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The Three Mile island nuclear power facility.
Guest Post by Luke Weston. Luke is a Melbourne-based physicist and occasional freelance electronic engineer, with a strong interest in educating the community about nuclear energy and related issues.
It is often said by the anti-nuclearists that the commercial nuclear energy industry “can’t get insurance” against the risks of nuclear or radiological accidents, or that it is “uninsurable”. This is simply garbage, a myth, a load of baloney that gets exclaimed backwards and forwards between the anti-nuclearists, without any of them ever bothering to actually check the facts or do the research. It’s simply a meme, one of many nonsense pseudo-fact memes that persist in the community of people who are really just devout believers that nuclear energy is bad.
The Price-Anderson Act in the United States is often bought up by anti-nuclear activists as some sort of damning evidence of preferential government treatment for nuclear energy, but it’s actually quite the opposite – it’s legislation which imposes exceptional demands on nuclear energy above and beyond any other industry; demands which are completely out of proportion to the reality of the demonstrably low risk of nuclear energy, especially relative to other energy sources.
This should be compared with the risks associated with other important energy generation systems, where the industry is not insured in any such way against significant impacts on society and the environment.
In this post I’ll focus the discussion mainly on the Price-Anderson act in the United States. How does this relate to other nations? I’m not really in a position to say. How does this relate to the earthquake and tsunami-related damage to the Fukushima-Daiichi reactors? I’m really not in a position to say. What is the position of the Japanese government regarding the amount of private-sector insurance coverage that their nuclear energy industry is required to maintain? I really don’t know and I won’t pretend to know – but you can do the research, ask skeptical questions, think critically and evaluate the evidence just as well as I can, if you want to find out.
When there’s a catastrophic disaster on an oil rig or a coal ash dam or a natural gas pipeline or a coal mine in the United States and people lose their lives and/or there is severe environmental damage, where are the Price-Anderson style requirements for insurance and industry liability coverage for those industries? They do not exist.
In these kinds of incidents, the government is likely to spend a fortune managing and cleaning up the effects. Sites polluted by the fossil fuel industry and the chemical industry in the United States are all too often cleaned up as Superfund sites; these industries are not required to take responsibility for themselves in the same way that the nuclear energy industry is.
(As an aside, we’re not talking about old, deteriorating underground tanks of radioactive fission-product raffinate that were produced at the Hanford Site in a great rush at the end of the Second World War and during the Cold War and were not properly treated and packaged and contained, of course – the DOE is responsible for cleaning up that site, and the nuclear power industry in the United States has got nothing to do with it. Anti-nuclear activists love to muddy the waters and change the subject, though.)
The air pollution resulting from the use of coal and other fossil fuels causes around 30,000 premature deaths in the United States each year – does the coal generation industry have appropriate insurance coverage? The risks from catastrophic flooding resulting from the failure of a hydroelectric dam, for example, are borne directly by the public. The 1977 failure of Idaho’s Teton Dam caused about half a billion dollars in property damage – but the only compensation provided to the affected communities was around 200 million dollars worth of low-cost loans provided by the government.
Nuclear power plants in the United States have literally never harmed anyone. The large liability and insurance pool which the industry provides as it is required to by the Price-Anderson act has almost never been touched at all, and not one cent in Price-Anderson liability has ever been paid out from the government’s liability which might exist, theoretically, if the industry’s own private insurance coverage was entirely exhausted.
The commercial nuclear energy industry in the United States has over 10 billion dollars worth of liability insurance protection provided by the commercial sector, covering them in the event of claims resulting from some kind of nuclear energy-related incident sufficiently catastrophic so as to have a deleterious impact on the community outside the plant boundary. The utilities using nuclear energy (and, indirectly, the consumers of nuclear electricity, for whom the cost of the required insurance constitutes a tiny portion of the cost of their electricity; a fraction of a cent per kilowatt-hour) – not the federal government or the American public – pay for this insurance.
Fukushima Daiichi nuclear accident
The Price-Anderson Act requires that the nuclear energy industry has massive pools of liability insurance, which is provided by the private, commercial insurance industry. These insurance pools have paid out a total of more than 200 million dollars in claims and litigation costs since the Act came into effect, mainly as a result of dubious claims supported by anti-nuclear activist groups, particularly following the Three Mile Island accident, which did not have any bona fide health physics impact on any person outside the plant’s boundary. (It is important to point out that not once has any of these claims ever involved a bona fide case of illness or injury to a person relating to ionising radiation or radioactivity from a nuclear power reactor, supported by legitimate evidence.) The American taxpayer has not paid one cent of this.
(This is quite similar to the way that anti-vaccination activists seize on any case where a court has awarded any damages to a person with an illness that they say is “caused” by vaccination, and claim that this is actually proof of unreasonable harm actually being causally associated with the vaccination, which is in fact not the case.)
While the nuclear energy industry’s insurance pools have paid out about $200 million in claims, and the industry has actually paid about 21 million dollars to the US government in indemnity fees, again, the American taxpayer has never paid for any of this. The Price-Anderson Act does not give the commercial nuclear energy industry in the United States any government money; it is actually a set of government requirements requiring the commercial nuclear energy industry in the United States to spend money.
The Price-Anderson Act requires nuclear energy utilities to demonstrate evidence of financial protection – nuclear power licensees are required to provide a total of more than ten billion dollars in pooled insurance coverage to compensate the public in the event of a catastrophic nuclear accident. Wherever they are available to the commercial insurance industry, nuclear power stations in the Western world actually represent sought-after business because of their high engineering and risk management standards. This has been the case for fifty years.
Significantly, because the RBMK reactors at Chernobyl were of a design that was never acceptable to anybody outside the Soviet Union, notably due the lack of any containment vessel as well as due to the intrinsic physics characteristics of the reactor, the accident had no impact on premium rates for the commercial Western nuclear energy industry.
The structure of insurance practice in relation to the nuclear energy industry is different from the management of ordinary industrial risks. It involves international conventions, national legislation channelling liability to the operators of the plants and mandating very large insurance pools taken out by the nuclear energy industry from the private-sector commercial insurance industry and the pooling of insurance capacity in more than twenty countries.
