Jack Spencer: Time for nuclear energy

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By JACK SPENCER | REAL CLEAR WIRE

The silver lining of this month’s United Nations COP28 global warming conference is the growing consensus that nuclear energy is critical to meeting national carbon dioxide reduction goals.

Denying the world access to clean, affordable fuels like gas, oil, and coal is a real problem. But recognizing that nuclear energy must play a pivotal role in our energy future is a major step forward—one that should enjoy widespread support, regardless of one’s views on CO2 reductions.

But to go big on nuclear requires thinking big on nuclear energy policy, and that means questioning the subsidize-first mentality that has defined U.S. energy policy for decades.

The goal should not be to build a few nuclear power plants. Rather, we should strive to create an economically sustainable, competitive, innovative and uniquely American nuclear industry.

This will require a realignment of responsibility. The government’s role should be to protect public health and safety. The private sector’s role should be to operate a competitive commercial nuclear sector.

That means getting rid of the subsidies, rethinking regulation and getting Washington out of nuclear waste management. Washington should have a regulatory role, but not its current role as Nuclear CEO.

The reason is simple: Governments are not good at business, because they make decisions based on politics rather than on good economic sense. This never yields a successful industry.

Some argue that nuclear energy requires more governmental control, suggesting that nuclear presents more financial, technical, and political risks than other industries.

But all big projects have financial risk. Private oil refineries can cost billions of dollars, and projects like skyscrapers, liquid natural gas export terminals and other large industrial projects all require massive capital outlays. Companies and individuals regularly take big financial risks.

Then there is technological risk. But nuclear is not really that different from other industries. With 440 nuclear reactors operating globally, technical risk for existing technology is relatively low. Industry knows how to build and operate nuclear plants.

Possible technological risks with new designs are not beyond the realm of those posed by innovation in other cutting-edge businesses, such as fracking or offshore energy exploration. e. Beyond that, as it pertains to nuclear energy, there is a vast federal research infrastructure in place that the private sector can access to help mitigate that risk.

Political risk, however, is real and uniquely high when it comes to nuclear energy, and it exacerbates financial and technical risk calculations. Any justification for government intervention is based on mitigating government-imposed risk.

But here is the problem.

When government intervenes to mitigate a risk that it has created, it adds another layer of political risk. Worse, it creates dependence, distorts capital flows, incentivizes rent-seeking and lobbying, and forces firms to allocate resources to satisfy politicians and bureaucrats rather than improve its business.

This creates misalignments between responsibility and authorities and undermines economic efficiency.

Even worse, politics often changes, making it difficult to build a sustainable business model around political preferences. At best, this approach could yield a couple of reactors or keep some firms above water, but it won’t produce a robust, competitive, innovative nuclear industry. Failure is likely.

The major question is: How does America minimize political risk and allow the private sector to manage other risks, so that a robust industry can emerge?

It will require changing the Department of Energy’s role, bold regulatory reforms, and solving the problem of nuclear waste management.

We need to get the Energy Department totally out of the nuclear commercialization business. The problem is not that people are not doing their jobs, the problem is the nature of government.

The Department should not be funding grants, loans, or demonstration projects. Nor should it be attempting to improve operations or economics of existing plants or new technologies. The private sector can do these better than government.

The Energy Department has an important role to play in nuclear research and scientific discovery, but it needs to get as far from any commercialization or commercial operations as possible.

What about regulation?

Worthwhile attempts are being made to improve the Nuclear Regulatory Commission. An efficient, predictable, and affordable regulatory process for new reactor technologies is essential.

But America needs to think bigger.

For example, states could be authorized to take a larger role in nuclear power plant regulation. The Atomic Energy Act of 1954 already allows states to regulate some nuclear materials. That should be expanded. States could regulate existing reactor technology, and the NRC could focus on new technologies. Not all states will use this opportunity, but some will.

