Nuclear's Comeback: Still No Energy Panacea

Proponents tout atomic energy as a clean, carbon-free alternative to coal and oil. But sky-high costs and uncertain financing could sink nukes again

By Michael Grunwald Wednesday, Dec. 31, 2008
    • Samuel Kubani / AFP / Getty

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    This sticker shock has unnerved Wall Street. A Warren Buffett--owned company has scrapped plans for an Idaho nuclear plant; banks and bond-rating agencies are skeptical as well. In fact, renewables attracted $71 billion globally in private capital during 2007 while nukes got zero. The reactors under construction around the world are all government-financed. "I have to keep explaining: France and China are not capitalist countries!" says Congressman Ed Markey, an antinuclear Massachusetts Democrat. "Nobody wants to put their own money into this so-called renaissance--just ours."

    A nuclear renaissance still might make sense if it could save the planet. America's existing nuclear plants already prevent the release of nearly as much carbon as America's passenger cars actually release every year. But more plants simply can't reduce emissions quickly enough to address our climate crisis. We need serious cuts within a decade, and the first new plant won't come on line before 2016.

    The nuclear renaissance, in truth, has yet to be born. No one has broken ground or made any irrevocable investment decisions. "There's been some excessive exuberance," the NRC's Klein says. Still, license applications are cascading into the commission. Bush's full-throated support for the industry has been echoed by Democrats as well as greener Republicans like Governors Charlie Crist of Florida and Arnold Schwarzenegger of California. "Nuclear is expensive, no doubt about it," says former EPA head Christine Todd Whitman, now a paid spokeswoman for the industry. "But we can't keep saying no to everything."

    The nuclear industry has learned from the mistakes it made in its first go-round, when timelines doubled, costs exploded, and half its orders for new reactors were canceled. It ran at a record 92% capacity last year, virtually trouble-free. The not-in-my-backyard fear that was a factor in shuttering so many plants has faded; one industry poll found that new reactors are supported by most Americans, including four-fifths of those who live near one. And regulators have worked with the industry to standardize reactor designs, which should enhance safety margins--Klein jokes that France has 104 varieties of cheese but only one standard reactor, while the U.S. has one cheese but 104 different reactors. The NRC is fast-tracking applications, combining construction and operating licenses into a single permit and taking other steps to, as Myers puts it, "strip the risk out of the regulatory process." Congress has even approved "risk insurance" to reimburse the industry for regulatory delays; that's in addition to the government-issued liability insurance it already enjoys. And the industry often has more clout at the state level; Florida has guaranteed utilities collect-as-you-go cost recovery for nuclear investments even if they never complete any reactors. "We have a very positive political and regulatory environment," says FPL president Armando Olivera, whose company spent $2.3 million on six Washington lobbying firms in 2007. "We wouldn't be comfortable building new reactors if we didn't."

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