Risk modellers work with probabilities, models and data
The approach of the national nuclear insurance pool was primarily developed in the United Kingdom in the 1950s as a way of marshalling insurance capacity for the coverage of the then-novel and exotic perceived risk of radiological accidents or reactor accidents. Other national pools that followed were modelled on the UK pool, forming the association of insurance brokers serving the nuclear energy industry that is in business today as Nuclear Risk Insurers Limited.
NRI’s capacity comes from eight insurance companies and 16 Lloyds syndicates, and it represents the largest single block of risk transfer insurance capacity in the world, at more than 400 million British pounds. It also reinsures other nuclear energy industry insurance pools worldwide. It covers risks including property, industrial risk in all parts of the nuclear fuel cycle, such as the nuclear fuel handling and radioactive waste management industries, construction work on nuclear energy sites and transport liabilities. The role of the commercial insurance and actuarial sectors in understanding and underwriting the risks associated with the commercial nuclear energy industry is discussed at greater length in 2008 issue three of Market magazine, the industry journal of Lloyds of London.
In the United States, one of the major commercial insurance providers specialising in nuclear energy is Nuclear Electric Insurance Limited. NEIL insures domestic and international nuclear utilities for the costs associated with interruptions, damages, decontaminations and related nuclear risks. If the commercial insurance industry will not provide any coverage for the commercial nuclear energy industry, as anti-nuclearists often claim, then would they care to explain what it is exactly that these nuclear-specialist insurance corporations actually do?
Risk is quantitative. It’s a number. Consequences, expressed financially, multiplied by the probability of a particular contingency – or the sum of the consequences of every different possible contingency, with all the different possible adversities and contingencies weighted by their probabilities. Anti-nuclearists seem to have a really hard time understanding this fact, and since this simple fact is at the foundation of how insurance works, I guess that’s why anti-nuclearists seem to have such a hard time understanding the insurance industry and how it relates to nuclear energy.
The commercial insurance industry will provide you insurance for absolutely any kind of risk, as long as they can actually quantitatively estimate what the risk really is. The industry will provide a successful professional singer with insurance coverage against the risk of some kind of injury damaging her ability to sing, and you cannot seriously say that this risk is any easier to quantify than the risks associated with the commercial nuclear engineering sector.
see Chapter 8 – Understanding Risk
If they can put a probability and a cost on it with any reasonable degree of confidence, then the commercial insurance industry can sell you insurance for it. When dealing with a relatively complex system such as a nuclear power plant, these risks are quantitatively assessed through Probabilistic Risk Assessment.
When dealing with a situation or with a technology which is perceived to involve greater risk than it really actually does, then it seems like this would present an attractive opportunity to the commercial insurance industry – because you can charge the customers higher premiums to provide the same degree of coverage of real-world risk, right? Nuclear energy certainly seems like a good example of such an industry, doesn’t it?
The Price-Anderson Act seems to exist only because of the completely distorted, false, unrealistic idea that nuclear energy is an extremely risky business. But the reality, which we see confirmed from direct, empirical, real-world experience basically every week, is that nuclear energy is literally the safest form of energy generation there is.
Incidentally, some people suggest today that the Price-Anderson model has been very successful and suggest that, in the wake of fossil fuel disasters such as the Deepwater Horizon well blowout, that it should actually be copied for the oil industry, the fossil fuel industries, the chemical industry and the like, so that such industries are required to cover their risks to the public and to the environment adequately, too.
However, personally I do not think this would actually work in practice, because it works well in the context of nuclear energy simply because nuclear energy really is very safe, and I don’t think that it is economically practical for industries like the oil and coal and gas industries which really do present high risks to health and to the environment to be forced to hold large amounts of liability coverage in the event of all too common accidents in the same way that the nuclear energy industry is under the terms of the Price-Anderson Act.
Facts well presented
Well done Luke. Very informative
Personally I would like to know how, in a solar powered world, we will be insured against a once in a decade freak weather event that will blackout the entire nation for a few weeks or months. What’s that going to cost and who is going to insure this risk? Who’s going to pay for the damage caused by the medieval riots and plundering (a world without electricity is truly medieval)? Who’s going to pay the diesel and natural gas fuel that critical sources such as hospitals will need for weeks?
Who’s going to insure the solar powered grid?
GREAT post Luke. This was one of the last little gremlins in my journey to supporting nuclear energy. Like a few of the others, I could not believe just how far the meme was from the facts. This detailed summation has improved my understanding further. Nice one.
Luke, the manufacturors stated accident rate for reactors is about 1 accident per 10,000 reactor years. That’s what you mean by “very safe”, right?
With a world wide reactor installed base of about 500 that rises to a risk of about 0.05 or 5% in any given year, or approximately 1 accident every 20 years or so. Pretty much what we’ve experienced really.
Now that is a perfectly calculable risk, and theoretically insurable provided we have an idea of the expected loss. We now have two incidents which give us an idea of the magnitude of the loss. For example, in the Japanese case the market has marked down TEPCO by over $60B, and that’s without considering the effects economic and environmental on the wider community.
So given all that – what’s a reasonable insurance premium for a “typical” $10B reactor with an operational lifetime of say 50 years? (Which is a lifetime risk of serious accident running at about 1 in 200 for that reactor)
NEIL comments on the Fukushima accident here (March 15):
http://is.gd/9cEIYv
To summarize, there is a Japanese insurance pool for nuclear accidents and NEIL provides a modest sum of reinsurance. However, the original Japanese insurance does not cover accidents caused by earthquake or tsunami.
They also say that the level of insurance is modest, only about $2 billion, which is confirmed by this NYT article:
http://is.gd/BQQf2W
So while it is correct to say that there is some kind of insurance for nuclear accidents, that does not cover any part of the Fukushima damage, and it would be less than 5% of the expected $50 billion damages bill even if it did.
The real problem is what exactly should be compensated. With a realistic radiation dose limit of 100 millisieverts per month as proposed by Wade Allison in “Radiation and Reason” (somewhat too conservative in my opinion), there is no way damages reach even $50 million. If in contrast you take the ICRP limits of 20 millisieverts per month like the Japanese government does, that $50 billion figure is possible as well.
The bill in Japan will be seriously inflated by including damages from irrational fear, which will probably be the larger part.
Is the pool insurance liability or property damage. By this I am asking if the utility has a reactor melt down would the utility receive insurance money to cover the damages to the plant?
