If your regional nuclear power plant ever melts down and irradiates you and your family and renders your home uninhabitable, you’ll get pennies on the dollar – if you’re lucky.
Why? Because since 1957, Congress has given the nuclear energy industry broad financial protection that sharply limits liability.
According to no less of an authority than the U.S. Nuclear Regulatory Commission, federal legislation known as the Price-Anderson Act covers “...liability claims of members of the public for personal injury and property damage caused by a commercial nuclear power plant accident. The legislation (helps) encourage private investment in commercial nuclear power by placing a cap, or ceiling, on the total amount of liability each nuclear power plant licensee (faces) in the event of an accident. Over time, the ‘limit of liability’ for a nuclear accident has increased the insurance pool to more than $16 billion.” (1)
A $16 billion insurance pool. Wow. Sounds like a lot of money, doesn’t it?
Well, of course it’s a lot of money. But in the context of a possible nuclear accident, $16 billion is side-splittingly laughable. It’s petty cash. It’s chump change.
Consider the cost of the Fukushima disaster. “Completely cleaning up and taking apart the plant could take a generation or more, and comes with a hefty price tag. In 2016 the government increased its cost estimate to about $75.7 billion, part of the overall Fukushima disaster price tag of $202.5 billion. The Japan Center for Economic Research, a private think tank, said the cleanup costs could mount to some $470 billion to $660 billion, however.” (2)
How much has the Chernobyl cleanup cost so far? “The 1986 Chernobyl catastrophe that exposed some 10 million people to nuclear radiation in the surrounding countries has estimated costs of roughly $700 billion (through 2016)…” (3)
And here in the U.S., the industry will cover up to $16 billion. Whoopie.
“Okay, but wouldn’t my homeowners insurance cover beyond the $16 billion pool?” you fondly ask.
No. Commercially available home insurance pointedly excludes nuclear coverage precisely because of Price-Anderson. “A nuclear hazards clause is property insurance policy language that excludes from coverage any damage caused by nuclear reactions, nuclear radiation, or radioactive contamination.” (4) Why the heck would any self-respecting insurer want to take on risks as monumental in scale as Fukushima and Chernobyl?
So were there to be a Fukushima-Chernobyl type of event in the U.S., the nuclear energy industry would dump a paltry $16 billion on the table and walk away.
The end result: stick the balance to the victims. And to the taxpayers. Whoopie some more.
Again I ask -- whatever happened to capitalism in America? Whatever happened to market forces? If nuclear had to compete with fossil and solar and wind and geothermal energy without the protective cloak of Price-Anderson, it simply wouldn’t exist as an energy source. Because of the monumental financial risks, investors would never touch it.
A footnote: interestingly, Price-Anderson was set to expire this coming December 31st. So in anticipation, what did Congress do? Why, it gave the nuclear energy industry a lovely present: a forty-year-long extension, to the year 2065.
“On March 23, 2024, President Biden signed a bipartisan funding bill into law that includes a 40-year reauthorization of Nuclear Regulatory Commission’s (NRC) and Department of Energy’s (DOE) indemnification authority under the Price-Anderson Act ....” (5)
Sources:
(1) https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/nuclear-insurance.html
(2) https://www.scientificamerican.com/article/clearing-the-radioactive-rubble-heap-that-was-fukushima-daiichi-7-years-on/
(4) https://www.investopedia.com/terms/n/nuclear-hazards-clause.asp