This is a reasonable proposition because U.S. utilities have been safely operating large light water reactors for over 50 years. America should not be regulating large light water reactors as new, scary technology, because it is neither new nor scary. The regulatory burden should be significantly lifted on those reactors.

NRC personnel should not be the only ones who can review permit applications and other regulatory review work. Private firms should be able to compete for this business. They would lighten the NRC’s load and likely do a quicker job at lower cost.

Lastly, companies should be allowed to build reactors outside the existing NRC regulatory regime if they obtain their own liability insurance against accidents. In exchange they would forgo participation in the federal Price-Anderson program that currently provides liability coverage.

Some might question whether private insurers would cover a nuclear reactor absent a government backstop. But given outstanding safety records of existing reactors and promises that new technologies are safer, this should be an option. Insurance comes in many forms, and no one can predict what could ultimately emerge.

Either way, the insurance industry is extraordinarily sophisticated and does a tremendous job at pricing risk. It will be effective at ensuring that only the safest nuclear plants are built.

Finally, there is the question of what to do with nuclear waste—or, more accurately, spent nuclear fuel.

The federal government took responsibility for managing the nation’s spent nuclear fuel in 1982. By removing responsibility from the spent fuel producers, the 1982 Nuclear Waste Policy Act removed any incentive for the nuclear industry to integrate spent fuel management into its long-term business planning and left it instead to Washington bureaucrats. It should surprise no one that the plan has failed.

Reforms are needed to reconnect the nuclear industry to waste management. Reforms would allow for a private spent fuel industry to emerge that would drive innovation in reactor technologies and spent fuel processing. They would allow the nuclear industry and communities to engage in real negotiations, bound by legal contracts, to build and operate spent fuel management facilities.

There is no question that these proposed reforms are a major departure from the status quo, but they are reasonable, not radical. They would foster good governance and economic progress in the industry. As COP28 representatives discuss how to reduce carbon while raising global living standards, nuclear energy should be on the front burner.

Jack Spencer is a Senior Research Fellow in Energy and Environmental Policy at The Heritage Foundation. This article was originally published by RealClearEnergy and made available via RealClearWire.

25 COMMENTS

  1. Cost cutting measures and penny pinching corporate accountants, worked for the North Slope & Alyeska Pipeline Service (no leaks/improper storage/disposal due to coporate intent or lack of maintenance here ever happened to be the cause of a spill), what could go wrong with privatizing nuclear reactors and nuclear waste disposal?

  2. While it is true that nuclear power is generally safe and that it can play a large role in solving the global CO2 problem, Spencer is way off the mark when pushing his deregulation agenda. He’s neither an engineer, physicist, nor scientist, and therefore is not qualified to make balanced judgements about this highly-technical industry. Business risk factors often serve to pervert decision making when considered in industries requiring high degrees of safety and reliability. One need look no further that the Boeing 737 Max fiasco, the near-loss of reactor containment at the Davis-Bessie nuclear power station, or at a host of other similar incidents. The pull of the profit motive is far too strong to resist, and therefore mandatory regulations are best suited to assure safety and reliability.

    • And your qualifications are…?

      So exactly what is acceptable to the idiot left? It seems you’ve convinced yourself after a mass humanity die off, you’ll someone be exempt from the consequences.

      Sorry, you’re not that special.

      • Professional engineer with 35 years of working in the nuclear, process, and other high hazard industries in safety critical functions. Yours??

        • Hans, i think Masked Avenger 😷 was a State of Alaska Employee. Meaning his obvious superior qualifications trump your measly P.E. certificate!
          At least in Masked Avengers world!

    • “The pull of the profit motive is far too strong to resist, and therefore mandatory regulations are best suited to assure safety and reliability.”

      Boy, good thing that there is no such thing as a ‘power motive’ from those in positions of authority and control, and that regulatory capture is just a fairy tale.

