From Time Magazine on the Real Cost of Nuclear: Miami-based Michael Grunwald ... by gimleteye

One lesson of the past decade, in finance as well as nature, is that perfect storms do happen. When nukes are involved, the fallout can be literal, not just political. - Michael Grunwald

Miami-based Time Magazine writer Michael Grunwald offers the point of view that the renaissance of nuclear power is a myth. With such powerful evidence, one wonders why FPL is pursuing two new nuclear power plants at Turkey Point on the back of ratepayers. The answer is: the Florida Public Utilities Commission granted FPL the right to bill ratepayers in South Florida for the costs of planning, putting to work lobbyists and engineers in numbers that defy any opposition. Read, "Why No Nukes? The Real Cost of US Nuclear Power" from last week's Time Magazine, here:

Friday, Mar. 25, 2011
Why No Nukes? The Real Cost of U.S. Nuclear Power
By Michael Grunwald
The chaos at the Fukushima Daiichi nuclear plant — explosions, fires, ruptures — has not shaken the bipartisan support in partisan Washington for the U.S.'s so-called nuclear renaissance. Republicans have dismissed Japan's crisis as a once-in-a-lifetime fluke. President Obama has defended atomic energy as a carbon-free source of power, resisting calls to halt the renaissance and freeze construction of the U.S.'s first new reactors in over three decades.

But there is no renaissance.

Even before the earthquake-tsunami one-two punch, the endlessly hyped U.S. nuclear revival was stumbling, pummeled by skyrocketing costs, stagnant demand and skittish investors, not to mention the defeat of restrictions on carbon that could have mitigated nuclear energy's economic insanity. Obama has offered unprecedented aid to an industry that already enjoyed cradle-to-grave subsidies, and the antispending GOP has clamored for even more largesse. But Wall Street hates nukes as much as K Street loves them, which is why there's no new reactor construction to freeze. Once hailed as "too cheap to meter," nuclear fission turns out to be an outlandishly expensive method of generating juice for our Xboxes. (See pictures of an aging nuclear plant.)

Since 2008, proposed reactors have been quietly scrapped or suspended in at least nine states — not by safety concerns or hippie sit-ins but by financial realities. Other projects have been delayed as cost estimates have tripled toward $10 billion a reactor, and ratings agencies have downgraded utilities with atomic ambitions. Nuclear Energy Institute vice president Richard Myers notes that the "unrealistic" renaissance hype has come from the industry's friends, not the industry itself. "Even before this happened, short-term market conditions were bleak," he tells TIME.

Around the world, governments (led by China, with Russia a distant second) are financing 65 new reactors through more explicit nuclear socialism. But private capital still considers atomic energy radioactive, gravitating instead toward natural gas and renewables, whose costs are dropping fast. Nuclear power is expanding only in places where taxpayers and ratepayers can be compelled to foot the bill. (See pictures of the worst nuclear disasters.)

In fact, the economic and safety problems associated with nuclear energy are not unrelated. Trying to avoid flukes like Fukushima Daiichi is remarkably costly. And trying to avoid those costs can lead to flukes.

The False Dawn
In 1972 a federal safety regulator, worried that GE's Mark 1 reactors would fail in an emergency, urged a ban on containment designs that used "pressure suppression." His boss was sympathetic but wrote in a memo that "reversal of this hallowed policy, particularly at this time, could well be the end of nuclear power" and "would generally create more turmoil than I can stand thinking about." Four decades after this bureaucratic pressure suppression, Fukushima Daiichi's Mark 1 reactors seem to have failed as predicted. And while newer reactors don't have those problems, 23 Mark 1 reactors still operate in the U.S., including a Vermont plant that was relicensed for 20 more years the day before the disaster in Japan.

When Karl Marx, who would have appreciated nuclear economics, wrote that history unfolds first as tragedy, then as farce, he got U.S. nuclear history backward. America's initial experiment was a cartoonish disaster, with construction timelines doubling and costs increasing as much as 1,000% even before the Three Mile Island meltdown. In the 1980s, the industry required bailouts before bailouts were cool. But the U.S. industry has matured and learned from its mistakes. It still runs the world's largest nuclear portfolio, and it hasn't had a serious accident since 1979. Meanwhile, global-warming fears have positioned nuclear power as a proven alternative to fossil fuels that works even when the sun isn't shining and the wind isn't blowing, producing 20% of our electricity and 0% of our emissions. No-nukes outrage has burned out, with a recent poll registering 71% support.

