WASHINGTON (Reuters) - President Barack Obama plans to propose a tripling of government loan guarantees for new nuclear reactors to more than $54 billion, an administration official said on Friday, a move sure to win over some Republican lawmakers who want more nuclear power to be part of climate change legislation.
The loan guarantees, which follow Obama's pledge in his State of the Union address to work to expand nuclear power production, will be announced as part of Obama's budget proposal on Monday, the official said.
Obama in his State of the Union speech Wednesday called on Congress to pass a comprehensive energy and climate change bill with incentives to make clean energy profitable. "And that means building a new generation of safe, clean nuclear power plants in this country," he said.
Obama, however, is not waiting for Congress to act on climate change. On Friday, the president issued an executive order to reduce U.S. government greenhouse gas emissions 28 percent by 2020.
The government target was based on the combination of individual goals set by 35 federal agencies against an estimated 2008 baseline, the White House said.
Three U.S. senators -- Democrat John Kerry, Republican Lindsey Graham and Independent Joe Lieberman -- are working on a bipartisan bill to cut U.S. greenhouse gas emissions by implementing a nationwide cap-and-trade system that would require utilities, oil refineries and factories to have permits to spew polluting emissions.
To win support for the climate change bill, the legislation would also expand nuclear power and offshore drilling.
"Nuclear energy has long been the drumbeat for Republican lawmakers on how to reduce greenhouse gases," said Josh Margolis, an executive at CantorCO2e, a carbon broker and adviser. "This should help win votes from those lawmakers who doubted the sincerity of those who advocated for climate change goals."
Supporters of nuclear power argue that more reactors will be needed if the United States wants to tackle global warming, because nuclear is a much cleaner energy source compared with greenhouse gas emissions spewed by coal-fired power plants.
However, nuclear power has the problem of radioactive waste, which is now stored on site at reactor locations around the country.
The administration on Friday will also announce formation of a panel to consider the future of nuclear waste storage, including alternatives to a proposed site at Yucca Mountain in Nevada, the official said.
The new loan guarantees, if approved by Congress, would be on top of the $18.5 billion in financial assistance the department already has in its coffers.
The nuclear industry has been waiting for months for the department to dole out those loan guarantees. U.S. Energy Secretary Steven Chu has said he expects to soon award the loan assistance to the utilities preparing to build reactors.
The Energy Department last year narrowed the list of those energy companies likely to receive loan guarantees to four: Southern Co, Constellation Energy, NRG Energy and SCANA Corp.
The United States now has 104 operating reactors, which generate about 20 percent of the U.S. electricity supply.
"If we're going to stay at 20 percent total capacity, which is where nuclear is today, by 2030, then we need between 25 and 30 nuke reactors, and that is pushing the envelope to get that done," said Christine Whitman, who led the Environmental Protection Agency in the Bush administration and now heads the Whitman Strategy Group that advocates for nuclear energy.