The Congressional Budget Office: The Cost of Liability for Nuclear Accidents

The cost of the Price-Anderson Nuclear Liability act is highly controversial. Here is the Congressional Budget Office's estimate. It should be noted that the accident is calculated for Generation II reactors. The accident rate for Generation III + reactors would be much lower, with casualty-producing accidents occurring in spans of over once in a billion years. The probability of a casualty-producing accident occurring with a LFTR might be something in the order of once every 10 Billion years, or something close to the currently estimated lifespan of the universe. Added LFTR safety features would lower the casualty-producing accident probability even further. At this point concern about nuclear accidents enters into the realm of absurdity.

Among its various provisions, the Energy Policy Act of 2005 extended the Price-Anderson Nuclear Industries Indemnity Act, which limits the industry’s liability for accidents at nuclear power plants. In practice, Price-Anderson subsidizes utilities by reducing their cost of carrying liability insurance. Instead of purchasing full coverage, operators of nuclear power plants are required to obtain coverage only up to the liability limit, which is currently set at about $10 billion per accident.1 The value of the subsidy is the difference between the premium for full coverage and the premium for $10 billion in coverage. On the basis of data obtained from two studies—one conducted by the Nuclear Regulatory Commission (NRC) and the other by the Department of Energy (DOE)—the Congressional Budget Office (CBO) estimates that the subsidy probably amounts to less than 1 percent of the levelized cost for new nuclear capacity.2

To assess the health hazards that existing nuclear power plants could pose, analysts at the NRC estimated the probability of radioactive releases occurring at several nuclear facilities, including the Surry power station in Virginia, and the consequence of such an event.3 Damage to property and possible injury or loss of life caused by a hypothetical accident at that facility could be pertinent to assessing the liability of proposed nuclear plants because several of them would be located in areas of the Southeast with roughly similar population densities. For the Surry power station, the NRC study provides assessments of both internally initiated accidents (which could be caused by malfunctioning equipment or human error) and externally initiated accidents (which could result from a fire or earthquake). According to the study, an internally initiated accident at such a facility that on average caused more than 10 deaths would occur, at most, once every million years. A fire-related accident causing more than 1,000 deaths on average would occur, at most, once every million years. CBO’s analysis adopted those probabilities and results for the sake of determining liability from fatalities. To that, CBO added estimates of injuries and property damage to provide a more complete estimate of liability.

CBO based its assessment of liability from injuries and property damage on the DOE report, which modeled a radioactive release at the Limerick facility near Philadelphia. That scenario includes, in addition to the number of fatalities, estimates of injury and property damage, from which CBO inferred potential liability resulting from an accident at the Surry plant.

On the basis of the probability of fatal accidents estimated in the NRC report and the estimates of damage from such accidents in the DOE report, it appears that catastrophic accidents are possible but likely to be rare; CBO estimates that an accident causing about $500 billion in damages will occur an average of 3 out of every 100 million years.4 Because such potential damages are spread over a long period, the long-run average of damages per year (the expected cost) would be only about $600,000. That figure does not include the cost of nonfatal accidents, which might already be covered by the $10 billion in damages for which the nuclear power industry is held liable under the Price-Anderson Act. If so, the projected annual subsidy is about $600,000 per reactor as well.

Insurance premiums represent a small portion of the levelized cost for a nuclear power plant. Even if the analysis based on the Surry facility understates the expected cost of fatal nuclear accidents by a factor of 10, paying a fair premium would not lead to large changes in the levelized cost. In CBO’s reference scenario, increasing the insurance premium by $6 million per year increases the levelized costs by 1 percent.
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1. That $10 billion in coverage has two layers: The owner of a nuclear plant is required to purchase primary insurance covering liability up to $300 million. In the event of an accident, liability for damages assessed at between $300 million and $10 billion would then be shared among the owners of all U.S. nuclear plants, who would pay a "retroactive premium."

2. See Nuclear Regulatory Commission, Severe Accident Risks: An Assessment for Five U.S. Nuclear Power Plants, NUREG-1150 (December 1990); and Department of Energy, Technical Guidance for Siting Criteria Development, SAND-81-1549 (December 1982). CBO’s estimate was derived to evaluate the sensitivity of levelized costs (or the minimum price of electricity at which a technology generates enough revenue to be economically viable) to limits on liability but should not be interpreted as a precise estimate of the expected cost of liability.

