June 7, 2013
By Jack Spencer
The federal government assumed responsibility for nuclear-waste management more than 30 years ago. The Nuclear Waste Policy Act of 1982 created an ostensibly simple system: Nuclear utilities would pay the U.S. Treasury a fee, collected from their customers, to cover the costs, and the government would see to it that the waste was taken care of. The act and its amendments over the years specified every detail of the disposal process. They stipulated how the waste would be disposed of, where, and who would be responsible.
Surprise! Despite the politicians’ and bureaucrats’ best efforts to centrally plan a long-term solution, the system doesn’t work. Although the government successfully collects money from the consumers of nuclear-generated electricity — nearly $30 billion since 1982 — it has collected zero nuclear waste. And as the waste — nearly 70,000 tons and counting — continues to build up at nuclear plants around the country, the government continues to dither. It literally has no plan to collect and dispose of the waste.
To address this, earlier this spring four senators released a draft of another “solution”: the Nuclear Waste Administration Act of 2013. Unfortunately, the NWAA does nothing to fix the failed system. Instead, it accepts the notion that the feds, not waste producers themselves, should be responsible for nuclear-waste management, and it continues the policy of having waste producers pay a flat fee for these services.
In an attempt to fix this, the bill creates a new bureaucracy to handle the problem in place of the Department of Energy — but this new bureaucracy cannot solve the problem if it works under the same assumptions that have stalled the DOE for three decades. Rather than modify and perpetuate a broken system, Congress should chart a totally new waste-management strategy. Here are some steps it should consider:
1. Start by finishing a permit for a permanent waste repository.
Deep geologic storage provides a safe, long-term solution and is critical to any sustainable nuclear-waste-management plan. There is almost no political or technical disagreement over that fact. It’s time to finish the permit review for Yucca Mountain. The Obama administration has tried to terminate the project, but finishing the review isn’t optional; it’s required by law.
2. Make producers responsible.
France, Finland, Japan, and Sweden all have functioning nuclear-waste programs. The common thread among them: Waste producers are responsible for waste management. A new American system should transfer waste management into hands more capable than the government’s.
3. Allow for market-based pricing.
Prices determine the attractiveness of a product or service for suppliers and customers alike and permit rational economic decision making. They also give potential competitors the information needed to guide them in introducing new alternatives. Waste-management reform should allow waste producers to pay directly for actual services rendered and nothing more — as opposed to the present system, in which they pay a flat fee for an undefined, unrendered service. And the amount paid should be whatever emerges as the market value of the service provided.
4. Allow competition.
Though full privatization of waste-management services should be the long-term objective, a transition that begins by simply allowing competition would be extremely valuable. The government could still offer waste-management services, but any reform should allow waste producers to seek services from regulated nongovernment entities. Utilities could then determine what approach would best meet their unique waste-management needs.
These basic reforms could yield a variety of outcomes — all of them better than what the current system delivers. Perhaps it will turn out that the private sector just can’t provide some or all of the needed waste-management services better than the government can. In that case, the government would remain as the nation’s sole waste manager. More likely, though, America will find that the private sector can provide the entire spectrum of services better than the government.
Regardless, policies that introduce market forces and corporate responsibility are key to a long-term solution. But to achieve this, we need a bill with some attitude.
First appeared on National Review Online.
Vice President, the Institute for Economic Freedom and Opportunity
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