America is entering a nuclear “renaissance,” but can we afford it?

In the early morning hours of March 28, 1979, the partial meltdown of the reactor core at Three Mile Island near Middletown, Pa., brought the nuclear power industry in America to a standstill.

Even though no one died and there was only a very small release of radioactivity, the public’s trust in the industry and in the U.S. Nuclear Regulatory Commission that oversaw it evaporated along with the plans for any additional nuclear plants. (It didn’t help that Chernobyl blew up seven years later in the Ukraine, the worst nuclear power plant accident in history, killing some 30 people outright and exposing thousands more to potentially lethal levels of radioactivity.)

“Everyone likes to use Three Mile Island as a milestone,” says Scott Burnell, a spokesman for the Nuclear Regulatory Commission. “It’s reasonable to say that from the time of the accident until 2007 the NRC did not receive any applications to start the licensing process [for a new nuclear power plant].”

Yet, the United States is the world’s largest producer of nuclear power, with 104 nuclear power plants generating nearly a trillion kilowatt-hours of electricity, almost 20 percent of the total electrical production in the country. About half of those plants were completed and went into operation after Three Mile Island. They were already underway when the accident happened, says Burnell, and plans and approvals kept coming through the NRC pipeline until 1996.

More than that, the nation stands today on the brink of a nuclear renaissance, according to Shane Johnson, chief operating officer of the Department of Energy’s Office of Nuclear Energy. Johnson says both utilities and the companies that build nuclear power plants are showing a great interest.

The push for more nuclear power began in 2005 under the Bush administration, whose energy bill that year included $18 billion in loan guarantees for the construction of new nuclear power plants. It didn’t take long for the industry to take notice.

“In 2005 we knew we were going to get applications [for new nuclear power plants],” says Burnell. “People were telling us ahead of time, ‘We’re going to send you an application.’”

By the middle of 2007 the applications began rolling in, topping out last year at a total 26 proposed new reactors. As of today 21 of those reactors are still being actively pursued, according to Burnell, with all but three in the Southeast. Outside the South there are reactors planned for upstate New York, Maryland and Michigan.

Pushing this nuclear renaissance along has been a convergence of big ideas and big issues, including the ongoing catastrophe in the Gulf of Mexico, which has reminded everyone of the terrible price to be paid for fossil fuels. Nukes generate virtually no greenhouse gases, making them the darling of many climate change advocates, and garnering the industry some unlikely allies, like Patrick Moore, a co-founder of Greenpeace, who was quoted saying nuclear energy is “the only large-scale, cost-effective energy source that can reduce [greenhouse-gas] emissions while continuing to satisfy a growing demand for power.” And finally, the Obama administration has embraced nuclear, pledging to triple the $18 billion in loan guarantees put in place by the Bush administration to $54 billion. The expanded program is part of the administration’s fiscal year 2011 budget request, which is before Congress now.

Energy Secretary Steven Chu told Congress during his confirmation hearings last year that nuclear power must be in the mix for America’s energy future, especially given global warming.

“It’s 20 percent of our [total] electricity production today, but it’s 70 percent of the carbon-free electricity we produce,” said Chu.

The first $8.3 billion loan guarantee from the Obama administration went to Southern Co.’s Georgia Power in February. The company plans to build two new reactors adjacent to its existing Vogtle 1 and 2 reactors near Augusta, Ga.

A second $2 billion loan guarantee was announced last month for the Eagle Rock Enrichment Facility to be built near Idaho Falls, Idaho, by AREVA, the French nuclear giant with manufacturing facilities in 43 countries and 75,000 employees worldwide, including 6,000 in the United States. Eagle Rock will supply uranium enrichment services to power plants in the United States.

Not everyone is buying into the renaissance. Critics of the nuclear industry like Ellen Vancko, a nuclear energy and climate-change analyst for the Union of Concerned Scientists, point to the loan-guarantee program as proof the so-called renaissance is fueled by a $650 million marketing and lobbying campaign the nuclear industry has undertaken in the past decade.

“The reality is nuclear power can’t move forward without massive public subsidies and tax breaks,” says Vancko. “Wall Street told [the nuclear power industry] they wouldn’t lend them money without loan guarantees. If the taxpayer doesn’t back up the loans, Wall Street won’t give them, it has said that point blank.”

As a result, Vancko fears the American taxpayer could end up saddled with a bill rivaling the cost of the bank bailout if a nuclear plant has a meltdown or there are massive cost overruns building new plants.

And unlike the Gulf, where President Obama is promising to make BP pay no matter what the cost of stopping the leak and cleaning up in its aftermath, the nuclear industry is protected by a 1957 law, the Price-Anderson Act, which limits the liability for all reactors in the country to about $10 billion.

Vancko says the 1957 law was designed to help a fledgling industry that couldn’t get insurance against accidents in the private marketplace because the risks at the time were so high. And even though in America the track record of the mature industry, except for Three Mile Island, is good, the protection of the Price-Anderson Act remains.

“It’s another example of a subsidy the government provides to make a technology appear viable,” says Vancko. “Loan guarantees and tax incentives create a so-called renaissance, but the renaissance will only occur if the risks are shifted to somebody else.”

With a single reactor now costing roughly $10 billion to build, even the massive subsidies being pushed by the Obama administration won’t go far, says Vancko. She says when the $18 billion loan guarantee program was first implemented by the Bush administration four years ago, it was expected to be enough to fund four new nuclear power plants. But it’s now clear it will only be enough for two. Hence the proposed tripling of the loan guarantee pool by the Obama administration.

Then, says Vancko, there’s the ongoing effort to tack $9 billion in nuclear power plant loan guarantees onto a pending emergency war-funding bill being considered by the House Appropriations Committee. Vancko says the tactic shows just how far some people are willing to go to help out the nuclear power industry.

“What do you do if costs keep escalating wildly? Keep adding to the pot,” she says.

While he declined to respond directly to Vancko’s criticisms, Johnson insists the loan-guarantee program is a temporary measure to restart an industry that has been essentially dormant for 30 years.

“The loan guarantees are seen as necessary at this point to show the private sector can construct and begin operation of these new facilities,” says Johnson. “It’s not seen as something that will go on in perpetuity.”

And it shouldn’t be overlooked, says Johnson, that the companies committing to new nuclear power plants are putting themselves in financial peril, given the “rather expensive” cost of those plants.

“The loan guarantees really are there just to backstop [the companies] in the event, for reasons outside the company’s control, something changes the conditions and they can’t go forward,” says Johnson. “Again [the loan guarantees] are only seen for the first few power plants, not something that will continue on indefinitely.”

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