3. A description and evaluation of the NRC’s probabilistic risk assessment models is provided in Nuclear Power Joint Fact-Finding (Keystone Center, June 2007).

4. Each fatality is assumed to lead to $5,000,000 in liability, and each injury is assumed to cause $2,500,000 in liability.

It would not be unreasonable to charge the reactor owners a premium to cover the value of
Price Anderson. On the other other hand it would also not be unreasonable, assuming the extreme unlikelyhood of a reactor event that would require government compensation, that the government fore goe such a premium in the grounds that it would be extremely unlikely that Price-Anderson compensation would ever be paid during the lifetime of these reactors, and that future reactors will be so much more safe, that the payment of future compensation is etremely implausible.

Sovacool Strikes Again

Benjamin Sovacool - or as he is known to his friends as Dr Benjamin K. Sovacool - is at it again. This time he is attacking nuclear power by arguing in effect that nuclear power plants are accident prone. I have elsewhere in this blog and in bartoncii noted the accident history of dams and the potential danger of dam accidents. Dr Benjamin K. Sovacool has used his connection with the scitizen web site to launch an anti-nuclear crusade. His latest posting is based on a paper he is publishing this month: “The Costs of Failure: A Preliminary Assessment of Major Energy Accidents, 1907 to 2007.” Sovacool's scitizen essay is called, "The Costs of Major Energy Accidents, 1907 to 2007." I will presently show that both titles are misnomers because Sovocool ignores thousands of energy related accidents and tens of thousands of of energy related deaths.

Sovacool tells us, "From 1907 to 2007, a new study finds that 279 major energy accidents in the coal, oil, natural gas, hydroelectric, and nuclear sectors have been responsible for $41 billion in damages and 182,156 deaths." Of course the study is his own. Notice he refers to energy sectors in his introduction. The term "energy sector" is usually understood to refers to the exploration, production, marketing, refining and/or transportation, and use of energy sources including oil and gas, coal, nuclear energy, renewable energy and alternative fuels.

Sovacool asks, "what counts as an energy “accident,” especially a “major” one?" We will presently see that a great many energy sector accidents do not count in Sovacool's research.

How does sovacool get his information. He tells us, "by searching historical archives, newspaper and magazine articles, and press wire reports from 1907 to 2007." this would in fact be far to great a task for one person to undertake in a lifetime, let lone a person of such great intellectual accomplishments that he holds a PhD from an institution of higher learning found in Blacksburg, Virginia. There are however shortcuts. Sovacool tells us. "The words “energy,” “electricity,” “oil,” “coal,” “natural gas,” “nuclear,” “renewable,” and “hydroelectric” were searched in the same sentence as the words “accident,” “disaster,” “incident,” “failure,” “meltdown,” “explosion,” “spill,” and 'leak.'" well this distinctly sounds like that well known research method called googling.

How did Sovacool decide to pick out accidents to study? He reports his criteria as follows:

# The accident must have involved an energy system at the production/generation, transmission, and distribution phase. This means it must have occurred at an oil, coal, natural gas, nuclear, renewable, or hydroelectric plant, its associated infrastructure, or within its fuel cycle (mine, refinery, pipeline, enrichment facility, etc.);
# It must have resulted in at least one death or property damage above $50,000 (in constant dollars that has not been normalized for growth in capital stock);
# It had to be unintentional and in the civilian sector, meaning that military accidents and events during war and conflict are not covered, nor are intentional attacks. The study only counted documented cases of accident and failure;
# It had to occur between August, 1907 and August, 2007;
# It had to be verified by a published source;

Almost immediately Sovacool's research failure emerges. He writes:
"While responsible for less than 1 percent of total energy accidents, hydroelectric facilities claimed 94 percent of reported fatalities. Looking at the gathered data, the total results on fatalities are highly dominated one accident in which the Shimantan Dam failed in 1975 and 171,000 people perished."

In fact not one but 62 Chinese dams failed in the 1975 dam disaster, and the Shimantan Dam was not the largest.

Sovacool reported finding "279 accidents" which meet his criteria. This is an astonishingly small number, and is a certain clue that something is seriously amiss with Sovacool's study.

