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03.24.11

Panic in the Nuclear Energy Lobby

With the White House offering $36 billion in loan guarantees, U.S. nuclear industry lobbyists have little opposition. But Eve Conant reports they fear overreaction to the Japan disaster.

If Alex Flint or any of his team gets five hours of sleep, it counts as a good night.

Flint, the chief lobbyist for the Nuclear Energy Institute—the policy arm of the U.S. nuclear industry—has practically been living on the Hill since the nuclear crisis in Japan began to unfold. The day after the tsunami he swept every other paper off his desk and went into 24/7 mode, blasting out emails three times a day and trying to reassure skittish lawmakers that U.S. reactors are safe.

He is, in short, engaged in white-hot damage control.

The Fukushima disaster has set off alarm bells for America’s 104 nuclear plants. By midweek Flint and his team had briefed 50 members of Congress and more than 300 staffers. A former staff director of the Senate Committee on Energy and Natural Resources, Flint confidently declares: “We still stand by our forecast of four to eight new plants online by 2020.”

But Fukushima could ultimately deal a setback to what was starting to be called a “nuclear renaissance” in America, as climate change and fears of dependence on Mideast oil loosened objections to an industry that had been stagnant for decades. “The nuclear industry stepped up and started arguing how they were carbon-free or carbon neutral,” says Paul Carroll, a nuclear policy veteran now at the Ploughshares Fund in San Francisco. And the argument paid off: The Obama administration has agreed to offer the nuclear industry $36 billion in federal loan guarantees, and Greenpeace co-founders are supporting nuclear energy. (In an ironic twist of the old “no new nukes” bumper stickers, a website called “ Know New Nukes”  shows grassy fields and promotes nuclear as a much-needed “clean air energy source.”) “The industry started salivating at the prospect of this renaissance,” says Carroll, who describes Flint’s group as the “NRA of nuclear energy.”

There has been little counterbalance to the nuclear lobbyists. “You could squeeze the critics of the nuclear industry into a phone booth.”

Such efforts have a price tag. Judy Pasternak, a former Los Angeles Times reporter working with the American University’s Investigative Reporting Workshop, has tracked a surge in industry efforts over the last decade “in which companies and unions related to the industry have spent more than $600 million on lobbying and nearly $63 million on campaign contributions.”

NEI's members have certainly contributed to that surge. In just 2010 Duke Energy, for example, shelled out $6.5 million on lobbying and Exelon spent $3.7 million, according to the Center for Responsive Politics. The industry has also been a generous source of campaign cash for lawmakers, with Exelon alone doling out more than $1.3 million in campaign contributions in 2010. According to Fortune, NEI has even sponsored the House Energy and Commerce Committee team in a congressional softball league.

The biggest fear of nuclear advocates? It’s not the other side. Michelle Boyd of Physicians for Social Responsibility says the anti-nuclear crowd, in comparison to NEI and others has “a pittance, an absolute pittance. There is very little money to do this work.” But Fukushima may have done their lobbying for them. The real concern for advocates is that a lack of understanding of nuclear power’s relative safety will lead to “the risk of a violent overreaction,” says David Brown, chief lobbyist of Exelon, the country’s largest nuclear utility.

But, he says, “we’ve been heartened by how tempered the response has been so far.”

Brown and other company executives have been working overtime to publicize their efforts to check on safety issues. “Every day our chairman asks if we’ve learned anything that would lead us to consider shutting down a plant. And every day we say, John, we’re not there.”

The industry has long been controversial. During the 2008 Democratic primaries, Hillary Clinton accused Obama of having “ cut some deals” with the Illinois nuclear industry (a charge more fully examined here). With the Fukushima reactors crippled by an earthquake and resulting tsunami, Obama’s ties to the nuclear industry have again come under increased scrutiny.  Illinois has 11 plants, the largest number of any state, and former top Obama aides, including Chicago mayor-elect Rahm Emanuel,  have worked in advisory roles for the state’s nuclear energy industry.

Peter Bradford, who served on the Nuclear Regulatory Commission during Three Mile Island, says the level of lobbying has been “staggering” but that any nuclear revival remains stalled, with “nothing but cancellations, cost overruns and delays” in recent years.

Taxpayer money is a key issue. A 1957 law, renewed during the George W. Bush administration for another 20 years, effectively caps liability for nuclear disasters, “so ultimately the taxpayer could be paying for damages that might occur at a plant,” says Robert Alvarez, a former Energy Department official now at the Institute for Policy Studies. But there has been little counterbalance to the nuclear lobbyists. “You could squeeze the critics of the nuclear industry into a phone booth. The NEI is the big player here and are able to hand out huge sums to members of Congress seeking to keep or get their jobs.” Government support is crucial because the loans are considered sufficiently risky that Wall Street “won’t lend a nickel to nuclear energy and hasn’t for 30 years,” says Alvarez.

With growing pressure to slash budgets, Alvarez hopes that lawmakers “will no longer have the stomach to support these loan guarantees. We’re ending breakfasts for poor children and firing cops but we let these guys have unlimited access to the U.S. Treasury?”

Rep. Ed Markey (D-Mass.) tells The Daily Beast that “even before the Japanese nuclear meltdown, Wall Street’s reticence to invest in new nuclear plants spawned a taxpayer-backed strategy to get the reactors built anyway, even without significant private financial support. After the Japanese meltdown, and in the midst of trying to trim our budget deficit, we should revisit whether it’s a good idea to provide taxpayer subsidies for these nuclear ‘toxic assets’ that can’t seem to survive in a free market.” Markey has called for a moratorium on new reactors in earthquake zones.

But industry supporters such as Sen. Johnny Isakson (R-Ga.), who counts the parent company of Georgia Power among his biggest contributors, continue to back nuclear power.  And his state is among the prime beneficiaries. Administration officials say they still plan to provide $8.3 billion in loan guarantees for Georgia Power to build what would be the first new nuclear reactor in this country in three decades.

Eve Conant is a Newsweek staff reporter covering immigration, politics, social and culture issues.