Josh Freed is director of the Clean Energy Program at Third Way, and a longtime supporter of using nuclear energy as one component of our response to climate change. We spoke yesterday afternoon about what the events in Japan mean for nuclear-energy policy in this country — if anything. An edited transcript follows.
Ezra Klein: Should this change our thinking on nuclear power?
Josh Freed: When nuclear goes wrong, it goes wrong big. Though what that means aside from a lot of white-knuckle days and nights for everyone, we don’t know yet. One shouldn’t minimize the dangers faced by the workers, but even something as catastrophic as the disaster in Japan might turn out to be a lot less catastrophic in terms of damage and loss of life than we fear right now.
And you have to weigh that against the health, environmental impact and assorted other costs of the fossil fuels we rely on every day. And if, like most people, you think climate change is happening and poses a massive threat, you have to ask what options we have. Right now, 65 to 68 percent of our electricity is coal or natural gas. Twenty percent is nuclear. And the remaining 12 percent is renewables. Now, the renewables are certainly growing, but it’s going to take a long, long time to get them to scale such that they can make a big dent in fossil fuels, let alone replace them. And they still require some kind of corresponding baseload fuel to provide the electricity for when they’re not running. So for a source that doesn’t emit carbon or other pollutants that contribute to health problems, the other source you have is nuclear.
EK: If I’m remembering this correctly. the Obama administration recently proposed loan guarantees to help with the construction of new nuclear power plants. What’s the status of that policy?
JF: Here’s the challenge: Utilities in the United States have a market cap of somewhere between 12 and 20 billion a piece. It costs between $8 and $10 billion to build a new nuclear reactor. For the past 40 years, no new reactors have been built — in part because of financing and in part because of regulatory challenges. The nuclear loan program was put in place to finance new reactors by making capital cheap enough that the utilities could go onto the private markets to secure financing. And they did that by guaranteeing the loans. The utilities still have to pay the credit premiums, so they have skin in the game.
EK: You could imagine a lot of movement on the Hill away from nuclear energy in the aftermath of this disaster. But I’m not really seeing it — most politicians, as far as I can tell, are taking a wait-and-see approach. Is that what you’re seeing, too?
JF: For the most part, that’s been the case. The reality on nuclear energy is that a plant is not going to be constructed and come online in the next two weeks. There is right now one new plant under construction in this country and it’s in Georgia. And what’s happening on that plant at the moment is that dirt is being moved for it. There are other applications pending, but they are very early in the process and ground hasn’t been broken. So the debate in Washington has plenty of time to mature and so we have plenty of time to learn exactly what happened in Japan and what lessons we need to apply in the United States. But so far, aside from a few outliers, this hasn’t been demagogued.