The government's role in the energy marketplace is clear in its loan-guarantee programs. This year, the Energy Department proposes to provide $166 billion in federal energy loan guarantees to aid the ailing auto industry and help finance nuclear, coal, and renewable energy projects. Sadly, the nuclear industry is slated to get the largest-and riskiest-share of that support.
Wall Street has refused to finance nuclear power for more than 30 years, rendering new construction impossible. The Obama administration, in a move to placate Senate Republicans, proposes to fund new power reactors with some $54.5 billion in federal loan guarantees. Because of the way the guarantees are structured, the actual loans will be made by the Federal Financing Bank out of the U.S. Treasury.Last year, the Government Accountability Office estimated that these loans have more than a 50-50 chance of failing. Because of skyrocketing costs, these loans might pay for five reactors-and merely expand the nation's electrical supply by less than 1 percent.
Meanwhile, the Obama administration is moving to terminate funds for the Yucca Mountain nuclear waste disposal site in Nevada. After nearly 30 years of trying, disposal of high-level radioactive waste is proving to be extremely difficult, so Obama has convened a "blue ribbon" panel of experts to recommend what to do with it. The accumulation of spent power-reactor fuel poses new safety issues, which will be the reality for several decades to come. Spent fuel pools-which currently contain about four times what their original designs envisioned-are more vulnerable to terrorist attacks than reactors.
Meanwhile, despite Obama's rhetoric about reshaping America's energy future, he's asking for a budget that would have the Energy Department continue to spend 10 times more on nuclear weapons than energy conservation.
Even with economic stimulus funding, the department's actual energy functions comprise only 15 percent of its total budget and continue to take a backseat to propping up the nations' large and antiquated nuclear weapons infrastructure. In fact, the Energy Department's proposed budget for the 2011 fiscal year, minus stimulus money, looks a whole lot like it did in the Bush administration, and as it has during several presidents' tenures.
There's currently a 15-year backlog of discarded nuclear warheads. Yet, Obama's proposed budget would halve spending on weapons dismantlement over the next five years. The physical elimination of nuclear weapons continues to have a low priority in Obama administration because it competes for funds to build a new weapons production complex-a "holy grail" of the nuclear weapons establishment.
The Energy Department faces a brave new world in which, for the first time, it is being called on to employ millions of Americans to create a new energy future for the United States. It doesn't appear that the Obama administration will meet this challenge. Instead, more of the nation's tapped-out treasure is going for costly nuclear power, and nuclear weapons we don't need and could never use.
Robert Alvarez, an Institute for Policy Studies senior scholar, served as senior policy adviser to the Energy Department's secretary and deputy assistant secretary for national security and the environment from 1993 to 1999. www.ips-dc.org