The insurance industry makes fortunes by “thinking the unthinkable:” calculating a price for betting that catastrophic events will not happen, but just in case providing means for financial recovery. Realizing that the potential risks and damages from a nuclear power accident were beyond the ability of the private insurance industry to cover, Congress in 1957 created the Price-Anderson Act as an amendment to the Atomic Energy Act, to provide liability coverage. Amended several times, most recently in 1988, the statue covers both military contractors and civilian nuclear power and provides the basis for exclusionary clauses in other US property and liability policies, which preclude recovery for damages from nuclear releases, accidents, and nuclear war.

THE 2-PART FORMULA[1]

The provisions that create liability coverage for nuclear power are interesting: essentially the industry is yoked at the neck--all will pay if any one has a major accident.

First, reactor owners pay into a self-insurance pool of $200 million, designed to cover events that fall short of a Chernobyl-style disaster. A second pool of about $8 billion would be composed of fees levied to every operating reactor in the US, to be triggered by an accident that exceeds the first pool. Each reactor–there are 103 operating today–would pay a share prorated from the total, up to $79 million each ($75 million plus a 5% insurance surcharge), paid over a 7-year period--or $10+ million per reactor, per year. The liability of the nuclear industry for that accident is then capped.

Thus ~ $8 billion is the maximum financial “contribution” the commercial nuclear industry would make in the event of nuclear catastrophe. Beyond the cap, taxpayers would pick up the tab in the form of disaster relief funds, and /or affected individuals–victims– would absorb the real costs.

YARDSTICK

Eight billion dollars is a “fine chunk of change,” however some estimates have placed the costs of Chernobyl above $350 billion to date. Sandia National Lab in 1982[2] projected that a major accident at the Indian Point reactors on the Hudson River near Manhattan would exceed $300 billion (1982 dollars). Taxpayer exposure to nuclear liability under Price Anderson is significant, and shows $8 billion to be what it is: a small contribution.

BREAKING FORMATION: DUKE POWER AND WEAPONS-PLUTONIUM

Since Price-Anderson links all U.S. nuclear power reactors to take (limited) liability for an accident at any one site, the assumption is that the operation of each of these reactors contributes a comparable level of risk to the overall chances of an accident occurring. In 2000, one utility, Duke Power crossed over a line that breaks these assumptions: the decision to use experimental fuel made from nuclear weapons derived plutonium, called MOX.

EXPERIMENTAL FUEL INCREASES NUCLEAR LIABILITY

MOX--Mixed oxide (plutonium and uranium) fuel is known, by its limited use in Europe, to challenge nuclear reactor operation, and is therefore more costly to produce and use than uranium fuel.[3] European MOX fuel is made from plutonium from commercial reactor waste. Nowhere in the world has weapons-grade plutonium been used to power a commercial reactor, let alone plutonium extracted from a nuclear warhead. The key here is not only the higher concentration of plutonium-239 which is good for bombs, and never tested in reactors, but also the fact that many other ingredients were added to the plutonium to make warhead “pits” that were never intended to go inside a nuclear reactor.

Duke is slated to begin use of weapons-grade plutonium MOX fuel in four nuclear reactors in the Carolinas under a contract with the US Department of Energy, part of a US–Russia agreement on surplus plutonium. For many reasons, a large alliance of public interest groups oppose the use of weapons-plutonium as MOX fuel, not the least of which is reactor safety concerns.

MOX: ACCIDENTS MORE LIKELY

Two key physical characteristics of uranium[4] give reactor operators some natural advantage in control of the fission process. 1) The presence of “delayed neutrons” allows operators to use control rods to slow and stop the reaction. Weapons-grade plutonium has only 1/3 as many “delayed neutrons,” reducing the effectiveness of control rods. 2) Uranium is more difficult to split as the temperature goes up, whereas heat makes it easier to split plutonium. These factors further reduce the margin of safety on aging reactor operations.

Plutonium also delivers more hard, fast neutrons, which age and fatigue reactor components more than conventional fuels. Additionally, one of the elements added to plutonium to make bombs, gallium, attacks the metals used to make fuel rods. These concerns contribute to an increased risk of reactor accidents with MOX use.

MORE CANCER AND MORE DEATHS

The Department of Energy has validated findings by Dr. Edwin Lyman of Nuclear Control Institute[5], that if there is a major reactor accident with MOX fuel in use, the health consequences will be far greater than from a similar accident in a conventionally-fueled reactor. Dr. Lyman’s findings show that if 100% MOX fuel is in use, the number of cancers and cancer deaths would double compared to the damage uranium fuel would cause. The function is linear, so initial plans to use 1/3 MOX fuel would result in about 30% more deaths. NRC approval of this program is pending. It is not clear why any federal agency would approve or proceed with a plan that so drastically increases health risks, nor is it clear that Price-Anderson should cover Duke’s increased liability.

DUKE: AN EXCEPTIONAL RISK ANYWAY

Of 103 reactors in the US, Duke’s McGuire-1 & -2 and Catawba-1 & -2 have the lowest level of protective containment in the US. A recent NRC report shows the potential for a major reactor accident combined with loss of containment at these sites. Duke and DOE have made an extremely risky decision to use experimental fuel.

PRICE-ANDERSON DUMPS PLUTONIUM LIABILITY ON TAXPAYERS

Price–Anderson, as written today, caps the nuclear industry’s liability for a major accident with uranium fuel, at a fraction of projected costs. It is a case of pouring water on a full cup: all additional accident costs due to MOX fuel would fall on the public--Mary Olson[6], April 2001