Special Reports
McCain's nuclear power policy identical to Bush administration's
By Jason Leopold
Online Journal Contributing Writer


Jun 20, 2008, 00:18

Presumptive GOP presidential candidate John McCain�s ambitious plan to build 45 new nuclear reactors by 2030 as a means to combat global warming and add juice to the power grid is a policy ripped from the Bush administration�s failed National Energy Policy, first introduced by Vice President Dick Cheney during the height of the California energy crisis seven years ago.

At a time when public awareness surrounding renewable energy resources, the devastating effects of global warming and the importance of conservation is at an all-time high, the Bush administration has steered tens of billions in taxpayer dollars toward revamping the dormant nuclear power industry, touting it as the only proven technology to combat climate change.

One of the cornerstones of President Bush's National Energy Policy, released in May 2001, was "the expansion of nuclear energy in the United States as a major component of our national energy policy."

�We have [an] opportunity to increase our supplies of electricity. To meet projected demand over the next two decades, America must have in place between 1,300 and 1,900 new electric plants. Much of this new generation will be fueled by natural gas. However, existing and new technologies offer us the opportunity to expand nuclear generation as well. Nuclear power today accounts for 20 percent of our country�s electricity. This power source, which causes no greenhouse gas emissions, can play an expanding part in our energy future,� the energy policy says.

Bush�s energy policy was largely written by corporate executives, such as the now defunct Enron Corp., and industry lobbyists during a series of meetings convened by Cheney in early 2001. When Enron imploded in a wave of accounting scandals later that year, documents surfaced showing that the company played a role in helping Cheney draft the energy policy. Documents obtained by the Washington Post last July show that several officials from the Nuclear Energy Institute (NEI), a powerful industry lobby, met with Cheney at least twice in March 2001.

Last year, NEI spent $680,000 during the first half of 2007, according to a disclosure form posted online August 13 by the Senate's public records office, lobbying the White House, Congress, the Department of Energy, and other federal agencies, to drum up support for nuclear energy as an alternative to the fossil fuels that emit greenhouse gasses. Cheney's longtime friend Tom Loeffler, a former lobbyist and Republican congressman, represented the NEI. Loeffler's former aide Nancy Dorn worked as a congressional liaison for Cheney, and later became a lobbyist for General Electric.

The lobbying appears to have paid off. In a series of speeches last year, Vice President Cheney and Energy Secretary Samuel Bodman said that reviving the nuclear power industry would be a long-term solution to the country's increasing thirst for electricity and a way to address global warming.

Last year, the Energy Department undertook a massive public relations effort, expected to continue until the end of 2008, to promote nuclear energy as the new "green" energy.

In a speech at a nuclear power conference held last October at the Howard Baker Center for Public Policy at the University of Tennessee, Secretary of Energy Samuel Bodman said nuclear energy is "safe, clean and reliable. And, for the foreseeable future, it is the only mature, emissions-free technology that can supply the power America will need to meet the projected increase in demand for electricity over the next 25 years. This is one of the reasons we have put so much emphasis on bringing about a nuclear renaissance here in the United States."

Before being tapped as Energy Secretary, Bodman ran a chemical company, Cabot Corporation, that spent years on the top five lists of the country's worst polluters. In 1997 alone, Cabot was responsible for the 54,000 tons of toxic emissions his company's refineries released into the atmosphere. Cabot was identified as the fourth-largest source of toxic emissions in Texas. Cabot is the world's largest producer of industrial carbon black, a byproduct of the oil refinery process. Bodman is the wealthiest official in the Bush administration. His net worth is estimated to be between $42 million and $164 million, the bulk of it in Cabot stock, deferred compensation, and other benefits.

In a speech Wednesday, McCain said he would adopt the Bush administration�s policy on nuclear power as his own.

"If I am elected president, I will set this nation on a course to building 45 new reactors by the year 2030, with the ultimate goal of 100 new plants to power the homes and factories and cities of America," McCain said during a campaign stop in Missouri.

A study conducted by the Massachusetts Institute of Technology in 2003, �The Future of Nuclear Power," disagreed with Bodman�s analysis. It said even with volatile natural gas prices and a wildly fluctuating market, the cost of producing electricity from nuclear power plants is still 20 percent more expensive than electricity produced from gas-fired power plants, and 60 percent more expensive than electricity produced from a coal-fired power plant.

McCain has made a point of distinguishing his policies as dramatically different from President George W. Bush. However, key aspects of McCain�s energy policy unveiled Wednesday are nearly identical to the Bush administration�s plan, specifically, McCain�s stance on nuclear energy.

In fact, one of McCain�s advisers on energy policy has been David Conover, the former principal deputy assistant secretary office of policy and international affairs at the Department of Energy.

Conover briefed members of Congress in July 2005 on the Bush administration�s plan of reviving the dormant nuclear power industry to deal with the threat of climate change, a position McCain has embraced.

