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New Jolt For Nuclear Power

News Analysis: Obama offers waste-plan overhaul, more R&D funds, and loan guarantees in hopes of building more reactors

by Jeff Johnson
March 8, 2010 | APPEARED IN VOLUME 88, ISSUE 10

Credit: Shutterstock
In 1979, personnel error, design deficiencies, and component failures caused a partial core meltdown of this Babcock & Wilcox reactor and contributed to public fears and a slowdown in U.S. nuclear power plant construction.
Credit: Shutterstock
In 1979, personnel error, design deficiencies, and component failures caused a partial core meltdown of this Babcock & Wilcox reactor and contributed to public fears and a slowdown in U.S. nuclear power plant construction.

In the mid-1970s, one of my first jobs out of college was with a global engineering and construction firm. When attending meetings in the chief engineer’s office, I was struck by a 4- × 4-foot photograph that covered most of one wall. It showed, in sharp black and white, a nuclear power plant under construction. The engineer was proud of that photo and gushed over nuclear energy, which, he often said, was on a growth curve that boded well for the future of the company and the nation.

“But what about the radioactive waste,” I asked with some timidity in the face of his exuberance. With a stern look, he countered, “That is a discussion for the future.”

Well, the chief engineer is likely long gone now, but the waste discussion remains as vague and volatile as ever. And 35 years after that conversation, the U.S. appears to be back where it started, taking up the debate over high-level radioactive waste anew. There are other signs of nuclear déjà vu—particularly, President Barack Obama’s newfound interest in providing government support for the energy source.

This time, however, nuclear power is not promoted as a “too cheap to meter” electricity generator, but as a way to curb greenhouse gas emissions and create jobs—despite a missing puzzle piece about the final fate of radioactive waste.

Over the past month and a half, the President and his energy secretary, Steven Chu, have announced a rebirth of government support for nuclear power on a level to exceed even the ambitions of former president George W. Bush and his Administration’s push for new power plants and an international spent-fuel-reprocessing program—GNEP, the Global Nuclear Energy Partnership (C&EN, June 18, 2007, page 48).

Obama’s and Chu’s support is coming in three ways: Creating a new commission to completely reexamine the radioactive waste issue and hammer out a road map for the future, tripling a government loan guarantee program to support the nuclear industry and encourage Wall Street investments in reactor construction, and increasing funding for Department of Energy nuclear energy R&D programs.

Obama and Chu have tied their nuclear energy support to jobs and to hopes of gaining congressional support for climate legislation, which is on life support in the Senate after barely surviving a vote in the House of Representatives. Government aid is needed, Obama stressed when announcing the loan guarantees, because without legislation establishing a price on carbon, “traditional plants that use fossil fuels will be more cost-effective than plants that use nuclear fuel.” Obama also tied his nuclear support to economics—both for jobs in construction and plant operation and for his goal of making the U.S. a global leader in building and exporting “a new generation of safe, clean nuclear power plants.”

So far, however, Obama’s nuclear vision has not swayed cap-and-trade opponents, and Senate Republicans who support nuclear power remain unified in their dislike of climate-change legislation. But the nuclear industry is abuzz.

“Transformational” was Nuclear Energy Institute (NEI) Chief Executive Officer Marvin S. Fertel’s term for Obama’s statements. “We have nothing less than a new political mandate for nuclear energy,” he said in a speech to Wall Street analysts. Environmental groups at first appeared stunned and silent, but they now are beginning to voice objections to parts of the program, particularly the government loan guarantees.

The Obama Administration announcements came quickly—concentrated over a two-week period.

On Jan. 29, Chu announced the selection of a top-level “blue-ribbon panel” to reexamine how the U.S. should handle spent fuel for decades into the future. A few days later, as part of DOE’s 2011 budget proposal, Chu said the Administration wants to increase nuclear energy R&D spending by 39% to $495 million, as well as sharpen the R&D focus. In particular, he cited an interest in small, modular nuclear reactors. And in another part of the budget, Chu proposed to increase taxpayer-backed loan guarantees for new nuclear power plant construction from $18.5 billion to $54.5 billion.

In mid-February, Chu and Obama also issued the nation’s first-ever nuclear loan guarantee, offering $8.33 billion to support construction of a two-reactor project planned by the electric utility Southern Co. to be built in Georgia (C&EN, Feb. 22, page 8). It would be the nation’s first new nuclear power plant in more than 30 years.

