STAFF EDITORIAL: Obama’s nuclear power plants plan needs scrutiny

President Obama’s decision to provide $8 billion in federal loans that guarantee the creation of two nuclear power plants in Georgia seems like a good idea — at first.

Nuclear power plants release zero greenhouse gas emissions and will supposedly cut down on carbon pollution by 16 million tons, equivalent to taking 3.5 million cars off the road, Obama said in his Feb. 16 speech in Lanham, Md.

When the country and Al Gore are decrying global warming and climate change, this will be a step in the right direction.

Obama’s actively reaching out to Republicans, trying to gain their support and construct a bi-partisan plan for climate change.

Also, building two power plants will spur 3,500 temporary construction jobs and create about 850 permanent jobs.

However, this solution to America’s climate woes is fraught with holes.

For one, building power plants is no walk in the park. This will be the first plant built in 30 years, since the 1979 Three Mile Island disaster, when part of a nuclear core melted in Pennsylvania, resulting in the worst nuclear power plant accident in U.S. history.

The nuclear reactors are projected to cost about $14 billion, according to the Wall Street Journal’s Web site.

The U.S. Department of Energy has authorized $18.5 billion in loan guarantees, and the 2011 budget is prepared to triple that amount to cover costs.

And herein lies the problem: When reactors are built and begin to profit, the borrowers will repay banks and pay the federal government a fee. But if the borrowers are unable to repay, the government swoops in and backs them up — with the help of the taxpayer.

And that default number is high. Reports by the Congressional Budget Office and the U.S. Government Accountability Office estimate loan defaults for the power plant could be as high as 50 percent. Yikes.

Power plants typically take a long time to be profitable, and with a 50 percent probability of default and a deepening pit of national debt, Obama needs to take a hard look at what he’s proposing.

Also, the government still hasn’t decided how to dispose of radioactive waste as they plan for a new plant.

Obama aims to close a proposed nuclear waste dump at Yucca Mountain in Nevada, but has no backup plan.

Our country has 70,000 tons of radioactive waste stored in 104 nuclar reactors and 2,000 tons are added each year, according to CNN’s Web site.

If we plan to build more, the country must scrutinize the amount of waste and money involved to see if these factors outweigh the benefits logged. Policymakers must confirm likely gains before taking on more debt for this project.