicans had spent the better part of a year blocking a piece of climate legislation known as the Waxman-Markey Bill, and it was hoped that some nuclear seduction might soften their opposition. Even if the White House had no luck with the GOP, what would be the harmreallyof firing up some new reactors? Much as tort reform is widely seen as a legitimate Republican goal in the pursuit of cutting health care costs, or the curbing of teachers union power is seen as a reasonable Republican aim in the pursuit of education reform, so too adding more nuclear power to the energy mix is widely considered a reasonable Republican priority in formulating a balanced energy policy. Were adults, right? Surely, were done blubbering over Silkwood. Many Democrats now seem to embrace nuclear power almost as heartily as their Republican colleagues.
Well, Republicans can love nuclear if they want. And Democrats can indulge them in some conciliatory fission if they want. But the rest of us shouldnt have to smile politely. Nor should we pretend that the bedfellows are anything but bizarre. The GOP and nuclear power are such old friends, like Tarzan and Cheeta, that we forget to reflect on the oddity of the relationship. At least Tarzan and Cheeta had compatible policy priorities, such as defense against crocodiles. But the nuclear industry and the Republican Party have nothing ideologically obvious in common other than a soft spot for things that go boom. That theyve teamed up all the same says somethingall too much, reallyabout our politics today.
nyone with even a passing interest in politics knows that Republicans stand for a few bedrock ideas. One is that the market knows better than politicians. (Republicans dont favor “using the government in Washington to pick winners and losers,” Senator Lamar Alexander once told Wolf Blitzer.) Another is that bailouts and subsidies are a waste of money. (“[T]here is no guarantee that financial assistance from taxpayer dollars will prevent these companies from collapsing,” said Lisa Murkowski, explaining her vote against loans to the auto industry.) So how does a push for expanded nuclear energy match up with such convictions? At the risk of oversimplifying, the short answer is “Not at all.” And the long answer is “Um, not at all.”
If theres any energy program thats more Big Government than nuclear power, it would have to involve the harvesting of millions of humans in pods for their body heat. (This was outlined in The Matrix, but Congress has yet to take up the plan.) Nuclear power is the king of subsidized energy industries, with its very origin in governmentfrom Truman-era research into nuclear fission, to the launch of Atoms for Peace under Eisenhower. The original idea, sixty years ago, was to give the whole business a push, with some generous government start-up capital, so that before long “cheap atomic power could be used to irrigate deserts” and to “air-condition the tropics and the frozen wastes of the Arctic,” as one enthusiastic New York Times writer put it.
The only trouble was that the original idea remained forever an idea. While we did achieve the air-conditioning of Las Vegasnot to mention a change of temperature in the Arcticthe part about cheap atomic power never really came to pass. Not only did nuclear energy remain stubbornly pricey; the nuclear industry proved spectacularly incompetent. The parade of nuclear power plants built in the United States in the 1970s and 80s resulted in dozens, even scores, of botched projects and billions of dollars in cost overruns. One particularly flagrant example: the Shoreham Nuclear Power Plant on Long Island. It took two decades to plan, build, and test, and wound up costing about eighty times its original estimate, which would have been bad enough even if it had been put into service; it wasnt. So bad was the track record of nuclear power in the United States that in 1985 Forbes called it the “largest managerial disaster in business history.” (To be fair, this was two months before the introduction of New Coke.)
So who paid for all of this bungling? We did. Taxpayers and electricity ratepayers were forced to bail out these foundering projects to the tune of nearly $300 billion in todays dollars. As for reimbursement of funds? The public got nothing. No executives were forced to unhand their bonuses. Even Hank Paulson might have been annoyed.
Such a miserable economic record is the primary reason that no new plants have been constructed in the United States in nearly three decades. Investment prospects for nuclear going forward also look unpromising. In fact, the estimated cost of building a nuclear plant has quadrupled in the last five years to an impressive $12 billion, or nearly the entire GDP of Afghanistan. (That we spend about five times that much each year trying to pacify Afghanistan by force raises some rather awkward strategic questions. But perhaps theres a solution to satisfy everyone: spend billions constructing nuclear power plants in Afghanistan. You heard it here first.) This would make nuclear energy more expensive watt for watt than virtually any other energy source, including renewables like wind power. And thats only if things go swimmingly. The last batch of reactors built on American soil exceeded their initial cost projections by an average of 200 percent.
The shaky financials of nuclear power arent limited to the United States. Englands nuclear power company British Energy was spared from bankruptcy in 2002 only by a generous state bailout. Frances mostly state-owned power company Electricit de France (EDF), which oversees a vast archipelago of reactors, has been in such a financial mess that, according to a 2004 report in the Economist, factoring in the liabilities on its balance sheet would leave the company “technically insolvent.”
But never mind the French and their chagrins nuclaires. Lets just have the market decide. The only trouble is that the mere mention of the word “reactor” sends private investors fleeing in terror. Banking giants such as Citigroup and Goldman Sachs are unwilling to sink their funds into nuclear power. Or, it would be more accurate to say, they are willing, but under only one condition: the government must shoulder all of the risk.
