Who is Qualified to Determine Nuclear Plant Safety?

Kansai Electric Power's Takahama Nuclear Generating Station.  Unit 1 and 2 are on the right; Units 3 and 4 are in the background on the left.  Courtesy Kansai Electric Power.

Kansai Electric Power’s Takahama Nuclear Generating Station. Unit 1 and 2 are on the right; Units 3 and 4 are in the background on the left. Courtesy Kansai Electric Power.

On July 12, the Otsu District Court in Japan made a significant decision regarding the future of Kansai Electric Power’s Takahama nuclear station when it upheld a previous lower court injunction against the operation of Units 3 and 4 at that site.  The district court had received a petition from just over two dozen intervenors in Shiga Prefecture earlier this year; legal wrangling ensued, with Kansai Electric filing an objection which ultimately today appears to have fallen on deaf ears.  As it now stands, there is a provisional injunction against the startup of these two plants.

Takahama 3 and 4, both of which are rated 870 MWe and which include Mitsubishi pressurized water reactor (PWR) nuclear steam supply systems, were cleared by the Nuclear Regulation Authority of Japan (NRA) in October 2015 under the new and vastly more complicated approval process implemented in the wake of the Fukushima accident.  Takahama Unit 3 began loading fuel the day before Christmas, 2015 and started up at the end of January 2016.  Unit 4 loaded fuel January 31, the day after Unit 3 reached criticality and then started up at the end of February.

Since then, higher courts in Japan have been sought by the intervenors, in order to stop operation of these units.  This happened March 9, forcing the shutdown of Unit 3, while Unit 4 was still working through its shakedown. It had started up but not reached commercial operation yet.

Naturally Kansai objected strenuously, noting that the plants were now very safe and had already received the clearance from the recognized national regulator to operate.  Today’s Otsu District Court decision to uphold the previous injunction against operating the plants will immediately be countered by Kansai, which has stated it will file a petition with the Osaka High Court.  This would override the district court decision.

What’s actually happening here is that the showdown is on to set the national precedent for just who it is that is responsible to determine that nuclear plants are safe to operate in Japan.  The continued injunctions being put against nuclear plants in Japan are being issued by various civilian courts which have no specific knowledge or understanding of nuclear power plants, their safe operation or construction.  Petition to higher and higher courts will invariably continue until the precedent is set either that the NRA is the only valid determinant of nuclear plant safety, or else that the population has the final say as to whether a nuclear plant can operate in its area.

That precedent has long been set in the United States, where, after numerous cases (mostly coming out of New England), the established fact is that it’s the Nuclear Regulatory Commission who ultimately determines whether a nuclear plant is safe. It is not the state governments or the other courts.  As of now, 23 units in Japan have applied to the NRA for review to restart, and today’s events seem to indicate that the final fate of any of them may hang not on the NRA review but rather on the local population.

As a footnote to this slowly developing saga, it must be noted that elsewhere, in Kagoshima Prefecture, an election has just been held which has led to installation of a known anti-nuclear candidate for governor.  Satoshi Mitazono has announced that he will seek the shutdown of Kyushu Electric Power Company’s two operating reactors at the Sendai Nuclear Plant.  He cannot do this directly by order, but can prevent their restart after they shut down for inspection later this year.  Indeed, as the Japan Atomic Industrial Forum has noted, in Japan the future of the many shut down nuclear plants doesn’t necessarily hinge on the final determination of plant safety by the NRA — a very unfortunate situation, given the island nation’s dependence on coal, oil and gas (all imported) for its electric power generation.


 

Will DavisWill Davis is Communications Director and board member for the N/S Savannah Association, Inc. He is a consultant to the Global America Business Institute, a contributing author for Fuel Cycle Week, and he writes his own popular blog Atomic Power Review. Davis is also a consultant and writer for the American Nuclear Society, and serves on the ANS Communications Committee and will serve on the Book Publishing Committee beginning in June. He is a former US Navy reactor operator and served on SSBN-641, USS Simon Bolivar.

