According to a Reuters article published on October 12, 2007, the “No Nukes” trio of Bonnie Raitt, Jackson Browne, and Graham Nash have gotten the old band together again to play protest songs like “For What It’s Worth”. The song has been remade with some new words about $50 billion dollar subsidies (referring to the loan guarantee provisions of the Energy Policy Act of 2005 as revised).
Brown, Nash, and Raitt have recruited some new members for their band. Keb’ Mo and Ben Harper have added some younger faces and new life to the grey haired trio of early baby boomers. (I am a baby boomer myself, but just barely.) They are using modern communications tools starting with a YouTube video titled Stop The Nuclear Bailout – NukeFree.org.
The song is well produced and these well known faces have their one liners – provided by the anti-nuclear industry – down pat.
They have even seized on the one aspect of the second Atomic Age that makes me a bit uncomfortable – the fact that there will be a tremendous amount of money moving with taxpayer assistance without the taxpayers having the equity.
I fully understand the need for some assistance in putting together the capital packages necessary to rapidly build up an industry that can make a real difference in the battle against climate change and I applaud the nuclear industry leaders for laying down the groundwork to make that happen. As the anti-nuke quint correctly states – “There something happening here.”
My issue is that even the early start plants in the second Atomic Age are going to make a ton of money if they are well built and operated. They will, like the first generation plants, achieve high capacity factors and low operating costs. Many of them will be selling their power into less regulated markets where the price is determined by the cost of generating power using natural gas, so there will be a 200-300% margin between their operating costs and the wholesale price.
With margins like that the plants will be able to recoup their capital costs and pay off their guaranteed loans. With a lot of skill, hard work, and a little good fortune there will be no cost to the taxpayers. That’s the good news. The bad news is that there will also be less return than there should be. The major portion of the gains will go to the big players, the ones that are already members of the 1% of Americans who together captured more income last year than the bottom 50% did.
They will deserve some of that gain, but since they are demanding that part of their risk be accepted by the taxpayers, the taxpayers should get a larger stake. If they want to keep all of the equity, the big boys should keep all of the risk.
I know there will be some taxes paid, but recent history tells me that the players will arrange to make those as low as possible by demanding local property tax waivers, capital gains treatment of what looks like income to many people, and perhaps even some way of off-shoring some of the income.
By the way, there is a company that is out there trying to show how to build new nuclear plants that are small enough and simple enough to be done without subsidies or loan guarantees. The key is in keeping the initial investment small enough so that major companies would not have to bet the farm in order to build a few plants and get the industry moving again. Shameless plug – that company is called