Kill 25 million Americans = $300 million fine

If you think financial deregulation was bad, consider our aging nuclear plants!

America has over 100 aging nuclear power plants. Since the risk of a nuclear plant disaster is mostly borne by the public at large — rather than owners of the plants — owners have insufficient incentives to monitor safety.

Nuclear plant operators' incentive to monitor is much lower still because they can’t even lose the value of their investment. The Federal Government caps nuclear firms' liability at just $300 million. So, even if a reactor melts down and kills tens of millions of Americans, its operator would be liable for only $300 million:

The [Price-Anderson Act] helped encourage private investment in commercial nuclear power by placing a cap, or ceiling on the total amount of liability each holder of a nuclear power plant license faced in the event of a catastrophic accident. Over the years, the “limit of liability” for a catastrophic nuclear accident has increased the insurance pool to over $10 billion.

Under existing policy, utilities that operate nuclear power plants pay a premium each year for $300 million in private insurance for offsite liability coverage for each reactor unit. This primary insurance is supplemented by a second policy. In the event a nuclear accident causes damages in excess of $300 million, each licensed nuclear reactor would be assessed a prorated share of the excess up to $95.8 million.

So, if a reactor has, say, a 1% probability of melting down, its operator would be (financially) foolish to spend more than $3 million eliminating the risk because cutting a 1% risk down to a 0% risk is worth — to the plant owner — only 1% of $300 million. Cutting the risk in half is worth just $1.5 million.

Given such disincentives to identify and fix safety risks, it’s imperative our government force nuclear reactor owners to undertake adequate inspections and repairs. But our government has instead been letting nuclear power plant firms ignore the growing risks. Three incidents in just the past two weeks make clear the very real dangers we face:

1) From today’s New York Times:

The discovery of water flowing across the floor of a building at the Indian Point 2 nuclear plant in Buchanan, N.Y., traced to a leak in a buried pipe, is stirring concern about the plant’s underground pipes and those of other aging reactors across the country.

A one-and-a-half-inch hole caused by corrosion allowed about 100,000 gallons of water to escape from the main system that keeps the reactor cool immediately after any shutdown, according to nuclear experts.

…It has raised concerns about the monitoring of decades-old buried pipes at the nation’s nuclear plants, many of which are applying for renewal of their operating licenses. Indian Point 2, whose 40-year operating license expires in 2013, already faces harsh criticism from New York State and county officials who want it shut down…

One argument raised by New York State in opposing extension of the license of Indian Point 2 or the adjacent Indian Point 3 reactor is that crucial components are aging in ways that the operators may not anticipate or understand.

2) Just a week ago, The Pittsburgh Post-Gazette reported:

A small rectangular hole was discovered in the steel containment liner plate at FirstEnergy Corp.’s Beaver Valley Unit 1 nuclear reactor in Shippingport, Beaver County, which had been shut down Monday for refueling and routine inspection and maintenance… Company inspectors found a small patch of blistered paint and protruding rust on the wall of the steel containment liner in the circular domed reactor containment structure.

“They found a small section of corrosion,” said Neil Sheehan, a NRC spokesman. “The steel liner is a vapor barrier that would only come into use if there is an accident, but is one of the barriers that needs to be vigorously maintained.”

3) Two weeks ago, The Asbury Park (NJ) Press reported:

Workers found an elevated level of radioactive tritium in water on the site of the Oyster Creek nuclear power plant in Lacey Wednesday, according to plant officials…

“Our experts … are working to determine how that tritium might have entered” a concrete vault at the plant, according to Benson and a plant statement.

The tritium discovery came a week after the U.S. Nuclear Regulatory Commission renewed Oyster Creek’s operating license until April 2029, following a years-long fight with opponents over the condition of a corroded steel radiation barrier at the plant and other issues.

These plants have become extremely dangerous, and neither the government nor their operators understand the risks. Operators are often baffled when problems arise, unable to say when they occurred or how. This is outrageous. But operators' very limited liability incents them to ignore public safety.

If you don’t like the effects of bank deregulation, you have every right to be seriously scared by our non-regulation of aging nuclear power plants.

Posted by James on Friday, May 01, 2009