After 120 Mt of CO2 has been injected into saline aquifers beneath WA’s Barrow Island governments will assume liability for anything going wrong
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSZEVpdXI110
The article says it is expected to be in force from around 2069 with the WA and Federal govts assuming 20% and 80% liability.
It the lot bubbles to the surface say after a quake the carbon tax alone would be worth $23X120X10^6 = $2.76 bn then add to that Lake Nyos type asphyxiation damages. Note Barrow Island is far bigger than Norway’s Sleipner raw (unburnt) CO2 capture project..
Apparently $108m was spent on the Maralinga A-bomb site cleanup but there was scope to spend $1bn
http://www.theage.com.au/articles/2003/05/10/1052280480444.html
I guess it depends on radiological standards and attribution of excess deaths e.g a radiation exposed worker who also smoked cigarettes. It seems to Feds can find compensation money in theory but in practice they spend less.
> The Price-Anderson Act seems to exist only because of the
> completely distorted, false, unrealistic idea that nuclear energy
> is an extremely risky business.
Citation would be helpful for this — is it an opinion, or based on some analysis that has been published somewhere?
Here’s what I found looking for published analysis of Price-Anderson:
http://www.doe.gov/sites/prod/files/gcprod/documents/paa-rep.pdf
It appears that repealing Price-Anderson would take away the Dept. of Energy authority to impose civil penalties for violations of nuclear safety regulations.
Could that be another reason people want to repeal Price-Anderson?
——
“Report to Congress on the Price-Anderson Act
The Price-Anderson Amendments Act of 1988 (1988 Amendments) directed both the Department of Energy (DOE) and the Nuclear Regulatory Commission (NRC) to file reports with Congress containing their respective recommendations for continuation, repeal or modification of the Price-Anderson Act. This report fulfills the statutory requirement in Atomic Energy Act § 170.p. by focusing on those provisions of the Price-Anderson Act under which DOE indemnifies its contractors and other persons for legal liability arising from a nuclear incident or precautionary evacuation caused by activities under a contract with DOE (the DOE indemnification). It also examines the related provisions in § 234A of the Atomic Energy Act under which DOE has the authority to impose civil penalties for violations of nuclear safety requirements by contractors, subcontractors and suppliers covered by the DOE indemnification….”
—-
Surely there’s better information out there to support the assertion that
> The Price-Anderson Act seems to exist only because of the
> completely distorted, false, unrealistic idea that nuclear energy
> is an extremely risky business.
Where can we look for more information to back this claim? I’d guess you mean the private insurance companies have done that risk/profit assessment and concluded there’s money to be made.
Have they published on this?
I’m not sure I understand the justification to publish a guest post so poorly researched and documented.
Oil Pollution Act of 1990. Imposes liability cap of $75 million on responsible parties, and sets up an Oil Spill Liability Trust Fund that can provide up to one billion dollars per incident. Money was collected for this fund on a five-cent per barrel fee on imported and domestic oil between 1990 and 1994. Efforts to raise the size of this cap stalled in Congress after the BP Macondo Well blow-out, likely due to intense lobbying efforts, and the willingness of BP to cover damages in excess of the cap to a level of $20 billion.
Incorrect. CERCLA (the “Superfund” fund law) is indeed a “Fund.” According to wiki, 70% of the cost of projects have historically been picked up by responsible parties (although there is a significant back-log of unfinished projects), and law establishes a trust fund “for cleaning up abandoned or uncontrolled hazardous waste sites.” $1.6 billion was collected in 5 years from tax on chemical and petroleum industries.
These all seem like relevant questions to me, and to the argument you wish to make about the undue burden of liability insurance on nuclear industry in the States viz other industries, or globally viz nuclear power. It doesn’t seem like you can make this claim without some discussion of this, beyond the fact you “really don’t know,” are “not in a position to say,” and others “can do the research.”
From just a quick look, you find there are many international agreements for insurance and liability for nuclear power (as well as country specific approaches), and trade, technology, economic development, and non-proliferation and power sharing agreements between countries sometimes depend on them. World Nuclear Association (Liability for Nuclear Damage) offers a quick summary. Council of Foreign Relations offers one example of significant impact of liability arrangements on international suppliers of technology, and trade relations (and economic development) between US and one country (India).
OMB, activist groups (we can rule them out), and economists have all put forward analyses suggesting risk is underestimated by Price-Anderson, and public backstops serve as a subsidy to the industry (and the same could be said for oil and gas liability caps as well). From OMB assessment: “In practice, Price-Anderson subsidizes utilities by reducing their cost of carrying liability insurance. Instead of purchasing full coverage, operators of nuclear power plants are required to obtain coverage only up to the liability limit, which is currently set at about $10 billion per accident” (p. 28). This seems to be fairly consistent with the practice in other countries to share the full cost of insurance for NPPs between both public and private entities … and also offer additional protections with respect to moral hazard, standardization (or redlining), and increasing public confidence in industry (especially with respect to local investment and securing stable private property values near power plants).
Thanks for a very interesting article. I’ve often thought about the opportunities posed by the mismatch between actual risk and perception of risk in the nuclear industry.
I’d love to invest in nuclear power insurance!
Luke, the key thing with insurance is having a premium pool which exceeds the possible losses related to an insurable event. Events like Fukushima are the ones I worry about from the perspective of paying for the damages beyond the plant itself. If such losses are not adequately covered then others must pick up the tab.
For example, the NEIL 2010 annual report indicates a policyholder’s surplus of US$3.6b.
I submit that if they were the insurers for Fukushima Dai-ichi they’d be looking at going out the back door if, as some media reports suggest, the cleanup bill will be in the tens-of-billions.
Can you augment your post with information relating to the amount of money (net premium pool) currently available to cover nuclear accidents?
This is the least you can do to support any argument that adequate insurance exists to cover the industry.
BJ: “what’s a reasonable insurance premium for a “typical” $10B reactor with an operational lifetime of say 50 years? (Which is a lifetime risk of serious accident running at about 1 in 200 for that reactor)”
Zero. Because zero injuries have been reported so far in the US.
