$50 Billion Program Agitates Enviros

Posted February 3, 2009 at 5:08pm

A proposed $50 billion energy technology loan guarantee in the Senate’s stimulus package has galvanized the environmental community, with more than 20 groups joining together in a lobbying blitz to oppose the program.

The proposal, added by Senate Appropriations Committee member Bob Bennett (R-Utah), would add $50 billion in loan guarantees in a program that would be administered by the Department of Energy.

But, the groups contend, the “vast majority” of the loans would go to nuclear power and liquid coal technologies.

The Center for American Progress Action Fund, Earthjustice, Greenpeace, the Sierra Club, Public Citizen, Physicians for Social Responsibility and others have lined up against the authorization, calling it a handout to the nuclear industry.

In addition, they say, the loans will not stimulate the economy — the legislation’s main goal — because it takes several years for initial construction of a nuclear power plant to begin.

Further, the environmentalists argue that the nuclear industry has a high loan default rate that could turn into a “preemptive and unnecessary” bailout of the industry, according to a letter they sent to Senators on Monday.

“We are at a time when the integrity of our financial system is being sorely tested,” the groups wrote. “A financial crisis is a particularly bad moment to pile more risky obligations on the shoulders of taxpayers and the federal budget.”

Bennett, a nuclear power advocate, added the measure to the Senate bill last week during an Appropriations Committee markup.

The House-passed version of the bill does not include the loan guarantee program.

The environmental coalition is hoping to exploit the differences in the bills as a way to get the provision removed. Beyond targeting the Senate, the group is already looking toward the House-Senate conference of the bill.

“I think the real target has to be the Speaker,” said Tyson Slocum, director of Public Citizen’s energy program. “She’s been very skeptical of nuclear power. We just need to make sure that she’s going to have influence over the conference process.”

Grass-roots networks have been activated. Friends of the Earth had several thousand activists sending messages to Capitol Hill on Tuesday. Additionally, the environmentalists are producing TV ads to make the case against sticking a nuclear bailout in the stimulus, according to FOE spokesman Nick Berning.

Taxpayer watchdogs are also joining the cause. Taxpayers for Common Sense called for the provision to be removed in its own letter on Monday, calling it wasteful spending that could jeopardize billions of taxpayer dollars.

“We have been down this road before,” wrote Ryan Alexander, president of the group. “During the late 1970s and early 1980s, DOE haphazardly issued loan guarantees to jumpstart the synthetic fuels industry. It was a fiscal nightmare and taxpayers ended up covering the bill.”

While nuclear supporters are happy with the provision, industry lobbyists take exception to the characterization that the loan guarantee program is solely for the industry’s benefit.

“It doesn’t inure specific benefits to the nuclear industry. It’s for the entire clean energy program,” said Derrick Freeman, a former aide to Sen. Mark Pryor (D-Ark.) who is now at the Nuclear Energy Institute.

“The initial allocation for nuclear in particular was $18.5 billion for new reactors. Any expansion from where it was is a boon for clean energy technology, nuclear being the cleanest,” Freeman added.

The nuclear industry has applications in to the Department of Energy for more than $120 billion in loan guarantees to build 21 new nuclear reactors, but the department has the authority to guarantee only $18.5 billion in loans for new nuclear generation. This increase in funding would allow the industry to begin to meet its goal.

This isn’t the first time that expanding the loan guarantee program has come up. The program was created as part of the 2005 energy act to distribute loan guarantees to innovative energy technologies, including new nuclear facilities.

In 2007, a similar provision supported by then-Sen. Pete Domenici (R-N.M.) was stripped from the energy bill.

Nuclear opponents rebut the NEI’s claim that the provision isn’t directly linked to the nuclear industry.

“They got the language in there and now they are too embarrassed to say they want it,” said Michele Boyd of Physicians for Social Responsibility.