In response to rising energy prices the public perception on nuclear energy is quickly changing. In fact, a recent poll showed that 2 out of 3 Americans are in favor of building new nuclear plants.

Both presidential candidates have nuclear on the table as an option to meet energy demands, albeit Senator John McCain more distinctly defined his role for nuclear power: a minimum of 45 reactors by 2030. Senator Obama also recognizes nuclear energy’s role to play in America’s energy profile, but criticized McCain for a “half-baked” idea. Speaking in Las Vegas in June, Obama said:

“[Giving oil companies additional access to oil resources] doesn’t make sense for America. In fact, it makes about as much sense as his proposal to build 45 new nuclear reactors without a plan to store the waste some place other than right here at Yucca Mountain. Folks, these are not serious energy policies.”

Of course, concern over nuclear waste isn’t unique to just Senator Obama. Waste storage is one of the most important impediments to more nuclear power in the public’s mind. But both candidates are hesitant to give a well-defined solution to the problem of nuclear waste. We’re here to do just that.

Let’s start with some basics. What is nuclear waste? The Nuclear Regulatory Commission defines high-level nuclear waste as “highly radioactive materials produced as a byproduct of the reactions that occur inside nuclear reactors.” But to actually call it waste is misleading; this “used” fuel generally retains about 95 percent of the uranium it started with, and that uranium plus some other elements can be recycled. (There is also a separate definition for low-level radioactive waste here.)

So it can be classified as either waste or potential energy? How much of this stuff does the U.S. have? Over the past four decades, America’s reactors have produced about 58,000 tons of used fuel. That “waste” contains roughly enough energy to power every U.S. household for 12 years.

Okay, then what’s the problem? Heritage Research Fellow Jack Spencer explains it in detail here. The Nuclear Waste Policy Act of 1982 attempted to establish a comprehensive disposal strategy for high-level nuclear waste. It charged the federal government with the responsibility of disposing of spent nuclear fuel and created a structure through which nuclear energy users would pay for the service.

The federal government has since accumulated approximately $27 billion, but the nuclear waste is still sitting at reactor sites. The goal was to place it in a geologic repository in Nevada called Yucca Mountain but the government’s projected date of 1998 to open Yucca was slightly off-target. (The license application has been submitted by the Department of Energy and the earliest date it can be open is 2017.)

Needless to say, the nuclear companies that have paid into the Nuclear Waste Fund with rate payers’ money weren’t thrilled about this. Consequently, they sued the government. As a result, taxpayers have already paid $94 million in lawyer expenses and $290 million in damages. The government is appealing another $420 million award. Long-term liability projections are astronomical, reaching $7 billion by 2017 and $11 billion by 2020.

To make a long story short, the system is broken and the taxpayers are paying for it. Well, what’s the solution? First, despite the Yucca Mountain boondoggle, the repository remains critical to the management of used nuclear fuel. Even if nuclear waste is reprocessed, there will be remaining waste that needs to be placed somewhere else; opening a geologic repository is a necessary step. A more comprehensive approach would include a combination of interim storage, recycling, and geological storage.

Sounds great, but how do we get there? We’ve got an answer for that too, privatize the whole shebang. A free-market approach to managing nuclear waste is the only way to ensure that the commercial nuclear industry will be sustainable in the long run. Among the steps needed to privatize the system, as outlined by Spencer, include:

• Creating the legal framework that allows the pri­vate sector to price geologic storage as a com­modity;
• Empowering the private sector to manage used fuel;
• Repealing the 70,000-ton limitation on the Yucca Mountain repository and instead let technology, science, and physical capacity determine the appropriate limit;
• Creating a private entity that is representative of but independent from nuclear operators to man­age Yucca Mountain;
• Repealing the mil, abolish the Nuclear Waste Fund, and transfer the remaining funds to a private entity to cover the expenses of constructing Yucca Mountain; and
• Limiting the federal government’s role to providing oversight, basic research, and development and taking title of spent fuel upon repository decom­missioning.

The full paper can be found here. It won’t be easy. But if we’re serious about nuclear energy meeting energy demands and environmental goals, it is without a doubt necessary.