Karl-Friedrich Lenz: “The bill in Japan will be seriously inflated by including damages from irrational fear, which will probably be the larger part. ”
Actually, the entire bill will be for irrational fear. It was the tsunami that did most of the killing and the mandatory evacuations that killed the nursing home residents. The reactors have not leaked enough radiation to match the natural background. So who should pay for the irrational fear? TEPCO or the irrationally fearful?
EL: The problem with your comment is that the nuclear power industry has caused zero injuries and the BP oil volcano causes morew than $20 Billion worth of damage, and the Oil Pollution Act of 1990 puts a CAP on liability, not mandates insurance. Oil is treated in the opposite way from nuclear.
“analyses suggesting risk is underestimated by Price-Anderson” What risk? Nobody has been damaged yet, in 50 years.
Alan: “Fukushima Dai-ichi they’d be looking at going out the back door if, as some media reports suggest, the cleanup bill will be in the tens-of-billions.”
The bill for Three Mile Island was $1 Billion and there were zero injuries. Don’t believe everything some innumerate journalist dreams up.
The Japanese are trying to reduce their exposure to radiation to LESS THAN THE NATURAL BACKGROUND! And they are scraping up soil that was contaminated by fly ash from coal fired power plants. No discussion of nuclear liability should ever leave out a discussion of natural background radiation and the uranium in coal. Likewise, the media and textbooks in Japan should also discuss natural background radiation and uranium in coal. Can anybody tell me some appropriate contacts in Japan?
Some people say they will have to spend “tens of billions” of dollars to “clean up” at Fukushima.
Now, I will reiterate here that I don’t know anything about how liability or insurance or risk coverage is arranged in the context of the Japanese nuclear energy industry.
But I am interested in finding out, from the people who make those statements, what exactly they are going to be cleaning up, and exactly how they are going to be cleaning it up, and exactly what they are going to be spending the money on.
We have experience from the Goiânia accident with regards to the cleanup of a significant amount of Cs-137 contamination around a limited area of the community – significantly more concentrated contamination than anything we’re going to be seeing at Fukushima.
What kind of contamination might we be seeing in the environment around Fukushima that needs to be cleaned up? What radionuclides, what concentrations, what form of contamination and what resulting radiological dose to the community?
If the radiological dose is at a level that is comparable to what people receive naturally in Ramsar or in Denver, for example – a level of radiological dose at which absolutely no scientific evidence of harmfulness exists – then I would argue that not one dollar worth of “cleanup” is justified.
How about we spend all that money instead on helping the tens of thousands of people who had their homes and communities destroyed, and lost their loved ones, due to that enormous, terrible earthquake and tsunami which we sometimes seem to forget about all too easily.
Will China “insure” it’s operators? Will they insure their neighbours? Should they?
This is the same country that can’t build primary schools for their own children in KNOWN earthquake-prone zones.
What cost is assigned to the lost productivity of the land surrounding Fukishima that it will be usable for “decades”?
Oh, it appears the Japanese government has been less than frank about the extent of problems; would insurance be paid on the original information or the cumulative costs over time on revised figures?
Luke: Now, I will reiterate here that I don’t know anything about how liability or insurance or risk coverage is arranged in the context of the Japanese nuclear energy industry.
No. And I think that’s the problem with your post. Insurance does not create liability, it mitigates it.
For example, let’s say I go out tonight in my car and run into a parked Ferrari worth $300,000 (say) totalingly it. What’s my liability?
$300,000, that’s what the owner wants from me and he doesn’t care where it comes from – direct from me or from my insurer it doesn’t matter.
The liability is created by my actions, and I can’t front up and say “but I don’t have insurance, therefore I get off scott free”. There’s hundreds of years of law behind this, but Luke’s post tries to turn all that on it’s head and pretend that it’s only legislative mandated insurance that creates the liability.
Wrong.
Hank Roberts above put his finger on this issue when he correctly described the effect of the US legislation as:
provisions of the Price-Anderson Act under which DOE indemnifies its contractors and other persons for legal liability arising from a nuclear incident or precautionary evacuation caused by activities under a contract with DOE
In other words, the legislation that Luke is so exercised about actually reduces and limits the liability of an operator in event of an accident. It doesn’t increase it. Instead, it passes the risk and the liability onto the DOE, ie. the public.
Just as EL also pointed out in the case of the Mexico Gulf oil leaks that the:-
Oil Pollution Act of 1990. Imposes liability cap of $75 million on responsible parties,
In other words, legislation can only limit liability, not create ones where nothing exists.
We’ve seen this in Australia with James Hardie who failed to insure against asbestos claims, largely because they thought there was no risk and neither did anyone else, but were destroyed when it was found that there actually was.
Luke’s post is premised on an upside down understanding of how the law works, and also has no understanding of how liability is evaluated.
@Asteroid Miner
I quite agree that almost all of the damage is from irrational fear. There is a lot of that around here in Japan, and many professional fear campaigners are busy increasing the damage.
@Luke Weston
This article in Mainichi gives an impression of what kind of damage payments are expected:
http://is.gd/469Vgp
They mention damages to tourism and to agriculture. Of course there will also be damage payments to people evacuated, which will increase if the Japanese government goes ahead with a completely unnecessary permanent evacuation zone based on the bogus ICRP limit of 20 millisieverts per year, as reported today.
A major insurance issue has to be 3rd party losses resulting from a nuclear accident … you know, the loss suffered by the corner shop when the event occurs. Most 3rd party insurance policies exclude nuclear accidents. Can this continue? Will not the nuclear industry have to step up with policies and premiums that can cover costs substantially i.e. without requiring the plant operator to gouge their balance sheet to meet claims?
From Live Insurance News:
As to the quanta of the “damages bill” resulting from Fukushima, I give below a sample of estimates which strongly suggest a figure far north of several billion is expected:
From Asian News Network:
From Earth Science News:
From Reuters:
I don’t care what the numbers are, really … I just want the nuclear industry and its’ insurers to simply have a big enough pot of money to deal with the once in 25 years (or whatever) accident that ends up costing a lot of money to clean up and make reparations.
And I want the cost of providing that sort of ‘insurance’ factored in to the economics of nuclear.
There’s little point in arguing for nuclear unless this is covered … just like we argue that fossil fuel folks should factor in carbon costs. And that also means that the fossil fuel folks should be held to account for 3rd party damages too.