      • You can take my word for it, Sir, that at least in the nuclear industry, regulators are far more motivated by fear than by power. The thought of nuclear catastrophe (a la Fukushima, TMI, or Chernobyl) is so terrifying to them that it overwhelms all other considerations. Your strong anti-regulation bias clearly indicates to me that you have never worked in nuclear or any other high-risk industry. If you had, your attitude and opinions would surely differ from those you espouse here.

    • Perhaps you can identify a power generation method that has no risks?
      While your point is valid, complete de-regulation is not going to produce safe effective power, it will produce greedy companies that will place profit before safety. However, over regulation is not effective either.
      .
      The regulations implemented under the Carter administration were intended to stifle nuclear power. Not only did they basically outlaw breeder reactors, they slowed development to a crawl. Making nuclear power too expensive is not helpful either.

  3. A good example of this bureaucratic mismanagement and political bungling is the former Satsop nuclear plant in Washington State. It was 76% complete when construction was halted. Had it been completed it would have supplied 2500 MW of clean power. Instead, it was eventually converted to a natural gas fired plant that supplies 650 MW of power.

    • Not an uncommon thing. Same thing happened in Shoreham, NY as well.
      That was because the public got all bent out of shape because of bad news reporting and outright lies about nuclear power and the risks associated with it.

  4. There are currently three Nuclear Power Plants in the Western US.

    “U.S. utilities have been safely operating large light water reactors for over 50 years…” and “given outstanding safety records of existing reactors and promises that new technologies are safer…”

    Is it possible that the government oversight and regulation of this technology has allowed for a fairly safe record?

    Three Mile Island and San Onofre tell us a different story than the 50 year safety record protrayed here. And promises that new technologies are safer somehow don’t make me feel any better when simple facts like Three Mile Island and San Onofre are overlooked.

    I do not support overburdensome government, nuclear power certainly has a place. But to think we should or will open up the private markets to nuclear fueled power generation and hope that some insurance company somewhere will insure something that has the power of the sun and the ability to wipe civilization from the face of the earth for thousands of years isn’t reality.

    Reality is we can use existing resources to meet clean air standards, we just need to stop listening to kooks who believe “the end is nigh” and let reason and actual science prevail over beliefs.

    • As a point of information, a 50-year record of safe operation in the nuclear industry is meaningless. The design basis major incident frequency for a nuclear power plant is actually on the order of 10^5 to 10^6 years. At this statistical interval, a plant operating for even hundreds of years without incident could still be considered to be statistically unsafe.

  5. Good luck reforming the regulatory miasma surrounding nuclear power. There are far too many bureaucrats and activist judges who are more than happy to play their part in preventing any rational solutions. With their new-found tools of disruption (e.g. tik-tok videos, gluing themselves to roadways, swatting, etc.), imagine what they’d do to any public hearings just to try to locate a site for a new nuclear installation.

  6. Stupid, Stupid Jack! You are so far left its unbelievable that you have an article on nuclear energy, Definitely a subject you don’t have any true knowledge of. Your thinking matches all far left Dems. Excuses and arguments don’t find there way to the table of nuclear energy and the totally bad decisions to install such energy in Alaska or anywhere for the matter of fact. When the energy bill was brought to the Legislature, they didn’t base the decision they made on any testimony of the perils of nuclear energy because the DEC Commissioner would not allow the opposite side to testify. And, he got the nuclear energy put into the energy bill for signing. No testimony before the legislature. Wow! The topic is one that needs more explanation and legitimate witnesses that have investigated nuclear energy and its true nature of destruction to every site its been placed in the United States and elsewhere in the world. So, to stupid thinking goes the problems. And, here in Alaska, we don’t have that problem and never will. The bill may contain the passage to have the energy but the people in this state are smarter than you thinl. Oh, by the way, the DEC Commissioner that got the bill passed was rewarded with a job on the PFD Board for the next phase of how to destroy Alaska by the Dunleavy thnking and actions.

  7. I say that we should not be building any reactors until AFTER we have working solutions to Nuclear waste storage and have PROPERLY addressed the risks and developed actual working remediation strategies in the event of accidental spills and leaks.

