Adding some juice to the nuclear energy industry

Saturday, February 20, 2010

"OBAMA doubles down on nuclear energy," wrote an environmental blogger after the president's State of the Union address last month. Actually, it's more like he tripled down. After his speech, he proposed increasing the size of the federal loan guarantee program for building nuclear power plants from $18 billion to $54 billion, and this week he backed two proposed reactors in Georgia -- which would be the first built in decades -- promising that this would just be the first of many such announcements.

The merits of nuclear power have been debated for years. Such power has drawbacks, not least the waste that reactors produce and that the government cannot decide where to store. But given that nuclear power produces essentially no carbon emissions, it's an appealing option for consistent and relatively clean electricity generation.

Ideally, the government should make as few choices as possible about which clean-carbon technologies to promote. The best way to move to a carbon-free economy is to put an appropriate price on emissions and let the market take over.

But carbon tax or no, the president is right to signal that he will unfreeze the regulatory process, which, in concert with public discomfort, has stymied the industry for decades. And there is a reasonable argument that nuclear should get this federal push. Though nuclear may well be more cost-efficient than its critics allege, huge upfront construction costs scare off investors. If loan guarantees for the first batch of new plants help demonstrate that reactors can be built without the delays and cost overruns that have characterized some nuclear projects, capital will come to nuclear without as much governmental support in the future and without taxpayers actually spending much.

A 2003 Massachusetts Institute of Technology report, which its authors updated last year, reckons that nuclear might even compete with cheap fossil fuel generation under such circumstances. That's an outcome anyone concerned about climate change should support. In the process, Mr. Obama also might buy some goodwill among pro-nuclear Republicans as he presses Congress to pass climate-change legislation. It's worth a try.


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