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There have been many articles recently about the vulnerability of Nuclear sites to terrorist attacks. Some corporate spokespersons have tried to create the illusion that nuclear plants are impervious to any possible attack.

Consider the Associated Press article about the recent Alaskan pipe line oil leak. “Oil spewed like a geyser from the trans-Alaska oil pipeline.”

Over 150,000 gallons of oil were lost.

What sinister plot and high-tech weaponry caused so much damage? Just a drunk with a gun. And, as far as anyone knows, he meant no harm!

A drunken man unwittingly did this much damage with just a bullet. Imagine what havoc a committed terrorist, with no regard for his own life, could unleash!

It was proven that even the Pentagon is not terrorist proof. No reasonable person would expect a nuclear plant to be completely terrorist proof. For corporations to imply that they are, only further erodes their paper thin credibility. It is time for the baloney of attack proof nuclear plants to be laid to rest.

Lawmakers Wrong to Force Taxpayers to Subsidize Nuclear Industry's Insurance Costs

WASHINGTON, D.C. -- The House Subcommittee on Energy and Air Quality was wrong to vote today to reauthorize the Price-Anderson Act, which calls for the government - and therefore taxpayers - to foot most of the bill in the event of a nuclear power accident, Public Citizen said today.

Not only is it a bad idea to reauthorize the act, but lawmakers should gather much more information about the security of nuclear power plants before even considering the legislation, particularly in light of the events of Sept. 11, Public Citizen said. The nuclear power industry has a dismal record of passing mock security drills, and recent published reports indicate that nuclear power plants could not withstand the attacks perpetrated on the World Trade Center and the Pentagon.

"This is absolutely the wrong time for the Congress to be considering the extension of this program," said Wenonah Hauter, director of Public Citizen's Critical Mass Energy and Environment Program. "The current law doesn't expire until next August, but the leadership in the House of Representatives has put this legislation on a fast track. It's foolhardy to consider this until a full and thorough discussion of nuclear safety is conducted."

The Price-Anderson Act was passed in 1954 to help the nascent nuclear power industry get off the ground by providing government-backed indemnification in the event of any nuclear power accidents. Now, nuclear power plants must buy $200 million worth of insurance, and the industry's costs in the event of an accident would be capped at $9 billion. However, a nuclear accident would likely cost $500 billion, according to government estimates. The government would have to pay for what the nuclear industry doesn't cover. Under the pending legislation, the act would be reauthorized for 15 years. Public Citizen opposes the reauthorization, but says that if lawmakers do approve it, they should impose strict security requirements to protect against terrorism and assure the security of the reactors and surrounding communities.

Of particular concern in light of the events of Sept. 11 is the subcommittee's approval of concessions to new reactors constructed according to the pebble bed modular reactor design, which cuts costs by eliminating the traditional containment that protects the reactor from explosions and intrusions.

"This reckless move to promote dangerous new reactors is straight off the nuclear industry's wish-list," Hauter said. "There is no excuse for such blatant disregard of the safety risks that a new generation of nuclear plants would pose to the American public."

Further, the bill continues to require the American taxpayer to pick up the tab for willful and negligent actions of private contractors at U.S. Department of Energy facilities. As Energy and Commerce Committee ranking member John Dingell (D-Mich.) pointed out, neither the Environmental Protection Agency nor the Defense Department provide this level of subsidized indemnification to their private contractors who perform unsatisfactorily.

"What's the rush?" Hauter asked. "This is not the time to rush this legislation through the Congress. By doing so, we would expose our citizens to even more harm - financially and otherwise. Congress should put an end to corporate welfare for the nuclear industry."

WHAT IS THE PRICE-ANDERSON ACT?

Originally enacted by Congress in 1957, the Price-Anderson Act is a federal law designed to shield the nuclear industry from full accountability for its actions. In the event of an accident the industry’s liability is dramatically limited. No other industry receives this type of protection.

HISTORY OF THE PRICE-ANDERSON ACT

Nuclear energy was first developed and used in the atomic weapons of World War II. After the war, Congress enacted the Atomic Energy Act of 1946, which established a federal government monopoly over all nuclear materials.

Stemming from President Eisenhower’s Atoms for Peace program, Congress passed the Atomic Energy Act of 1954 which included provisions that eliminated past restrictions and encouraged the commercial development of nuclear energy by private industry.

Nuclear powered electricity was thought to be a cheap and abundant new energy source but it became apparent that serious disincentives to private investment would impede the development of the nuclear power industry. The potential for a catastrophic accident that could have enormous financial impacts made companies unwilling to expose their assets and discouraged private insurance companies from underwriting the industry.

