Fukushima's impact on U.S. new nuclear projects
Three important reasons why the U.S. new build will continue
Prognosticators of financial doom and gloom for the future of construction of new nuclear power plants in the U.S. say they have plenty of evidence to bolster their case. The main Japanese utility responsible for trying to control the disaster has itself demonstrated at times confusion in resolving problems. Fianncial analysts say if the leading utility in Japan, a nation strongly committed to nuclear energy, can't control its reactors, what does it say about the global industry?
Of course, they fail to mention that six reactors at Fukushima were taken out of service by the combination of a 9.0 earthquake and a 15 meter high tsunami. Is it any wonder the utility, which has asked for international help, is at times overwhelmed by the damage?
The view of naysayer groups is open to question based on three factors. First, the Obama administration continues to be committed to nuclear energy. In the first week following the Fukushima accident, President Obama spoke out repeatedly on the issue. Second, the Department of Energy said it would continue to evaluate new nuclear reactor projects for federal loan guarantees. Third, a Gallop Poll taken in late March showed steady support for nuclear energy with little change from similar polls a decade ago.
Doom and gloom about the future of nuclear energy comes mostly from the financial community. For instance, global giant UBS told the Bloomberg wire service April 4 that the nuclear reactor crisis at Fukushima will hurt the nuclear industry's credibility more than the Chernobyl disaster in 1986.
“At Fukushima, four reactors have been out of control for weeks -- casting doubt on whether even an advanced economy can master nuclear safety.”
“We believe the Fukushima accident was the most serious ever for the credibility of nuclear power,” UBS analysts said.
Reuters reported March 14 that Standard and Poor's warned clients that the risk of cancellations or delays for existing and future nuclear projects has increased as a result of the situation in Japan.
Those are tough assessments from very credible sources. Who answers them?
Obama holds fast for nuclear energy
Despite these warnings from Wall Street, the President held fast to nuclear energy as a plank in his energy platform. The Washington Post reported March 18 that while the President's policy faces a test of public confidence, that he is standing firm on the issue.
“I still think that nuclear power is an important part of our overall energy mix,” he told an interviewer this week from WVEC-TV in Norfolk. He added that “we’ve got to do it in a safe and sensible way.”
Loan guarantees not going away
Following the White House lead, the head of the loan guarantee program at the Department of Energy said that the remaining authority for new project would be used and that the administration was asking for another $36 billion in new loan coverage in the 2012 budget.
Platts reported March 31 Jonathan Silver, the head of the US Department of Energy's loan guarantee program said that the Fukushima nuclear disaster in Japan will not derail the Obama administration's plan to help finance proposed reactors in Maryland, Texas and South Carolina.
"From an investment perspective, [the Fukushima incident] does not affect our timeline," Silver told the Energy and Water Development Subcommittee of the House Appropriations Committee. "It is too early to tell what the actual implications on the timeline will be, but I have every expectation we will be able to put that capital to work in a meaningful timeframe."
Platts reported that Silver said DOE last year was moving closer to offering a conditional loan guarantee for the proposed Calvert Cliffs reactor in Maryland, but Constellation Energy pulled out of its partnership with French-owned EDF, saying DOE's credit subsidy fee for the project was too high. EDF still intends to build the reactor and is looking for another project partner.
"All other things being equal, we would expect to be able to move that project forward once the financing mechanisms are able to be met," Silver said.
Gallop Poll results
According to a Gallop poll taken the end of March, the majority of Americans say nuclear power plants in U.S. are safe. Despite concerns about a possible nuclear disaster in the U.S., 58% of Americans think nuclear power plants in the U.S. are safe, while 36% say they are not.
Gallop notes that Americans are divided on the issue of increasing the number of nuclear power plants in this country, but these attitudes have not changed very much from 10 years ago. The poll of roughly 1,000 adults released April 4 was conducted March 25-27.
Gallup notes that the Japanese nuclear crisis does not appear to have a major effect on U.S. attitudes about nuclear safety.
“There is no exact Gallup trend to which these results can be compared. However, Gallup asked Americans in 2009 about the perceived safety of ‘nuclear power plants’ without specifying their location, finding 56% saying they were safe Gallup notes in a summary of the findings.
The poll finds that the public is split on whether new reactors should be constructed in the United States. Gallup, in asking about views on increasing the number of U.S. plants, found that 46% called nuclear power necessary and 48% called the risks too high. This leaves just 6% undecided. With a margin of error of 3% for each finding, the results show essentially a 50-50 split in public opinion.
Gallup notes that views on the prospect of new plants have been stable for a decade.
“Despite all that has changed over the last 10 years, responses to this question did not change materially between its prior asking in May 2001 and the current poll, though it may be possible that attitudes changed between these intervals in unknown ways. Still, this finding suggests there has been no substantial diminution in support for nuclear power plant construction over this past decade -- despite the current, and highly visible, nuclear plant problems in Japan."
Anti-nuclear groups take note. Your efforts to exploit the current crisis for immediate political gain have not moved the needle in terms of public support for nuclear energy.
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