8 thoughts on “Who is Qualified to Determine Nuclear Plant Safety?

  1. Stephen Maloney

    Brian:

    Let’s begin with my opinions are my own.

    But, since you seem interested in my nuclear credentials, I’ll summarize it. My nuclear background begins with service as commissioned officer in the nuclear Navy where I qualified chief engineering office by ADM Hyman G. Rickover. I left active duty to become a senior nuclear engineer in thermal hydraulic and nuclear safety analysis at Pilgrim Station. I did a little graduate work at MIT’s nuclear engineering department under Professor Norman Rasmussen (principal author of WASH-1400) before switching over to operations research. While at Pilgrim, I was active on a spectrum of nuclear safety issues involving NRC USIs defined from WASH-1400, and representative to technical advisory committees of several NSSS owners’ groups and TMI groups. That work includes DHR, Mark I containment upgrade program, Browns Ferry safe shutdown studies, ATWS, reactor accident consequence modeling, and small break LOCA accident analysis. I co-founded EPM and will let you research that if it’s that important to you – same with Devonrue and our work on the station blackout, EPS reliability, and DHR studies.

    And, yes, I also have “a background in LNG [liquefied natural gas] risk analysis” along with a number of other matters as my risk management career evolved over the years.

    No, I’m not an intevenor. I worked with utilities over the years, including supporting litigation on spent fuel claims against the United States and claims against vendors regarding errors and omissions. I supported a corporate emergency response team during the Fukushima accident and dealt with the safety issues facing our team in Japan.

    A risk management professional doesn’t have to be an intervenor on nuclear regulatory matters. Risk professionals assess and manage risks as they are – not as you want them to be..

    As for Congress’s obligation, as I said and I suspect we may agree, there is no legal obligation on any sovereign government to do anything. I’m not an attorney but my understanding is the only obligation the United States has is to comply with legal contracts it enters into. That’s one of the reasons the Nuclear Waste Policy Act was structured as a contract – because the nuclear operators were (quite correctly) concerned the Federal Government would fail to take delivery of spent nuclear fuel on the schedule provided in the individual contracts. And, that’s also why when DOE started defaulting on its contracts back in the late 1990s, so many nuclear operators had legal standing in the US Court of Federal Claims to seek damages from the United States.

    And, I also think we agree that the United States can pursue claims exceeding the amounts covered by insurance. But, as Fukushima demonstrates, severe nuclear accidents can quickly lead the nuclear operator to declare bankruptcyg just as TEPCo was forced to do by Fukushima. So, sure, the Feds can pursue a claim but the nuclear operator lacks the capital to cover any judgment. That leaves a lot of people displaced from their homes (as with Fukushima). The Japanese Government stepped in after Fukushima to try to compensate the victims. I have little doubt the US would do the same. You may not agree.

    But that’s my point – nuclear operators lack sufficient capital (contingent in the form of insurance, and economic capital on its balance sheet) to compensate the third party damages from accidents beyond a TMI which was trivial.

    I agree I may have been sailing a bit too much regarding the BP spill. And, yes, of course, the Jones Act and other legislation put the Federal Government as guarantor for spills. However, you will recall BP stepped up and assumed the liabilities. Odds were, BP would probably have lost in court if they fought the claims – far better to take responsibility.

    But, here’s where I think you miss my point – I brought up the Gulf spill because BP being properly capitalized to cover third party damages from its hazardous operations. In contrast, nuclear operators lack sufficient capital to cover the far more extensive damages arising from a Fukushima event. I doubt even a BP could deal with the order of magnitude larger claims and cleanup required by Fukushima.

    You bring up natural gas. If you review IEA or EIA forecasts, it’s pretty clear natural gas will dominate energy markets for quite some time. Fact is there is already too much of it in most parts of the world (both pipeline and LNG) with the result that many producers are losing money trying to cover their fixed costs.