�Concerns over . . . climate change suggest a larger role for nuclear power as an energy supply choice,� Conover told the Senate Committee on Commerce, Science and Transportation's Subcommittee on Global Climate Change and Impacts in testimony on July 20, 2005. �The Nuclear Power 2010 program is working with industry to demonstrate the Nuclear Regulatory Commission's new licensing process.�

The NP2010 has been one of Cheney�s pet energy projects. Officials in the Energy Department said the vice president has worked on the project with a relatively unknown administration official, Deputy Energy Secretary Clay Sell. Before being sworn in as deputy energy secretary in March 2005, Sell, a lawyer whose roots extend to Bush's home state of Texas, was a White House lobbyist working on energy issues. He had also participated in secret meetings with Cheney's Energy Task Force and has worked closely with David Conover, McCain�s energy adviser.

According to the Department of Energy's web site, NP2010 was launched in 2002, and "is a joint government/industry cost-shared effort that can help provide solutions to meet future base load energy demand and address climate change. Specifically, NP2010 seeks to: demonstrate new, untested processes for licensing reactors in the United States; identify sites for new nuclear power plants, complete first-of-a-kind engineering of new reactor designs; develop and bring to market advanced nuclear plant technologies, and evaluate the business case for building new nuclear power plants."

Last September, Princeton-based NRG Energy Inc., having emerged from bankruptcy, became the first company in 30 years to submit an application to build two new General Electric-designed nuclear reactors at its Bay City, Texas, nuclear power plant facility. NRG's former president, David Peterson, traveled to Washington on two occasions in 2001 to help Cheney's Energy Task Force shape the country's energy policy, according to government records.

Prior to NRG's application, there had not been a filing for a new nuclear power plant in the United States since before the Three Mile Island nuclear reactor meltdown three decades ago.

NRG Chief Executive David Crane told investors last year that massive federal tax incentives and federal loan guarantees, a move McCain supports, included in the Energy Policy Act of 2005 was the deciding factor in steering the company toward the $6 billion nuclear project.

"The whole reason we started down this path was the benefits written into the [Energy Policy Act] of 2005," Crane said.

That legislation called for upwards of $125 million in annual tax credits for a nuclear plant, in addition to loan guarantees that would cover about 80 percent of construction costs. Furthermore, the federal government provided $2 billion in risk insurance for application costs, thereby protecting energy companies in the event they would not be able to finance a nuclear project due to regulatory obstacles.

The federal loan program automatically requires taxpayers to cover any defaults on the loans. In a February 2007 report to Congress, the Government Accountability Office said failure to properly account for default risks in the loan program was one factor that "could result in substantial financial costs to the taxpayer."

A 2003 Congressional Budget Office (CBO) report said the risk of utilities defaulting on loans for new nuclear plants is "very high -- well above 50 percent."

Last October, the Tennessee Valley Authority, the nation's largest public power provider, also filed an application with the NRC for a license to construct and operate two new nuclear power reactors in northern Alabama, using General Electric's Westinghouse AP1000 reactor units. The application was filed under the banner of NuStart Energy, LLC, a consortium of electric utilities that joined together in 2004 to test the NRC's streamlined nuclear reactor licensing program. The licensing costs were paid for by the federal government under an Energy Department program called Nuclear Power 2010 (NP2010), to promote construction of new nuclear power plants.

Sell, the Deputy Energy Secretary, said TVA's application was a "a monumental step toward the rebirth of nuclear power in the United States."

Members of the NuStart consortium include: Constellation Energy, Duke Energy, EDF International North America, the US subsidiary of the French electric utility, Entergy Nuclear, Exelon Generation, Florida Power & Light Company, Progress Energy, South Carolina Electric & Gas, Southern Company and Tennessee Valley Authority, Knoxville, Tennessee.

With the exception of Progress Energy, South Carolina Electric Gas & Light and EDF International, all of these companies participated in meetings with Cheney's Energy Task Force and advised the vice president on energy policy. Additionally, these corporations have said publicly they intend to file applications for nuclear reactor licenses before the end of 2008, the deadline to receive billions of dollars in federal subsidies and tax credits. The NRC says it expects to receive as many as 21 applications to build 32 new reactors before the end of 2008, with most, if not all, expected to go online in 2015.

Jon Block, nuclear energy and climate change project manager for the Union of Concerned Scientists (UCS), said one of the problems with constructing new nuclear facilities is how to dispose of nuclear waste.

"In over 50 years of operating experience, the nuclear industry still has not managed to solve the problems of safety, security, and disposal of highly dangerous radioactive waste," said . "Until that happens, we're much better off investing in safer, cleaner energy sources such as renewable wind, geothermal, tidal, and solar projects."

The Department of Energy, the agency largely responsible for monitoring nuclear waste, submitted an application to the NRC to build a repository at Yucca Mountain, the site of a former nuclear testing ground in Nevada, where the agency has proposed burying the waste deep underground.

McCain supports the idea of storing waste in Yucca Mountain, a move opposed by a majority of Nevadans and one that could cost the Arizona Republican a critical swing state.