It is disingenuous to do otherwise.
Alan, on 22 August 2011 at 8:23 PM — All those numbers appear way off. First of all, TEMPCO has already paid out about US$30 billion in compensation payments to evacuees. As for the decommisioning of Fukushima Dai-ichi (all of it), comparison to TMI and accounting for inflation suggests the total decommisioning bill will be about US$12 billion.
Seriously, Luke — you have completely misunderstood Price-Anderson.
If you are relying on some source for what you say, please cite it so we can look at it.
If you’re relying on something you can’t cite — please, please, check what you assume.
Your whole posting here needs to be rewritten based on actual facts.
Barry — please, please — get someone to do fact checking for your major new posts. A librarian, someone dispassionate about facts.
What scares people about nuclear power? The enthusiasts are scary.
Ask someone in the industry-on the finance/legal side — about this.
I have no idea what the Australian insurance/indemnification laws are. A post about those from someone who knows them would be good.
Hank Roberts, if you are relying on some source for what you say, please cite it so we can look at it.
If you’re relying on something you can’t cite — please, please, check what you assume.
Pot: kettle black.
David, TMI — one reactor, TMI did not contaminate the surrounding area.
Fukushima has contaminated the local groundwater, along with the surface areas downwind.
A better comparison may be to the US Hanford or Oak Ridge cleanup programs, both ongoing.
The statements now refer to a longterm exclusion zone; that’s where the big cost difference estimates likely come from.
http://www.nytimes.com/2011/08/22/world/asia/22japan.html is news.
Hank Roberts, on 23 August 2011 at 3:52 AM — I suggest the area around TMI was understudied by modern standards. I used it only to estimate the costs of decommissioning Fukushima Dai-ichi. What the Japanese decide about the surrounding area is up to them.
I’m a Hanford downwinder and I assure you that Fukushima Dai-ichi is a easy decommisioning in comparison to the always ongoing effort to mitigate the Hanford mess. {But by the way, don’t forget the Savannah River site.]
Yomiuri Shimbun: 3 kilometers
http://newsonjapan.com/html/newsdesk/article/91567.php
@David B. Benson
Where did you get that figure of $30 billion already paid from?
Japan Times here
http://is.gd/XOEMlz
gives a figure of about 400 billion Yen paid in provisional compensation, which would be around $5 billion.
Karl-Friedrich Lenz, on 23 August 2011 at 8:47 AM — According to a WNN
http://www.world-nuclear-news.org/
article, which you’ll have to dig out of the archives.
Here is the WNN report, which clearly I misremembered:
http://www.world-nuclear-news.org/newsarticle.aspx?id=30544&terms=tepco payments
David Benson:
The range of numbers is large … but then your numbers total $42 billion after just a few months and without factoring in all the costs. The numbers I linked to at least come from analysts studying the situation over time.
But, as I said, I don’t care what the precise number is. Bottom line … it’s going to a huge number … in the tens of billions at least.
And the industry will need to factor in these financial catastrophes.
If the insurance company cannot cover it; and the operator’s balance sheet cannot cover it; then it’ll fall to the public to cover it … or not!
People need to consider the total costs of a major accident … it’s not just decommissioning and the first lot of compensation cheques.
For the operator there is income loss and plant replacement cost for starters …
Alan, on 23 August 2011 at 10:06 AM — I disremembered the numbers; see my previous comment for a lin to a report on TEPCO’s financial situation so far.
But the decommissioning costs of about $12 billion have yet to begin; so far TEPCO is still stabilizing the reactors. The decommisioning will take about 12 years and probably won’t even begin for a few years.
In the USA the reactor operators pay into a decommissing fund. The idea is that at the end of the reactor life the decommissioning costs have already been paid for. I don’t know how this is done in Japan.
As some would like to bang the “huge number” drum over the Fukushima accident, it is worthwhile to put those huge numbers in context. On a previous thread I did a little back of envelope calculation that suggested that a notional $100 billion cost for the accident distributed over the entire history of nuclear power would represent an incremental carbon abatement cost of about $1.40 per tonne. This assumes that nuclear has displaced black coal generators.
This is cheap, indicative of the importance of nuclear power to emissions reduction and also indicative of the magnitude of the CO2 problem.
Clearly $100 billion is a large sum for any corporation or insurer to stomp up, but it is also for a very rare event and it needs to be restated that the event was caused by a natural disaster. A bunch of reactors did not go pop for internal reasons. It is also an accident that very likely would not have happened if the reactors were of a more modern design and will very likely not happen in the future because of lessons learned in protecting all reactors from such external events.
I think Bernard Cohen said something to the effect that if fission power lasts 1000 years, we may well be able to look back and say that Chernobyl was the worst nuclear accident. That is not disproved and we may possibly be able to add that Fukushima was the second worst accident.
In this context of the social and environmental benefits of nuclear power and the very small likelihood of large radiation release I see no ethical reason why the state should not assume liability for harm done in a very rare major accident over and above that covered by insurance paid for by plant operators. If this facilitates deployment of low emission electricity generation capacity required to address the impending climate crisis then why not?
EL writes; “In practice, Price-Anderson subsidizes utilities by reducing their cost of carrying liability insurance. Instead of purchasing full coverage,”
I ask EL, which industry, company or individual has “full coverage” for the worst possible accident?
If a jumbo jet accidentally flies into a skyscraper or sports stadium and kills 30,000 people, are they covered for the full loss?
If a genetics lab releases a virus that kills a billion people, or destroys the corn crop worldwide, are they fully covered to pay all damages?
If you have a wedding reception or graduation party at your home and a tornado kills 50 people, do you have enough insurance to reimburse the families of those victims for the full economic loss?
What did Union Carbide pay for the 8,000 people they killed in India? Did all chemical companies pay for that loss? Should companies that run safe operations be forced to assume the risk of dangerous operations they have no control over?
I am opposed to Price Anderson, the reasons are here;
http://www.theoildrum.com/node/3877#comment-335609
Well, quokka, you’re gonna need some coping mechanisms ‘cos people are going to bang on about the absolutely inevitable NEXT accident and who covers the costs.
Of course Fukushima may not have occurred without the earthquake/tsunami … but it doesn’t matter what caused it … it happened and there are costs.
