Nuclear Information and Resource Service

Tell the House: No Nuke Loan Guarantees, No Reprocessing

The US Senate approved two controversial amendments to the Resolution authorizing President Obama's FY 2010 budget. Both were offered by Sen. Crapo (R-Idaho); one would make it easier for the Congress to provide $50 Billion in additional taxpayer loan guarantees for construction of new nuclear reactors, the other would encourage taxpayer funding of new reprocessing facilities.

These amendments can be deleted by the House-Senate conference committee. Please send the letter below to your Representative. Let's create a big stir and stop these amendments!

After you've sent the letter, please forward the link to this page to your friends and colleagues and ask them to send a letter too.

February 09, 2010

Subject:

Dear Representative,

I urge you to do everything in your power to ensure that the House-Senate conference on President Obama's budget deletes Senate amendments 733 and 734 in the final conference version of the Budget Resolution.  Offered by Sen. Crapo (R-ID), these amendments support $50 billion for taxpayer loan guarantees that could be applied to the construction of new nuclear reactors (#733) and an increase in funding for nuclear waste reprocessing research and development (#734).

Additional loan guarantees for new nuclear reactors would create a significant liability to U.S. taxpayers. Even prior to the current credit freeze, Wall Street determined that the nuclear industry is such a poor financial risk that it would not loan the industry money absent guarantees from taxpayers that those loans would be repaid. Because the funds for nuclear loan guarantees almost certainly would come from the Federal Financing Bank, taxpayers would be first loaning the money and then guaranteeing to themselves that the money would be repaid. Why should taxpayers take a risk private investment firms are not willing to accept?

The Congressional Budget Office (CBO) estimates the likelihood of default for loans made to nuclear reactor developers to be “well above 50 percent.” These risks are intensified by nuclear power’s enormous capital costs and long lead times. Estimates of construction costs for nuclear reactors have more than tripled just since early 2006. According to an October 2008 report by the credit rating agency Standard & Poor’s, the costs continue to “soar” due to production bottlenecks, increasing costs of materials, and lack of trained workers and utility construction experience. The showcase reactor under construction in Finland is already three years behind schedule and more than 50 percent over budget.

Reprocessing is an expensive and polluting process and poses a significant proliferation risk. DOE already has received $145 million in reprocessing R&D funding in the FY2009 Omnibus package, which is more than double what the program received as recently as FY2004 ($66 million).  Amid growing criticism of the process, DOE has scaled back its reprocessing plans, including deciding not to site a new R&D facility.  In addition, the Obama administration has announced that it will undertake a re-evaluation of radioactive waste policy. It would be premature, at best, to fund controversial radioactive waste programs before this re-evaluation is complete. Congress should provide no funding for reprocessing.

It is unacceptable to ask taxpayers to shoulder the costs and risks of these technologies when alternatives exist that are faster, cleaner and more cost-effective at meeting our energy needs and addressing the climate crisis.  Thank you for your support on this issue.

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