Today, the Obama administration is expected to announce the start of a new campaign to ramp up nuclear power production in the U.S. after a three-decade lull. It will begin with an $8.3 billion loan guarantee for Southern & Co. to build two new reactors in Georgia. The endeavor seeks to backstop a total of $55 billion in nuclear power plant loans, according to the President's budget proposal. From what I have read about the project, it sounds like possibly the perfect sort of infrastructure project that the government should be involved in.
I've complained several times about the government making bets on funding business propositions, like electric cars, that have not yet proven their profitability. If the government is going to throw money at something, then the target should be a known quantity. Nuclear power fits that criterion. The U.S. has been successfully using this energy source for a very long time. As a result, we can be fairly certain that such projects will ultimately be profitable and won't need government life support forever.
As far as the endeavor as a jobs effort, this project also gets a good grade. According to Reuters, it will create as many as 3,500 construction jobs. I also saw White House Office of Energy and Climate Change Policy Director Carol Browner on CNBC this morning explaining that the bulldozers are standing by for the go-ahead from the Nuclear Regulatory Commission's green light. In other words, those construction jobs shouldn't take a few years to materialize, but should relatively quickly -- assuming that there aren't significant regulatory hold-ups.
Jobs Now, Jobs Later
And unlike some infrastructure projects like building roads or bridges, this one actually helps job growth in perpetuity. Reuters also reports that it will create 800 permanent jobs in the area. And these aren't any jobs: they're stable, high-paying jobs. So this stimulus effort will result in the kind of real permanent job growth that the U.S. needs.
Probably Not Very Costly
It's also important to note that this isn't a direct funding -- it's a loan guarantee. So long as the project can earn back its costs, the U.S. government may end up spending nothing. It's essentially just making banks more willing to take a risk on the power endeavor. While the taxpayers will ultimately be on the hook if the project goes awry, most government jobs efforts cost taxpayers no matter what. As a result, we should get all this job creation for free.
Preparing For Energy's Future
Finally, as Browner said on CNBC this morning (clip below), this will help continue to expand Americans' use of clean energy. Wind, solar and other green sources are also being targeted by the Obama administration, but it's nice to see nuclear energy in the mix. A few months back, I noted how China is in the process of vastly expanding its nuclear power creation. The U.S. would be crazy to ignore this source. It should serve as a major part of its future energy consumption. With as much energy as the U.S. consumes, it must have a broad, diverse plan to ensure it creates sufficient energy in the years to come.
At this point, I can see really see only one negative about the project: why did it take so long? I would have liked to have seen such an announcement about a year ago. The jobs created by this and similar projects would have helped to employ some of the many Americans who have found themselves unemployed over that time period. And given all of the benefits explained above, projects like this are pretty much a no-brainer.