March 22, 2011

The Road to Nuclear Hell

…is paved with good intentions—and faulty calculations of risk.

There is nothing like an undeniable catastrophe to focus attention on the proper way to respond to risk—especially that most elusive form of risk, which involves low frequency and high severity occurrences. Never has that been truer than with the one-two punch that just hit Japan—a huge earthquake (8.9 on the Richter scale) followed by a tsunami of equally stupendous proportions. Right in the line of fire was the 1971 Fukushima Daiichi power plant, which has teetered on the brink of a meltdown for over a week now. In the United States, the visceral response has been to boost the always strong, if sometimes latent, categorical opposition to nuclear power.

Illustration by Barbara Kelley

So powerful has that movement against nuclear power been that no new nuclear plant has been commissioned since the incident at Three Mile Island in 1978, which means that our aging nuclear plants remain active as their useful lives are extended with various repairs and upgrades. But that still leaves them far inferior to any new plant that could be put into service today. At the same time, the United States dithers on the designation and construction of any new site to deal with the growing risk of spent nuclear fuel (SNF), which is generated in ever-larger quantities, but remains stored in inferior facilities located onsite, near the nuclear facilities that have generated these rods.

This combination is, of course, just what magnified the serious dislocations in Japan. A lot of the local damage came from the direct hit to the country’s nuclear plant. But much of the radiation came from the fuel rods that overheated when they were no longer covered with the water needed to cool them down. In this instance, we should hope that a word to the wise would be sufficient, for our own policies have, in the name of abundant caution, created exactly the same risk in the United States.

As far back as 1982, the United States enacted the Nuclear Waste Policy Act, which empowered the United States to locate, develop, and operate an underground nuclear waste disposal site. After 30 years, the job should have been long done. But the strength of local politics is such that it took 20 years for Congress to approve, in 2002, the Yucca Mountain site in Nevada. Seven years later, under the constant prodding of Senate majority leader Harry Reid, the Obama administration, in one of its more boneheaded decisions, decreed that this site was no longer an option.

The worst nuclear facility that could be built using today’s technology is likely to be far safer than the safest 40-year old plant now in service.

The fundamental blunder of that decision lay in its indefensible approach to risk management. The correct approach in all these cases is to start with the following comparison: take the current situation and the level of risk that it poses, then compare that risk with the risks inherent in the current situation. By that standard, Yucca Mountain is a no brainer. Leaving SNF onsite in rickety containment facilities is just asking for trouble. Putting it in Yucca Mountain, which has gone through extensive safety reviews, reduces that risk by many orders of magnitude.

Unfortunately, the 2009 decision to take Yucca Mountain off the table was justified, if at all, by an entirely bogus analysis. It is true that no site is ever one hundred percent safe. That conclusion does not depend on any detailed analysis of a given site. It only depends on the blunt observation that siting decisions never have the status of necessary or mathematical truths. But by that standard, no new facility should or will ever be built. Find some alternative site, and, as sure as night follows day, there is at least one dimension on which the site falls short of perfection, so that it, too, has to be rejected. In the meantime, the local storage facilities only grow in risk. On this first dimension, therefore, the irrefutable conclusion is that the current policy of inaction meets the definition of reckless: it is a conscious and knowing effort to increase the level of risk associated with certain essential activities.

The situation doesn’t look any better when we turn to the second ingredient of the Japanese tragedy. Forty years is too long to keep any nuclear plant in operation. But the only way to decommission these old plants is to put up some new power source. On that issue, of course, nuclear power is not the only option on the table. But in the United States, it may well be still the best.

Even France has a more sensible nuclear power policy than the United States.

Right off the bat we can write off both solar and wind energy as powerful sources of energy. These intermittent sources of energy are difficult to collect and expensive to transmit. Even large government subsidies have not kept these useless operations in working order. Throwing good money after bad energy projects is not going to bend the laws of physics. It will only illustrate, yet one more time, the futility of government engagement in industrial planning. Remove the subsidy, and market sources are likely to find those few niches where these power sources make sense.

