This weekly newsletter, focused on environmental issues, highlights relevant analysis done by the John Locke Foundation and other think tanks, as well as items in the news.
1. Nuclear Power, a Creature of the State
Commentary
With all the concerns about the safety of nuclear power and whether or not the U.S. should go forward with plans to expand nuclear power in this country, there is one thing that is going completely unnoted–the nuclear power industry is a creature of the state.
Most of the research that gave rise to nuclear power was driven by the government, including research for the atom bomb and Eisenhower’s Atoms for Peace program. The industry is protected from bearing the full liability of any accidents through the Price-Anderson Act, which was put in place when it became clear that insurance companies would not voluntarily insure nuclear power plants. Nuclear power plants are built and run by government-created electric utility monopolies, and they are typically built with government guaranteed loans and paid for by electricity rates that are not set by the market but by public utility commissions.
It’s time to see if the nuclear power industry can make it on its own. If it truly is as safe as people say it is, insurance companies should be perfectly willing to provide insurance without Price-Anderson. If nuclear power is as sound an investment as its proponents say, then the industry should be able to raise all the capital it needs without loan guarantees and other subsidies. I am not taking a position on any of these issues. What I am saying is, take away the subsidies and let the market decide. By the way, we are also going down this same road with wind and solar power. If an industry needs massive government subsidies to get off the ground, it should stay on the ground.
For additional commentary on the current state of nuclear power and its feasibility from a free-market perspective, see here and here.
2. Crony capitalism on the march: Duke Power puts shareholders’ money at risk to subsidize Democrats’ convention
Duke Energy CEO Jim Rogers, a vocal proponent of CO2 taxes and Obama-style global-warming policies, is putting his shareholders’ money where his ideology is. He has pledged that he will use $10 million of Duke Energy money to guarantee loans that are being made to the DNC by Fifth Third Bank to fund the 2012 Democratic National Convention to be held in Charlotte, NC. This means that if the DNC defaults on the loan, the people who hold stock in Duke, not Jim Rogers personally, will be on the hook for the money.
As Paul Chesser of the American Tradition Institute put it:
News reports emphasize that if the DNC defaults on the loan, that Duke’s shareholders and not ratepayers would be on the hook, as though it’s better for those who invested their 401k to lose money for a political cause.
Chesser goes on to point out that:
Duke is also trying to build a new nuclear power plant in South Carolina that would require federal approval, and has plans for others. [Rogers] told the North Carolina Chamber of Commerce two weeks ago:
"As we wait for Washington to break its gridlock and deflate its deficit bubble, we need to continue to modernize our power infrastructure and build more efficient sources of generation…New nuclear generation is an important part of our decarbonization strategy. …"
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