The 30-year itch

IN HIS state-of-the-union message last month, Barack Obama said that America needs “an all-out, all-of-the-above strategy that develops every available source of American energy.” Mr Obama boasted about a wind-turbine factory in Michigan, America's abundant supplies of natural gas and the millions of acres opened for oil exploration. He urged Congress to pass tax incentives for energy efficiency and clean energy and to end oil-company subsidies.

But Mr Obama made no mention of nuclear energy, even though America's 104 nuclear reactors provide around one-fifth of its electricity, and even though the Nuclear Regulatory Commission (NRC) was poised to approve, for the first time since the Three Mile Island accident in 1979, the construction of a new nuclear reactor on American soil. It duly did so on February 9th, giving its first-ever combined construction and operation licences to the Atlanta-based Southern Company to build two new reactors at Plant Vogtle, in eastern Georgia, where they will join two existing reactors that have been in operation for 25 and 23 years. Southern Company got $8.3 billion in federal loan guarantees for the Vogtle expansion, and it expects the new reactors to begin operation in 2016 and 2017. This will be the among the largest construction projects in Georgia's history, representing capital investment of $14 billion and bringing the state, by the firm's estimate, 3,500 construction jobs and 800 permanent jobs.

Some claim that the Georgia decision heralds a nuclear renaissance in America. Another four reactors—two in South Carolina and two in Florida—are up for NRC approval this year, with the South Carolina decision just weeks away. The coal industry may be fighting new federal emissions standards, air-pollution regulations and even the idea of carbon pricing, but those things are all a boon for carbon-free nuclear power. Steven Chu, America's energy secretary, has called nuclear power an essential part of America's energy portfolio, and has been vocal about the administration's commitment to “restarting the American nuclear industry”. In 2009 Lamar Alexander, Tennessee's senior senator, called for 100 new reactors to be built by 2030. The following year Mr Obama proposed tripling the nuclear loan-guarantee programme to $54 billion. Mr Obama's proposed budget for fiscal 2013 (which begins this October) includes money to fund research into advanced small “modular” reactors.

Still, nuclear power faces strong headwinds. A poll taken last year showed that 64% of Americans opposed building new nuclear reactors. The NRC's last new reactor approval predates Three Mile Island, Chernobyl and Fukushima, all of which dented public support (and not just in America either: nuclear power supplies three-fourths of France's electricity, yet in one poll 57% of French respondents favoured abandoning it). America's anti-nuclear movement has been as quiet as its nuclear industry, but as one comes to life so will the other.

Already a consortium of nine environmental groups plans to contest the Vogtle licence in court, alleging that the NRC violated the National Environmental Policy Act by failing fully to consider the environmental impact of the new reactors. Mindy Goldstein, who heads the Turner Environmental Law Clinic in Atlanta and is representing the nine groups, said that the NRC failed to “consider the implications of Fukushima” before issuing its licences.

That position echoes one taken by Gregory Jaczko, the NRC's chairman, and the only one of its five members to dissent from the commission's approval of the Vogtle plants. “I simply cannot authorise issuance of these licences”, he wrote, “without any binding obligation that these plants will have implemented the lessons learned from the Fukushima accident before they operate.” In its approval, the NRC noted that it could not yet issue any Fukushima-derived safety requirements because its “review of recommended actions associated with lessons learned from the Fukushima Dai-ichi events is ongoing.” The NRC has the authority, however, to force compliance with future requirements as and when they are issued.

Safety, then, may well result in delays and cost-overruns: two factors not entirely unfamiliar in building nuclear plants. The cost of Vogtle's first two reactors was initially pegged at $660m; they ended up costing a cool $8.7 billion, with electricity rates for Georgians spiking as a result. A study by Mark Cooper, an economic analyst at Vermont Law School's Institute for Energy and the Environment, found that in constant dollars the cost of nuclear power roughly quintupled between the 1970s and the early 1990s. Mr Cooper also found that initial cost projections tended dramatically to underestimate actual costs, as the Vogtle experience would seem to bear out.

That is only part of the problem. Last August, when the head of America's largest nuclear utility said that this was not the time to build new nuclear plants, the main reason he gave was not political opposition or the threat of cost overruns, but the low price of natural gas. “Shale [gas]”, said John Rowe, head of Exelon, “is good for the country, bad for new nuclear development.” The Energy Information Administration, a statistics agency, forecasts that shale-gas production will nearly triple by 2035, keeping its production cost at a stable and economical $5 or so per thousand cubic feet until the end of 2023. Nuclear power, after all, needs to compete against other energy sources. That being so, Mr Rowe put the odds of a real nuclear renaissance at 5:4 against.