A vice-president from General Electric echoed the fears of the entire industry in testimony before Congress when he stated that his company would not build nuclear power plants unless they could be protected from full liability in the event of an accident.

In order to get this fledgling nuclear industry off the ground the Price-Anderson Act was passed by Congress in 1957 as a temporary, ten-year program.

Since its enactment, the Price-Anderson Act has been extended on three separate occasions. What was once portrayed as a “temporary” solution, now forty-four years later, has become a permanent crutch for the nuclear industry.

PRICE-ANDERSON ACT CURRENT STATUS

The Price-Anderson Act is set to expire on August 1, 2002. With the expiration of this legislation, existing reactors will continue to be covered under the Act. Price Anderson currently limits the nuclear industry’s liability at $9.43 billion.

Each utility is required to carry $200 million of liability insurance per reactor. If claims following an accident exceed that amount, all reactor operators must contribute up to $83.9 million per reactor. Currently, there are 103 operating nuclear reactors in the United States.

THE SPECIAL INDUSTRY PROTECTIONS IN THE PRICE-ANDERSON ACT

No other industry has ever been so thoroughly insulated from financial risks. Businesses that engage in activities with high liability risks are required to be held financially responsible for their actions. This is the market’s method of regulating hazardous enterprises. If the private insurance industry - the professional risk assessors-refuses to insure an activity, or requires such high premiums that the activity is prohibitively expensive, this is the market mechanism for limiting that activity.

By forcing the development of nuclear power before it was ready to meet the tests of the marketplace, the Price-Anderson Act not only provided an enormous subsidy to the nuclear industry, but a unique protection as well. The value of the subsidy has a range of estimates. The low range estimate of $3.45 million (2001 dollars) per reactor per year is cited in a report from the University of London, England authored by A. Heyes and C. Liston-Heyes entitled Liability Capping and Financial Subsidy in North American Nuclear Power; Some Financial Results based on Insurance Data. A high range estimate is $33 million (2001 dollars) per reactor per year according to a report by J.A. Dubin and G. S. Rothwell entitled Subsidy to Nuclear Power Through Price Anderson Liability Limit. With 103 currently operating plants, this is a total annual subsidy of $355 million to $3.4 billion.

Limit on Liability

The Price-Anderson Act limits the financial responsibility of the nuclear industry. Limiting the liability creates an inherent subsidy by relieving the nuclear industry of the costs of fully insuring against the risk of an accident. All other industries insure to a reasonable limit against potential liabilities and risk loss of assets if the insurance is inadequate. The cost of this insurance is a normal cost of doing business, which is then reflected in the price of the product or service provided. By eliminating the cost of purchasing adequate insurance, and removing a significant portion of the investment risk, the Price-Anderson Act makes nuclear power appear cheaper than it would if the hidden costs were internalized. The cost of any product or service should reflect the true costs of doing business. Furthermore, although the Act is deliberately vague about who would pay in the event of an accident, it is highly likely that Congress would vote to help compensate victims. This raises a question: why should American taxpayers be forced to assume financial responsibility for the mistakes of private industry. The use of public money to protect the assets of the nuclear industry is inappropriate.

The time has come to shift the liability burden from the taxpayers to the nuclear industry where it belongs.

Department of Energy (DOE) Contractor Indemnification

The Price-Anderson Act also established a system of financial protection for DOE contractors, which apply regardless of the conduct of the person indemnified. Even in the event of a nuclear accident caused by gross negligence or intentional misconduct, these companies are entirely shielded from any financial accountability. Prior to the 1988 amendments to the Act, DOE had discretion to enter indemnification agreements with its contractors. However, the 1988 amendments made the indemnification mandatory.

DOE indemnification covers activities relating to a repository for civilian nuclear spent fuel including the transportation, storage or disposal of nuclear waste. Price-Anderson also covers any nuclear incident in the U.S. during the transport of nuclear material, including evacuation. Further, DOE indemnification also covers any incident regarding any cleanup activity at a DOE site cleanup which include the nuclear weapons sites.

These DOE contractors are indemnified up to a total of $9.43 billion by the federal government. This means that if there is an accident caused by any DOE contractor it is the taxpayers that will pay any damages. By removing this element of financial responsibility, a crucial incentive for contractor safety and accountability is lost. Taxpayers should not have to bear the costs of unsafe practices and activities.

