Odds against new US nuclear plants-finance lawyer

Mon Mar 28, 2011 6:21pm EDT

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 By Roberta Rampton
 WASHINGTON, March 28 (Reuters) - Public fears about nuclear
safety stacked up on untenable economics make it unlikely that
any new nuclear reactors will be built in the United States in
the next several years, a lawyer who specializes in energy
project financing said on Monday.
 Even if public opinion were to "snap back" after the
emergency at Japan's Fukushima Daiichi plant -- the world's
worst atomic crisis in 25 years -- nuclear plants cost too much
to build, even with government loan guarantees, said Irving
Rotter, a partner with New York law firm Sidley Austin.
 "The likelihood that the United States will have a nuclear
reactor within the next several years is exceedingly remote --
it was as exceedingly remote before the incident in Japan,"
Rotter told a nuclear policy conference held by the Carnegie
Endowment for International Peace.
 Long before the Japanese plant was battered by an
earthquake and tsunami earlier this month, natural gas was a
far cheaper fuel source for electricity in the United States.
[ID:nN24139785]
 Exelon (EXC.N), an energy utility with nuclear plants as
part of its fleet, said last week that a review of U.S. plants
launched by the U.S. Nuclear Regulatory Commission in the wake
of the Japan disaster could add even more costs, if regulators
step up safety requirements.
 LOAN GUARANTEES COME WITH A COST
 The Obama administration offered loan guarantees to help
secure financing, but the cost of the terms was extraordinarily
high, Rotter said, pointing to the failure of a deal for a
nuclear reactor in Maryland as an example. [ID:nN09265747]
 "Public opinion, which is fairly important both for finance
and the politics underlying nuclear, has moved very rapidly ...
from favoring nuclear power in the United States ... to being
decidedly opposed," Rotter said.
 Other nations with fewer options to nuclear power, or where
governments are more involved in financing plants, may choose
to go ahead with projects, he said.
 But an analyst who has advised five Indian prime ministers
told the conference that the Japanese crisis would weigh
heavily on plans for a series of new reactors in his country.
 "I think it couldn't have come at a worse time for India,"
said Vallampadugai Arunachalam, chairman of the Center for
Study of Science, Technology and Policy in India.
 "This debate is so intense right now," he said.
 The German government backed away from a plan to renew
licenses for aging power plants after the Japanese crisis, an
example of growing "political risk" for the industry, said Mark
Hibbs, a senior associate at the Carnegie Endowment's nuclear
policy program.
 "There is the potential for an enormous amount of damage
politically to this energy sector ... because of the wave of
recriminations that is going to arise about who is ultimately
responsible for this," Hibbs told the conference.
 It will take months before regulators and the nuclear
industry have enough facts about what went wrong at the
Japanese plant to make firm conclusions about what lessons to
draw, said Richard Meserve, a former chairman of the U.S.
Nuclear Regulatory Commission.
 "I think it's premature to be able to judge whether this
was such a failure that we ought to just decide we just can't
do this," said Meserve.
 "I don't think this will be the end of nuclear, presuming
that they get the reactors under control," he said.
 (Editing by Dale Hudson)






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