Obama still wants nukes

March 30, 2011, 1:00 PM UTC

Daniel Poneman of the U.S. Energy Department talks about why the president is committed to nuclear power.

FORTUNE — The Obama administration has remained steadfast in its support of nuclear power, despite the disaster at the Fukushima plant. Fortune’s Tory Newmyer interviewed Daniel Poneman, the U.S. Deputy Secretary of Energy, to understand why.

What role does the administration see nuclear playing in our energy portfolio after the disaster in Japan?

You have to put this in the context of the President’s clear call in the State of the Union address for a new energy policy that will end our dangerous over-dependence on foreign oil and include a significant movement to renewables. We’re very focused on nuclear power in that context as a component of the mix. But we’re not going to pick winners and losers.

If it’s a question of a cost-effective clean-energy mix, why not invest more in renewables in the hope of making them more competitive?

The problem, to begin with, is we don’t now have a price on carbon. The efforts we’ve undertaken through CAFÉ standards and other mechanisms put an emphasis on getting to a cleaner mix. We need to see how it plays out and which cost curves come out the lowest. There have been a lot of innovations, and the American economy has always done best leaving those decisions to investors.

Do the $36 billion in new loan guarantees for nuclear in the President’s budget still make sense? And isn’t the disaster only going to make financing for nuclear more expensive?

We’ll have to see how markets respond over time. The need to get first movers access to financing is the rationale for all loan guarantees, whether nuclear or renewables. The investments we make are conditional commitments. One condition is that unless the Nuclear Regulatory Commission concludes that any reactor is safe to operate, the project will not get the loan guarantee.

How do you ensure public confidence in the safety of the technology doesn’t collapse after an event like this?

Any strategy we’ve got going forward has to enjoy a wide degree of public support. The American people have to believe in its safe operation. We expect a healthy debate. The President has called for a 90-day review. That should be heavily scrutinized, because we need to make sure the public is satisfied with the safety of nuclear power. The industry will be held to a high standard and it should be.

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