Too big a lie to fail

Hillary Clinton is in the Czech Republic trying to convince the Czechs to “buy American”.  Specifically, the secretary of state hopes to win the $10 billion contract for the two new reactors at the Temelin nuclear power station for Westinghouse.  I fought the first two reactors built by Westinghouse at Temelin between 1991 and 1997 in the Czech Republic.

If you read the mainstream media you will find out a number of things about this project.   One of the first things you will discover is if Westinghouse wins this contract it will mean 9000 jobs for the US.  That’s great, right?

U.S. Secretary of State Clinton shakes hands with Czech Prime Minister Necas in Prague

Clinton and Czech PM Necas trade lies

No, it is a lie.  We can tell it is a lie several ways.

First we can look at number of jobs created building other similar plants.  Two Westinghouse units of the same design are being built in Georgia.  Southern Company which owns that plant estimates at the peak there will be 5,000 jobs.  But the vast majority of these jobs are construction jobs.  Temelin will create almost no US jobs in construction.  Just as they did with the construction of the last two reactors, they will hire Czechs and other laborers from eastern European countries.

Second, we can do a little math.  They are saying it will take 5 years to complete this project (it will take longer, but lets pretend it is 5 years).  The average nuclear engineer (which is most of what they Westinghouse jobs will be) makes $80K per year.  9000 jobs * 80K per year * 5 years * 2.5 mark up by Westinghouse for staff is $9 billion dollars or 90% of the estimated cost of the reactor.  Leaving $1 billion for all the construction labor and materials. Nuclear power is a capital intensive industry (meaning the materials are a bigger part of the cost than the salaries).  This number is simply a fiction.

Finally, inside the Czech Republic Westinghouse is telling everyone that 75% of the jobs will be going to local people, not US Americans.  So if the 9000 Americans are supplemented with 27K Czechs and others it will be taking 10 times more people to build these Czech reactors than it does the ones in Georgia.

So why do they tell this lie?  First off, they can get away with it.  Just like the Republicans lied about the number of job Keystone would create (claiming between 20K and 100K, when the actual number was closer to 4000), they assume no one is doing their homework.  And they are largely right.

It is worth pointing out that Westinghouse is owned by the Japanese company Toshiba, so the lions share of the profits from this venture will not be coming to the US at all.

These reactors are likely never to be completed.  In 2011 the Czech Republic exported the equivalent of nearly all of the power for the first two reactors at Temelin to Germany.  In 2012, after closing 8 reactors and dramatically increasing it’s renewables portfolio Germany is significant net exporter of power.  The Czech Republics larges energy customer is gone and is never coming back.

Unfortunately, we will still have to fight them to avoid these costly, dangerous and unnecessary reactors from being built.  Madam Secretary would do well to come home without these US jobs.