White House Chews on Chu’s Nuclear Budget

By Kennedy Maize

Energy Secretary Steven Chu can’t serve two masters, only one: the White House. Chu is going learn that truth, in an ongoing battle between DOE and the Office of Management and Budget. Predictably, the showdown between the entrenched bureaucracy and industrial interests that Chu serves daily and the political administration he serves ultimately has come over nuclear energy research. Chu will lose, unless the White House wants him to win.

The Energy Daily has reported that, in the traditional federal budget kabuki that characterizes this time of the year, Chu has objected to the “pass back” budget document from the White House’s OMB. The pass back, which came last December, was the OMB’s final version of the DOE budget that the administration will present to Congress sometime in February.

Chu’s lament is that OMB doesn’t look kindly on DOE’c spending desires for non-traditional nuclear technologies. In particular, according to The Energy Daily account, based on DOE documents almost certainly leaked to the newsletter by the agency, Chu is irritated that OMB doesn’t support the agency’s requests for “fast reactor” research (we’re talking liquid sodium cooled, fast neutron breeder reactors), and for small, modular light-water technology.

The “fast reactor” funding is the crux of the dispute, according to my sources with close ties to OMB. The nuclear power industry, led by GE-Hitachi, is pushing a revitalization of sodium-cooled fast neutron breeder reactors, touting their ability to process nuclear waste into plutonium fuel. GE-Hitachi have long been touting their machine, dubbed PRISM, aiming for substantial DOE R&D support. That orchestrated campaign has included an entirely credulous article in a recent issue of Esquire magazine, touting liquid metal fast breeder reactors as the next great thing in nuclear power. That, of course, is bogus.

The Energy Daily story noted, “Chu’s letter did not explain the rationale for OMB’s proposed nuclear R&D restrictions, which are surprising on several fronts and which appear likely to harden perceptions among industry officials and others that the administration is fundamentally anti-nuclear.”

Let’s deconstruct that run-on sentence. Surprising? On what fronts? Sodium-cooled reactors using fast neutrons to breed plutonium have been a dream of the world nuclear industry for over 50 years. They have never worked at a commercial scale. Just reference Detroit Edison’s Fermi 1 plant, Japan’s Monju, France’s Superphenix. All failures. There’s no surprise in the OMB decision that it has better things upon which to lavish federal dollars.

Liquid sodium coolant has great thermal properties, but it’s nasty as a snake to deal with in terms of chemistry. It’s corrosive, and it catches on fire and explodes if it leaks from reactor coolant systems. That’s what happened at Monju. Leaks also shut down Superphenix, touted as the exemplar for future breeder reactor plants.

The U.S. Congress more than 25 years ago pulled the plug on the Clinch River (Tennessee) Breeder Reactor. It was a wise decision to kill an outrageously expensive project with little hope of success. Ironically, the Democratic Carter administration proposed to kill the project in 1977, but a Democratic Congress refused. When Republican Ronald Reagan became president, he pushed the project in a big way. Congress, despite a Republican Senate led by Tennessee’s Howard Baker, terminated Clinch River in late 1983. I covered the whole fight on a daily basis, writing for Congressional Quarterly and The Energy Daily.

Despite the breeder’s failures, the nuclear industry hasn’t given up. Steven Chu has fallen into a trap that has ensnared many of his predecessors. He’s apparently concluded that his job is to represent the views of his industry constituents. His decision, says The Energy Daily, could “harden perceptions among industry officials and others.” So what? That’s not who Chu works for. His boss lives at 1600 Pennsylvania Avenue. Obama was elected by a majority of the American voters. Obama hired Chu.

Is the Obama administration “fundamentally anti-nuclear?” I doubt it, although there are elements of the administration for whom that shoe fits. But ask Exelon’s John Rowe if Obama is “fundamentally anti-nuclear.” And how does opposition to spending on low-priority, low potential payoff R&D constitute fundamental opposition to nuclear power? Simply put, that analysis by folks in the industry is brainless, or self-serving, or both.

When he picked Chu for DOE secretary, Obama was buying a reputation to burnish his new administration – Nobel laureate in physics – and an unknown quantity. The guy had never played in big-time energy politics, which may have been a good thing. But now he’s exposed to the real world, not the Alice in Wonderland environment of the DOE national labs.

So far, Chu has chosen to make the fight for DOE’s traditional constituents, going up against OMD Director Peter Orszag, who’s every bit as smart as Chu and has a lot more heft in terms of administration politics. Chu’s move is no surprise, but unwise.

My bet is on Orszag. In these disputes between DOE secretaries and OMB directors over budget submissions and spending priorities, OMB has won every time.