By Jim Snyder - 03/03/10 11:00 AM EST
The nuclear energy industry is enjoying a political revival after embracing climate legislation, linking arms with labor unions and mounting a big-dollar lobbying and advertising campaign.
The effort has had two goals: to promote nuclear power as a “clean” energy source and as a way to create tens of thousands of new jobs during an economic downturn.
But there is little doubt the industry enjoys broader support on Capitol Hill.
Just two years ago, nuclear industry lobbyists tried, and failed, to add a provision for nuclear power to climate legislation in the Senate. Sen. Barbara Boxer (D-Calif.) brought the climate bill to the floor in 2008 without any nuclear provisions.
“They were reluctant to include the word ‘nuclear’ in the bill,” Derrick Freeman, a lobbyist for the Nuclear Energy Institute (NEI), said.
Climate legislation Boxer and Sen. John Kerry (D-Mass.) released last fall, however, included a nuclear title.
Another measure being written by Kerry, Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) is expected to be even more generous to the industry.
In his State of the Union address, President Barack Obama called for the construction of new reactors. And in his budget request the next day, he tripled the amount of loan guarantees for nuclear power to $54 billion.
“The political future for nuclear power in this country is very bright,” David Crane, president and CEO of NRG Energy, told an audience of nuclear energy executives last month. NRG has applied for a loan guarantee from the Energy Department.
The industry is benefiting from something largely beyond its control.
Growing consensus on global warming and a serious push in Congress to cut carbon dioxide emissions naturally benefits nuclear power.
Nuclear plants don’t emit carbon dioxide, unlike facilities powered by coal or natural gas. The sector produces 20 percent of the electricity in the nation, but 70 percent of the clean energy generated.
And nuclear is a more reliable source of “baseload” power to meet the electricity demands of large population centers than wind and solar power, which also don’t emit carbon.
“We’ve hammered home the vocabulary of nuclear power in a carbon-free setting,” said Freeman.
That wasn’t always the case. NEI did not include climate legislation on its list of priorities until 2007. Because utilities usually use several fuel sources, they were reluctant to back legislation that could hurt one aspect of their operations for the benefit of another.
Since then, more utilities have expressed support for climate legislation, freeing NEI to more aggressively back a climate bill.
More recently, the nuclear industry has sold itself as a job creator. NEI, which spent $4.5 million on lobbying the last two years, announced a new ad campaign in February to stress how many jobs a nuclear renaissance would create.
“We believe the job-creation aspect of new nuclear [construction] is very significant,” said Patrick Moore, a co-chairman of the Clean and Safe Energy Coalition, or CASEnergy, with former New Jersey Gov. Christine Todd Whitman (R).
Nuclear utilities have helped underwrite CASEnergy, which is working to build grassroots support for the sector.
The group says as many as 2,400 jobs could be created at a single construction facility.
Not everyone is happy with nuclear’s newfound political fortune. Climate legislation that includes sweeping new nuclear subsidies runs the risk of losing some support from environmental groups.
“There are real issues and risks,” said Ellen Vancko, nuclear energy and climate change policy director for the Union of Concerned Scientists (UCS). “The most critical is, what do we do with all the nuclear waste?”
The administration has pulled the plug on Yucca Mountain, the proposed permanent waste repository, a loss for the industry. The White House has formed a blue ribbon panel to study the waste issue, including the controversial idea of reprocessing spent fuel.
After years of insisting that Congress fully fund Yucca, the industry now says waste can be stored temporarily on site for decades, although it also says a permanent geological storage site is still needed.
The absence of such a site has dogged the industry for years. For much of the past two decades, a period in which no new nuclear reactors were ordered, the sector was thought to be too toxic to offer a serious solution to the nation’s energy challenges.
James Connaughton, an executive at Constellation Energy, said he used to hear his audiences snicker when, as chairman of the Council for Environmental Quality in the George W. Bush White House, he would promote a revived nuclear power sector as a way to meet the country’s clean energy goals.
“There was great skepticism that the industry could have any kind of a turnaround,” he said.
“You are now seeing a political revival that is a necessary foundation for a commercial revival,” Connaughton said.
The industry has always enjoyed more support in Republican circles, from people like former Sen. Pete Domenici (R-N.M.), who sought incentives for nuclear power as chairman of the Energy and Natural Resources Committee. Domenici played a leading role in winning support for $18.5 billion in loan guarantees the Obama administration would now expand.
To make inroads with Democrats, nuclear executives have sought out stronger relationships with labor officials.
Freeman of NEI said the nuclear executives regularly host union officials on plant tours. “They see the wires and the pipes and the concrete. They see jobs,” he said.
Union officials often accompany utility execs in meetings on Capitol Hill. NEI sponsors a Welcome Back Congress reception with several union groups, although the most recent one was postponed because of weather.
“Labor has been heavily involved in our efforts in getting the facts out there,” Freeman said.
Although key Democrats are backers of nuclear power, a commercial turnaround could strain the limits of that political support.
The sector has a long list of legislative desires. It wants a streamlined regulatory review process, federal help in easing the process of siting new plants, production and investment tax credits and upward of $100 billion in loan guarantees.
To critics, the list shows why nuclear power can’t be relied upon to lower carbon dioxide emissions.
“Where does this public financing end?” Vancko of UCS said. The legislative wish list amounts to “unprecedented giveaways to the nuclear energy sector,” she said.
Fiscal watchdogs point to a Congressional Budget Office report that estimated the risk of default was as high as 50 percent. Industry lobbyists say the risks are reduced because utilities have to pay a fee to the Energy Department to receive a loan guarantee. That fee acts like insurance against a default.
NRG’s Crane said the industry is on the verge of a “breakthrough” in which one or two nuclear plants are built with the aid of federal financing. But a true renaissance will require more help.
He told a Platts nuclear conference in Bethesda, Md., in February that the industry should be lobbying more aggressively for the development of electric vehicles.
That way, nuclear companies will have another saleable point to make on Capitol Hill: a way to reduce dependence on foreign oil.