Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability? 1

Tue, 30 Oct 2007 14:30:00 GMT

The Environmental and Energy Study Institute (EESI) invites you to learn about the loan guarantee provisions in the 2007 energy bills that have passed the House and Senate and await conference (HR. 6/HR. 3221). The Senate bill’s provision would significantly alter how the Department of Energy (DOE) provides taxpayer-funded loan guarantees for new energy technologies, especially to costly nuclear power plants. Section 124(b) of the Senate bill (HR. 6) allows loan guarantees to be given to multiple projects to construct an existing nuclear power design; exempts DOE’s loan guarantee program from Sec 504(b) of the Federal Credit Reform Act of 1990 (FCRA) which allows DOE to write unlimited loan guarantees without Congressional oversight; and gives DOE unfettered access to the Incentives for Innovative Technologies Fund (EPACT 2005) without requiring appropriations or any fiscal year limitation. This provision, if adopted, would eliminate Congressional authority and the safeguards provided through the appropriations process regarding expenditures for these potentially risky projects and shift enormous financial risk from Wall Street banks to America’s taxpayers. The House-passed legislation on loan guarantees is different; it says that no eligible technology can be excluded from consideration from loan guarantees.

Because of the likelihood of delays and cost overruns in building new nuclear power plants, Wall Street banks are unwilling to accept any financial risks for nuclear power loans. Six of the nation’s largest investment banks-Citigroup, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley- recently told the DOE, “We believe these risks, combined with the higher capital costs and longer construction schedules of nuclear plants as compared to other generation facilities, will make lenders unwilling at present to extend long-term credit.” Our briefing panel will discuss whether the loan guarantee provisions constitute a significant taxpayer liability and/or poor governance. Speakers include:

  • Peter Bradford, President, Bradford Brook Associates; former Chair, New York State Public Service Commission and Maine Public Utilities Commission; and former Commissioner, U.S. Nuclear Regulatory Commission
  • Jerry Taylor, Senior Fellow, Cato Institute
  • Jim Harding, CEO, Harding Consulting
  • US Government Accountability Office (GAO)

Not only is the cost to the taxpayers potentially very high, so is the risk. The Congressional Budget Office has said there is a good chance that the DOE will underestimate the costs of administering these loans and that more than 50 percent of new reactor projects will default on their loan repayments, leaving taxpayers at risk. U.S. taxpayers will be fully liable for any potential shortfalls. The nuclear industry ask is $25 billion for FY 2008 and more than that in FY 2009-more than $50 billion in two years. According to the Congressional Research Service, this is more than the $49.7 billion spent by the DOE for all nuclear power R&D in the 30 years from 1973-2003. This is also well over the Administration’s target of $4 billion in loan guarantees for nuclear and coal for FY 2008.

This briefing is open to the public and no reservations are required.

A Climate of Change: Economic Approaches to Reforming Energy and Protecting the Environment

Tue, 30 Oct 2007 13:00:00 GMT

On October 30, The Hamilton Project at Brookings will host a two-part forum on mitigating climate change through market mechanisms and new technologies. In addition to the release of a new Hamilton Project strategy paper, the forum will highlight two new discussion papers on how to best design market mechanisms to reduce greenhouse gas emissions and will include proposals to expand — and possibly restructure — the federal research and development program to better promote the development of new greenhouse gas reducing technologies.

Former U.S. Treasury Secretary Robert E. Rubin and Hamilton Project Director Jason Furman, also a Brookings senior fellow, will open the event with a special award presentation, followed with opening remarks by former U.S. Treasury Secretary Lawrence H. Summers on economic approaches to energy security and climate change—the subject of the new strategy paper.

The new Hamilton Project strategy paper argues that the best way to address climate change is to give the private sector the right incentives to undertake emissions reductions. At the same time, the strategy calls for policies to protect low- and middle-income families from the consequences of higher energy prices.