See why Obama's nuclear bet won't pay off.

Read "Nuclear Batteries."

The result has been an extraordinary political coalition. Right-wingers who don't accept climate science and didn't even want the word french in their fries now wax lyrical about French reactors that reduce French emissions. Left-wingers who used to bemoan the industry's radioactive waste and corporate welfare now embrace it as an earth saver. So Congress has approved lucrative subsidies for construction, production, waste disposal, liability insurance and just about every other nuclear cost. It also approved "risk insurance" to compensate utilities for regulatory delays, even as the Nuclear Regulatory Commission (NRC) has worked closely with the industry to streamline its licensing process. And nuke-friendly states have required ratepayers to front the costs of any new construction — even if the reactors are never turned on.

Nevertheless, investors refuse to bet on nukes. The steady increases in electricity demand that were supposed to justify new reactors have been wiped out by the global recession, and energy-efficiency advances could keep demand flat. Natural gas prices have plummeted, Congress appears unlikely to put a price on carbon, and the U.S. still lacks a plan for nuclear waste. It also turns out that building safe places to smash atoms is hard, especially after such a long hiatus. The U.S. has lost most of its nuclear manufacturing capacity; it would have to import Japanese steel forgings and other massive components, while training a new generation of nuclear workers. And though industry lobbyists have persuaded the NRC to ease onerous regulations governing everything from fire safety to cooling systems, it's still incredibly tough to get a reactor built. (See top 20 green tech ideas.)

New nukes would still make sense if they were truly needed to save the planet. But as a Brattle Group paper noted last month, additional reactors "cannot be expected to contribute significantly to U.S. carbon emission reduction goals prior to 2030." By contrast, investments in more-efficient buildings and factories can reduce demand now, at a tenth the cost of new nuclear supply. Replacing carbon-belching coal with cleaner gas, emissions-free wind and even utility-scale solar will also be cheaper and faster than new nukes. It's true that major infusions of intermittent wind and solar power would stress the grid, but that's a reason to upgrade the grid, not to waste time and money on reactors.

Anyway, there aren't many utilities that can carry a nuclear project on their balance sheets, which is why Obama's Energy Department, a year after awarding its first $8 billion loan guarantee in Georgia, is still sitting on an additional $10 billion. A Maryland project evaporated before closing, and a Texas project fell apart when costs spiraled and a local utility withdrew. The deal was supposed to be salvaged with financing from a foreign utility, but that now seems unlikely. (See how fundraising helped shape obama's green agenda.)

The utility was Tokyo Electric.

Another Perfect Storm
Pundits keep saying the mess in Japan will change the debate in the U.S., but the BP and Massey disasters didn't change the debates over oil drilling and coal mining. And the nuclear debate seems particularly impervious to facts. Obama wants to triple funding for the already undersubscribed loan guarantees, but Republicans still accuse him of insufficient nuclear fervor. So don't expect the U.S. to copy German Chancellor Angela Merkel, who just shut down seven aging plants. GOP Senator James Inhofe of Oklahoma has already rejected the idea of "a nuclear problem," suggesting that "once in 300 years, a disaster occurs." That's true if you don't count Chernobyl and you're sure nothing will happen for the next 250 years.

The industry's defenders may ignore Fukushima Daiichi, but the industry will not. It's serious about public safety, and meltdowns are bad for business; no company wants to lose a $10 billion reactor overnight. But additional safety measures cost money: in 2003 industry lobbyists beat back an NRC committee's recommendation for new backup-power rules that were designed to prevent the hydrogen explosions that are now all over the news. (Comment on this story.)

It may sound unrealistic to require plants to withstand a vicious earthquake and a 25-ft. tsunami, but nobody's forcing utilities to generate power with uranium. One lesson of the past decade, in finance as well as nature, is that perfect storms do happen. When nukes are involved, the fallout can be literal, not just political.

This article originally appeared in the March 28, 2011 issue of TIME.