News
Energy Bill Aids Expansion of Atomic Power
Also see below:
Hanford Leak Shows Shoddy Work, Critics Say [
Energy Bill Aids the Expansion Plans of Atomic Power Plants
By Edmund L. Andrews and Matthew L. Wald
The New York Times
Tuesday 31 August 2007
|
Lobbyists have told lawmakers and administration officials in recent weeks that the nuclear industry needs as much as $50 billion in loan guarantees over the next two years to finance a major expansion.
The biggest champion of the loan guarantees is Senator Pete V. Domenici of New Mexico, the ranking Republican on the Senate Energy Committee and one of the nuclear industry's strongest supporters in Congress.
Senator Jeff Bingaman, Democrat of New Mexico and the energy bill's author, has long argued that nuclear power plants do not need federal loan guarantees. Mr. Bingaman said that the industry was over-interpreting the provision and that it would provide loan guarantees for only the most innovative power plants.
But the provision has the potential to considerably expand the nuclear industry, which plans to build 28 new reactors at an estimated cost of about $4 billion to $5 billion apiece. And while the nuclear industry would be the biggest beneficiary, the provision could also set the stage for billions of dollars in loan guarantees for power plants that use "clean coal" technology and renewable fuels.
The nuclear industry is enjoying growing political support after decades of opposition from environmental groups and others concerned about the risks. An increasing number of lawmakers in both parties, worried about global warming and dependence on foreign oil, support some expansion of nuclear power.
But the provision could go much further than many lawmakers had in mind by giving the Department of Energy the power to approve an unlimited amount of loan guarantees for "clean" power generation. Under legislation enacted in 2005, nuclear power qualifies as a clean technology because it does not emit carbon gases that contribute to global warming.
Power companies have tentative plans to put the 28 new reactors at 19 sites around the country. Industry executives insist that banks and Wall Street will not provide the money needed to build new reactors unless the loans are guaranteed in their entirety by the federal government.
The federal government guarantees many billions of loans each year to help farmers, exporters, small businesses and students. The government does not actually lend the money but agrees to pay it back in case the borrower defaults.
While the nuclear industry says it will need $25 billion in loan guarantees in 2008 and $50 billion over the next two years, President Bush had proposed a far smaller amount - $4 billion - in new loan guarantees next year for "clean" electric power technologies, which include plants that run on so-called clean coal technologies and renewable fuels.
Many experts fear that the proposed subsidies could leave taxpayers responsible for billions of dollars in soured loans.
"Such projects, by their nature, pose significant technical and market risks," the nonpartisan Congressional Budget Office warned last month in an analysis of the provision. "Studies of the accuracy of cost estimates for pioneering technologies have found that estimates are consistently low."
Michael J. Wallace, the co-chief executive of UniStar Nuclear, a partnership seeking to build nuclear reactors, and executive vice president of Constellation Energy, said: "Without loan guarantees we will not build nuclear power plants."
The little-noticed provision in the Senate bill subtly refines and expands the loan guarantee program that Congress passed in the Energy Policy Act of 2005.
As before, the Department of Energy would be allowed to guarantee 100 percent of the loans and up to 80 percent of the total cost to build a reactor.
But the bill essentially allows the department to approve as many loan guarantees as it wants for both new reactors and plants that use other "clean" technologies.
That is a big change. Under current law, the government is only allowed to guarantee a volume of loans authorized each year by Congress. Last year, Congress limited the government to awarding just $4 billion in loan guarantees for clean energy projects during the 2007 fiscal year.
Mr. Domenici, who has been pushing the Energy Department to move much more aggressively in approving loan guarantees, has argued that there is no need for limits on the loan volume because power companies will be required to pay an upfront fee to cover the estimated cost of the guarantee. In essence, the "credit subsidy" payments would be used as a kind of insurance premium that could be used to cover the cost of any defaulted loan.
"It is very clear that this is a self-financing program," Mr. Domenici told James Nussle, Mr. Bush's nominee to become the White House budget director, at Mr. Nussle's confirmation hearing last week. "There should already be $25 billion to $30 billion in the loan guarantee fund."
But the Bush administration opposes the measure, fearing that it could prove extremely costly.
The provision would "remove appropriate controls over the size of the program and increase taxpayer liability," the Office of Management and Budget wrote in an official position statement on the energy bill.
Michele Boyd, legislative director of the consumer advocacy group Public Citizen, said the measure would subsidize plants with conventional technology.
"None of these so-called 'advanced' nuclear reactors deal with the fundamental flaws of nuclear power, such as dangerous radioactive waste, vulnerabilities to air attack and excessive cost," said Ms. Boyd, whose staff began investigating the provision shortly after the Senate passed the bill last month.
Mr. Bingaman, the bill's primary architect, said that he was aware of the provision but believed that it would apply only to reactors with fundamentally new technology.