Indeed, in this situation, the misguided affection for solar energy could easily make matters worse. In Germany, various regulations require that nuclear plants be powered down so that wind energy can be better deployed. Unfortunately, it is far more risky to dial down—and then up—a nuclear reactor than it is to turn off a windmill. Goofy government subsidies, therefore, lead to an increased business risk. Nuclear power should be the anchor tenant, with wind and solar power as marginal sources. Reversing the priorities puts everyone at risk.

We can, of course, switch to coal, oil, and natural gas—and all of the facilities for these energy sources can likewise now be built in a far safer fashion today than two generations ago. But that is true about nuclear power as well, so long as we are prepared to take advantage of the best technology developed overseas in places such as France, which for years has had a far more sensible nuclear power policy than the United States.

Yet, taking that point of view requires a wholesale revision of current thinking about how to develop nuclear power plants. Right now, anti-nuclear groups such as the Union of Concerned Scientists can point with some truth to the proposition that, as Bob Herbert recently noted in the New York Times, "[t]he total cost to ratepayers, taxpayers and shareholders stemming from cost overruns, canceled plants and stranded costs exceeded $300 billion in today’s dollars."

Throwing good money after bad energy projects is not going to bend the laws of physics.

Why should anyone be surprised at this appalling figure? The high cost in each of these areas is not a function of the construction costs of new nuclear facilities. It is a direct consequence of the grotesque permitting and regulatory structure that is put into place to supervise—make that guard against—the construction of new nuclear facilities in the United States. Quite simply, it is the very people who cry out in opposition to nuclear power who have done everything possible to thwart any sensible investment in this area.

So how should the situation be improved? The first answer is simple: the worst nuclear facility that could be built using today’s technology is likely to be far safer than the safest 40-year old plant now in service. Switching out the old for the new makes perfectly good sense.

Second, there is just no reason to settle for today’s worst technology when we can contract overseas to hire people who have designed and built the best of the new plants now in service. On this score, as on so many others, the Obama administration has to put aside its juvenile "America First" position on international trade in order to allow foreign participation in these decisions.

Third, we have to learn how to streamline the regulatory process so that delay does not become the inevitable outcome when determined anti-nuclear activists wear-out overburdened government bureaucrats. The risks of what I call "permititis"—the excessive delays caused by repetitive and mindless reviews—has to be replaced by a far more expedited procedures than those now in place. The Nuclear Regulatory Commission should be encouraged to develop a standard design that could then be modified on a limited basis to take into account the safety risks presented by particular sites. Those sites should be selected through a much more abbreviated process that is intended to forestall the next Yucca Mountain fiasco.

In dealing with these controversial matters, it is absolutely critical to learn the right lessons from the calamity at Fukushima Daiichi. There is no site anywhere in the United States that is remotely as risky as the rocky coast of Japan. Put a new, well-constructed plant smack dab along the San Andreas fault line and it would never be exposed to a quake that would come within five percent of the power of the Japan quake and tsunami.

The good news from the Japanese tragedy is that if we adopt sound new policies in the United States now, we should be able to start to reduce nuclear risks within five to seven years. But if we freak out about nuclear risks and hold fast to the current failed policies, it could well be another 20 or 30 years before the situation will start to improve. And remember, these outsized delays are not costless. If and when they lead to some nuclear meltdown, we can thank the anti-nuclear activists whose retrograde analysis of risk has made those catastrophes that much more possible. The road to nuclear hell can be paved with good intentions.

Richard A. Epstein, Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, Laurence A. Tisch Professor of Law at New York University, and senior lecturer at the University of Chicago, researches and writes on a broad range of constitutional, economic, historical, and philosophical subjects. He has taught administrative law, antitrust law, communications law, constitutional law, corporate law, criminal law, employment discrimination law, environmental law, food and drug law, health law, labor law, Roman law, real estate development and finance, and individual and corporate taxation. His publications cover an equally broad range of topics. His most recent book, published in 2013, is The Classical Liberal Constitution: The Uncertain Quest for Limited Government (2013). He is a past editor of the Journal of Legal Studies (1981–91) and the Journal of Law and Economics (1991–2001).

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