Atomic Economics

Fifty years ago the pushers of the "Peaceful Atom"---including Lewis Strauss, Chairman of the Atomic Energy Commission---promised electricity that would be "too cheap to meter."  The pledge has turned into the biggest lie in U.S. financial history.  Far from being cheap or reliable, nuclear power plants have drained the American economy of hundreds of billions of dollars.  That money could have financed green power sources that would have avoided the global warming crisis and freed the US from dependence on foreign energy sources.

The key decision was made in 1953.  A year earlier, Harry Truman's Blue Ribbon Paley Commission reported that the future of American energy was with renewable sources.  Predicting 15 million solar-heated homes by 1975, the Truman Administration knew that our best route to energy independence and economic security was with green power.

In 1953, Bell Laboratories made an historic breakthrough, perfecting photovoltaic (PV) technology to the point that cells made of silicon could transform sunlight into usable electric current.  The first cells were used to power space satellites.  But the prospect of making homes and offices energy self-sufficient with PV rooftop installations was a monumental moment in technological history.

In an essentially military decision, Dwight Eisenhower chose nuclear power instead.   Pledging to share the Peaceful Atom worldwide, Eisenhower turned the US away from green power.

But even with huge government subsidies, no utilities would step forward to build Ike's atomic reactors.  So in 1957, Congress passed the Price-Anderson Act, which made the taxpayer and the victims of any potential disaster the ultimate insurers.  The industry promised that improving technology would entice private insurance companies to take the risk.  But after fifty years it hasn't happened.  And despite today's hype about new designs, no private company will assume the risk for new reactors either.

Through the ensuing half-century, atomic reactor construction was defined by epic cost overruns and delays.  The two reactors proposed in the 1960s for Seabrook, New Hampshire for a total of $250 million turned into one for $7 billion, decades late.  Long Island's $7 billion Shoreham operated briefly, then shut.  Overall, Forbes compared the losses on nuke power to "a commitment bigger than the space program ($100 billion) [and] the Vietnam War ($111 billion).  The scale of the "collapse" was "appalling."

During the deregulation crisis of 1999-2001, the industry took more than $100 billion in "stranded cost" payouts from state and federal sources.  Reactor owners argued that nuclear power was too expensive to compete in a deregulated market, and that they were owed compensation for having risked their capital on an experiment that failed.

Today the nuclear industry says all that is behind them, and that a "new generation" of reactors will somehow reverse a half-century of catastrophic economics.  But in Finland, the first of these plants is already two years behind schedule and $2 billion over budget. 

And the renewable energy industry on which Eisenhower turned his back on 1953 has come of age.  Wind power is far cheaper than nukes, can be installed quickly, and helps solve rather than worsen the global warming crisis.   Solar, bio-fuels, efficiency and conservation all have investors lining up for them, without the need for taxpayer guarantees or government-backed catastrophic liability insurance. 

To invest in nukes is to throw still more good money at a bad technology.  Those who do so guarantee us all fifty more years of economic chaos and energy shortfalls.


Daniel Ford
The Cult of the Atom

Rocky Mountain Institute

The Union of Concerned Scientists

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