The 15-member blue-ribbon panel faces a tough task: They are to develop a draft national high-level radioactive waste strategy in 18 months and a final report six months later. The need for the panel was driven by Obama’s announcement last year that he was killing the Yucca Mountain repository in Nevada after the U.S. government had invested $10 billion and 20 years in research on what was to be the only U.S. high-level radioactive waste repository.

“We have learned a lot in the past 20-plus years,” Chu said, “and we see a lot of other options on the horizon.”

Chu has made clear that for Obama’s DOE, Yucca was dead and “completely off the table” and he stressed that the panel was not a “siting commission” trying to find a new repository site.

“The commission,” he said, “is to determine how the nuclear industry will address spent fuel 30, 40, 50 years down the road.”

The commission is made up of scientists, former members of Congress and government officials, academics, nuclear industry leaders, and nongovernment nuclear experts. All, however, support nuclear energy.

Critics note that the commission has five former members of Congress but only one geologist. Yet geology became a key issue when Yucca Mountain slipped from favor in part over concerns about the site’s geological stability and permeability to water. Also missing from the commission, critics add, are local government officials whose constituents will be strongly affected by waste transportation and the eventual location of a waste facility.

As they discuss such concerns, the radioactive waste grows. It currently exceeds 60,000 tons, resting at some 130 commercial and defense sites in some 39 states.

But the buildup doesn’t bother Chu, who points to a Nuclear Regulatory Commission (NRC) study that concluded the waste can be safely stored in dry casks at each site for a half century or more. The panel’s role, Chu explains, is to look with a fresh eye at new technological opportunities that have come into play since Yucca was selected.

Spent-fuel reprocessing is to be part of the examination, as are new reactor designs that will allow more complete use of reactor fuel, Chu said. Speaking at a February budget briefing, he said he saw no contradiction in government support for new advanced-reactor construction while overhauling the nation’s overall approach to spent fuel and nuclear waste.

“I deeply believe that waste and spent fuel are solvable problems, both technologically and, call me wildly optimistic,” Chu continued, “I believe they are solvable politically.” Chu’s remark was a nod to the strong political opposition—particularly by Senate Majority Leader Harry Reid (D-Nev.)—that helped kill Yucca.

Chu expects the commission to look at all waste issues, but members are far from united in views of how nuclear waste should be addressed. For instance, former New Mexico Sen. Pete Domenici, who left the Senate last year due to a degenerative brain disease, has long advocated for spent-fuel reprocessing, but Massachusetts Institute of Technology physicist Ernest Moniz frequently writes and speaks in opposition to reprocessing, saying it is too expansive and unnecessary when uranium is abundant.

While the commission begins its labors, Chu announced that government loan guarantees would go to Southern and its three partners to support construction of two 1,100-MW nuclear reactor power plants to be built in Burke, Ga. Southern and three partners plan to build the reactors next to two currently operating ones. The two reactors are expected to cost $14 billion when complete in 2016 and 2017.

When the President announced the deal, he underscored the new jobs that can result from revival of this mature yet currently moribund industry. For example, the Southern reactors are projected to create 3,500 construction jobs and 800 permanent jobs, the President noted, stressing nuclear energy’s historic importance to the nation as a producer of 20% of U.S. electricity, despite the fact that its 104 power plants are reaching the end of their projected lives.

In addition to jobs and energy production, Obama emphasized that the Southern project would eliminate 16 million tons of carbon dioxide emissions per year, the amount that would be emitted by an equivalently sized coal-fired plant. And with a sting to environmentalists, Obama equated nuclear energy with renewable energy sources—wind and solar—when he made his announcement.

Responding, Carl Pope, Sierra Club executive director, said in a statement, “We need to prioritize the cleanest, cheapest, safest, and fastest ways to reduce emissions, and nuclear power is not clean, cheap, or fast and safe.” He warned that the loan guarantees will put taxpayers on the hook for billions if Southern gets and then defaults on the loan. “Retrofitting our homes and commercial buildings would result in significantly greater emissions reductions almost immediately,” he added. Pope was joined by an array of environmental organizations that choked on providing a backstop for this well-capitalized 50-year-old industry.

