President Obama's push to expand renewable domestic energy has put him in an awkward position following the explosions at a nuclear plant in Japan and the subsequent leakage of radiation. While Obama can still talk about solar, wind and biofuels, nuclear power is practically the only way to generate reliable and affordable energy without fossil fuels.
Making things more uncomfortable for Obama, three of his most intimate corporate friends -- General Electric, Duke Energy and Exelon -- are deeply involved in nuclear energy.
GE has a direct role in the Japan nuclear fiasco -- the reactors that exploded were GE Mark 1 reactors. The industrial giant is also famously cozy with the Obama administration. CEO Jeffrey Immelt was an early pick for the President's Economic Recovery Advisory Board, and Obama recently tapped him as chairman of his jobs council.
The close relationship between GE and Obama is conspicuous on the policy front, with agreement on bailouts, stimulus, climate policy, health care reform, high-speed rail, wind energy, electric cars, embryonic research subsidies, export subsidies and more.
Now GE runs the risk of being 2011's BP. The United States won't be directly harmed by the radiation from Fukushima, but fear still grips a large swath of Japan. While there were definite Obama-BP connections (Obama booster Tony Podesta was a BP lobbyist and BP also supported cap-and-trade laws), Democrats were able to distance themselves from the oil giant after the spill and even try to pin BP on the GOP. If GE's design is instead found liable for the problems in Fukushima -- and the radiation causes serious harm -- there will be no credible way for Obama to run away from his corporate ally.
While GE may be the Obama administration's closest corporate pal, Duke Energy -- the No. 3 nuclear power company in the country -- is probably the Obama campaign's biggest supporter. The president picked Duke's hometown, Charlotte, for next year's Democratic National Convention in part because Duke CEO James Rogers promised to underwrite the convention -- essentially a pep rally for Obama's re-election -- by guaranteeing a $10 million line of credit. That means that if the DNC Host Committee spends more that it raises, Duke shareholders will make up the difference. It also means the DNC gets to borrow at lower rates than it otherwise would.
Duke, like GE, actively boosts Obama's climate agenda, and, like GE, Duke stands to profit from it.
Duke's Midwest power plants are predominantly coal-powered, but they are regulated utilities with government-granted monopolies -- if cap-and-trade policies drive up the cost of burning coal, Duke just passes the costs on to its captive Midwest customers.
Meanwhile, Duke's plants in the Carolinas are nuclear-powered. Nuclear is the only reliable form of energy (outside of hydroelectric in some regions) with near-zero emissions of greenhouse gasses. Taxing emissions counts as a subsidy for nuclear. Duke is asking the Obama administration for more direct subsidies -- a federal loan guarantee to build a new nuclear plant in South Carolina.
Then there's Exelon -- the country's No. 2 nuclear company. Obama's top political strategist, David Axelrod, was a consultant for Exelon, which is based in Obama's home state of Illinois. Frank Clark, CEO of Exelon's Chicago-based subsidiary ComEd, was an Obama advisor and fundraiser, and Exelon director John Rogers has also raised funds for Obama.
Exelon CEO John Rowe is a vociferous and longtime advocate of climate change legislation. In 2009, Forbes reported that if the Waxman-Markey climate legislation -- supported by Obama -- became law, "the present value of Exelon's earnings stream would increase by $14 a share, or 28%."
Also, the man who brokered the merger that formed Exelon was a Chicago dealmaker named Rahm Emanuel -- later Obama's chief of staff, and now the mayor of Chicago. And this week, a top Obama energy aide left the White House to work at Exelon.
Obama is bound tightly with these nuclear giants, so he could suffer if the anti-nuclear backlash spreads. A March poll by Pew Research showed only 39 percent of Americans support expanding nuclear power in the U.S., down from 47 percent in October.
In his energy policy speech at Georgetown on Wednesday, Obama downplayed nuclear power and pledged to tighten nuclear safety regulations. His energy plan looks like an attempt to dull any edge Republicans might gain from public anger over gas prices or worry about utility bills. The White House calls for more domestic drilling and generally adopts the GOP "all-of-the-above" line, which means subsidizing everything.
His liberal base is displeased with his embrace of oil and "clean coal," but these days Obama needs to run away from his nuclear friends.
Read more at the Washington Examiner: http://washingtonexaminer.com/politics/2011/03/obamas-friends-turn-radioactive-after-japan-accident#ixzz1IwWJiQgC
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