Democrats split on Trump plan to use development funds for nuclear projects

Democratic lawmakers are split over a Trump administration proposal that would allow international development funds to be used for overseas nuclear projects.

The U.S. International Development Finance Corp. (DFC), a fledgling government fund with an aim to alleviate poverty, has proposed lifting the longtime ban it inherited from its predecessor that bars funding for any nuclear projects.

Proponents say nixing the ban, originally conceived to limit the risks of nuclear proliferation, will allow the U.S. to help provide nuclear power to countries that will need more energy to grow their economies.

But opponents of removing the prohibition see a number of issues arising if the ban is lifted, including how to handle spent nuclear fuel, the potential for money to be funneled away from poorer nations and the challenge of dealing with risky and expensive projects.

“International nuclear power projects described by DFC are not a cost-competitive form of zero-carbon energy, remain unproven, will divert funds from higher-priority low-income countries, and are not supported by other development banks,” Sens. Ed Markey (D-Mass.) and Bernie Sanders (I-Vt.) wrote in a letter to the DFC on Friday.

“DFC financing of overseas nuclear reactors may offshore the physical risks associated [with] nuclear power, but they would keep U.S. taxpayers on the hook for the steep financial ones,” the senators added.

The Trump administration sees the removal of the ban as a way to combat the growing influence of China and Russia, which have sold nuclear technology to other countries.

“America’s broad strategy of energy dominance has a gaping vulnerability,” the administration’s Nuclear Fuel Working Group wrote in an April report. “This reality threatens American energy security, narrows or eliminates foreign policy options and erodes American international influence” in the nuclear market.

Democrats who support lifting the ban argue it could help develop small modular reactors, a form of nuclear energy that is not yet commercially available but promises to be safer and more scalable than traditional large reactors.

Sen. Sheldon Whitehouse (D-R.I.) and Rep. Conor Lamb (D-Pa.) along with seven other Democratic lawmakers, called the ban “outdated because of advances in nuclear technology.”

“This work can help establish the United States as a world leader in transformative energy projects that help address climate change. The DFC can provide financial alternatives to state-directed nuclear investment offered by countries like China and Russia that may leave developing countries burdened with debt,” they wrote in a separate letter to DFC on Friday, arguing the two countries show “less concern about security and non-proliferation.” 

Another top concern about opening up financing to nuclear projects is that the funding would most likely be routed to wealthier nations that are in a better position to begin building nuclear power plants.

“Lifting the DFC’s prohibition against financing nuclear power would likely direct more funding toward wealthier countries, instead of to the countries that the DFC was created to help,” Markey and Sanders wrote in their letter, pointing to Eastern Europe and the Middle East.

“Investments in these countries will divert much-needed funds from low-income and lower middle-income countries which currently lack the capacity and expertise to build, operate, and decommission nuclear projects,” they added. “The DFC should not be dedicating its limited financing to unproven technologies that present both safety and security risks. Pushing experimental research and development is not part of the DFC’s mandate.”

That concern was shared by Democrats in support of lifting the ban.

“We encourage you to prioritize supporting advanced nuclear technology in emerging and frontier markets. The fast-growing economies of Africa, Asia, Latin America, and the Middle East are those most in demand for low-carbon energy and are also the markets for which the DFC was designed to support,” Whitehouse and Lamb wrote.