The two new discussion papers will feature alternate views on how to best harness market forces to protect the environment. Gilbert E. Metcalf of Tufts University will discuss his proposal for a carbon tax and Robert N. Stavins of Harvard University will present his proposal for a cap-and-trade system. John Deutch of the Massachusetts Institute of Technology and John Podesta of the Center for American Progress will also discuss their recent proposal for a new federal research and development strategy, and Richard Newell of Duke University and Resources for the Future will share his ideas for creating science and technology policies that would enable new technologies to work effectively.

Welcome and Special Presentation
  • Robert E. Rubin, Citigroup Inc. and Jason Furman, The Hamilton Project

An Economic Approach to Energy Security and Climate Change

  • Lawrence H. Summers, Harvard University

Panel One

Creating a Green Market: How to Best Price Carbon

  • Moderator: Sebastian Mallaby, Council on Foreign Relations
  • Gilbert E. Metcalf, Tufts University
  • Robert N. Stavins, Harvard University
  • Jason Furman
  • Kathleen McGinty, Pennsylvania Department of Environmental Protection

Panel Two

Warming up to New Technologies: Innovating Our Way To a Stable Climate

  • Moderator: Roger C. Altman, Evercore Partners
  • John Deutch, Massachusetts Institute of Technology
  • John Podesta, Center for American Progress
  • Richard Newell, Duke University
  • Kelly Sims Gallagher, Harvard University
  • David Sandalow, Brookings Institution

Hyatt Regency Regency Ballroom 400 New Jersey Avenue, NW Washington, DC

After Kyoto, Eyes on Bali: Global Climate Change and American Leadership

Mon, 29 Oct 2007 17:00:00 GMT

Senator John Kerry will speak to the Council on Foreign Relations on Monday. His address, “After Kyoto, Eyes on Bali: Global Climate Change and American Leadership,” will focus on the security risks of global climate change and the way forward as the United States approaches the next round of global climate change talks in Bali in December. Sen. Kerry and Sen. Boxer are leading the Senate delegation to this next round of international discussions.

Council on Foreign Relations 58 East 68th Street New York, NY 10021

Climatically-Induced Increases in Water Vapor and Precipitation: Causation and Implications

Mon, 29 Oct 2007 16:00:00 GMT

Moderated by Dr. Anthony Socci, Senior Science Fellow, American Meteorological Society

Speakers
  • Dr. Brian J. Soden, Associate Professor of Meteorology and Physical Oceanography, University of Miami’s Rosenstiel School for Marine and Atmospheric Science, Miami, FL
  • Frank J. Wentz, Remote Sensing Systems, Santa Rosa, CA
  • Dr. Francis Zwiers, Director, Climate Research Division, Environment Canada, Toronto, Ontario, Canada
  • Dr. Benjamin D. Santer, Program for Climate Model Diagnosis and Intercomparison, Lawrence Livermore National Laboratory, Livermore, CA

America’s Climate Security Act of 2007

Wed, 24 Oct 2007 18:30:00 GMT

Visit Hill Heat’s continuing coverage of. S 2191.

The initial draft.

Witnesses
  • Kevin Anton – president, Alcoa Materials Management
  • Frances Beinecke – president, Natural Resources Defense Council
  • William R. Moomaw – director, Institute for the Environment, Tufts University
  • Will Roehm – vice president, Montana Grain Growers Association
  • Paul Cicio – executive director, Industrial Energy Consumers of America

Research to Improve Water-Use Efficiency and Conservation: Technologies and Practices

Wed, 24 Oct 2007 18:00:00 GMT

_Witnesses_
  • Ms. Val Little, Director, Water Conservation Alliance of Southern Arizona
  • Mr. Ron Thompson, District Manager, Washington County Water Conservancy District, State of Utah
  • Mr. Ed Clerico, President, Alliance Environmental LLC
  • Dr. Glen Daigger, Senior Vice President and Chief Technology Officer CH2M Hill