Over the years, the industry has received at least $100 billion in direct subsidies, according to Taxpayers for Common Sense, an antisubsidy nonprofit. The group also worries about defaults and points to a Congressional Budget Office study that predicted a 50% default risk from nuclear loan guarantees due to the high construction costs that have plagued the industry. CBO’s reasoning was that in order to cover these costs, nuclear energy providers would have to charge more for electricity, making them noncompetitive with other energy sources. And considering the lengthy time nuclear projects take to complete and their huge size and cost, wind, natural gas, and solar—with their quicker construction turnaround time, smaller size, and per unit construction costs—could be cheaper and involve much less investor risk.

Along with Southern, DOE is currently considering three other loan guarantee applications from nuclear companies. In all, there are about 13 applications for new nuclear power plants pending before the NRC, says commission spokesman Scott Burnell. Each seeks to take advantage of a new NRC process to speed permitting, as well as DOE’s loan guarantee program. If all are approved, some 20 new reactors would be built, Burnell says.

But Southern’s loan guarantee is conditional at this time and will depend on whether the company can obtain an NRC permit and financing. Neither the reactor design nor Southern’s site has been fully approved by NRC.

Southern has an early site permit, which allows it to begin excavation, Burnell notes, but its application for a combined construction and operating license has not been approved. If NRC works out its differences over the reactor design and also approves Southern’s license request, NRC will marry the permit application to the design, and Southern may move ahead. It could approve the two applications by late 2011, Burnell says.

Chu wants to see more projects like Southern’s and by tripling funding for loan guarantees, he hopes to support construction of seven to 10 new reactors. “The U.S. has been sitting on the sidelines in the nuclear technology race for far too long. It is time for the country that pioneered nuclear power to retake the lead,” he said.

But not everyone is convinced the increase in nuclear loan guarantees is a good idea. The move to triple loan guarantees is “a prime example of pork-barrel politics on behalf of special interests,” said Ellen Vancko, nuclear program manager with the Union of Concerned Scientists, in a statement.

“Although it may be appropriate to provide loan guarantees to a small number of first mover reactors,” she continued, it is dangerous to put so much money at risk of default for an industry with a history of cost overruns.

NEI, however, applauded the tripling and said it was “critical to accelerate deployment of dozens of new reactors needed to meet rising electricity demand and stem the growth of greenhouse gas emissions.” NEI also announced the ramp-up of an advertising campaign to promote the benefits of nuclear energy to the public.


Along with the loan guarantees, the Administration is encouraging construction of new reactors with advanced designs and increasing the DOE nuclear R&D budget for 2011. Much of the federal budget increase will go to reactor technologies that modify the fuel cycle and could include spent-fuel reprocessing, according to the agency.

But Chu has also singled out the importance of R&D on fundamentally new designs, particularly small modular reactors, which he called a “sort of reverse economies of scale” approach. Instead of the standard 1,000-MW nuclear power plant, these would be less than 300 MW.

Some half-dozen designs are under development globally, and one of the furthest along is the mPower, a light water reactor built by Babcock & Wilcox. It produces 125 MW of power, and at 15 feet in diameter by 75 feet tall, the reactor is small enough to be made in a factory, shipped to an installation site, and placed underground, said Warren F. Miller Jr., DOE assistant secretary for nuclear energy, while speaking at a congressional hearing late last year.

The modules could be scaled up if needed to supply electricity to larger utilities or could run individually for specific utilities or industries. For example, Miller pointed to chemical and petrochemical companies that need electricity and process heat, which could be supplied by the smaller reactors.

Babcock & Wilcox intends to submit an application for certification of the mPower reactor to NRC in 2012, a company spokesman says, but at the earliest, the company could bring the first such reactor on-line in 2020.

Even with this renewed government support, nuclear power faces tough competition from other energy sources. Unlike in the 1970s when nuclear saw real growth in response to an energy crisis, today’s energy crunch has dynamic new players. Almost daily, some start-up company announces a new solar panel, wind turbine, or fuel cell—as well as DOE or venture capital funding for support—all would-be competitors to nuclear reactors. The new technologies are small, quick to install, and have little or no fuel cost or carbon output. And they avoid the 10 years of construction, $7 billion-plus cost, and the inherent difficulties associated with fission and radioactivity.

But these new technologies are untested and puny compared with 1,000-MW nuclear power plants. Nuclear plants also run 24/7 and are relatively carbon-free—assuming one gets the energy that nuclear needs for uranium mining, milling, and enrichment as well as fuel preparation, transportation, and disposal from noncarbon sources.

But a real race is on, and it is a global search for energy. How this competition plays out in the next decade will define our world long into the future.



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