Jan 24 - McClatchy/Tribune


The Obama administration soon may guarantee as much as $18.5 billion in loans to build new nuclear reactors to generate electricity, and Congress is considering whether to add billions more to support an expansion of nuclear power.

These actions come after an extensive, decade-long campaign in which companies and unions related to the industry have spent more than $600 million on lobbying and nearly $63 million on campaign contributions, according to an analysis by the Investigative Reporting Workshop at American University.

Nuclear power generates about 20 percent of America's electricity, but many existing reactors are aging and no new plant has been authorized since the 1979 incident at Three Mile Island, when small amounts of radiation were released and authorities feared for days that a huge surge might escape. That's in part because it can cost as much as $8 billion to build a nuclear plant, and in part because the problems of nuclear waste and safety remain unsolved.

But the problem of global warming remains unsolved, too, and as the nation struggles to rebound from a deep recession, building new nuclear reactors increasingly looks to some like a big jobs program.

 The industry, capitalizing on both developments, argues that nuclear energy must be part of any effort to curb heat-trapping carbon emissions.

Its longtime foes - environmentalists, labor unions, Democrats - increasingly agree. "This is nuclear's year," said House Majority Whip Jim Clyburn, D-S.C., who in recent years has become one of the industry's champions on Capitol Hill.

Democratic Sen. Barbara Boxer of California, who chairs the Senate Environment and Public Works Committee, has pledged that the climate bill that's making its way through Congress will include new government help for the nuclear industry. Sen. Lindsey Graham of South Carolina says he'd provide a much-sought Republican vote for the bill if its energy provisions include help for the nuclear industry.

Some Republicans, who historically have been friendlier to nuclear power, are pushing a plan to build 100 reactors over the next 20 years. The industry considers the forthcoming $18.5 billion in guarantees a down payment on a more ambitious expansion.

Getting to this point has taken lots of time and lots of money, and the debate over the safety and economics of nuclear electricity is far from settled.

During the Bush administration, the nuclear industry got more in electricity-related research and development funding than coal and other fossil fuels did combined, and Congress approved the loan guarantees.

More recently, the industry has been reaching out to newly empowered Democrats, among them Clyburn, whose state is among the nation's leading nuclear-power producers. (President Barack Obama's home state of Illinois is the biggest, and he and some of his closest political allies have long relationships with Exelon Corp., the country's biggest nuclear power company.)

The industry also has begun to build strong ties to important labor unions.

In the first half of last year, when Congress was considering whether to add nuclear loan guarantees to the economic stimulus package and was starting to work on the climate change bill, companies and unions interested in nuclear energy spent more than $55.8 million on lobbying, the analysis found.

Federal Election Commission records also show that industry trade group the Nuclear Energy Institute donated a total of $99,000 to 63 candidates in the first half of 2009. Sixty percent of the money went to Democrats. As a group, nuclear interests gave $3.5 million to congressional candidates in the first six months of last year.

It hasn't hurt that all these efforts have coincided with a big run-up in energy prices and growing concern over the effects that coal-fired power plants have on the buildup in carbon emissions and global warming.

"We don't believe that nuclear energy is the answer, but as you look at needs for clean energy and the need to protect the environment, there isn't a solution without nuclear," Areva spokesman Jarret Adams said. Areva's reactors would power many of the new plants that are on the drawing boards.

Still, many environmental groups worry about the safety of nuclear power. "The nuclear power industry is always going to remain several minutes away from serious accident and disaster," said Tom Clements, the Southeastern Nuclear Campaign coordinator for Friends of the Earth, a global environmental group.

The Price-Anderson Act, passed in 1957, limits industry liability for a nuclear accident. Most recently renewed in 2005, it requires a private operator to buy the most private insurance possible - currently $300 million - and assesses fees on the industry for a fund to pay out damages above that amount if necessary. If the fund, which now stands at more than $10 billion, isn't enough, Congress would decide whether to require more industry contributions or appropriate public money. The law is now in force through 2025.

Opponents also question why nuclear power needs federal subsidies. "If nuclear power is the right path to go down, why can't it pay for itself?" Clements said. "Nuclear power is going to be dependent on subsidies and handouts, and we still get nuclear waste and the threat of accident in return."

The waste issue remains perhaps the biggest stumbling block. Generating nuclear power produces huge quantities of radioactive waste, including plutonium, a key ingredient for nuclear weapons. When many of the current reactors were put into place, there was an assumption that the federal government eventually would create a national repository. After decades of debate, however, that promise appears no closer to being met, and the plants have become de facto storage facilities.

In many ways, the nuclear power industry's efforts to win support are a textbook case of how the influence game is played in Washington. Besides the money spent on lobbying and campaign contributions, the industry, led by the Nuclear Energy Institute, has created a network of allies who give speeches, quote one another approvingly and showcase one another on their Web sites. The effect is an echo chamber of support for nuclear power.