Designers, builders and suppliers indemnified

The Price-Anderson Act places the limited burden of accident liability on the utilities, while exempting the designers, manufacturers and component suppliers. According to the investigations following the Three Mile Island nuclear reactor accident, both the manufacturer of the plant (Babcock and Wilcox) and the utility that operated the plant were at fault.

Non-profit institutions exemptions

The 1988 amendments to the Price-Anderson Act enabled DOE to assess civil fines and penalties against its contractors, but it specifically exempted DOE nonprofit contractors as well as their for-profit and nonprofit subcontractors and suppliers. According to a March 1999 U.S. Department of Energy Report to Congress on the Price-Anderson Act, the contractors currently exempt are: University of Chicago for activities at Argonne National Laboratory; University of California for activities at Los Alamos National Laboratory, Lawrence Livermore National Laboratory and Lawrence Berkeley National Laboratory; Universities Research Association, Inc. for activities at FERMI National Laboratory; Princeton University for activities at Princeton Plasma Physics Laboratory; and Battelle Memorial Institute for activities at Pacific Northwest Laboratory.

Conclusion

The Price-Anderson Act accomplished its purpose of removing the impediments to the private development of nuclear power. After forty-four years, this extraordinary protection of the industry is not necessary and should not exist. Reauthorizing this legislation will allow continued government interference in the free market, distorting the economics of nuclear power by hiding its true costs.

The federal government should not be in the business of picking winners and losers. Such decisions should be left to the marketplace. Nevertheless, recently Vice President Cheney stated, “We want to encourage investment in nuclear energy and to do that we must renew the Price-Anderson Act.” This statement alone demonstrates a lack of faith that the nuclear industry can stand on its own.

The Price-Anderson Act should be allowed to expire and not reauthorized. Existing reactors would still be covered, but new reactors would have to openly compete in the market in terms of their costs, benefits and risks. It is time that Congress allows the nuclear industry to be fully accountable for its actions.

Bob Montgomery (The Greenville News) quoted more of Duke Energy’s spin in “Oconee Nuclear plant safe from terrorist attacks, officials say.” Duke Energy has made contradictory statements on the issue. For that matter, so has the Nuclear Regulatory Commission (NRC).

The opening statement is ambiguous: “In the wake of recent terrorist activity in the U.S., Duke Power Company officials feel confident that the Oconee Nuclear Station could withstand a terrorist attack without the release of radiation and casualties.”

The statement does not specify if the station is being attacked by a nest of angry blue-jays or a nuclear warhead. The lack of clarification is usually no accident. It is carefully chosen to induce a certain belief without any substantial facts. Facts presented may seem to be pertinent, but are intended to obscure the issue.

The next statement is equally ambiguous: “The builder of the plant's reactor buildings and storage facilities says the 3 1/2-foot thick walls are reinforced with steel and the buildings are not very high and are not as likely a target as the 110-story World Trade Center.”

The composition of the walls and the height of the reactor buildings have zero bearing on whether the site is a terrorist target, or not. The implication is that nothing on earth can knock down thick concrete walls or a building that is shorter than 110 stories.

By mentioning the World Trade Center, the nature of the attack is defined: a jumbo jet full of fuel. Many experts have stated that no reactor was ever designed to withstand such an attack. Some of these experts work for the NRC and some of them work for Duke Energy. Yet, there are Duke Energy spokespeople still trying to project the illusion that nuclear reactors are impervious to any type of attack!

The next statement also sidesteps the issue: “‘I take a great deal of pride in it,’ said Bob Dick, vice president of construction in the 1970s when the plant was built. ‘It was designed to withstand earthquakes and tornadoes. There are several lines of defense from any projectiles.’"

An earthquake or a tornado is not a jetliner. A defense from any projectile is a very broad statement. And, the projectiles in question did not even exist when Duke’s plants were designed. The statement is pure gibberish, when speaking of large jet plane crashes.

The statement by Bob Dick, Head of Corporate Excellence, could seem valid to some, but is intended to mislead. Don’t laugh; “head of corporate excellence” was actually his title when he retired!

He retired shortly before CEO and Chairman Bill Lee. Come to think of it, there has not been much excellence since!

The next statement has zero to do with jet crashes: “Duke spokeswoman Becky McSwain said the company also has a well-trained, armed security force.”

Yes, but not armed with anti-aircraft guns!

The next statement is really laughable: "‘I think a terrorist would be an idiot if they targeted a nuclear plant,’ McSwain said. ‘Hitting it with an airplane doesn't have a high likelihood you'll have any consequences.’"

First of all, name calling will not deter terrorists, if anything, it will only serve as a challenge to them. (“Hey, idiots - bet you can’t blow up our plants!”)

