PDF file with letter, signatures and background information (188 KB)
August 11, 2010
Prime Minister Naoto Kan
Minister of Finance Yoshihiko Noda
Minister of Economy, Trade and Industry Masayuki Naoshima
We are writing to share with you the financial risks involved with new atomic reactor projects proposed in the United States. The environment for nuclear construction in the US is highly uncertain - much more so than in the rest of the world. The US has immense renewable energy resources that are truly unparalleled around the world and a larger potential for efficiency gains than in any other industrialized nation. As a consequence of these fundamental marketplace and technology risks, investment in new reactors in the US will remain extremely risky, even if climate legislation is enacted that raises the price of fossil fuels.
Electricity demand has plummeted in the U.S. due to the two-year economic recession. The large projected increases in electricity demand made just a few years ago - which served as the basis for many new reactor proposals - are now highly unlikely to be reached for another decade or more.
At the same time, the US has a host of lower-cost alternatives to meet the need for electricity, even in a carbon-constrained environment. The U.S. has abundant renewable energy resources that are significantly cheaper than new reactors. Estimated costs for constructing new reactors in the U.S. have quadrupled since 2001, while the cost of renewable technologies continues to decrease. Currently, the estimated cost for electricity from a new reactor is 12 cents to 20 cents per kilowatt-hour, compared to 3 cents per kilowatt-hour for efficiency, while several plentiful renewable resources including wind and biomass fall in the range of 5 to 10 cents. Moreover, there is growing confidence in the availability of alternatives. Recent estimates of the natural gas resources have increased dramatically and the price has tumbled and is expected to remain low. Cogeneration opportunities are abundant in the U.S. industrial sector.
Meanwhile, the US uses far more electricity per capita than other industrialized nations, leaving a lot of potential for efficiency to further dampen electricity demand. Climate policy, which may put a price on carbon emissions, will also likely create a very substantial mandate for efficiency technology and renewable energy that will dramatically shrink the need for new, nonrenewable, large baseload generating capacity. It is not only renewable electricity standards and energy efficiency resource standards that will have this effect, but also building codes, appliance efficiency standards, and increases in funding for weatherization retrofitting of buildings.
In addition to the supply- and demand-side risks in the US, significant problems with new reactor designs have meant that none have received final certification from the U.S. Nuclear Regulatory Commission (NRC). Until their reactor designs are certified, no proposed new reactors can receive an NRC combined construction and operating license (COL). Design problems are likely to delay licensing and further increase the costs.
Moody's Investors Service have called new reactors a "bet the farm" investment. Credit rating agencies have downgraded some US utilities proposing to build new reactors. In 2003, the Congressional Budget Office (CBO) estimated the likelihood of default for loans made to nuclear reactor developers to be "very high - well above 50 percent." CBO has not developed a more recent estimate, but the necessary conditions for new reactors have only deteriorated further since then.
Due to Japanese corporate involvement in many of the proposed US reactor projects, it might appear that they would make good investments. The reality, however, is that the projects involving Japanese companies have suffered the same delays, design problems and financial difficulties as other proposed nuclear projects. With decreased U.S. electricity demand, an abundant supply of cheaper alternatives and ongoing design problems, investment in new reactors in the U.S. is simply as bad a deal for Japanese investors as it is for American investors.
Just as we have warned American taxpayers and elected officials about these very serious financial risks, we also urge you to very carefully consider these risks before deciding to invest in new atomic reactors in the United States.
If you have any questions, please don't hesitate to contact Kevin Kamps at Beyond Nuclear, (301) 270-2209 extension 1, as well as Michele Boyd at Physicians for Social Responsibility, (202) 667-4260.
