The US government insurance scheme for nuclear power plant accidents no longer makes sense via Bulletin of Atomic Scientists

By Victor Gilinsky, February 26, 2020

The Japan Center for Economic Research, a source sympathetic to nuclear power, recently put the long-term costs of the 2011 Fukushima accident as about $750 billion. Contrast that with the maximum of $13 billion that could be available after a catastrophic US nuclear accident under the plant owners’ self-insurance scheme defined by the Price-Anderson Act. The Act will have to be renewed before 2025; Congress should seize the opportunity not only to reflect on the lack of insurance in the event of a catastrophic accident, but also to reconsider our approach to nuclear power plant safety altogether.

Price-Anderson frees nuclear plant operators and all firms involved in nuclear construction and maintenance of any liability for offsite accident damage. The only chance for additional compensation lies in the act’s declaration that if accident damages exceed the legal limit “Congress will thoroughly review the particular incident” and will “take whatever action is determined to be necessary” to provide full compensation to the public. In short, a Fukushima-level accident would toss the costs of compensation and cleanup unto the lap of Congress.


The cost of, say, additional equipment, is a comparatively firm figure; but the dollar benefit of risk reduction is a very soft number, which means the cost-benefit balance is suspect.

There is a more fundamental problem. Consider the NRC’s metric for risk, which underlies its approach to nuclear safety. For an agency so devoted to “risk-informed” decision making, the NRC is strangely vague about its a definition of risk. It says merely that risk has to do with three questions: “What can go wrong? How likely is it? What are the consequences?” The key question is how to combine the probability of an accident and the consequences that would ensue. In practice, the NRC analysts take risk to be the probable, or average, loss per year—that is, the product of the probability of a particular accident and the consequences (computer-estimated radiologically caused deaths and contaminated land, expressed in dollars). (This is by no means the only possible way to express a risk goal. One may, for example, choose a figure of merit that puts more emphasis on reducing consequences, which the NRC leaves open-ended.)


The NRC staff studied the possibility of a fire in US nuclear plants similar to the ones that suffered the Fukushima accident. (The United States operates about two dozen such reactors, all over 40 years old.) The staff told the commissioners that such a fire could produce a radiological release 25 times as great as the release during the Fukushima accident (and this was not the absolutely worst case). But the staff also estimated the probability of such an occurrence to be so infinitesimally small that, even multiplied by the dollar value of the harm and damage caused by a release 25 times greater than at Fukushima, the annual risk was far below the added cost of removing spent fuel from cooling pools earlier than is now required. In other words, there was no need to do anything, which was music to the ears of the NRC commissioners, who resist imposing any additional costs on the financially shaky nuclear industry.

What happened was that the NRC staff multiplied a very large number by a very small number—each a more-or-less educated guess—to get a highly uncertain result, which the commissioners then took at face value. One of the probability figures on the staff table of results (the chance of a cancer fatality within 10 miles of the plant) for a particular configuration is presented as 2 trillionths per year (2×10-12). Or, to put it another way, if a plant kept operating forever in that configuration, the accident might happen about once in 500 billion years. That’s once in 30 lifetimes of the universe. Do such numbers mean anything?

[…]Curiously, from the chairman on down, the NRC misstates the legal standard for its safety decisions. The NRC and its staff claim their job is to provide “reasonable assurance of adequate protection,” whereas the standard in the Atomic Energy Act is “adequate protection.” Under the law, their job is to provide adequate protection, period. Do the commissioners think the extra cushion of “reasonable assurance” justifies weaker regulation?

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