New nuclear subsidies are a terrible idea

So when scholars at conservative think tanks like the Heritage Foundation and taxpayer groups such as the National Taxpayers Union agree with environmentalists on something, it's time to sit up and take notice.

That's exactly what's happening on the issue of federal subsidies for new nuclear power plants. Fiscal conservatives know that nuclear subsidies are a potential multi-billion dollar boondoggle, while environmentalists know that — even beyond the environmental and public safety threats posed by the reactors themselves — there are far better and much cheaper solutions to our energy and global warming challenges.

No new nuclear reactor has been ordered and built in the United States since 1973 because of massive cost overruns for reactor construction, loan defaults and safety concerns. One study by the Department of Energy found that the actual cost of new nuclear power plants built in the United States averaged more than three times the original estimates. Despite this dismal history, nuclear industry supporters are urging a "nuclear renaissance" as a solution to global warming.

While it's true that nuclear reactors can generate electricity with little to no global warming emissions, our research shows that investing in new nuclear reactors will actually set us back in the race to curb global warming. The nuclear industry simply cannot build new reactors fast enough to deliver the progress we need on a time scale that will make enough of a difference. Moreover, new nuclear reactors are far more expensive than other forms of emission-free electricity.

In fact, new nuclear power plants are so expensive and risky that private investors refuse to touch these construction projects. So the nuclear industry is looking to U.S. taxpayers to subsidize the construction of 100 new reactors. With limited federal resources to spend on energy solutions, every dollar spent on nuclear will come at the expense of energy efficiency and renewable sources.

Meanwhile, history seems doomed to repeat itself as several proposed new nuclear projects are under scrutiny. Regulators in Florida have recently denied massive electricity rate hikes proposed for two new nuclear power plants; and a municipal utility in Texas is threatening to pull out of its involvement in a project to build two new reactors there because of a $4 billion cost increase. The Nuclear Regulatory Commission has sent one new reactor design back to the drawing board because of concerns that the reactor could not withstand severe weather including tornadoes and hurricanes as well as earthquakes.

None of this has stopped nuclear proponents and the Obama administration from proposing enormous new federal subsidies. The Department of Energy requested a tripling of federal loan guarantees — to $54 billion — for nuclear power plants in its 2011 budget request. These loan guarantees risk billions of taxpayer dollars because the federal government would guarantee loan repayment in the event the borrower defaulted. The Congressional Budget Office and General Accountability Office have estimated that the risk of nuclear loan defaults could be as high as 50 percent.

In response, four taxpayer and nonproliferation groups, including the National Taxpayers Union and Taxpayers for Common Sense, have already written President Obama with their concerns about these loan guarantees and warned "with hundreds of billions in bailouts already on the shoulders of U.S. taxpayers, the country cannot afford to move forward with a program that could easily become the black hole for hundreds of billions more."

When it comes to our energy future, there is no need to risk billions in taxpayer dollars on risky nuclear loan guarantees. Energy efficiency programs are already cutting electricity consumption by 1-2 percent annually in leading states, and the U.S. wind industry is already building the equivalent of three nuclear reactors per year in wind farms. America has vast potential to do more.

Environmentalists and fiscal conservatives may not see eye to eye on how to achieve a new energy future, but we do agree that we cannot afford massive new subsidies for nuclear power plants. We don't need them.