How far has Sovacool missed the marek in his study? He tells us "The second largest source of fatalities, nuclear reactors, is also the second most capital intense, supporting the notion that the larger a facility the more grave (albeit rare) the consequences of its failure."

In fact had Sovacool not made such stupendous blunders in his research, he would have known that neither of these assertions were true. Arguably the largest number of fatalities are associated with the hydroelectric sector since around 200,000 people were killed by or died as a result of the collapse of several dozen Chinese dams in 1975. It is quite possible that the cumulative death tolls for the coal mining industry is higher than the death toll for hydro. Sovacool mentions one oil pipeline in Nigeria, actually there were several. A 1998 accident at Jesse, Nigeria killed 1200 people. Two 2006 accidents killed 150 and 500 people. An oil pipeline explosion kills 508 in Cubatão, Brazil, during 1984. Other oil pipeline disasters have occurred.Sovacool also ignores oil welk fires, and both oil refinery fires and explosions. One explosion and fire in Texas City, in March 2005 killed 15 people and did hundreds of millions of dollars worth of damage. The U. S. Occupational Safety and Health Administration levied a $21 million fine against BP after the fire. A Shell Oil refinery fire, loss worth $49 million (2003 dollars), Roxana (IL), 1985. An oil refinery fire, in Norco (LA), 1988 did $513 million in damage. A Union Oil refinery fire kills 17 & loss worth $177 million (2003 dollars) at Romeoville (IL) in 1984. A Shamrock Oil & Gas Corp. refinery fire kills 19 firefighters at Sun Ray (TX) in 1956. A Phillips Petroleum plant fire, loss worth $1,113 million at Pasadena (TX) in 1989. A 1975 fire at the Gulf Oil Refinery Philadelphia killed 8 firefighters. Other large fires occured at the same refinery on May 16, 1975, and on October 20, 1975.


It would also appear that fatalities involving natural gas pipelines also accounted for far more casualties than nuclear power related accident. A single LPG pipeline explosion near Ufa in Russia killed up to 645 people on June 4, 1989.

Thus It would appear that the coal, hydroelectric, oil and natural gas sectors have accounted for a far higher death toll than the nuclear sector has.

What about property loss? In order to assess the cost of nuclear related accidents, relative to costs related to accidents in other sectors, we must have to make a comprehensive list sector accidents. Clearly coal mining and other coal sector related accidents might well involve greater property loss. Our lists of energy sector accidents would be extremely long, and involving literally thousands of accidents. Many accidents would involve the loss of human life, but thousands of accidents would meet Sovacool's property loss criteria. Since it is quite clear that Sovacool has failed to do include thousands of energy related accidents that would have meet his criteria in his research, no value can be ascribed to his work.

Sovocool has produced another typical example of his work. His research is weak, his research methods are suspects, and his conclusions will not withstand critical examination.

Benjamin K. Sovacool, “The Costs of Failure: A Preliminary Assessment of Major Energy Accidents, 1907 to 2007,” Energy Policy 36(5) (May, 2008), pp. 1802-1820.

C.J. Barton, Sr. at ORNL: Into the 1960's

In the late 1950’s my father was nearing 50. He had come back from a major political problem , a conflict with his boss Warren Grimes over my fathers stand in opposition to local liquor sales. Along the way he had contributed to the way scientist’s design and use an important research tool, the gloveboxes. The glovebox research had come about because he had been asked to do research that required glove box use. His research problem had been to establish if it ware possible to use Plutonium as a fuel in Molten Salt Reactors. Plutonium is a very dangerous material to work with, and there had been fires and accidents involving glovebox research in the past. My father had , by the late 1950's reached an age at which many scientists begin to loose their productivity, but his most productive years at ORNL lay ahead of him.

In the late 1950’s and early 1960’s some ORNL research focus shifted from experiments with exotic liquid fuel reactors, to questions concerning the light water reactor. The success of the Atomic submarine had caught many people’s attention. Admiral Hyman Rickover had a far more narrow focus than Alvin Weinberg, and Eugene Wigner. Rickover was a navy man and the navy liked boilers, because they were the traditional way to power ships. A light water reactor is in fact a reactor inside a boiler. Not only does the water cool the reactor, it also slows down the neutrons that cause a chain reaction. But ordinary water does not do as good job of promoting a chain reaction as graphite or “heavy water reactors” do. Hence LWRs need more U235 to keep their chain reaction going.