    But, your point is well taken – if an LNG tanker has an accident, will the operators have sufficient capital to cover third-party damages? I think we agree they should. Do you agree?

    Finally, you ask what is the insurance liability risk for an LNG tanker exploding in a busy harbor? The most recent published studies answer “not much” – and certainly not as severe as what happened in the Gulf, or what happened in Japan. But, I’ll defer to Federal and other studies rather than offering my own opinion.

    So, again, let’s you and I seek consensus where we can find it:
    (1) we have direct evidence that third party damages from reactor and spent fuel pool events at Fukushima can be far more severe and with decades of cleanup than presumed in the current contingent claims structure of the EPA2005 Price-Anderson renewal.
    (2) Fukushima was far more expensive than Deepwater Horizon by about an order of magnitude.
    (3) the economic capital (e.g., decommissioning funds and balance sheet) of nuclear operators are far less than BP spent on the Horizon cleanup
    (4) if a Fukushima happens at a US facility, the affected “TEPCo” is bankrupt
    (5) if the nuclear operator is overwhelmed by the magnitude of the claims and clean up, third party damages either go unpaid or the sovereign steps in in some fashion (Japan at Fukushima, the US at whatever plant is affected)
    (6) if the sovereign steps in, that’s a bailout not much different than TARP bailed out a lot of large financial institutions almost a decade ago
    (7) all operators of hazardous processes should have as a license condition sufficient capital (from a variety of sources including insurance and balance sheet) to cover potential third party damages. And that should apply to LNG and natural gas production, storage, pipeline, and shipping facilities.

    Appreciate the conversation. Do we have consensus? If not, where and why don’t?

  2. Brian Mays

    Sorry for the belated response sailing this past weekend.

    Wow, I didn’t realize that spouting BS on the Internet paid so well. I guess I’m in the wrong business.

    Actually, Brian, I have far more nuclear safety experience than in the petroleum industry, as you seem to suggest.

    Aren’t you Stephen Maloney, formerly with Towers Perrin and then with Moody’s Analytics who is quoted in the press as having “a background in LNG [liquefied natural gas] risk analysis”?

    If I am wrong and you’re just the garden-variety anti-nuke then you have my apologies. Such common names are easy to confuse.

    If you ask around the senior ranks of the nuclear industry, I think you might find a number of people would acknowledge I know quite a bit about the station blackout accident, DHR accidents, fire-induced safe shutdown events, and a range of other accident sequences that were the focus of these groups and NEI.

    Ah … so you’re an intervenor? If so, then probably a well-paid one, judging by your sailing habits. I should let you know that that holds very little water with me. Most intervenors that I have encountered are blowhards who know very little about what they proclaim to talk about. They know their talking points and that’s about it. Most so-called “consultants” are the same. You are fitting that description quite well.

    But, you’re right, Congress would have to sign off on stepping in there’s no obligation under law for them to do so.

    And here is why these “consultants” or whatever they call themselves aren’t worth the money they’re paid.

    This is exactly the opposite of what I said. Congress most certainly does have an obligation under law to step in and compensate the “victims” (how much of a victim they are under a “no-fault” insurance scheme is somewhat questionable, but never mind), because these “victims” can sue the government for claims under the Tucker Act.

    What I was referring to is that the President and Congress can decide to go after the plant owners in the event of an accident whose claims exceed the amount provided by the two levels of insurance. There is nothing to stop them. There is no statutory liability cap. You can claim that there is a de facto liability cap, sure, but that is the fault of the politicians elected at the time, not the law, and it’s certainly not a consequence of “regulatory capture,” a term that you like to throw around like a rag doll (as if it means anything by the way you misuse it).

    … would have economic consequences far beyond a Discovery Horizon.

    Do you mean Deepwater Horizon? You sure you’re not still out sailing?

    If you want to keep harping on the Deepwater Horizon incident, you should at least admit (assuming that you know) that the Oil Pollution Act of 1990 authorizes payment for oil spill cleanup costs and damages using federal tax revenues.