Of course the future chance of a major accident caused by design/operator failure will REDUCE with design improvements.
Of course the future chance of a major accident by any cause will INCREASE with large scale deployment of nuclear.
Another multi-tens-of-billions-of-dollars plant disaster will happen … computer says “Yes!”
The industry must get its act together to assure that costs are covered for a really, really bad scenario WITHOUT duck-shoving liabilities to the public.
Have fun selling this one! IMO the definition of ‘major accident’ is the make-or-break to such a notion getting up with the public. This is the nub.
I’d be happy to pay a couple cents more per kWh if that means the industry has very effective insurance coverage.
@Alan
That is your assertion. Not fact. The PRA for Gen III+ reactors is a couple of orders of magnitude better than that for the BWRs at Fukushima and much much better than the RMBK at Chernobyl. So on that risk assessment basis you would be wrong.
Applying simple minded statistics doesn’t cut it. We are not rolling dice where the outcome of future experiments is independent of prior experiments. For example, the probability of a NPP ever being done over by a tsunami has been dramatically reduced by learning lessons from the Fukushima accident. This should be plainly obvious.
You should do your calculations if you think that a couple of cents per kwh is needed. Hint – I gave an estimate of incremental CO2 abatement cost due to the Fukushima accident. (Deleted personal opinion of other’s motives.)
@ quokka
Do you normally read half of what’s said?
You picked this comment:
And then tried to give me a little lecture about stats without referencing the earlier part of my comment:
I will guarantee that nobody could predict with precision where the future resultant probabilities will lie … certainly not you.
Then you give your patronising “hint” comment regarding the cost of adequate insurance. I don’t know what that might be … you sure as hell don’t know what that might be … I simply indicated that I’d be prepared to pay an amount … which I guessed might be more than adequate to provide for future liabilities.
But then none of your snipes is intended to educate me … because you and everybody else is just as clueless about the future probability and premium quantums.
You reveal yourself as an aggressive sniper with your final sentence:
(The comment to which you refer has been deleted as a violation of BNC comments policy)
@BNC
Over the last year I have consumed a large quantity of very good information here … mostly quietly.
But I find it increasingly difficult to find the diamonds amidst the maze of posts and diarrhoea of comments and link bombs which, over recent months, drags a thread very quickly into the tit-for-tat snipes between what are now the usual suspects.
I am sick of it and take my leave.
MODERATOR
Sorry you feel that way Alan – it will be a shame to see you leave. BNC tries hard to moderate the blog and weed out any remarks which violate the commenting rules, however the blog is not moderated 24/7 and some violations may be missed or not edited for a while. Missed violations should be referred to the moderator for correction.
@Alan,
I apologise for ascribing a motive to your comments. It was wrong to do do so and poor etiquette.
I do standby everything else I wrote. If you want to go down the road of insurance for every possible accident scenario, there will be no end to it. Anti-nukes will always be able to trump it – no matter how improbable it may be. It is an impossible requirement to satisfy and one that no other industry is subject to.
quokka: If you want to go down the road of insurance for every possible accident scenario, there will be no end to it.
a.) A PRA is supposed to identify every risk scenario and quantify it
b.) “insurance” here is being used as a generic term to mean “how much is the loss”, regardless of who actually pays. It doesn’t matter whether it is the operator, the insurer, the victim or the government; the cost is the same.
The liability still exists regardless of whether there is a formal insurance contract or not.
It is an impossible requirement to satisfy and one that no other industry is subject to.
No, every industry, and every person is liable for the damage they cause. How they pay for it is their business.
What they should not do is say “hey I’m uninsured therefore I get off, right?”. No they don’t.
And they should not say “hey I’m broke so therefore I get off, right?”. Well yes if they’re willing to bankrupt themselves. But then the public is on the hook.
So when we’re looking at public policy outcomes we have to look at the cost. We can put a word to it like “insurance” but it is quite clear what is meant.
Some participants on the blog are slipping into old habits of attacking the person not the argument and assuming they know the motives of commenters. BNC Comments Policy does not allow this. Please desist from breaking these rules or your whole post, and not just the offending section, may be deleted.
@BJ
Your definition of “insurance” as a generic term may well be quite reasonable, but this is not the sense in which it is used in the “nuclear debate”. Anti-nukes quite specifically mean it to designate insurance from private insurers paid for by the plant operator(s).
It is interesting to look at what the numbers might be for Generation III+ nuclear power plants based on their PRA of large radiation release.
Assume a very bad accident that costs say $500 billion, a PRA of say 1 in 10^7 reactors years for a large radiation release for a 1 GW plant.
This represents a cost per kWh of
$500 * 10^9 / 1,000,000 kW * 24 * 365 * 10^7 * 0.9
= 6.34 * 10^-6 $/kWh
= 0.00000634 $/kWh
… if I haven’t screwed up my arithmetic.
Not saying that an insurance risk assessor would go about it like this.
There is a safety aspect of the Price-Anderson law that is subtle but very important. Safety of every plant affects all plants. If one plant has a big problem, then all plants have to pay. Subtly, this leads to an industry that concerns itself with all plants not just my plant. The US industry shares both problems and innovative solutions. “What happens to one plant happens to all plants” is a phrase that is imbedded in the Price-Anderson act.
Maybe that’s one reason the US nuclear fleet has such a great safety record.
@ BJ –
You wrote: “No, every industry, and every person is liable for the damage they cause. How they pay for it is their business.”
If you mean to state or imply that “every industry and every person” is obligated to retain insurance, or other resources, or a combination of these, that is sufficient for any damage that might flow from unlikely, but nonetheless possible, consequences of their actions, then you are wrong.
Most anyone, and probably most industries, can cause an accident, or incidental harm, that is beyond their ability to pay for, and also beyond any insurance they possess, or that they can buy in the marketplace.
Say you have a fire in your house because you did not clean the lint filter in your dryer (quite foreseeable, as this is a major cause of fires) and it happened to occur during a drought and it was windy, but also during a period of street repair that critically delays access for emergency vehicles, i.e., fire trucks. At the time of your fire, there are repairs going on down the street that make gas mains particularly vulnerable, and one is leaking. Because of a combination of circumstances, many of which are beyond your control, but not beyond your imagination, fire spreads quickly to the neighborhood and then to the whole city, which goes up in flames because you did not clean your dryer vent. The toxic waste from the burning city pollutes a waterway and the downstream municipality lost its water supply and had to buy water, but couldn’t acquire it (drought, you know), so lots more people die. Your homeowner’s policy is not going to cover that.
