When nuclear experts discuss nuclear energy, they generally talk about three different parts: the front end of the fuel cycle, business and operations, and the back end of the fuel cycle. The front end includes all of the activities necessary to produce nuclear fuel. This means mining, enrichment, fuel fabrication, etc. Once the fuel is dropped into the reactors, the business and operations crew take over. They are responsible for the plants and provide the electricity. The back end of the fuel cycle is where spent nuclear fuel, or nuclear waste, is managed.
In the United State, two of these three processes are run by the private sector. One is run by the government. Two of them are run efficiently and productively. One of them is not. It doesn’t take a genius to add these numbers up.
Let’s first look at the front end. Mining uranium has been a safe and productive private sector activity in the United States for years. Then we have enrichment, which is an interesting example. Until about a decade ago, enrichment was a state-run activity. And guess what? The U.S. had no viable commercial enrichment industry. It was antiquated, over priced, and uncompetitive. Fast forward a few years after privatization, and wouldn’t you know it, today the U.S. has two enrichment facilities under construction and two more in the works. Other front-end activities are private as well. Fuel design. Fabrication. All of it. The government’s role consists of environmental and operational oversight, which the Environmental Protection Agency and the Nuclear Regulatory Commission have done very effectively, if not efficiently.
The only time there are hiccups is when the government gets involved – like when they try to ban uranium mining in Arizona and Virginia. And while it’s true that there were construction delays when plants were built in the 1970s, they were a result of government interference.
The operations of nuclear power plants are relatively straightforward. While one may not run itself, it practically could. These very safe and highly efficient plants provide electricity for twenty percent of America’s homes. Given this outstanding record, it should not be a surprise that they are run by the private sector.
Just FYI: Chernobyl was not.
And then there’s the government-run back end of the fuel cycle – the “waste.” Let’s start from the beginning. 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 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, but really beyond 2020 is more likely.)
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.
So here’s the million dollar question. If the private sector efficiently runs the first two divisions of the nuclear process, what should be done with the back end? If you said privatize it, give yourself a gold star.
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 Heritage nuclear expert Jack Spencer, include:
• Creating the legal framework that allows the pri¬vate sector to price geologic storage as a com¬modity;
• 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 man¬age 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 decom¬missioning.
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.
