Two weeks ago, it would have been unbelievable that the George W. Bush Administration would preside over the most radical socialization of the American economy ever.
Two weeks ago, it would have been unbelievable that energy issues would have to take a back seat to general economic issues in the waning days of the current Congress.
Two weeks ago, it would have been unbelievable that the Gang of 10 energy bill would collapse under its own weight; yet that's exactly what happened.
The Gang of 10--later the Gang of 20--was an effort to craft a "bipartisan" energy bill that would allow offshore oil drilling much closer to our shores than currently allowed. It was billed as a compromise measure, to bring Republicans and Democrats together to allow some drilling, but not unlimited drilling.
In the course of crafting the Gang of 10 or 20 bill, some members of Congress got greedy.
They didn't only want oil drilling--anathema to virtually all environmental groups--they also wanted nuclear power. And in a big way: the draft Gang of 10/20 bill contained unlimited taxpayer loan guarantees for new nuclear reactor construction (contact me if you'd like a copy of the draft Gang of 20 bill; it was never publicly released).
In return, the Gang of 10 or 20 offered the basic support for renewables that so many people have been fighting for for years--i.e. an extension of the production tax credits for renewable energy.
Why these tax credits are even an issue is mind-boggling. Unlike loan guarantees for new atomic reactors, they cost the taxpayer absolutely nothing. If projects don't produce power, they don't get the tax credit; if they do produce power, then the tax credit works.
New nuclear reactors--at least the first few of them--already have this tax credit. In fact, the nuclear provision was modeled after the renewable provision, except the renewable provision so far has not been renewed...
But the nuclear folks wanted more, much more. They wanted unlimited taxpayer-backed loan guarantees for construction of new atomic reactors across the United States.
They might have gotten them, except for two things: first, a National Call-In Day on Wednesday, September 17 resulted in thousands of phone calls to the Senate in opposition to nuclear power loan guarantees. We're talking a serious amount of phone calls--Sen. Kerry, for example, got 30 phone calls from a single zip code! By the end of the day, quite a few Senate offices had put their phones on autopilot--including Obama, Durbin, and a lot of others.
The second thing was, of course, the meltdown of the US financial infrastructure. When the U.S. is promising a trillion or more in bailout funds, unlimited loan guarantees for nuclear reactors--which could total a half-trillion or so just to build a few dozen--suddenly seemed like not such a great idea.
And to add to that, Constellation Energy--the first company (through its subsidiary UniStar Nuclear) to apply for taxpayer loan guarantees for new nukes, suddenly completely collapsed. Warren Buffett and his MidAmerican Energy went to a financial Wal-Mart, saw a one-day sale they couldn't resist and bought Constellation for 25 cents on the dollar compared to Constellation's stock price last January.
But even Warren Buffett can't change the reality that taxpayer loan guarantees for new nuclear projects are riskier than ever, and make less sense than ever when federal funds are needed to address basic economic needs for our people.
Since new nuclear power plants simply won't be built without substantial taxpayer support, it is tempting to say that the new nuclear "renaissance" is dead in the water.
I won't go quite that far, but it is clear that the nuclear power industry, if it still intends to build new reactors, is going to have to scramble to come up with some new financing mechanism.
And while they do that, the prices for solar power--both PV and thermal--continue to decline rather than increase; wind power remains the fastest growing energy source in both the US and the world, energy efficiency remains the low-hanging fruit of any effective energy policy.
Whatever else the economic collapse brings us, and it may be quite awful, this collapse is going to usher in the era of nuclear-free, carbon-free energy that we need and deserve--and in that sense, the collapse, over the long run, just might be beneficial. I hope we can all hold on in the meantime.....
Michael Mariotte
Nuclear Information and Resource Service
nirsnet@nirs.org