Japan disaster may mean setback for U.S. nuclear industry
Saturday, March 12, 2011; 9:45 PM
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."