Government Waste on Nuclear Waste

COMMENTARY Environment

Government Waste on Nuclear Waste

Apr 8, 2010 3 min read

Commentary By

Jack Spencer

Senior Research Fellow for Energy and Environmental Policy

Nicolas Loris @NiconomistLoris

Former Deputy Director, Thomas A. Roe Institute

A waste of taxpayer dollars. That's what those who oppose using Yucca Mountain as a nuclear materials repository say.

They point to the roughly $10 billion that already has been spent on Yucca, which they say was doomed to fail from the start. Recognizing this, so the argument goes, President Obama is demanding that the Nuclear Regulatory Commission (NRC) cease its work on the Yucca project - killing it for good.

Seems reasonable. No sense wasting more money on a project with no future. Look closer, though, and it becomes clear that closing Yucca Mountain is the real waste. The real story here is about government ineptitude, not wasteful spending.

The 1982 Nuclear Waste Policy Act, as amended, established a system, however flawed, for utilities to pay the federal government to collect and dispose of America's commercial nuclear waste. The act set up a fee that electricity users would pay utilities to fund disposal activities. Jan. 31, 1998, was set as the legal deadline to start waste collection.

Since the program's inception, $30 billion, including interest, has been paid to the federal government to fund it. The problem? Not a single atom of nuclear waste has ever been collected.

In other words, users of nuclear electricity have been paying for waste disposal while Washington has been pocketing the money. It is no different from paying for your trash to be collected. But in the instance of nuclear utilities, the trash man never came. So now all that used nuclear fuel has to be stored on site. That wasn't part of the original bargain.

Still, all that on-site storage has to be paid for. So not only do electricity ratepayers have to pay the federal government to dispose of the waste, the utilities also have to pay to store it. So that's twice.

That's not all.

Nuclear companies have begun suing the federal government for breach of contract for not collecting the waste. And when the government loses a lawsuit, it's the taxpayers who foot the bill. And they are losing. According to the Justice Department, out of the 72 cases filed against the government, 26 have reached final court decisions, and taxpayers have paid out $1.4 billion to nuclear utilities.

Justice expects 25 more cases to be filed over the next two fiscal years. The Government Accountability Office projects the money owed to utilities will reach $7 billion by 2017, $12.3 billion by 2020 and $500 million each year after 2020.

That means paying three times for waste disposal. And the waste hasn't moved one inch.

Here's the real kicker: Neither Mr. Obama nor Secretary of Energy Steven Chu has offered any scientific or technical justification for closing Yucca Mountain. The issues surrounding Yucca are purely political, despite Mr. Obama's push to detach science from politics.

After announcing his top science advisers, the president said, "It's about listening to what our scientists have to say, even when it's inconvenient - especially when it's inconvenient."

Except when it's inconvenient to well-connected political leaders.

If politicians eager to shut down Yucca are so confident that the science is on their side, why not allow the NRC to finish its work on the repository?

Luckily, the NRC has decided not to just go along to get along. Citing a bevy of legal challenges questioning the Obama administration's authority to compel the NRC to stop work on Yucca, the commission this week announced that it would continue its Yucca work until the court system rules on those lawsuits.

Letting the NRC do its job, though, is merely a step in the right direction. A long-term solution will require a more comprehensive reform effort. Instead of continuing to rely on the federal government, we must develop a system whereby waste producers are given more responsibility for managing their own waste.

Doing so would introduce the market forces that have been absent from America's current approach to nuclear waste management. It will be these market forces that ultimately will give the United States an economically rational and thus sustainable nuclear waste management solution.

If the U.S. is truly at the threshold of a nuclear renaissance, then such an approach to waste management could give rise to a robust nuclear waste management services marketplace - which should include a repository at Yucca Mountain.

The president's choice to close Yucca Mountain isn't just wasting taxpayer and ratepayer dollars. It's wasting valuable time - and missing a chance to truly reform the way we handle nuclear energy in this country.

Jack Spencer is a research fellow in nuclear energy policy in the Roe Institute for Economic Policy Studies at the Heritage Foundation. Nicolas Loris is a research assistant at Heritage.

First appeared in The Washington Times