Constellation Energy and the French EDF Group say they're committed to building an enormous nuclear-power plant next to the one Constellation already operates at Calvert Cliffs on the Chesapeake Bay. But the $9 billion project looks less and less certain with each month that goes by.
It's not just the delayed Department of Energy review of the government-backed financing. (Without that financing, the unit is dead. Constellation complained last week about the procrastination.)
It's not just the usual political catfight for government resources, although with Calvert Cliffs in his district, House Majority Leader Steny H. Hoyer is a formidable ally.
It's that the very economics of nuclear power look vastly different than they did two years ago. Or two weeks ago, for that matter. It's far from sure that the Calvert Cliffs expansion, proposed by the Constellation-EDF joint venture known as UniStar Nuclear, will proceed even if it gets government money.
"When we get the DOE loan guarantee, that certainly is a major step forward for us," UniStar Chairman Michael J. Wallace said in an interview last week. "We then need to go through calculations on all the other variables to see whether this project can go forward on an economically sound basis. And we have to continue to do that over the next several months."
At stake are thousands of construction jobs, hundreds of permanent jobs to run the unit and 1,600 megawatts of carbon-free energy to ease Central Maryland's electricity shortage and the resulting high prices. Not to mention a significant step in cutting the emissions that are cooking the planet.
People concerned about radiation safety and nuclear proliferation want the project to fail. But don't blame fears of another Three Mile Island if it does. The fault may end up lying with the plant's diminishing chances of making a buck.
The project could be doomed by Congress' refusal to pass climate-change legislation. "We know we don't have the votes," Senate Majority Leader Harry Reid told reporters 10 days ago.
Any climate-change bill worthy of the name would tax carbon-dioxide emissions or cap them and allow emission-permit trading. Either setup would have rendered electricity from traditional, carbon dioxide-intensive coal more expensive and carbon-free nuclear kilowatts more competitive.
But if coal electricity won't be penalized, building nuclear plants is much less attractive for investors such as UniStar — even with government-backed financing. And if Reid doesn't have the votes to pass a climate-change bill now, when Democrats control both House and Senate, he or his successor is unlikely to have them for years to come.
Wallace tries to put a good face on it, suggesting that Washington will find ways to regulate coal plants even without legislation. The dirtiest of fuels, coal, is already under pressure from regulators for producing sulfur dioxide and other air pollution. The Obama administration is trying to regulate carbon dioxide as a pollutant under the Clean Air Act.
But regulations aren't as powerful as a law taxing carbon emissions for all the harm they're doing — a measure, by the way, supported by some Republican economists. (N. Gregory Mankiw, who was the head of President George W. Bush's Council of Economic Advisers, is the most prominent.)
For new nuclear construction, "the only hope was a shrinking cap on carbon and a rising price for CO2," Joseph J. Romm, a former Energy Department official and senior fellow at the Center for American Progress, said in an interview. (Read his blog at ClimateProgress.org.) "New nuclear plants? I don't think many will be built. They're just too expensive."
Oh yeah, expense. Nuclear-plant projects were infamous in the 1970s and 1980s for cost overruns and, in some cases, bankruptcy. Reactors in France and Finland similar to the design that UniStar is contemplating for Calvert Cliffs face construction delays and blown budgets.
Add that element of uncertainty to all the others. Here's one more.
Besides coal, the other major competitor to uranium as an electricity generator is natural gas. Three years (and $600 million in UniStar design and legal costs) ago, when UniStar applied to the Nuclear Regulatory Commission to build the plant, natural gas prices were high and heading higher.
Now they aren't much more than a third of what they were in the summer of 2008. Because of vast new supplies of "shale gas" in previously unrecoverable deposits, some analysts believe prices will stay low for natural gas for years.
That, too, would make nuclear power less competitive. Natural gas is cleaner than coal, and gas-driven electric plants are relatively cheap to build.
Last week Mayo Shattuck, CEO of Constellation Energy, said the government's delay in approving the loan guarantees put the project in jeopardy. The Calvert Cliffs project is one of three nuclear plants in the U.S. on the drawing board. The others are in Georgia and Texas.
The Energy Department has approved loan guarantees for the one in Georgia, but so far Congress has appropriated enough money for only one other. On Friday Hoyer said through a spokeswoman that the administration is "in its final stage" on a decision on the second one.
The holdups "affect the prospects for the Calvert Cliffs project," Shattuck told stock analysts. As a matter of fact, so do all the other factors mentioned in this column. Changing U.S. energy economics caused Constellation's UniStar partner, EDF Group, to take a huge accounting charge on Friday.
The fact that Constellation stock goes down every time it looks like the plant will be approved suggests that even the people who own the company don't want it to happen.