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Wednesday, March 16, 2011

Nuclear Plants Run on Tax Dollars

Nuke plant leaking moneyYesterday, I wrote that any new nuclear plants in the US would likely be shoddy. "Take an industry that needs government assistance to survive, add government spending cuts, mix in a whole bunch of deregulation, and you've got a half-assed nuclear facility," I wrote. "This is the way we do things in the new Republican reality -- half-assed, all the way, every time."

We have a Republican party fixated on spending cuts -- to the point where they want to cut funding for tsunami preparedness and have mocked volcano monitoring as an absurd waste of money. They've got deregulation fever, meaning a hands-off approach to industry. And it'd be tough to find one who gave a crap about the environment. So a half-assed nuclear industry it would be, if Republicans had their way.

Over at ThinkProgress, Jeff Spross posts a video demonstrating the GOP's rhetoric on nuclear safety prior to the events in Japan. Not only is it enlightening, but it backs up my argument -- that, for Republicans, "half-assed" and "adequate" are synonymous.

McCain comes out the worst here. In a debate, he dismisses concerns about nuclear safety as an "extreme environmentalist" position. At a campaign event, he portrays it as gibberish, summing up safety concerns as "blah, blah, blah." Like it or not, Republicans are always going to be in American politics and Republicans are sometimes going to be in power. The very existence of the GOP in America is reason enough to believe that safe nuclear power is completely impossible here.


While the average person probably has a healthier respect for the inherent health and environmental risks involved with nuclear generation than your average Republican, it's not very likely that they know the monetary risks involved. Nuclear power has historically been a boondoggle, costing taxpayers and ratepayers tremendous amounts of money.

In the 1980s and 1990s, the nuclear industry was quietly bailed out after what was called "'the largest managerial disaster in business history." See, investors aren't interested in nuclear plants, because they're incredibly expensive. As a result, the return on the investment is very slow in coming -- it takes a long time for a plant to begin to pay for itself. So the US government offers loan guarantees. All this means taxpayers are on the hook if the companies just walk away when everything becomes too expensive -- which is exactly what happened.

"Nuclear power plants abandoned by their sponsors cost the nation almost $50 billion in today's dollars, according to a 1992 study by economists Charles Komanoff and Cora Roelofs," the Union of Concerned Scientists found in 2009. "Specifically, the 100 nuclear plants canceled from 1972 to 1982 cost about $10 billion. Fifteen more plants canceled in 1983 and 1984 added $11 billion to that figure. And more cancellations after 1984 (such as of Washington Public Power Supply System's Units 1 and 3 in 1985) may have added another $4 billion. Together, these costs total $25 billion, or $40 billion to $50 billion in 2006 dollars."

In the end, ratepayers and taxpayers "bore as much as one-half to three-quarters of the costs of these abandoned plants."

And what if one of the new, half-assed nuke plants does what you'd expect a half-assed nuke plant to do? Thanks to liability caps, it could cost taxpayers billions.

National Journal:

An American nuclear power-plant accident similar to the ongoing disaster in Japan would leave taxpayers on the hook for billions, and perhaps hundreds of billions, of dollars in health and economic damage claims, risk experts estimate.

Federal law puts most nuclear-accident liability on the shoulders of taxpayers, but regulators have not enforced safety standards vigorously enough to fully safeguard against those risks, economists Geoffrey Heal and Howard Kunreuther wrote in a 2009 paper that warned of excessive taxpayer exposure to the risks of nuclear catastrophe.

Heal, a professor at Columbia University, and Kunreuther, of the Risk Management and Decision Processes Center at the University of Pennsylvania's Wharton School of Business, acknowledge that the risks and costs of a nuclear accident in the United States are difficult to quantify. But they say that the upper-end damage estimates of a full core meltdown are almost "unimaginable."

So, we bail them out right at the start with loan guarantees and tax incentives. We bail them out if they don't make enough money and quit. We bail them out if the whole thing goes up in a nuclear disaster. Is there any point where we wouldn't bail the industry out? Not that I can find. Like most things involving big money in America these days, the profits are private and the risk is public. Put another way, the profits are privatized, while the losses are socialized -- they always take the money, you always take the hit.

And, to top it all off, one party of two is completely uninterested in regulation, environmental protection, or infrastructure spending, practically guaranteeing lax oversight and weak regulation at some point.

Does any of this sound like a good idea?


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