The World from Berlin 'Obama's Nuclear Calculation Not Likely to Bear Fruit'

US President Barack Obama has announced billions of dollars in loan guarantees for two new nuclear power plants in Georgia. Many see the move as an attempt to gain Republican support for his climate change bill. But German commentators argue that Obama has made a mistake.

The Vogtle nuclear power plant in Georgia, where federal loan guarantees are to back the construction of two new reactors.

The Vogtle nuclear power plant in Georgia, where federal loan guarantees are to back the construction of two new reactors.

The United States hasn't built a new nuclear power plant in three decades. But if President Barack Obama has his way, that will soon change. On Tuesday, Obama announced a federal loan guarantee worth $8.3 billion (€6.11 billion) for the construction of two new nuclear power plants in the state of Georgia.

"Whether it is nuclear energy or solar or wind energy, if we fail to invest in these technologies today, we'll be importing them tomorrow," Obama said in his speech.

The announcement has been widely criticized by environmental groups in the US, many of whom do not view nuclear energy as a clean energy solution. So far, no permanent storage site for nuclear waste has been found, with the Obama administration saying in 2009 that the Yucca Mountain Repository, once touted as a potential solution to the problem, is no longer an option. Currently, waste is stored on site at nuclear facilities.

"The loan guarantees announced today may ease the politics around comprehensive clean energy and climate legislation, but we do not believe that they are the best policy," Carl Pope, head of the Sierra Club, an influential environmental organization, told the New York Times on Tuesday.

Currently, there are just over 100 nuclear power plants in the US, supplying some 19.6 percent of American energy needs. With many of those reactors scheduled to go offline in coming years, there have been calls for a nuclear renaissance in the US. Indeed, the Obama administration has requested $54 billion in the 2011 budget for loan guarantees for new nuclear reactors.

Nuclear Industry Bailout

Obama's lifting of the 30-year moratorium on new reactor construction is seen in part as an effort to gain bipartisan support for his energy package, which includes the goal of establishing an emissions cap-and-trade system in the US and reducing American CO2 emissions by 4 percent by 2020 relative to 1990 levels.

Critics, though, point to the fact that costs for new reactors have skyrocketed in recent years, from $3 billion a decade ago to $9 billion today. The Congressional Budget Office has estimated that the chance of energy companies defaulting on nuclear reactor loan guarantees is "very high -- well above 50 percent." Of 26 applications for new reactors sent to the Nuclear Regulatory Commission in the last three years, 19 of them have been cancelled or substantially delayed, often due to concerns about budget overruns and excessive costs.

"This is a massive effort to engage in risk shifting so the construction can go forward," Ellen Vancko, an analyst with the Union of Concerned Scientists, told MSNBC. "It's no different than the Wall Street bailout or the GM bailout. The nuclear industry just wants it in advance."

German papers on Thursday take a look at Obama's decision.

The center-left Süddeutsche Zeitung writes:

"Critics of atomic energy are convinced that campaign donations from the nuclear industry influenced Obama's decision. No less than $63 million have flowed into the campaign budgets of various candidates in the last 10 years. Obama too has profited from this generosity. But there are two other factors that likely influenced him more. First, Obama never experienced firsthand the anti-atomic movement as did many left-leaning politicians of his generation in Europe. He really does see ... atomic energy as a viable option to reduce US CO2 emissions. He feels the risks are manageable."

"Secondly, as with all of Obama's decisions, the pro-nuclear stance stems from domestic political calculations: For years, Republicans have thrown their weight behind a nuclear renaissance. They fantasized about 100 new reactors. By making concessions to the conservatives on the issue of atomic energy, the president hopes for quid pro quo when it comes to his climate protection package."

"It is a calculation that is not likely to bear fruit. As he has done in the health care debate, Obama has shown indecisiveness recently in the climate debate as well. His climate alliance, which included support from the energy sector, is disintegrating. The first companies are turning their backs on him. Republicans have taken notice, making it unlikely that they will give Obama the satisfaction of supporting one of his key reforms in an election year. Some Democrats have likewise gotten cold feet. A climate protection law complete with a European-style emissions cap-and-trade regime won't become a reality in the US in the near future. Instead, the country will only get a few more nuclear power plants."

The left-leaning daily Die Tageszeitung writes:

"Even if the US begins constructing new nuclear reactors, that hardly means that a new atomic renaissance is approaching in free-market democracies. On the contrary. The fact that Obama had to rubber stamp federal loan guarantees worth over $8 billion for two atomic power plants clearly shows that nuclear energy is only economical with massive state help."

"For new atomic power plants to be economical on their own, they must provide electricity for eight cents per kilowatt hour. The cost of electricity from both wind generators and solar-thermal power plants will soon fall to that level. It may be that state money can reanimate atomic technology on the short term. But given such numbers, the industry won't survive for long."

The Financial Times Deutschland writes:

"In contrast to the debate in Germany, atomic power and environmentalism are not necessarily mutually exclusive in the US. Even some environmental activists in America define green policies as anything which reduces CO2 emissions. People are more concerned with global warming and America's dependence on oil from countries that sponsor terrorism than they are with the safety of nuclear energy and the problems posed by waste storage. The mood is similar in countries like Britain."

"In Germany, the situation is a different one. Given the relatively young age of existing reactors, constructing new ones is unnecessary. And it would be a political impossibility (...) ."

"The degree of emotion and ideology in Germany's discussion of atomic energy is likely unmatched anywhere in the world. Opponents undeniably have good arguments on their side, particularly when it comes to the challenges of long-term storage of nuclear waste. But Germany, in contrast to its position in the renewable energy debate, is not likely to take a leadership role when it comes to phasing out nuclear energy. Internationally, the focus is on cutting carbon emissions. Wherever older power plants are to be found, atomic power will experience a renaissance."

-- Charles Hawley


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