Only $1 billion in new loans to green energy companies?
No more subsidies for nuclear power
by Joseph Romm
10 May 2008 6:22 PM
PorkBuster
Once your power source has reached, say, 10 percent of the electricity grid, let alone 20 percent, it should be time to cut the cord to government funding.
Yet after more than $70 billion dollars in direct subsidies, billions more in insurance subsidies, plus another $13 billion available through the energy policy act of 2005, Sen. McCain and others still feel that climate legislation must not merely create a price for carbon dioxide that would advantage all carbon-free sources of energy, but that we must also throw billions more dollars of pork at the industry. At some point, infatuation has turned to obsession.
I am not against building new nuclear power plants; far from it. But when is enough enough, in terms of massive taxpayer support for a mature industry? We had such an incredible clamor for welfare reform in the 1990s, to change "government's social welfare policy with aims at reducing recipient dependence on the government." If we reduced the poor's dependence on government, why not the super-duper rich?
Total subsidies to nuclear approaching $100 billion
Let's start with a historical subsidies. This 1999 Congressional research service report lists the subsidies for all major sources of energy from 1948 through 1998. This October 2007 Government Accountability Office report [PDF] examined federal electricity-related subsidies from 2002 to 2007.
Bottom line: From 1948 to today, nuclear energy R&D exceeded $70 billion, whereas R& D for renewables was about $10 billion. (For the record, from 2002 to 2007, fossil fuels received almost $14 billion in electricity-related tax subsides, whereas renewables received under $3 billion, but that's fodder for another post.)
But that's not all. The Price-Anderson Nuclear Industries Indemnity Act, which caps the liability for claims arising from nuclear incidents, reduces the insurance that nukes need to buy and puts taxpayers on the hook to cover all claims in excess of the cap. The benefit of this indirect subsidy has been estimated at between $237 million and $3.5 billion a year -- suggesting it has been worth many billions of dollars to the industry. Indeed, it could be argued that the value is considerably larger than that, since the industry might not have existed at all without it:
At the time of the Act's passing, it was considered necessary as an incentive for the private production of nuclear power -- this was because investors were unwilling to accept the then-unquantified risks of nuclear energy without some limitation on their liability.
OK, that was fine for a new, almost completely unknown technology in 1957. But now through 2025? If investors aren't willing to accept the risks of nuclear energy now, without taxpayers liable for any major catastrophe, maybe that tells you something about the technology.
And then we have the staggering $13 billion in subsides and tax breaks in the Nuclear Giveaway Bill Energy Policy Act of 2005 (not even counting the value of the Price-Anderson act extension). It includes "Unlimited taxpayer-backed loan guarantees for up to 80 percent of the cost of a project"! The complete list of subsidies is worth seeing in its entirety.
And yet for all this pork, Sen. McCain put into his 2007 climate bill another $3.7 billion in federal subsidies for new nukes, even though that bill creates a cap-and-trade system that would establish a price for carbon dioxide, which benefits nuclear power and all low-carbon energy sources.
Enough is enough
Yet last fall, when Grist asked McCain, "What's your position on subsidies for green technologies like wind and solar?" he said:
I'm not one who believes that we need to subsidize things. The wind industry is doing fine, the solar industry is doing fine. In the '70s, we gave too many subsidies and too much help, and we had substandard products sold to the American people, which then made them disenchanted with solar for a long time.
