E2 Round-up: More fallout from loan-guarantee announcement, U.S. CAP departures

More reaction in today's papers to President Barack Obama’s announcement that the government would provide a loan guarantee for the construction of two new nuclear reactors to be built by Southern Company. Mother Jones’ Kate Sheppard notes in her piece that Energy Secretary Steven Chu didn’t seem familiar with a Congressional Budget Office estimate there was a 50 percent chance nuclear producers would default on their loans.

Under the loan guarantee program, taxpayers would have to repay most of the loan if the borrower defaulted. 

"I don't know of the CBO report," Chu told reporters during a conference call on Tuesday. "We don't believe the chance of default is 50 percent. We believe it's far less than that."

DoE Press Secretary Stephanie Mueller sent Sheppard this response: "This is a 7 year old analysis of legislation that was never enacted, and it is not germane to the current project.” Ben also blogged about Chu and the CBO.

Not surprisingly, the nuclear energy industry was more upbeat. It “hailed” the announcement by Obama, according to the Christian Science Monitor. Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute, called the move a “major milestone” in the industry’s renaissance, according to the online newspaper.

The government would provide an $8.3 billion loan guarantee for Southern to build two reactors at its Vogtle power plant in Burke, Ga. Southern must still receive a license from the Nuclear Regulatory Commission to build and operate the plants.

The guarantee program is advertised as a necessary step to re-start the nuclear energy industry. But MarketWatch is dubious of the latest nuclear revival. Declining natural gas prices and electricity demand may counterbalance the new political support the industry is enjoying.

Another way to spur the industry, obviously, is by capping carbon dioxide. In fact, Obama’s embrace of nuclear power is in part to entice Republicans to support a broader cap-and-trade bill.

Republicans welcomed Obama’s announcement of the loan guarantee program. But the move doesn’t seem to have changed their minds about climate change legislation, in the New York Times.

Speaking of cap-and-trade, the U.S. Climate Action Partnership lost three members yesterday. Ben and I wrote a post about the possible implications to the climate debate.

SolveClimate has long take on the departures, too. All in all, the decision by ConocoPhillips, BP and Caterpillar to leave may not be a bad thing for U.S. Climate Action Partnership, according to the blog.

The resignations “wiped some big names off the roster of the influential industry-environment partnership, but they also may give the group more freedom to take stronger positions as it lobbies Congress.”