Yucca’s demise to cost Nevada

The Obama administration and the state's congressional delegation have vowed to financially bleed the decades-old Yucca Mountain nuclear waste project, but doing so probably will cramp Southern Nevada's already hurting economy.

That's the observation of University of Nevada, Las Vegas economics professor Keith Schwer. He directs The Center for Business and Economic Research at the university and co-authored a 2003 report on the project's economic impact in the state.

"Obviously if you close all of that down, you're not going to have those direct dollars coming into Nevada," Schwer said Thursday. "That translates into an adverse economic impact."

Money trickling into Southern Nevada from the Department of Energy's spending on salaries, office space, subcontractors and equipment amounts to a fraction -- roughly 2 percent -- of what is generated from the tourism and gaming industries. Nevertheless, shutting down the project is not helping the sagging economy and housing market recover, Schwer said.

And laying off workers, such as the 500 project employees who lost their jobs this year because of DOE funding cutbacks, acts as a negative multiplier in the economic equation by contributing to unemployment and increasing home vacancies.

If scientists, engineers and support staff leave the area in search of new jobs, they take with them the money they would otherwise be spending in the Las Vegas Valley on everything from groceries to new cars.

"That is the fundamental point," Schwer said.

Nevada officials who have strategized against the Yucca project have said they are sympathetic to job losses.

But the cause of killing the repository, which they see as deeply flawed and dangerous, is bigger than the workers, who they said should not be surprised the end finally might be near.

Senate Majority Leader Harry Reid on Jan. 14 declared, "Yucca Mountain is not a jobs program."

In a later interview, Bruce Breslow, the new executive director of the Nevada Agency for Nuclear Projects, said Yucca Mountain is "going to be a nuclear cemetery," and not a boon for high-paying jobs in science and university programs.

The Yucca work force has been halved in the past three years, from about 2,750 to 1,400, according to DOE. About 1,120 work in Nevada, with most of the remainder in Washington.

From 1983 through last year, DOE spent $6.4 billion to study Yucca Mountain as the national site for entombing 77,000 tons of spent nuclear fuel from commercial power reactors and highly radioactive defense waste. Most of that was spent in Southern Nevada to administer the project, drill a 5-mile exploratory tunnel in the mountain, pay salaries and conduct research.

In all, $10.6 billion was spent nationwide on the nuclear waste program during those years. About $7 billion of that came from a fund by nuclear utility ratepayers and about $3.5 billion from separate Defense Department appropriations to pay for storage of the military's nuclear waste.

In 2000 alone, the Yucca Mountain Project contributed $195.7 million to the state's economy and accounted for 3,650 jobs, according to the center's 2003 report.

That means another $131 million in disposable income was stimulating the state's economy. The figure and its multiple effects on the economy increased until studies were completed and the program was scaled back last year while DOE submitted its license application to the Nuclear Regulatory Commission for constructing the repository.

In the last year of George W. Bush's administration, DOE sought $494 million for the whole nuclear waste program but only $386 million was approved under a continuing resolution.

After Barack Obama became president on Jan. 20, Congress later approved only $288.4 million for the project through the end of the fiscal year on Sept. 30, primarily so DOE can answer questions about the license application for nuclear regulators. Most of that money, about 80 percent, will be spent in Nevada. The NRC's licensing board can take up to four years to review the application before the commission decides on granting a license.

For comparison, Schwer estimates the Yucca Mountain Project's economic potential amounts to less than $24 million per month, while in February, Clark County gaming revenue was $710 million, down 17 percent from a year ago.

"We're talking about millions, not billions, each year."

Contact reporter Keith Rogers at krogers @reviewjournal.com or 702-383-0308.