Pro-nuclear loan program dropped from stimulus

Thursday, February 12, 2009
By H. JOSEF HEBERT, Associated Press Writer

WASHINGTON —  A proposal to increase a loan guarantee program for innovative energy projects by $50 billion has been stripped from the economic recovery package after environmentalists argued it would primarily benefit the nuclear industry.

Sen. Robert Bennett, R-Utah, who had gotten the measure into the stimulus bill as it moved through the Senate, confirmed Thursday that the provision had been removed from the final bill during negotiations between the House and Senate.

Bennett's amendment authorized a more than doubling of an existing $42 billion loan guarantee program established by Congress in 2005 for new technologies that do not emit _ or are designed to capture _ carbon dioxide, the leading greenhouse gas blamed for global warming.

While a broad range of technologies would be eligible, the nuclear industry has been especially aggressive in seeking the loan support. It has submitted requests on $122 billion worth of projects, although the 2005 law capped the amount of loan guarantees for nuclear reactors to no more than $18.5 billion.

Bennett's provision had no limit on how much of the additional $50 billion in loan guarantees could go to the nuclear industry projects.

The issue involved $500 million in actual stimulus package spending. But under congressional budget rules, the $500 million would be enough to support 10 times that amount in actual loan guarantees since the government has to come up with actual money only if a project fails.

Given the Obama administration's strong support for renewable energy, a significant portion of the new loan guarantees likely would have gone for non-nuclear projects, though the nuclear industry clearly stood to benefit from the program's expansion.

Nevertheless, the new loan program prompted intense lobbying by environmental groups and tax watchdog groups who argued that "the vast majority" of the loan support would go for building new reactors and liquefied coal plants with carbon capture _ neither of which would produce imminent jobs.

"The only opposition that erupted publicly was that I had somehow gone into the tank with the nuclear industry," said Bennett. "The anti-nuclear folks raised a significant political attack on the whole program."

But some members of Congress also have expressed concern about the existing loan guarantee program, which has yet to make a final loan decision even though the program has existed since early 2006.

At a Senate hearing Thursday on the program, Sen. Jeff Bingaman, D-N.M., chairman of the Energy and Natural Resources Committee, and Sen. Lisa Murkowski of Alaska, the panel's ranking Republican, both raised the possibility that the program might be better managed by an independent entity and not the Energy Department.

Bennett also may have contributed to the scuttling of his own provision. After getting his amendment into the bill, he voted against the overall economic recovery package when it came up in the Senate. That may have made his provision an easy target as lawmakers looked for ways to trim.

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