February 23, 2010 | WebMemo on Energy and Environment
President Barack Obama’s proposals on nuclear energy do little to back up his pro-nuclear rhetoric. Most worrisome is his effort to terminate the Yucca Mountain nuclear waste repository project.
His budget provides no funding for Yucca construction activities, and the Department of Energy (DOE) has filed a motion to permanently withdraw its application to the Nuclear Regulatory Commission (NRC) to construct the repository. Such action not only flouts existing statute but threatens to end America’s nuclear renaissance before it even begins.
Flouts Congressional Prerogative and Existing Statute
According to the Nuclear Waste Policy Act (NWPA) of 1982, as amended, the federal government was obliged to begin collecting nuclear waste by 1998. According to the Yucca Mountain Development Act of 2002, Yucca Mountain was to be the waste repository. Despite having collected over $30 billion in waste disposal fees from electricity ratepayers and spending $10 billion on Yucca development, no waste has been collected.
This has put the federal government in partial breach of contract even before the President decided to ignore existing statute and terminate the Yucca program. With over 60 suits already filed, the federal government has paid out $214 million in settlements. Without Yucca Mountain or any backup plan, this taxpayer liability will amount to over $12.3 billion through 2020 and $500 million annually thereafter. Terminating the program without regard to existing statute exacerbates these problems, and communities are already beginning to investigate the feasibility of pursuing additional legal actions.
What About Waste Confidence?
To license a new reactor (or to maintain operations at existing reactors) the federal government must reasonably demonstrate that it can fulfill its waste disposal obligations under the NWPA. So long as Yucca Mountain was moving forward, this proposition was supportable.
However, the President has said that he intends to withdraw the DOE’s Yucca application with prejudice (meaning that the application cannot be resubmitted, thus effectively killing the program forever). This could cast doubt on the DOE’s ability to meet its waste disposal requirements, especially since there is no backup plan to dispose of nuclear waste. If the DOE is legally challenged and courts rule that these concerns are legitimate, they not only could delay the issuance of permits to build new reactors but could call into question the legitimacy of operating licenses at existing plants.
The Administration’s Yucca policy signals once again that the government cannot be a trusted partner. It demonstrates one of the fundamental deficiencies of the American approach to nuclear energy.
Because the federal government is responsible for waste management, an activity on which the nuclear business depends, the future of the industry is essentially subject to the political whims of Washington. This introduces significant unpredictability, which, when combined with up-front capital costs that reach $6–8 billion, makes nuclear energy a high-risk investment. Instead of reducing that risk through the application of sound economics, this dynamic forces the nuclear industry to seek favor in Washington and taxpayer support through programs such as loan guarantees.
A More Appropriate Yucca Policy
If the Administration wants to oppose Yucca Mountain, it should not evade congressional authority, enacted statute, or the established regulatory process. To terminate the Yucca project legitimately, the Administration should seek to overturn current policy through legislative initiative. Until then, the Administration should:
Quit the Nuclear Doublespeak
The President’s positive remarks about nuclear energy in the U.S. are encouraging, but if his words are not supported with sound policy, then nuclear energy could face a tumultuous future. Because of the long-term implications of the President’s Yucca decision, the Administration needs to be completely transparent. This Administration could make groundbreaking strides for nuclear energy if it handles the situation deftly.
Jack Spencer is Research Fellow in Nuclear Energy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
Nuclear Waste Policy Act, Public Law 97-425.
H.J. Res. 87, January 23, 2002, at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:hj87enr.txt.pdf (February 23, 2010).
U.S. Government Accountability Office, “Nuclear Waste Management: Key Attributes, Challenges and Costs for the Yucca Mountain Repository and Two Potential Alternatives,” November 2009, at http://www.gao.gov/new.items/d1048.pdf (February 17, 2010).
Associated Press, “SC Leaders May Sue If Nevada Nuke Waste Dump Ditched,” IndependentMail.com, February 16, 2010, at http://www.independentmail.com/news/2010/feb/16/sc-leaders-may-sue-if-nevada-nuke-waste-dump-ditch/ (February 22, 2010).
U.S. Nuclear Regulatory Commission, “Fact Sheet on Licensing Yucca Mountain,” April 2009, at http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/fs-yucca-license-review.html (February 18, 2010).