(See PDF file with background notes on financial risk (120 KB))
Sincerely,
Nikos Pastos
Alaska's Big Village Network
Alaska
Lewis Cuthbert
The Alliance for A Clean Environment
Pennsylvania
Rochelle Becker
Alliance for Nuclear Responsibility
California
Jeff Napolitano
American Friends Service Committee Western MA Chapter
Massachusetts
John Runkle
AP1000 Oversight Group
International
Kevin Kamps
Beyond Nuclear
National
Grant Smith
Citizens Action Coalition of Indiana
Indiana
Victor McManemy
Citizens for Alternatives to Chemical Contamination
Michigan
Deb Katz
Citizens Awareness Network
Massachusetts, Vermont, New York,
New Hampshire
David Hughes
Citizen Power
Pennsylvania
Keith Gunter
Citizens Resistance at Fermi Two (CRAFT)
Michigan
Suzanne Miller
Cleveland Peace Action
Ohio
Michael Keegan
Coalition for a Nuclear-Free Great Lakes
Michigan
Bob Kinsey
Colorado Coalition for the Prevention of Nuclear War
Colorado
Donald B. Clark
Cumberland Mountains for Peace & Justice and
Network for Environmental & Economic Responsibility
United Church of Christ
Tennessee
Kathryn Barnes
Don't Waste Michigan
Sherwood Chapter
Michigan
Lynn Sims
Don't Waste Oregon
Oregon
Chris Trepal
Earth Day Coalition
Ohio
Cara L. Campbell
Ecology Party of Florida
Florida
James Robert Deal
Flouride Class Action
Washington
Bob Darby
Food Not Bombs
Georgia
Tom Ferguson
Foundation for Global Community/Atlanta
Georgia
Patricia T. Birnie
GE Stockholders Alliance
Arizona
Christopher LaForge,
Great Northern Solar
Wisconsin
Bonnie Redding
The Green Party of Florida
Florida
Jim Riccio
Greenpeace
National
Joan McCoy
Home for Peace and Justice
Michigan
Lynn Howard Ehrle
International Science Oversight Board
National
Mavis Belisle
JustPeace
Texas
Mark Haim
Missourians for Safe Energy Coalition
Missouri
Jim Warren
NCWARN
North Carolina
Dave Kraft
NEIS
Illinois
Judy Treichel
Nevada Nuclear Waste Task Force
Nevada
Gene Stilp
No Nukes Pennsylvania
Pennsylvania
Nina Bell, J.D.,
Northwest Environmental Advocates
Oregon
Alice Slater
Nuclear Age Peace Foundation
New York
Mali Lightfoot
NuclearFreePlanet.org
Oregon
Michael Mariotte
Nuclear Information and Resource Service
National
Glenn Carroll
Nuclear Watch South
Georgia
Jay Coghlan
Nuke Watch
New Mexico
Ralph Hutchinson
Oak Ridge Environmental Peace Alliance
Tennessee
Lloyd Marbet
Oregon Conservancy Foundatoin
Oregon
Cindy Peil
PAARC (People Against A Radioactive Chesapeake)
Maryland
Ayumi Temlock
Peace Action
Connecticut
Judi Friedman
PEOPLE'S ACTION FOR CLEAN ENERGY, INC
Connecticut
Elena Day
People's Alliance for Clean Energy (PACE)
Virginia
Michele Boyd
Physicians for Social Responsibility
National
Robert M. Gould, MD
Physicians for Social Responsibility
SF-Bay Area Chapter
California
Lewis Patrie, M. D.
Physicians for Social Responsibility
Western , NC Chapter
North Carolina
Mary Lampert
Pilgrim Watch
Massachusetts
E.M.T. O'Nan
Protect All Children's Environment
North Carolina
Tyson Slocum
Public Citizen
National
Judith Mohling
Rocky Mountain Peace and Justice Center
Colorado
Dennis F. Nester
The Roy Process
Arizona
Russell Lowes
www.SafeEnergyAnalyst.org
Arizona
Randy Kehler
Safe & Green Campaign
Vermont
Susan Corbett
Sierra Club Nuclear Issues Activist Team
National
Jill Johnston
Southwest Workers Union
Texas
Maureen Heddington
Stand Up/Save Lives Campaign
Illinois
Ken Bossong
SUN Day Campaign
National
Terry J. Lodge, Esq.
Toledo Coalition for Safe Energy
Ohio
Marylia Kelley
Tri-Valley CAREs
California
Patty Gillis
Voices for Earth Justice
Michigan
Greg Wingard,
Waste Action Project
Washington
Al Gedicks
Wisconsin Resources Protection Council
Wisconsin
Diane Farsetta
Wisconsin Network for Peace and Justice
Wisconsin
Nancy Munger
Women's International League for Peace and Freedom
National
Sara Barczak
Southern Alliance for Clean Energy
Georgia
Nancy Burton
Connecticut Coalition Against Millstone
Connecticut
Bobbie Paul
Georgia Women's Action for New Directions.
Georgia
Vina Colley
Portsmouth/Piketon Residents for Environmental Safety and Security and Nuclear Workers for Justice
Ohio
Gwen DuBois, M.D., MPH
Chesapeake Physicians for Social Responsbility and Crabshell Alliance
Maryland