"I would be amazed if this generic loan program applied to most of the plants that are being proposed, either for the nuclear industry or coal industry," Mr. Bingaman said Monday night. "The idea of this is not just to help an industry build plants. It's to demonstrate new technology that meets the nation's energy needs."
But industry officials say the measure would directly affect the reactors on the drawing board.
"I think we can say that with all the projects moving forward on the schedule they are now on, that there could be a need for $20 to $25 billion in loan guarantees," said Richard Myers, vice president for policy development at the Nuclear Energy Institute, a trade association.
The House is hoping to pass its own energy bill this week. But leading House Democrats have made it clear they oppose any kind of loan guarantees for nuclear reactors.
The House recently passed an appropriations bill for energy and water programs that included $7 billion in loan guarantees for projects involving renewable energy and specifically excluded nuclear plants.
Representative Peter J. Visclosky, Democrat of Indiana and chairman of the House Appropriations Committee's panel on energy and water, said last month that the nuclear industry had estimated a need of $25 billion in guaranteed loans for next year and "more than that" in 2009.
The industry's request, Mr. Visclosky warned, "overwhelms" what the committee had been willing to offer the entire energy industry.
Still, nuclear industry executives say they hope the Senate's loan guarantee provision will be adopted by House lawmakers.
Hanford Leak Shows Shoddy Work, Critics Say
By Michael Milstein
The Oregonian
Tuesday 31 July 2007
Nuclear Reservation - the Energy Department doesn't know how long or how much waste seeped into the ground.
Crews discovered highly radioactive waste was leaking at the Hanford Nuclear Reservation last week only after workers in protective gear were checking a clogged pump and noticed the ground was soaked with spilled nuclear sludge.
Critics labeled Friday's spill as further evidence of a bumbling cleanup at the contaminated site in central Washington, saying that safety equipment should have immediately detected the leak.
"You've got some of the most dangerous material ever created by humans in those tanks," said Hyun Lee, a lawyer for the Hanford watchdog group Heart of America Northwest.
The U.S. Department of Energy, which runs the reservation and is overseeing the cleanup by private contractors, could not say Monday how long radioactive material leaked or how much had escaped and seeped into the arid ground.
Energy officials promised more details today after teams finish a review the sequence of events and examine the site of the spill.
"It's not only what happened, it's how we responded to it that we're looking at," said Erik Olds, Energy Department spokesman.
Once the leak was discovered, authorities issued a "take cover" alert to workers in the area, warning them to stay inside. A dozen workers were examined for exposure to harmful levels of radiation but were found to be fine.
The federal government created the Hanford reservation at the dawn of the nuclear age to supply plutonium for nuclear weapons, but it has taken on a legacy as the most contaminated nuclear site in the nation.
The Energy Department is considering whether to use Hanford to house nuclear waste from other sites around the country, but critics said last week's spill shows federal officials must concentrate on handling what's already there.
The multibillion dollar cleanup of Hanford's contaminated buildings and ground has been plagued by spills, cost overruns and other problems. Contractors have developed new tools and technologies to deal with a leftover brew of chemical and nuclear waste.
Last week's spill happened as cleanup contractor CH2M Hill Hanford Group Inc. pumped radioactive and chemical sludge Friday morning from an old, single-walled tank to a newer and more secure double-walled tank.
The contractor employed a new tool called the "Rotary Viper" that was supposed to spray high-pressure water inside the aging tank, breaking up the waste so it would not clog pumps, the Department of Energy said.
The line carrying the waste between tanks was a double-layered hose-inside-a-hose designed to prevent leaks, but a leak apparently developed around the pump once it clogged, officials said.
When workers realized the pump had clogged, they entered the area in protective gear to try to manually restart it, said Kim Ballinger of the Department of Energy. But they detected unusual radiation levels and quickly backed out and shut down all the equipment, she said.
"They knew something was going on because radiation levels were higher than normal," she said.
Officials then assembled an "entry team" in protective gear to further check the area about 9:45 a.m. Friday. They noticed a patch of soil about 15 feet across that was dark where it was soaked with liquid that had leaked around the pump.
The site was later sprayed with a cement-like material to seal any spilled material so it would not be blown by the wind. Monitors in the area detected no evidence of any airborne radiation, Ballinger said.
Officials at the Washington Department of Ecology said it appeared the contractors had followed proper procedures after the leak was discovered. While the federal Department of Energy oversees Hanford, it assigns its cleanup to specialized private contractors.
But Heart of America Northwest called for an independent investigation into whether the cleanup is complying with all required hazardous waste laws. Equipment should be in place to detect even small leaks immediately and should have been tested before any waste was moved, the group said.
The group has won a legal settlement with the government requiring public notification of any spills.
Comments
This is a moderated forum. It may take a little while for comments to go live.