Saturday, April 21, 2012

Invisible hand not working for the nuclear industry

Bernie Sanders and Ryan Alexander outline sixty years of subsidies for the nuclear industry:

  • $95 billion on nuclear energy research and development (R&D) since 1948
  • unspecified amounts in tax breaks for uranium mining, loan guarantees for uranium enrichment, special depreciation rules, etc
  • $100 billion (estimated) for disposal of radioactive nuclear waste
  • $18.5 billion in taxpayer-backed loan guarantees
  • federal liability insurance that puts the gov on the hook if there is a nuclear plant disaster, estimated cost could be as high as $720 billion just in property damage

Why so much welfare for this industry?  "As secretary of energy Steven Chu confirmed at a recent Senate hearing, without federal liability insurance and loan guarantees, no one would ever build a new nuclear plant."

But why not?  As Sanders & Alexander point out, "The Exelon, which takes in $33bn in revenue annually, is the leading operator/owner of nuclear reactors in the US.  Entergy, with revenues of more than $11bn annually, is the second largest. Together, these two companies own or operate almost one-third of US reactors, and based on their revenue they are doing pretty well."

Why so much welfare in the face of so much prosperity, they want to know...could it be because of these guys or how about these guys?  Entergy spends $4.6 million a year on lobbying and has thirty eight lobbyists.  Wow!  And the latest isn't even listed yet, make that 39.  Exelon has 36, and spends at least $6 million a year lobbying (I don't know how much either pays for things like "historical consultation").  And they've got help: overall, 1,494 clients hire lobbyists to work on nuclear & energy policy.

Sanders and Alexander argue, "[a]fter 60 years, this industry should not require continued and massive corporate welfare. It is time for the nuclear power industry to stand on its own two feet."

Who knows what the industry "requires" in terms of subsidies.  It doesn't matter.  The only thing that determines how much welfare they get is is how much they can spend on lobbying.

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