While energy lobbies such as big oil and big coal have taken turns in the spotlight, big nuke flies largely under the radar. Alex Flint, the Nuclear Energy Institute's chief lobbyist, summed up the strategy last year at a luncheon with utility officials from Southeastern states: "Quiet." He likes to let surrogates make the case.

For instance, Patrick Moore, who played a leading role in Greenpeace during the 1970s, now helps lead the Clean and Safe Energy Coalition, known as CASEnergy Coalition. His partner is Christine Todd Whitman, a former New Jersey governor and Environmental Protection Agency administrator. Both have touted nuclear power at gatherings of members of Congress and on national television.

Left unmentioned in these settings is that the Nuclear Energy Institute paid a public relations company to create CASEnergy, an example of the so-called "Astroturfing" techniques that many industries have adopted to give the appearance of grass-roots support.

Moore, who runs a consulting company based in Vancouver, British Columbia, acknowledged the ties in an interview, referring to the Nuclear Energy Institute as "my biggest client." He declined to divulge his fees. Whitman's firm, the Whitman Strategy Group, says on its site that it was hired by CASEnergy, but the coalition's Web site doesn't mention the financial relationship. Neither does the Nuclear Energy Institute's site, where Whitman and Moore are quoted on the merits of a nuclear future.

Labor is another new ally. The Nuclear Energy Institute and 20 unions co-sponsored a "Welcome Back, Congress" bash in a House of Representatives office building in January 2009. In March, Mark Ayers of the AFL-CIO arranged a meeting between the Nuclear Energy Institute's president and House Energy and Commerce Committee Chairman Henry Waxman to talk about the climate bill. The liberal California Democrat is leading the effort to pass the measure.

It seemed to work like magic.

"Now, Mr. Waxman has not been somebody who's been particularly open to our agenda in the past, and yet he was very much so this time," the institute's Flint told nuclear executives in May. Flint credited union help for the changed atmosphere, quoting his boss's description of labor allies as "bulletproof gear."

No one expected Waxman to lead the charge for nuclear, Flint said.

Rep. John Dingell, a veteran Michigan Democrat who was Waxman's predecessor as committee chairman and the top recipient of nuclear-interest campaign contributions - more than $600,000 since 1999 - was offering an amendment to the climate bill that would create a clean-energy bank, which would help finance an expansion of low-carbon energy technologies. In addition to renewable energy sources such as wind, solar and geothermal power, the capture of emissions from coal and nuclear energy plants would be eligible for help.

The Nuclear Energy Institute had merely hoped that Waxman wouldn't squelch Dingell's proposal without a vote. Waxman not only let the amendment in, but also voted for it.

Ayers received a call from the Nuclear Energy Institute's then-president soon after he took up his AFL-CIO post in 2007. Ayers listened to his plea for help, he recalled in an interview, while thinking that many proposed new units would be in the South and in remote areas, generally not union-friendly territory. So he offered "a quid pro quo here: I help you, but I want to build these plants."

Later, a requirement in the House climate bill's bank amendment for "prevailing wages" at projects that receive government-backed loans helped Ayers' construction unions. More explicitly, the Nuclear Energy Institute took a pro-union position for nuclear construction sites and gave Ayers access to utility officials to pitch labor contracts. Cementing the relationship, the institute hired one of Ayers' lobbyists and last May, elected Ayers and an officer of the electrical workers' union to its board.

Third Way, which describes itself as a moderate progressive policy organization, also has come out in favor of nuclear power. After the Nuclear Energy Institute sent Third Way Vice President Matt Bennett to France in July 2007, he wrote, "We all came back with the faith of the converted."

Two months later, Bennett and Third Way trustee John Dyson wrote a Boston Globe column headlined, "Just say 'oui' to nuclear power." In the second-to-last paragraph, they noted that Third Way got less than 1 percent of its budget from nuclear industry donations.

These constituencies are important to the party that's in power. Disclosure records show that the industry deftly kept its traditional base among Senate Republicans - who want 100 new nuclear units even if the climate bill fails - while building bridges to Democrats in both houses.

Clyburn is one example, receiving about $195,600 from nuclear energy companies and affiliated unions since 2000, $187,000 of that in the last two election cycles. The Nuclear Energy Institute contributed at least $10,000 to Clyburn's scholarship foundation, and nuclear interests spent more than $30,000 for two six-day trips for Clyburn and his wife. One was to inspect nuclear facilities in France, and the other in the United Kingdom. He also owns stock valued at $15,000 to $50,000 in SCANA Corp., a South Carolina company that's applied to build two reactors.

Clyburn has become a key ambassador for the industry, making ample use of its surrogate network. He quoted CASEnergy's Moore approvingly in an opinion column he wrote and in a keynote speech to a convention of Ayers' building trades group.

He arranged a session on nuclear power for the Congressional Black Caucus. Nuclear energy is so high on Clyburn's agenda that he made a point of attending Senate confirmation hearings for Steven Chu, Obama's energy secretary. When Chu spoke favorably about nuclear fission as a source of electricity, Clyburn concluded that "Obama is not anti-nuclear or he would not have nominated Chu."