Future of Biofuels

Wed, 24 Oct 2007 13:30:00 GMT

_Witnesses_
  • Adam Gardner – Guster guitarist, singer and founder, Reverb
  • Don Endres – CEO, VeraSun
  • Steve Gatto – CEO, Bioenergy LLC
  • Nathanael Greene – senior policy analyst, Natural Resources Defense Council

Nathanael Greene posts on the hearing:

As I said I would in my last post, I testified yesterday before the House Select Committee on Energy Independence and Global Warming as part of a hearing on biofuels. And Adam Gardner of Guster was sitting there on the witness panel with me. In fact he spoke first and probably the most eloquently.

Adam and his wife started Reverb, a non-profit that helps bands green their tours by helping them use biodiesel in their buses, offsetting carbon emissions, setting up educational eco-villages outside of concerts, and other cool stuff. During his oral testimony, he talked about about how people from band members to students were getting inspired and taking action but also looking to Congress for leadership. I would assume that the transcript of this statement and his written testimony will be available on the Committee web site (link above) soon, I would recommend them to anyone worried about “kids these days” or generally feeling pessimistic.

(If you’re feeling down, don’t read the latest Global Environmental Outlook from UNEP. Here’s a quote from the press release:

It salutes the world’s progress in tackling some relatively straightforward problems, with the environment now much closer to mainstream politics everywhere. But despite these advances, there remain the harder-to-manage issues, the “persistent” problems. Here, GEO-4 says: “There are no major issues raised in Our Common Future for which the foreseeable trends are favourable.”

In addition to Adam's testimony you could also read my recent post on optimism and environmentalism.)

GAO’s Report on the Status of NOAA’s Geostationary Weather Satellite Program

Tue, 23 Oct 2007 18:00:00 GMT

Witnesses

  • David Powner, Director, Information Technology Management Issues, Government Accountability Office
  • Mary Ellen Kicza, Assistant Administrator for Satellite and Information Services, National Oceanic and Atmospheric Administration

The human health impacts of global warming

Tue, 23 Oct 2007 14:00:00 GMT

Contact Bettina Poirier, Democratic Staff Director at 202-224-8832

Witnesses
  • Julie Louise Gerberding – director, Centers for Disease Control and Prevention
  • Howard Frumkin – director, National Center for Environmental Health, Agency for Toxic Substances and Disease Registry
  • Susan R. Cooper – commissioner, Tennessee Department of Health
  • Michael McCally – executive director, Physicians for Social Responsibility
  • Don Roberts – professor emeritus, The Uniformed Services University of the Health Sciences

Archive Webcast

Update: Geberding’s written testimony was censored by the White House; see this post for more.

Garrison Institute Climate Leadership Retreat

Tue, 23 Oct 2007 04:00:00 GMT

Influential leaders will gather for a U.S. Leadership Retreat on Climate Change & a Green Energy Future. This is the second leadership retreat convened by the Garrison Institute designed to help a broad cross-section of leaders and organizations strengthen ties, build the capacity to actually reverse global warming, and coalesce around a positive vision of a prosperous, green and more equitable future.

The emerging climate movement does not lack ideas, leaders, or organizing capacity. It lacks coherence and collective power. Inhibited by institutional imperatives and political constraints, we have not yet aligned ourselves (let alone America!) behind solutions as big as the problem. At the same time, leaders seldom have the chance to pull back from campaigns and projects to take stock of the larger picture together. This retreat has three primary objectives:

  • To create an opportunity for some of the most innovative leaders working on global warming & a green economy to meet, share, and explore new opportunities for mobilizing America for real climate solutions;
  • To shape, develop and advance the 1Sky campaign to its next stage of development;
  • To provide leaders with time to slow down and explore practices that can help deepen vision, gain perspective, and sustain commitment, energy and hope in the face of immense loss.

The retreat will be facilitated by Robert Gass, one of the most gifted facilitators and leadership coaches in the country.

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