Still, they would sell you another dryer. The obligation to cover the contingency is not a condition precedent to your purchase of a clothes dryer.
Your contention that it is “their [the dryer owner’s] business” to “pay for it,” i.e., the damage, is, under this plausible scenario, false.
Think that this is absurdly impossible?
Think of the Great Chicago Fire.
http://en.wikipedia.org/wiki/Great_Chicago_Fire
The person who started the fire did not have insurance to pay for four square miles of Chicago, 300 innocent deaths, or provide housing for thousands of homeless. That is 300 more than have died from Fukushima, by the way.
The number of imaginable linked factors that *could* lead to massive uninsured harm is nearly unlimited, see, e.g., Bill Hannahan’s examples above. Insurance, in your definition of it, i.e., “how much is the loss” will not be available to cover all plausible scenarios.
The whole problem has been around for a long time. Consider this:
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
The blacksmith who forgot to bring a replacement nail for the horseshoe in this ancient rhyme did not have insurance to cover the resulting loss of the kingdom.
The inability to cover the consequences of all potential scenarios is a common characteristic of human activity.
The larger question is: how do you judge nuclear energy in light of its risks and benefits? To reiterate: insurance is not going to cover all costs of all possible accidents for virtually any industrial activity, so the real question is: what are the best energy options for society in light of what is available and the challenges we face.
Careful and fair thinkers who “do the numbers” and think through the many various issues associated with energy options often conclude that nuclear must be a key part of a rational energy strategy that attempts to ameliorate some of the consequences of climate change, while providing the energy desired by a growing human population that is not satisfied to live in poverty, and that will almost certainly access energy of some source, one way or another.
Claiming that nuclear energy, alone, should be categorically excluded from consideration when dealing with the problem, on the grounds that it cannot secure market insurance for any conceivable accident that could be associated with it amounts to a presumption, a priori, that nuclear should be treated fundamentally differently from any other human endeavor that involves risks.
This is, I believe, the held belief of the anti-nuclearists; it is rooted in, and reinforced by, well-stoked fears. People who believe it seek validation, just like most human beings who hold any belief.
Alleged concerns about insurance seem to me to be just a smokescreen – – an effort to find a way to rationalize the emotion, while simultaneously deploying a simplistic proposition that appeals to the emotions of like-minded believers, but that depends on undisclosed premises that are false.
Your Oil Drum post is an excellent justification for why nuclear power needs and benefits from the Price-Anderson Act. If liability for any industry is unlimited, and the documented risks of an accident exceed the net worth of a utility company or equipment sub-contractor, who wants to invest in a company where bankruptcy (and not paying bond holders) is the predictable outcome of an unlikely accident (no matter how hard you try and rule them out). The Price-Anderson Act provides an assurance that bond holders wont be hung out to dry when a once in 500 years tsunami washes away power to your poorly sited and obsolete power plants (I’m no fan of the Mark I BWR containment design), and that your company won’t survive to live another day (to say nothing of the displaced victims of the surrounding area) and design an even better power plant that will produce decades of trouble free energy and have the confidence of investors and the public?
Frankly, the best case for the on-going implementation of the Price Anderson act is made by the nuclear industry itself. Back in the days of the BP deepwater horizon blowout, Lamar Alexander (a strong supporter of nuclear power in Congress … who proposes 100 new nuclear plants in 20 years in the States) made this case in congressional hearings. Under Price Anderson, industry is mandated to carry $375 million in liability insurance per reactor, and contribute $111.9 million to cover damages up to $11.6 billion. The act assures the industry that liability claims ARE NOT unlimited, and the company won’t end up in courts fending off every business, personal, and property claim until it’s lawyers finally claim uncle and declare bankruptcy. Moral hazard is also an important component of Price Anderson. As Lamar argued, “the entire nuclear industry is responsible for any accident … Each of the industry’s 104 nuclear reactors are required to insure each of the other reactors for damages related to a nuclear accident. This makes each reactor in the entire industry collectively accountable for the actions of others.” And Price-Anderson also reduces costs (on a capped amount, not an unlimited amount) of insurance to individual power plants: “If each reactor were forced to carry $11.6 billion of liability insurance on its own,” Lamar said, “there would be no nuclear industry because nobody could afford the insurance … If each oil rig were required to carry unlimited liability, the same would be true for an American offshore oil industry as well” (Platts Inside Energy, June 14, 2010).
9/11 is a fair example (which you brought up), and airlines were protected by a $1.5 billion cap on damages per plane. A “cap” was not used as part of victim’s compensation fund, but the concept still applies and most damages were limited to around $1.8 million on average (by the lead official administering court established fund). Your position seems to be leave the industry to fend for itself when faced with a major accident, or leave it to the courts to decide on a case by case basis (pitting bond holders against share holders against the government against insurance companies, against the victims’ lawyers … and crossing your fingers that bankruptcy is not the best possible option and leaves everyone with an empty pocket, and lots of rising and unpaid costs). Considering how “uncertainty” is already a dirty word in the industry, I’m not sure how adding even more of it expands the prospects of nuclear power for the future (and brings new supporters to its cause)?
No Frank, I was referring to legal liability. Liability is independent of whether you carry insurance or not.
quokka I think you might have screwed up your arithmetic. You seem to assume that your plant produces power for 10^7 years.
And on a smaller point, you don’t say where the factor of 0.9 represents.
BJ –
You indicated you were talking about insurance. That is what you wrote:
” b.) “insurance” here is being used as a generic term to mean “how much is the loss”, regardless of who actually pays. It doesn’t matter whether it is the operator, the insurer, the victim or the government; the cost is the same.
The liability still exists regardless of whether there is a formal insurance contract or not.”
So what are you talking about?
“Insurance,” per your definition the issue of “how much is the loss?”
or
“Liability,” as in “who pays?”
If it is the latter, it seems different from the sense in which you used the word “liability” in the quote above. You used the phrase “the liability,” which seems to refer to the overall liability. Overall liability is the same as the overall cost.
