Tuesday, February 16, 2010

New York Times Plays Nuclear Gotcha. Badly

Time to reacquaint myself with the mysteries of blogging, and there's no better way to do that than by jumping down the throat of the New York Times, which just lost a finance writer under unpleasant circumstances (Email me, guys, my rewrite skillz are unstoppable. And untraceable).

Behold, the New York Times, on the new nuclear loan guarantees. Southern Company, the utility that Boss Hog from the Dukes of Hazzard would be if he was a utility (See Greg Palast here), has received a guarantee for $3.4 billion in financing for two new nuclear units. For some reason, the Times has managed to inflate that figure to $8.3 billion, maybe by including both potential interest and principal payments, even though Southern is quite clear (pdf) on the number.

But the reporter's most conspicuous boo-boo is right here:

The new aid for the nuclear power industry serves many of the Obama administration’s objectives, helping broaden support for its energy policy proposals, which face obstacles in Congress; helping control emissions of greenhouse gases; and to some extent bolstering employment and domestic energy production.

Mr. Obama said, “Make no mistake: whether it is nuclear energy, or solar or wind energy, if we fail to invest in these technologies today, we’ll be importing them tomorrow.”

But these reactors were designed by Westinghouse, a subsidiary of Toshiba, and many major components will be fabricated abroad. And nuclear power is of limited use in offsetting oil imports.

This is, to say the least, rather unfair. I've been very critical in the past of politicians conflating the debate about how the US generates its electricity with that about where it gets it oil from, since so little of the US generating fleet runs on oil. But Obama didn't say that. Obama, notes the reporter, wants to bolster domestic energy production, without specifying what kind of energy production it wants to bolster. He then notes that Obama says "if we fail to invest in these technologies today, we’ll be importing them tomorrow.

Our reporter took one look at the word "import" and thought he would like to take the president down a peg. He notes, correctly, though huffily, that "nuclear power is of limited use in offsetting oil imports," though he could have said the same about any source of fuel for generating capacity. But Obama was talking about importing technologies, not hydrocarbons. I'm not one for squealing about moments of laisse majeste (as I never tired of saying yesterday, I wasn't allowed to vote for the bugger), but this is weak fuel for a hail of peanuts.

UPDATE: The article has been revised with the gotcha nonsense removed. Fortunately, the reporter has added a new bit of nonsense for me to pounce upon. This time, he's positing the notion that "banks", by which one assumes he means commercial lenders, will be funding the loans guaranteed by the Federal government. WRONG! Lending money to a project with the full faith and credit of the federal government is just not profitable. One can simply buy government debt to earn pretty much the same return with fewer headaches. Soooo, as again the Southern press release makes clear, the actual money for the loan will come from the government-owned Federal Financing Bank. Since the government is taking on the credit risk, it might as well front the cash itself.


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