It is with this understanding in mind that politicians have made their latest proposals. The $54 billion in loan guarantees in Obamas budget would cover up to 100 percent of project debt for new reactors. If the projects go sour, Uncle Sam pays back the money. Which is to say, we pay. (See above, under nuclear power, 1970s and 80s.) And the chances of the projects going sour are pretty high: the Congressional Budget Office has put the odds of default on a nuclear loan guarantee at “well above 50 percent.”
o let us pause for a moment to consider. We are being asked to guarantee loans to an industry that generates zero organic enthusiasm in the market, despite having had six decades to get its act together. Lets leave aside that a sixty-year-old should have perhaps moved beyond training wheels. Lets even set aside the likelihood that nuclear power will continue to require our forced beneficence. Lets just think about it in terms of political principle. Is there anything about all this elaborate intervention that bears any semblance to faith in the marketplace?
Neverthelessthis may fail to surprise the readerRepublicans remain enthusiastic. “I applaud the Obama administration and the Department of Energy for moving forward on a [nuclear] loan guarantee agreement,” said Senator Murkowski, she of the nay vote on loans to automakers. Senator Richard Shelby, another opponent of the auto bailout, will “continue to strongly advocate for increases in nuclear power.” Senator Alexander, who hates picking winners and losers, has decided to make the loser the winner, by leading the charge for nuclear loan guarantees. When it comes to certain expenditures, Republicans have no apparent reservations about backing huge loans that private investors wouldnt touch on their own.
Of course, one nonfinancial argument in favor of nuclear energy is that the mountains of radioactive waste leave only a small carbon footprint. But that should resonate only among those concerned about climate change. Many Republicans see the threat of global warming as outright bullor, as GOP Senator James Inhofe puts it, “the greatest hoax ever perpetrated on the American people.” And if thats the case, why not go with an easygoing energy source such as natural gas? Heck, why not coal? Were overflowing with it, its time tested, its investor friendly, and its only one-quarter as expensive as nuclear energy. Coal mines have also produced far better folk songs than nuclear reactors.
Some Republicans sidestep these questions by asserting that it will take an energy smorgasbordincluding coal, natural gas, wind, nuclear, and moreto meet our future needs. According to this model, which proponents like John McCain refer to as “all of the above,” nuclear power is just one essential part of the mix. But think about it for a minute. If you wanted to secure your house against intruders, and among your choices were a $500 alarm system, a $200 shotgun, and a $3 million hologram that could be projected onto your house to make it look like it was the Eiffel Tower, would you pick “all of the above”? If you answered yes, you might consider working for John McCain.
It should also be noted that if nuclear power violates just about every official Republican principle, it also violates an unofficial one: that of Screw France. Should the United States see a major expansion of nuclear power, one of the top beneficiaries would be Areva, the worlds largest builder of nuclear plants, which is mostly owned by the French government. (The French and the Japanese, it should be noted, control virtually the entire nuclear supply chain.) The gruesomeness of this surely needs no elaboration.
o why, despite all these affronts to conservative virtue, does Republican ardor for nuclear energy remain undimmed? Conversations with Republican staffers on the Hill, while pleasant enough, dont really clear up the mattersince the staffers prefer to focus less on ideological explanations and more on policy mechanics.
But we can look to history for some likely answers. During the 1970s and 80s, with the Cold War still coloring all of our politics, nuclear power and nuclear weapons occupied similar symbolic space in the public mind. You tended to either favor both or oppose both. Those who favored both thought of themselves as the adults in the room, which, in the age of the Nuclear Freeze and the No Nukes concerts, made some sense. (If a policy is opposed by David Crosby and Jackson Browne, thats not a bad endorsement of it.) Then, as now, nuclear power owed its appeal partly to what political scientists have termed the “Fuck yeah” factor. It was the energy choice of the hardass, the sort who understands we live in a tough world and doesnt get all worked up over dolphins and Teflon.
Many conservatives also persuaded themselves that green radicals and fussy regulators were to blame for the cost overruns and other woes that hamstrung the nuclear power industry. That mind-set remains. “Theres a narrative among Republicans of an advanced technology thats being strangled by groups like Greenpeace and liberals who dont trust it,” says Jerry Taylor, an energy policy expert at the Cato Institute who opposes energy subsidies. “The reason there isnt more of a market for nuclear is that environmentalists have rendered nuclear investments excessively risky. Thats a narrative that conservatives find fairly natural.” Of course, for more than a decade, Washington has been peeling back the red tape that conservatives claimed was hampering the building of nuclear plants, and the licensing process for reactorsone of the main stumbling blocks in the pasthas been dramatically streamlined. Even so, building new reactors remains spectacularly risky and expensive.
But theres also another plausible explanation thats less forgiving. Its that the Bush years brought aboutor at least laid barethe evaporation of any remaining Republican adherence to “free markets” or “small government,” leaving instead a K Street machine devoted primarily to itself. Call it cronyism, call it corporatism, or just call it a mess. And Democrats, to a dispiriting degree, have joined in the fun. The public pays for losses while private industry collects on gains. Money flows from middle-class taxpayers to connected titansbank executives, mortgage giants, and, yes, moribund energy sectors. The business of nuclear energy has so far proved bloated and boondogglywatchwords for the sort of industry that only a politician could love. But its politicians who vote. And love it they do. Evenor, in this case, especiallywhen theyre Republican.
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