According to Boeing, a 767 has a maximum takeoff weight of 206 tons! It can hold 23,980 gallons of fuel, and can cruise at over 500 mph! To top things off, this huge mass can explode on impact! So, a Boeing 767, fully loaded with fuel, crashing into a nuclear reactor does not have a high likelihood of causing any consequences?

The mildest scenario from such an attack would be a raging fire, and it is doubtful that this would be the only damage. So, this would be of no consequence, and all three reactors would keep merrily churning out 100 percent power? Hey, no need to report this to the NRC; it’s of no consequence.

Here is another statement of no relevance: “Duke recently received a 20-year permit renewal for the Oconee station, which McSwain said is a sign of confidence the plant will remain stable well into the future.”

In granting the permit, the NRC did not certify that the reactors were invincible to any possible attack. This is another attempt to muddy the water.

The article was not completely one-sided. It did provide a couple of opposing viewpoints: "‘Plants were not designed to meet that kind of challenge,’ said Edwin Lyman, scientific director for the Nuclear Control Institute, a Washington-based watchdog group.”

No expert can argue with that statement.

The next statement is more subjective: “He said a jetliner traveling at full-speed diving into a nuclear plant could inject jet fuel into the containment leading to a meltdown.”

He never said it would; he only said that it could. With any luck, we will never know for sure. Although, there are surely some Kamikaze terrorists, who are dying to find out!

This statement shoots down all the reactor invincibility bluster: "...However, the NRC did not specifically contemplate attacks by aircraft such as Boeing 757s or 767s and nuclear power plants were not designed to withstand such crashes."

Politicians and nuclear experts say the Sept. 11 terrorist attacks reinforce the need to turn excess bomb-making material into a form that can't be used to create nuclear weapons.

The attacks on Washington and New York underscore, they say, the need for programs -- both here and abroad -- that neutralize weapons-grade plutonium, such as the projects slated for the Savannah River Site near Aiken. Concerns that terrorists could try to steal the material are rising, especially when it comes to Russia, which has significant stockpiles of excess plutonium and lax security.

A Coke-can sized amount of the material is be enough to make a nuclear bomb.

The recent attacks "have changed the whole debate," said U.S. Rep. Lindsey Graham, a Seneca Republican. "If terrorists could get ahold of these materials, is there any doubt about what they would do with it? This needs to be one of the nation's top priorities."

Those fears factor into an already tangled discussion about the programs slated for SRS that would make the plutonium difficult to use in a weapon.

Earlier this year, an immobilization program to put plutonium inside safer glass logs was put on hold. A plan to process the plutonium into mixed oxide, or MOX, fuel for use in commercial reactors is in jeopardy. Funding for the project was cut, but S.C. lawmakers are working to restore it. Those programs together are estimated to cost anywhere from $2 billion to $6 billion.

"It's a question of whether or not there's going to be a lot of loose nuclear material lying around," said U.S. Rep. John Spratt, a York Democrat.

"I think the lesson learned from (Sept. 11) is that, as horrendous as that was, it still was not as bad as the explosion of a small nuclear device on lower Manhattan.

"Look at the cloud overhanging that site in New York now -- What if that were radioactive? You get a no-man's zone in Manhattan for years to come, and before you clear it all out, that dust sprinkles all over New Jersey and New York and Connecticut."

South Carolina's program may depend on events unfolding in Russia. An agreement between the United States and Russia calls for both countries to begin neutralizing their weapons-grade plutonium during the next six years. The agreement calls for each country to process up to 50 metric tons of plutonium.

But the Russians are having trouble paying for their end of the bargain, just as the Bush administration is hinting that the U.S. program might not be fully funded. Both countries had planned to turn the plutonium into fuel for power plants, as well as to immobilize some of it. Agreements call for the two countries to process the plutonium roughly on the same schedule.

The U.S. Department of Energy said Tuesday it remains committed to the "dual track" of immobilization and MOX, and the terrorist attacks have not changed that. But DOE spokesman Joe Davis referred questions to the National Security Council, which has raised concerns over costs associated with the programs. Efforts to reach the NSC were unsuccessful Tuesday.

Both the United States and Russia are supposed to begin operation of plutonium disposition plants no later than Dec. 31, 2007. But the plan is dependent on the United States' committing $200 million to help pay for the Russian program.

Other European countries also set to help pay for the program have pulled back.

"I wouldn't be surprised to see somebody say, 'No we can't do this unless it's parallel to the Russian side,' " Spratt said.

