UPDATE 5-Obama seeks to boost nuclear power in new budget

* White House seeks to triple nuclear loan guarantees

* Move aimed at winning over Republicans on climate bill

* Senators working on climate bill with more nuclear power
(Adds comments from senators, environmentalist)

By Tom Doggett and Matt Spetalnick

WASHINGTON, Jan 29 (BestGrowthStock) – President Barack Obama’s
budget proposal will call for tripling government loan
guarantees for new nuclear reactors, 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 $54 billion in loan guarantees, which follows Obama’s
pledge in his State of the Union address to expand nuclear
power production, will be announced as part of Obama’s proposed
2011 budget that will be sent to Congress on Monday.

Obama on Wednesday called on Congress to pass an 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.

“As the world moves to tackle climate change and diversify
our national energy portfolio, nuclear energy will play a vital
role,” said Carol Browner, who advises the president on energy
and climate change issues.

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.

Lieberman’s spokesman said the senator believes increasing
the nuclear loan guarantees “will help engage supporters of
nuclear power from both sides of the aisle in the ongoing
conversation about energy independence and pollution
reduction.”

Kerry sees the administration’s new loan guarantee
initiative “as an important sign of the White House’s
commitment to addressing climate change and advancing clean
energy goals,” the senator’s spokesman said.

“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. “This
should help win votes from those lawmakers who doubted the
sincerity of those who advocated for climate change goals.”

Senator Lisa Murkowski, the top Republican on the Senate
Energy Committee, said the extra loan guarantees were “a good
first step toward expanding our use of clean nuclear energy.”

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.

“Every new nuclear power plant built would be a step
backwards when it comes to solving global warming,” said Anna
Aurilio with Environment America.

The administration on Friday also announced a 15-member
commission to consider the future of nuclear waste storage,
including alternatives to a proposed site at Yucca Mountain in
Nevada, which the administration opposes.

The panel will be headed by former congressman Lee Hamilton
and former National Security Advisor Brent Scowcroft. The
commission will produce an interim report within 18 months and
a final report within 24 months.

The new loan guarantees, if approved by Congress, would be
on top of the $18.5 billion allotted by the department.

The nuclear industry has been waiting for months for the
department to dole out those loan guarantees.

The Energy Department last year narrowed the list of those
energy companies likely to receive loan guarantees to four:
Southern Co (SO.N: ), Constellation Energy (CEG.N: ), NRG Energy
(NRG.N: ) and SCANA Corp (SCG.N: ).

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.

Investing

(Additional reporting by Timothy Gardner and Richard Cowan;
editing by Jim Marshall, Walter Bagley and Lisa Shumaker)

UPDATE 5-Obama seeks to boost nuclear power in new budget