Rickover saw that the light water reactor could power for more than submarines. it could also be useful for powering surface ships, and Rickover realized, civilian power plants. Rickover had pushed for the development of reactors large enough to power aircraft carriers. President Eisenhower had called for the development of the peaceful uses of nuclear energy, and the aircraft carrier reactor allowed Rickover to kill two birds with one stone. Rickover donated a naval reactor to serve as a prototype civilian power reactor. At the same time, the navy was still able to do research with the reactor.

The Shippingport reactor thus became the prototype civilian power reactor. And virtually every functioning power reactor since has been a light water reactor. The Light Water reactor was an ORNL project and the staff of ORNL from Alvin Weinberg downward was aware of its flaws and weaknesses. One of the problems of the light water reactor was what could be called its intrinsic safety issues.

Light water reactors are supposed to heat water, and hot water, under pressure is a difficult medium to work with. There was always a danger that a leak could develop somewhere in the plumbing. If the coolant started leaking, then the temperature inside the reactor would start to rise. This would intern increase the pressure inside the reactor pressure vessel, and force more water out. Thus a loss of containment accident could turn disastrous.

Research at ORNL increasingly turned to the question of what could happen in the event of a light water reactor accident. That was where George Parker came in. Parker was the ORNL Reactor Chemistry Division’s leading expert on the behavior of radioisotopes in reactor accidents. Parker was like my father, a senior scientist, who was more comfortable in a lab than in a staff meeting.

My father, who had speech difficulties, was a good writer. Parker was not. My father was assigned in 1960 to work with George Parker, if only to help Parker to get his ideas and research on paper. My father was to later say that his role was to interpret George Parker to the world. But the fact that my father was lead author of some of their papers tells me that my father was taking the lead is some of their joint research. The two scientists hit it off, and became within the confines of the laboratory friends. My father greatly admired George Parker, who he considered to be a gifted scientist.

The two scientists worked together to gain a picture of what would happen in the case of a nuclear accident. They studied a chain of events that began with the overheating of fuel elements, to the breach of reactor fuel containment within the reactor, the melting of reactor fuel, and the behavior of molten reactor fuel. They traced the escape of radioisotopes from the confines of a reactor. It is probably safe to say that they made themselves into some of the worlds leading experts on fission product release in reactor accidents, and indeed the wrote the Chapter on Fission Product release in a 1973 Reactor Textbook, “The Technology of Nuclear Safety.”

Thus 20 years before the Three Mile Island accident G.W. Parker and C.J. Barton Sr., had a good idea what would happen if such an accident were to occur.

For most of my fathers first dozen years at Oak Ridge his writing was confined to internal reports, and other research related documents. But beginning in 1960, he began publishing papers in Nuclear Safety, and other scientific journals. At the same time, My father was writing a major technical report with George Parker and two other associates, “Fuel Element Catastrophe Studies: Hazards of Fission Product Release from Irradiated Uranium.”

That study was followed up in 1962 by a Nuclear Safety paper that my father coauthored with R.E. Adams, W.E Browning, and Parker, a paper on “Particle and Fission Product Behavior in Nuclear Accidents.”

During the early 1960’s my father became involved in an amazing diversity of studies. He continued to do Molten Salt research for the Reactor Chemistry Division. In addition nuclear fusion was becoming a focus at ORNL and he and R. A. Strehlow were asked to do research on how electric power might be extracted from a Thermonuclear Reactor. They propose a blanket approach, which turned high-energy neutrons into heat.

My father was also became involved in research about environmental contamination by radioisotope discharged from the Oak Ridge facilities.

Update: I have been reviewing my father's papers and have found a detailed account of his career. In a few matters, my father, who will be 96 on the 16th of this month, appears to have forgotten a few details. His memory for dates is not always accurate. He simply has for gotten exactly when things happened. On the other hand, he told me several stories that were not included in his earlier account. I plan to scan his most interesting papers, and post them. I must have to say that what my father writes is more interesting than anything I have said.