    (LINK)

    So, if a nuclear operator can’t get enough insurance for the magnitude of contingent claims, why would anyone allow them to operate when cheaper energy sources are available?

    Cheaper meaning natural gas — particularly LNG in which you have a background in risk analysis — I assume. Right?

    So what is the insurance liability risk for an LNG tanker exploding in a busy harbor? These types of accidents (including Deepwater Horizon) actually kill people, unlike TMI and Fukushima.

    (LINK)

  3. Stephen Maloney

    Brian – thanks for the reply. Sorry for the belated response – sailing this past weekend.

    Actually, Brian, I have far more nuclear safety experience than in the petroleum industry, as you seem to suggest.

    You might presume I have no nuclear experience and dismiss my commentary about utility groups and NEI. Never a good idea to presume facts not in evidence – I consulted to them for quite a number of years. If you ask around the senior ranks of the nuclear industry, I think you might find a number of people would acknowledge I know quite a bit about the station blackout accident, DHR accidents, fire-induced safe shutdown events, and a range of other accident sequences that were the focus of these groups and NEI.

    I also know a thing or two about the dynamics of “regulatory capture” and the principal-agent problem which, in my experience, seems quite pronounced in the nuclear industry compared to other industries in which I’ve worked.

    But, let’s not dwell on my background. Rather, let’s focus on the core issue: whether nuclear operators are sufficiently capitalized to underwrite the risks (individually or jointly) associated with a so-called “Class IX” accident, be it a full core melt or a spent fuel pool melt.

    The “Energy Policy Act of 2005” reinstated and extended the Price-Anderson Act through December 31, 2025. Through this program, the U.S. nuclear power industry has roughly $12 billion in liability insurance protection to compensate the public for third-party damages in the event of a nuclear accident..

    Fukushima’s economic and population density is comparable to that in the vicinity around Pilgrim Station in Massachusetts and other sites in the Northeast and certain areas in the Southeast. The clean-up and decommissioning costs facing the now-bankrupt TEPCo, the Japanese insurance pool, and the ultimate guarantor (the Japanese Government) is currently estimated at several hundred billion dollars in current dollars. So, if a full-core melt occurred at my old plant, it would have some pretty extraordinary economic effects on Plymouth, Bristol, and Barnstable counties. Clearly, the $12 billion in the pool would be exhausted within a year of a comparable accident.

    And, quite to the contrary, there is a liability cap – the $12 billion in insurance is it. Everything beyond that is uncompensated, which means, like TEPCo, the Federal Government would have to step in to compensate the victims.

    But, you’re right, Congress would have to sign off on stepping in – there’s no obligation under law for them to do so.

    Do you have any doubt they would once the pooled insurance is exhausted? It’s called a “bailout” – not unlike the $700 billion authorized by Congress under TARP after the Panic of 2007-2008. Or, what the Japanese government will pay in Fukushima Prefecture over the next 4-5 decades.

    The key issue here is that a Fukushima involving, say, a sister US BWR-4 with a Mark I containment from an event disabling long-term systemic DHR failure would have economic consequences far beyond a Discovery Horizon. BP could easily handle that kind of disaster because it has the capital. The thinly capitalized nuclear operators – and their $12 billion pool – would be quickly overwhelmed.

    In effect, nuclear operators are not much different from the recipients of TARP – “too big to fail”.

    So, if a nuclear operator can’t get enough insurance for the magnitude of contingent claims, why would anyone allow them to operate when cheaper energy sources are available?

    Perhaps regulatory capture might be a factor.

  4. Brian Mays

    “Regulatory capture” is a well-documented dynamic in regulation.

    Yes, that is particularly true in the petroleum industry, which you are most familiar with, Stephen. Isn’t it?

    In the US, we have NEI and various other bodies who have successfully derailed a wide range of safety initiatives for a very long time.

    Nonsense. Pure nonsense. You should stick to analyzing oil companies and LNG facilities.

