Look Before You Leap on Nuclear Energy

In his Townhall column, John Stossel cites my Cato colleague Jerry Taylor as he explains that nuclear energy may not be viable without government subsidies.

President Obama recently announced $8 billion in loan guarantees for nuclear power plants. I smiled when I heard. Finally, even Democrats woke up to the benefits of nuclear power. But Cato Institute energy analyst Jerry Taylor set me straight: "If nuclear power made economic sense, we wouldn't need to subsidize it." Affordable nuclear power, says Taylor, is a Republican fantasy. Promoting it makes no more sense than Nancy Pelosi's promotion of wind and solar power. "Take a Republican speech about nuclear power, cross out the phrase 'nuclear,' and put in 'solar' -- you've got a Democratic speech about energy." ...I thought the only reason that nuclear didn't pay for itself is the burden of excessive regulations and objections from silly environmentalists. Apply for permission to build a plant, and their cumbersome lawsuits impose ruinously expensive delays. Again, Taylor set me straight. He says the nuclear industry itself is comfortable with today's level of regulation. The big problem today is not environmental rules, but simply the huge cost. The same high costs, he says, are found in countries that have long been friendly to nuclear power. He also notes that when the Department of Energy proposed offering to guarantee 80 percent of the cost of new nuclear plants, the big investment banks told the department that even 80 percent loan guarantees wouldn't be enough. They needed 100 percent guarantees, or they wouldn't make the loans. "To me that's a market verdict that you're supposed to respect. ... We need to leave these (matters) to markets. And in the marketplace, investors will not spend a single red dime on nuclear power because it's too expensive. ... It's not Jane Fonda or Greenpeace that killed nuclear power. It's Wall Street investment banks who've looked at the bottom line."