In an interview, Clyburn said he could report progress. Four congressional Democrats from New York, he said, are moving in his direction on nuclear power. Carol Browner, the Obama administration's energy czar and a former head of the EPA, told him that it would be inconsistent to worry about global warming and dismiss nuclear power. He raised the issue at a congressional lunch with Obama and said he left feeling reassured.

The industry is plugged in on its own at the White House through labor groups and Exelon. Exelon CEO John W. Rowe is the Nuclear Energy Institute's past chairman and a current director.

The company, based in Illinois, has funded Obama's campaigns since his Senate run, when employees contributed more than $48,000, according to CQ Moneyline, and Exelon's political action committee gave the maximum of $10,000. Exelon employees gave Obama nearly $210,000 for his presidential campaign, according to CQ Moneyline.

Exelon's management includes two Obama bundlers who are friends of the president. One, director John W. Rogers, helped direct Obama's Illinois fundraising during his presidential race and helped plan the inauguration. The other, Frank M. Clark, has lobbied on nuclear issues for the company.

White House chief of staff Rahm Emanuel is close to Exelon, too. The merger that created the utility was the biggest deal of Emanuel's brief but lucrative investment-banking career. Another White House connection is strategist David Axelrod, whom Exelon subsidiary ComEd once hired to create a fake grass-roots organization supporting higher electricity rates.

Exelon lobbyist David Brown said that the company had applied for the federal loan guarantees, but it didn't make the cut for the first round. Exelon hasn't contacted its high-level White House friends, he added.

The nuclear wish list is controversial. Electric utilities want more than $100 billion in guarantees for construction that's expected to cost $200 billion. The Nuclear Energy Institute contends that the guarantees wouldn't cost taxpayers a dime because the recipients would pay fees that should cover the cost of defaults, much the way that auto insurers cover the cost of accidents with premiums paid by safe drivers. However, the Congressional Budget Office concluded in 2003 that the risk of default on a nuclear loan would be "very high _ well above 50 percent."

Critics of nuclear power say these sums would divert resources from other low-carbon sources of electricity that don't have nuclear's safety or waste issues. These include wind, solar, biomass and geothermal generators. The clean energy bank as proposed would "be a big nuclear-coal slush fund," charged Michele Boyd, who lobbies for Physicians for Social Responsibility. Carbon capture for coal and nuclear construction are so expensive that there would be little left over for renewables, she thinks.

Even some advocates of new reactors say that utilities should find private financing without involving taxpayers.

"It's a proven technology. Kick back the government and let industry get about the business of building reactors," said Jack Spencer, an analyst for the Heritage Foundation, a conservative research center in Washington.

There are other options, too, for generating more nuclear electricity. By upgrading its existing reactors, Exelon expects to gain an additional 1,300 to 1,500 megawatts of capacity. That's about what a new reactor could produce for significantly less money - a total of $3.5 billion. No loan guarantees are needed for these projects, said Marshall Murphy, a spokesman for Exelon's nuclear division.

Clyburn, however, said the nuclear industry deserved help. A former employment counselor, he finds the jobs argument convincing, and he's unimpressed by local opponents who argue that the seven plants in his home state are unsafe. "Every time I talk to somebody about the dangers, they go back to Three Mile Island," he said. "In fact, Three Mile Island did not fail. ... That process worked. So what's the deal?"

Most of all, Clyburn said, he wonders how the U.S. will generate electricity in the future. "I just woke up one day and said, 'Where are you gonna get it?' " he recalled.

There's no telling whether the industry's expensive effort will succeed. Witness the fate of the full-court press a week after Obama's inauguration.

Sen. Robert Bennett, R-Utah, who received $56,000 in nuclear-interest donations from 1999 to 2008, pitched the addition of $50 billion in loan guarantees for the nuclear power industry to the economic stimulus bill. Sen. Byron Dorgan, D-N.D., allowed it; he chairs the energy appropriations subcommittee and has received $190,000 in industry contributions since 1999, nearly half of that in 2007-2008. Although nuclear power plants starting a multi-year licensing process are hardly "shovel-ready," "You take the vehicles you can get," Bennett said in an interview.

The full Senate included the money, but critics protested and the House insisted on removing the loan guarantees from the final version of the bill.

Obama stayed out of the fight. "The president is a very smart guy," Clyburn said. "The Energy Department hadn't given out the (Bush-era loan guarantees of) $18.5 billion. Why tie up $50 billion?"

Since then, Chu has announced talks with four finalists for those guarantees. "That $18.5 billion can only cover three or four, but no more," he told the House energy appropriations subcommittee in June.

He'd be back to ask for more, he added.

* (Pasternak, formerly a reporter for the Los Angeles Times, reported and wrote this article under contract with the Investigative Reporting Workshop, a project of the School of Communication at American University in Washington. Caroline Stetler and Meera Pal of the workshop staff contributed to this report.)

(c) 2010, Investigative Reporting Workshop.

Distributed by McClatchy-Tribune Information Services.

(c) 2009, McClatchy-Tribune Information Services