    … you quickly see that the operators are under-capitalized for the risk of operating nukes anywhere in the US.

    This is why the federal government mandates that nuclear plant operators enter into a pooled insurance arrangement. You really didn’t do your homework, did you?

    In other words, remove the Federal subsidy (and implicit bailout) that goes with nuclear liability caps.

    The only subsidy is a subsidy to the insurance companies, since nuclear licensees are required by law to purchase no-fault insurance — two tiers worth. There is no liability cap. Read the law. Congress would have to sign off on any cap.

    If you want to compare the nuclear industry to the BP ecological disaster, you should consider the scenario in which insurance paid for by Exxon Mobil would be used to cover the damages resulting from BP’s spill. Until then, you’re comparing apples to oranges.

    The Deep Horizon disaster was only six years ago. Meanwhile, in the nearly 60 years since the Price-Anderson insurance system was instituted, the second tier of pooled insurance hasn’t been touched even once.

  5. Stephen Maloney

    “Regulatory capture” is a well-documented dynamic in regulation. In the US, we have NEI and various other bodies who have successfully derailed a wide range of safety initiatives for a very long time.

    Since regulatory capture is inevitable, it’s far more effective to supplement compliance with regulatory edicts with full liability for third party damages and cleanup costs should things go wrong – not unlike holding BP fully liable for Discovery Horizon. In other words, remove the Federal subsidy (and implicit bailout) that goes with nuclear liability caps.

    Of course, when you compare the balance sheet of BP with that of any nuclear operator, you quickly see that the operators are under-capitalized for the risk of operating nukes anywhere in the US. That fact alone means nuclear operations is risky since an American Fukushima defaults to a Federal bailout.

    Moreover, Discovery Horizon could be remediated. An American Fukushima would cost far more in third party damages and site remediation.

    Responsible behavior and effective risk management go hand-in-hand with accountability. By the same token, risky behavior is inevitable when agents know a bailout is available.

  6. Dave Hancock

    Obviously, someone is not in charge. The NRA did listen when I warned about cyclonic hydrology work hardening in austenitic recirculation system…however, the NRC stated disordering of the engineered system by GE at Nine Mile unit 1, was a ‘rate payer’ issue and not a ‘safety issue’. (both, Steve Alexander NRC). GE key personnel in San Jose, evidently did nothing to change the placement of emergency back up systems, when I warned of my concerns in 1989, hence Fukushima. So, who listens to whom….seems to depend on who butters your bread. Remember Peter Atherton and Maine Yankee? As I recall, Peter was fired and humiliated for reporting that the fire retardant burned…later it was reported the core spray pumps had never been wired. Nuclear Safety is everyone’s concern…i.g., if you live on this planet.

  7. George Vayssier

    I agree in part with with Will Davis´ comments. In principle, the NRA should have the final say in matters of nuclear safety – nobody else. However, the NRA is a governmental organisation, and in many countries citizens have the right to protest against governments decisions in some special, usually high level court. Such a court can overrule a government´s decision. Including a restart of a nuclear power plant. Of course, the court does not rule ´better` in nuclear safety issues than the regulator – it even does not intend to do – but it balances the decision by the governent against the interests of the petition makers. In a democratic country, the final say in a conflict is always with a court – also and even notably, if it concerns a conflict with the government. Even here where we might have ´an incompetent industry and a lapdog regulator`, to quote rubaxter. The solution is not to restrict democratic principles, but to increase competence with industry and regulator – which, indeed, may be a longer way to go. Abolishing democracy is more often proposed to end stalemates and other problems – we never should go this way. It is as Churchill said: democracy is the worst political system you can think about – after all other ones that have been tried in the course of history.

  8. rubaxter

    Well, obviously the Japanese utilities and their lap dog regulator are incompetent, given what’s come to light in recent history.

    I deal with ‘safety’ at my job, every day, and be glad the US courts haven’t opened that domestic cess pit of conjecture and double speak analysis.

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