All of the major news outlets have been filled with reports of President Obama’s new promise to provide loan guarantees for the creation of new nuclear plants. The promise comes amid efforts by Obama and Democrats to make forward progress on their effort to impose cap and trade legislation on the energy sector. Obama’s bid, clearly targeted at Republicans who he feels may be willing to compromise on cap and trade in exchange for nuclear energy, appears to be little more than yet another empty promise by him and his administration. Republicans should ignore the President’s meaningless promise and continue to oppose cap and trade.
Nuclear power is a source of energy which has been advocated by conservatives and energy producers for years. Nuclear power offers an opportunity to significantly increase energy production in America, reduce dependence of foreign resources, and meet the politically expedient desire to avoid increasing carbon production. The economics of nuclear energy are relatively straightforward, involving a significant upfront investment with significant payout over the life of the power station. This is something that power companies have been ready to jump at for decades, and for which they would have no problem securing funding from the usual private sector debt markets.
Far from economics, the primary problem with nuclear energy has been from the environmental arena. By citing concerns about the potential danger from nuclear facilities, environmentalists have managed to build a strong NIMBY sentiment in the areas where nuclear power has been considered. Additional concerns over the disposal of reactor waste have further complicated the issue, primarily because of political resistance to building a properly designed disposal facility. The regulatory system has further compounded the political issues by developing a process which borders on impenetrable for the approval of permits to construct new nuclear facilities.
By guaranteeing loans for the construction of nuclear facilities, Obama proposes to extend government investment to solve a non-problem. His position allows him to portray himself as supporting nuclear power to Republicans in hope of winning their support on cap and trade legislation, all without running any risk that new nuclear power plants will actually be permitted. Obama’s promise is, in short, a ruse to win support from gullible conservatives with no downside for his liberal base.
Republicans should see through and reject Obama’s empty promise.
Tags: cap and trade, energy, nuclear power