    • The real danger from spent nuclear fuel is not radiation. It is heavy metal poisoning.
      .
      The word spent might be a tip off. The radioactive atoms have been used up through fission to the point they cannot produce power any more. Is it perfectly safe to hold it in your hand? No, but it is not an environmental disaster ready to happen if there is a leak. It can be contained without issue.

      • Of course the real truth is that per the NRC, U.S. reactors have generated about 65,000 metric tons of Spent Fuel, of which 75 percent is stored in temporary pools at the reactor site, according to Nuclear Energy Institute data. Spent fuel rods give off about 1 million rems (10,00Sv) of radiation per hour at a distance of one foot — enough radiation to kill people in a matter of seconds.

        • What exactly is stopping that fuel from being re-refined and reused?
          Oh… regulations from the very same NRC you are citing.
          .
          And, if instead of the current reactors, we instead built breeder reactors, the amount of waste will be significantly reduced. But… the very same NRC regulations are stopping that as well.
          .
          I am curious. How does one get within one foot of spent nuclear fuel that is stored in a temporary pool? Is there zero security? Or are you just citing fearporn?.
          Oh… look. It is fear porn.
          From the NRC:
          “The water-pool option involves storing spent fuel assemblies under at least 20 feet of water, which provides adequate shielding from the radiation for anyone near the pool. The assemblies are moved into the water pools from the reactor along the bottom of water canals, so that the spent fuel is always shielded to protect workers.”
          .
          See the part where it says “…adequate shielding from the radiation for anyone near the pool.” People are not dying from radiation poisoning, because processes to safely store it are well known and implemented correctly.
          .
          Oh… and since you want to cite fear porn, let’s pretend there is no shielding at all, either from the water or other methods. A million RADS is a collective amount, not a number from a single pool, there are something like 121 storage pools across the nation, which means the average pool is emitting about 8.3K rads, not a million. Also note, the inverse square law applies here as well. Since your measure is one foot away, and the pools will keep humans at least 20 feet away, the radiation is actually 20.7 RADs.
          Yep, not good, but hardly an instant death sentence.
          .
          How about actually knowing the topic you are talking about, instead of just reading the scary stuff?

  8. While containment breech accidents are relatively rare, they do occur and when they do, the consequence is always an event that adversely effects human health in significant ways over many generations.

  9. Without the idiot with the open flame checking for air leaks, then his failure to pull the fire alarm until he had exhausted 3 different fire extinguishers before someone else pulled the fire alarm, Three Mile Island would have never happened. And fuel liquids and gas, as well as coal are abundant and relatively affordable. The technology used to make them burn as clean as possible has existed for 20 years. Everything done since then has resulted in a net increase of fuel consumption. Technology does not exist for an electric option for vehicles in the near future and it is idiocy to push for hydrogen fueled vehicles as an option. YOUR representatives in congress are working to impoverish YOU under the guise of their climate agenda BS.

  10. Human-induced errors and failures are an intractable component of all high tech and high hazard systems. As much as we would like, it is impossible to eliminate them, and therefore they must be accounted for in the design of the system. It is unfortunately impossible, however, to foresee every type of human-induced fault. That’s why airplanes still crash, nuclear reactors still meltdown, refineries still explode, and hospitals kill people. For a good treatise on this subject, I would recommend the book “Normal Accidents”, by Charles Perrow.

  11. If the NRC stopped making all new plants be one-off custom designs. The cost would drop precipitously. The safety would be increased by having standard training for operators. The Navy has done it for decades with an admirable safety record

    • I think I’d wait for the accident and incident information to be declassified before I claimed that the navy has had an admirable safety record with nuclear materials and reactors.

      • How many vesselshavebeen lost due to reactor issues? None!. Thresher and scorpion were not reactor failures the biggest killer of nuclear naval vessels Is budget cuts

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