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Japan disaster may mean setback for U.S. nuclear industry

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Stymied by concerns about safety and cost, the U.S. nuclear power industry has struggled to make a comeback for decades. Now the revival may have to wait even longer, as earthquake damage to a reactor in northern Japan has again highlighted the potential hazards of going nuclear.

The timing is tough for the industry, which recently has been enjoying more support in Washington than on Wall Street. President Obama as well as Republican leaders on Capitol Hill want to lend the industry billions of dollars in additional taxpayer funds to help pay for building new nuclear plants. Even some environmentalists had begun to embrace nuclear energy in the wake of last summer’s oil spill in the Gulf of Mexico and amid concerns about global warming.

But banks and investors worry that the plants are too expensive and risky to finance. The crisis in Japan could jeopardize or at least tone down political support for nuclear energy just as the industry needs all the financial backing it can get from the government.

“The nuclear renaissance in the U.S. was on the rocks in any case,” said Peter Bradford, former commissioner of the U.S. Nuclear Regulatory Commission. “There’s no way this is a positive for a technology that’s dependent entirely on political support.”

Cost remains the biggest obstacle for any revival of nuclear energy. Billions of dollars are required to build a single plant. And lenders have been leery of financing projects because of a history of incomplete projects, blown budgets and bankrupted companies.

Momentum for a comeback also has been slowed because other energy sources remain less expensive. Natural gas is cheap, especially with the expansion of supplies from shale rock, and there’s been no legislative action to tax carbon emissions.

Representatives of the nuclear industry said Saturday that it’s too soon to know what impact the disaster in Japan could have on U.S. policy.

“Until we know exactly what happened in the plants in Japan it’s very hard to know what conclusions to draw,” said Alex Flint, senior vice president of governmental affairs for the Nuclear Energy Institute, a group that lobbies for the industry.

Just over a year ago, Obama pledged more than $8 billion in additional loan guarantees for the construction of the first nuclear power plant in the United States in almost three decades. The president has also touted the potential of nuclear energy in two State of the Union speeches.

“He is as supportive as any administration in recent history,” Flint said.

On Saturday, the White House said it supports developing a variety of energy sources, of which nuclear is only one.

“The president believes that we need to continue to diversify our nation’s energy supply, including a focus on clean energy sources from renewables like wind and solar, to natural gas, clean coal and nuclear power,” said Clark Stevens, a spokesman for the White House. “The administration is committed to ensuring that nuclear energy is produced safely and responsibly, and will continue to incorporate best practices and lessons learned into that process.”

Meanwhile the Republican takeover of the House last year catapulted one of the industry’s biggest backers, Rep. Fred Upton (R-Mich.), to the head of the Energy and Commerce Committee.

“The details of this tragedy are still unfolding,” Upton said in a statement Saturday evening. “The head of the Nuclear Regulatory Commission is scheduled to testify before the Energy and Commerce Committee next week, and we will use that opportunity to explore what is known in the early aftermath of the damage to Japanese nuclear facilities, as well as to reiterate our unwavering commitment to the safety of U.S. nuclear sites.”

Momentum for the nuclear industry grew following the passage of the Energy Policy Act in 2005, which included several subsidies for nuclear energy.

Of the 65 reactors being constructed worldwide, three are in the United States, according to NEI. Flint estimates that by 2020, four to eight new plants will be running.

Nuclear energy provides 20 percent of this country’s electricity, compared with 30 percent in Japan.

Unlike past crises such as Three Mile Island and Chernobyl, which did not involve natural disasters, the problems at the plant in Japan were triggered by earthquakes, which disrupted the power supply to the reactors’ cooling systems. As a result, some experts said that two plants in California that lie near fault lines — Diablo Canyon and San Onofre — could come under extra scrutiny. Both plants have been checked by the Nuclear Regulatory Commission for their ability to withstand tsunamis and earthquakes.

“Just when Japan needed power most for recovering from the natural disaster, the collapse of the electrical grid system basically complicated the crisis because the nuclear power plants themselves had to shut down to mitigate the inherent radiation hazard,” said Paul Gunter, director of the Reactor Oversight Project at Beyond Nuclear. “It clearly demonstrates that this technology in times of national crisis . . . cannot be relied upon when you need it the most.”

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