NRC caves on foreign ownership (and why you shouldn’t expect it to value human life like other federal agencies)

atomicenergyactsinglestampThe NRC Commissioners voted unanimously earlier this month to adopt its staff recommendation that the agency’s rules be changed to allow a “graded approach” on meeting the Atomic Energy Act’s prohibition on foreign ownership, control, or domination of U.S. nuclear reactors.

This cave-in to the nuclear power wasn’t entirely unexpected (I wrote about it months ago here), although the unanimous vote was certainly a disappointing showing from the two newest Commissioners, who might have been expected to take a more skeptical line toward the industry than some past Commissioners. But it’s too bad.

And it’s just more evidence that the NRC sees its mission less as regulating the nuclear industry–even when the law is clear, and there are few laws more clear-cut than this Section 103(d) of the Atomic Energy Act–than in accommodating the industry.

There have been few intervenor victories in nuclear licensing cases. There have been two cases where intervenors successfully used the law and NRC regulations to defeat proposed nuclear facilities. One was Urenco’s first stab at building a uranium enrichment plant in the U.S. (under the name Louisiana Energy Services, or LES) near Homer, Louisiana. The other was the proposed Calvert Cliffs-3 reactor on the Chesapeake Bay in Maryland.

I was involved in both of those. In the LES case, we beat them on financial qualifications grounds. We proved to the Atomic Safety and Licensing Board that the corporate structure of LES was such that the company could not demonstrate that it would have the financial means of cleaning up its mess after operation–especially if something went wrong and it had to close early.

We also won on environmental justice grounds. Then NRC-Chairman Ivan Selin had committed the agency to complying with President Clinton’s 1995 executive order on environmental justice, which prohibited siting of major facilities where it would have a disproportionate impact on minorities and the poor. Selin didn’t have to do that; the NRC is an independent agency and can’t be forced to follow executive orders. But I knew Selin, and I know he believed in it. And the licensing board, after hearing the evidence we presented, issued the first, groundbreaking order completely denying LES’ application on the grounds that the site not only would have a disproportionate impact–but that the site was chosen for exactly that reason.

I should be clear when I say “we” in this case, I don’t mean me. I helped, but it was attorney Diane Curran in Washington, and Nathalie Walker of what was then Sierra Club Legal Defense Fund (now EarthJustice) in New Orleans, and experts like Dr. Arjun Makhijani and Michael Sheehan, who comprised the grand “we.”

After we won (and later beat Urenco proposals to build in Tennessee and Alabama to boot, though we lost in New Mexico and the plant is operating–17 years later than planned), the NRC changed its financial qualifications rule, and when Selin left dropped its commitment to environmental justice.

In the NRC’s view, regulations are made to facilitate licensing, not to be used by the public rabble to stop licenses from being granted.

In the Calvert Cliffs-3 case, the problem was that, by the end of the case, the reactor project was 100% owned by Electricite de France (EDF). It’s tough to get more than 100% owned, and it’s tough to read the Atomic Energy Act as allowing that. And, in fact, the graded approach would still not allow 100% ownership. The NRC probably would if it could, but they know if they ever tried that we’d haul them into court and win so fast their attorney’s bodies would become whirling dervishes.

But at the time we first filed the foreign ownership contention (which, full disclosure, I wrote and followed through to its successful conclusion), the foreign ownership was nowhere near 100%. In fact, the project was supposedly a 50-50 joint venture between Baltimore’s Constellation Energy and EDF. That first contention argued that the corporate structure and amount of investment in the project at that time indicated that EDF was more than a 50% partner and thus was not only the largest owner, but also controlled and dominated the project.

The ASLB, in admitting the contention for hearing, said it wasn’t sure of the merits but it was willing to consider the issue because EDF subsequently had bailed out Constellation by buying 49% of all its existing reactors when the utility was about to collapse because of its close financial dependence on Lehman Brothers when that firm went down,

It wasn’t until Constellation dropped out of the project a couple years later that EDF found itself holding the entire bag.

They key here is that under the “graded approach” proposed by the NRC staff, that initial corporate structure that provided the underpinning for the initial contention almost certainly would have been approved in advance by the NRC. And thus the contention would have been unlikely to have been accepted. And thus Calvert Cliffs-3 probably would have been approved for licensing even before EDF became the 100% owner (and perhaps Constellation wouldn’t have dropped out, at least on paper). And thus that unnecessary, extraordinarily expensive and dangerous reactor might be under construction right now.

Once again, the NRC is changing the rules because we were able to defeat a reactor for not meeting the rules. In the NRC’s view of things, if a nuclear project cannot meet the rules then the problem is the rules, not the project.

That is of course, what the industry wants–here’s the Nuclear Energy Institute’s press release on the Commissioners’ action.

There will be a public comment period on this “graded approach” that the NRC staff comes up with, but since the Commissioners ignored the comments against adopting that approach in the first place–not to mention the strong dissents from a large number of its own top staff members, don’t hold your breath that the agency will come up with anything that makes sense. Rather, it will try to skirt the Atomic Energy Act’s requirements as much as possible while pretending not to.

And that’s why we don’t expect much out of the NRC on another critical issue of current interest, being publicized by our friends at Union of Concerned Scientists.

The NRC currently places a value on your life of $3 million. That’s what your life is worth to them (you may well have a different take on what your life is worth; I know I do). Other federal agencies put the value of a life at $9 million. The idea that a life is priceless is, of course, relegated to political campaign speeches and dropped whenever inconvenience to an industry interferes.

The NRC staff, bless their little hearts, wants to raise the value to the federal standard of $9 million and have sent the issue to the Commissioners to decide.

As UCS notes, the nuclear industry will oppose this change. What UCS doesn’t say is just how vociferously and ferociously the nuclear industry will oppose this change. They will do it as quietly as possible; it’s bad PR to go public with the notion that your life isn’t worth much, after all. But they will go after it hard.

Because it would cost the industry money–a lot of it. Tripling the value of human lives would upend all of the cost-benefit calculations the NRC has made about new safety requirements (especially the post-Fukushima recommendations the staff made when Greg Jazcko was chair and are now dropping left and right). It could well force the staff to implement new safety measures, and perhaps even stronger ones than have been considered to date. It might change the nature of emergency planning. It could change a lot of things. It might even, gasp, cause some reactors to close because it would be too expensive to retrofit them to meet safety requirements that are actually based on something meaningful.

And the industry certainly doesn’t want changes in that direction. They’d be much happier if the NRC put no value at all on a life.

Doing things that cost the industry money is not in the NRC’s DNA. Nor is implementing regulations that might close reactors, or prevent new ones from being licensed. So while we salute the staff for even making the proposal, we don’t have much faith that the Commissioners will adopt it in the face of industry opposition.

It would be nice to be surprised. Then we’d have the chance to see the amazing contortions the staff would undergo to try to make sure the new cost-benefit analyses didn’t actually apply to any particular reactor that might close or might be prevented from being licensed.

Michael Mariotte

May 27, 2015


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3 thoughts on “NRC caves on foreign ownership (and why you shouldn’t expect it to value human life like other federal agencies)

  1. Victor

    The only intervenor success in denying a power reactor license on safety grounds occurred in the 1960s and involved the proposed Corral Canyon plant in Malibu, California. The identity of the crucial intervenor tells you a lot–it was Bob Hope. The nuclear plant was too close to his ranch.


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