But not everyone agrees about the type of program needed to process the plutonium. Brian Costner, a former DOE senior policy adviser who ran the Columbia-based watchdog group Energy Research Foundation, said some programs provide greater safety from terrorism.

Because of high security, there is less fear that a terrorist could steal U.S. plutonium. But after the Sept. 11 attacks, some worry that nuclear sites could look like gigantic bombs to terrorists who hijack airplanes.

In that scenario, Costner said, immobilization would leave sites with a more stable form of plutonium. "That way, it's much less vulnerable to dispersion, even through an enormous explosion," Costner said.

But the U.S. might not abandon programs like MOX, even though Costner and others say it requires more transport of plutonium to different sites and more time. Cash-strapped Russia has insisted it doesn't want to throw away valuable plutonium, said Tom Clements, a spokesman for the Nuclear Control Institute.

"The MOX program would involve more transport and handling and more areas for attack and diversions," Clements said. "But the Russians don't want to immobilize the material, they want to make use of it."

However, Russian security surrounding plutonium is low. Former Democratic U.S. Rep. Butler Derrick visited Russia as part of a group studying the security of plutonium.

"Some of it was really laughable," he said. "They had stuff stored in what looked like an outhouse to me."

The recent attacks highlight the need to keep the plutonium from falling into terrorists' hands.

"This certainly reinforces the importance of maintaining control and ultimately of reducing quantities of stuff like plutonium that can make a mess," said Laura Holgate of the Nuclear Threat Initiative and a former DOE director in charge of nuclear materials like plutonium.

"Simply having nuclear material on one of those planes could have a significant impact in terms of public health, and an incredible panic," she said.

NRC MOX Fuel Hearing - Part One

Charlotte, N.C. -- Duke Energy is planning to use plutonium from nuclear bombs – remnants of the Cold War -- as fuel for electricity, but critics say it could make nuclear plants targets in the new war on terrorism.

Both the McGuire Nuclear Station on Lake Norman and the Catawba station on Lake Wylie plan to become the first in the nation to use weapons grade plutonium in a fuel known as mix-oxide fuel or MOX.

"When you use MOX in a nuclear reactor, if there were an accident, it would increase the casualties by 25 percent,” says Edwin Lyman, a doctor at the Nuclear Control Institute. “This I think would make McGuire and Catawba especially attractive targets to terrorists looking to maximize the death toll."

"Nuclear plants are not particularly attractive targets anyway,” says Rebecca McSwain with Duke Power. “They have an armed, well-trained security force in place every day. They are hardened structures built to withstand earthquakes, tornadoes with 4 feet of steel reinforced concrete."

But no one planned or designed nuclear power plants to withstand the crash of a Boeing 767.

The debate over security comes even as the Nuclear Regulation Commission holds hearings on the re-licensing of McGuire, but it was not until an hour into the hearing that anyone mentioned the word plutonium.

“Why have you not been mentioning the most obvious word today, plutonium?" asks Rosemary Hubbard, with the Blue Ridge Environmental Defense League.

Under the Department of Energy plan in 2007, plutonium fuel would travel by truck or train from Aiken, S.C. to the Charlotte area.

York County’s Emergency Management Director says it is the transportation of the material that concerns him more than what happens once it is on site.

The first public meeting on the proposed renewal of McGuire Nuclear Station’s (North Carolina) operating license was held at 1:30 PM today, by the U. S. Nuclear Regulatory Commission (NRC).

Brew Barron, McGuire Site Vice President, was a speaker for Duke Energy. Mr. Barron favors nuclear power over other sources because of the economics. He spoke of the money the plant brought into the area and of the company’s various projects at local schools.

Other speakers in favor of the license renewal also mentioned the financial aspects of the plant. Some said that they trusted Duke Energy. Some said that they have confidence in the personnel to operate the plants safely. Some said that the company has always cooperated with their agencies.

The speakers opposed to the renewal did not question the positive items mentioned, but questioned the proposed use of MOX fuel and the possibility of terrorist attacks on the plant. Many compared the September 11, 2001 attack on the United States to an attack on a nuclear plant. These speakers opposed plutonium fuel being shipped across the nation to produce MOX fuel.

One lady was opposed to license renewal, MOX or no MOX. She was opposed to spent fuel being stored outside the plant. She said that it was too tempting of a target for terrorists.

Mr. Don Moniak, of the Blue Ridge Environmental Defense League, was on hand to urge that the operating license not be renewed. One of his main concerns was the ice condenser emergency cooling system. He said that even the governing experts admit that these systems are weak.

Second NRC Meeting on McGuire