The overall cost/overall liability remains the same regardless of who takes, or is assigned, responsibility for paying it.
As soon as you get into your question of “how much is the loss,” i.e., “overall liability” (I agree these are the right questions [they are the same question]) from a societal perspective, then you have to compare “how much is the loss” to “how much is the benefit?”
If there is benefit, then you have to weigh it. When you weigh it, you have to recognize it. Recognizing the benefit is what, in my experience, anti-nuclearists aim to elide by raising “insurance” issues. They seem to generally want to claim that nuclear energy exists only because the overall nuclear enterprise receives a unique and unfair advantage in the form of relief from responsibility from harms, if those harms materialize.
This is untrue. As you can see from links in other comments, e.g., EL’s comment, above, liability caps are extended to other large enterprises that offer highly desired benefits (which are often diversified, such as the ability to fly on airplanes, or low cost, emissions-free electricity) along with the potential to create significant costs (which are likely to be localized) in the event that something goes wrong.
________
Quokka’s 0.9 likely represents that average capacity factor of a nuclear plant, which is 90%.
Cyrus asked for another cite supporting what I and others said about Price-Anderson; here:
——-
http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/funds-fs.html
“The Price-Anderson Act … designed to ensure that adequate funds would be available to satisfy liability claims of members of the public for personal injury and property damage in the event of a nuclear accident involving a commercial nuclear power plant…. by placing a cap, or ceiling on the total amount of liability each holder of a nuclear power plant licensee faced in the event of an accident. …
…
Claims resulting from nuclear accidents are covered under Price-Anderson; for that reason, all property and liability insurance policies issued in the U.S. exclude nuclear accidents.”
———-
Frank I think you’re drawing a distinction without a difference, or if there is a difference it’s one I don’t understand.
The liability is the liability full stop. If there is legislation in place that caps liability for the operator – which there is in the Price-Anderson case – that just means somebody else takes up the remainder.
From a financial perspective however there is no difference.
A 5.8 magnitude earthquake occurred today 12 miles from Dominion’s North Anna Nuclear Generating Station. According to local reports, everything is okay because the station is built to withstand a 6.0 earthquake directly beneath it.
According to Henry Benz of the USGS on Fox Report tonight, these earthquakes “are not unexpected and the details on these earthquakes in terms of style faulting are consistent with what we know about the geology and geophysics.”
This, to me, is unbelievable. North Anna is okay because it was 12 miles away from a very shallow earthquake only registering 5.8 magnitude.
No, North Anna is not okay. There has to be a greater safety margin! If this type of earthquake is expected, and even I expected it after December 2003 quake, why is the nuclear generating station only built to withstand a 6.0 magnitude quake? This to me is insanity.
Could someone please explain to me why this minimal safety margin of 0.2 magnitude is rational? The earthquake didn’t scare me, but learning about the 6.0 magnitude design threshold of the Dominion’s North Anna Nuclear Generating Station does scare me.
Jason, nuclear power plants are not “designed to withstand a magnitude 6.0 earthquake”. This, if anything, is just dubious media reporting. What they’re saying is not the accurate picture.
A magnitude 6.0 earthquake how far away? How deep?
They’re designed to withstand a certain peak ground acceleration. The relationship between the peak ground acceleration and movement that you feel at the surface at your particular location and the actual magnitude of the earthquake depends on lots of factors; most obviously how far away you are away from the epicentre and how deep the earthquake is, and what the geophysical characteristics of the earth are near a particular location.
We know that some earthquakes of a given magnitude throughout history – let’s say magnitude 6, or pick some value – can be highly destructive and damaging to cities, but sometimes an earthquake is much less significant in terms of damage and destruction even though the magnitude is the same. That is because the magnitude itself is not a measurement of how violent and destructive an earthquake is going to be.
Right. A very large portion of the costs we’re seeing at Fukushima are because of the evacuations.
It’s a little bit off the topic, but I think it’s worth at least thinking about and talking about the possibility that some or most of the Fukushima evacuations were not justified and should not have been done.
Evacuations create great disruption, inconvenience distress and psychological trauma for those people, who were already suffering greatly as a result of the earthquake and tsunami, with emergency accommodation and relief resources already taxed. It was also very expensive.
For some people in environments with relatively high radiological contamination, it was probably appropriate to evacuate. But for people in areas with radiological doses that are the same as in Ramsar or in Denver or similar, radiological doses that have no scientific evidence basis to consider them harmful, how can all those disadvantages of evacuation be justified? It’s worth thinking carefully about it.
Look, I’m all completely for peer-review. You’re absolutely allowed to point out that I might be wrong, but please provide that kind of criticism in a polite and most importantly in a constructive way that builds the sharing of knowledge in a constructive fashion.
Note to self… next time, add references and sources. Sure, that’s entirely fair enough. Got it.
If you think what I’ve written is inaccurate or incomplete, then explain it yourself, add further content yourself, provide further reference materials or reading material yourself.
There is a comment posted above by EL which is a little bit of critical but gentle peer-review, it’s a very good and constructive comment and I thank the poster for that comment. It’s a good example of what I’m trying to say. It’s best if you do not just say that myself or whoever you’re responding to has got it wrong and then just leave it at that without adding constructive input yourself.
Luke, you’re really going to have to justify this comment:
Right. A very large portion of the costs we’re seeing at Fukushima are because of the evacuations.
It’s a little bit off the topic, but I think it’s worth at least thinking about and talking about the possibility that some or most of the Fukushima evacuations were not justified and should not have been done.
The Japanese government is not well known – to put it lightly – for panicky exaggerations of threats to public safety, quite the opposite. You might try googling Minamata
Secondly, Ramsar has about 10 mSv/yr while Denver is reported at about 50 mRem/yr (about 0.5 mSv/yr)
Compare to levels reported on the edge of the Fukushima evacuation zone of 10 microSv/hour or around 88,000 mSv/yr.
The measures are separated by at least 4 orders of magnitude.
BJ, a rate of 10 microSv/h is 88 milliSv/yr, not 88,000 as you stated. This is less than 1 order of magnitude higher than the Ramsar average, and lower than some natural areas within the region. http://www.angelfire.com/mo/radioadaptive/ramsar.html
BJ, the risk of getting cancer from 88 mSv/year (less than 1% extra cancer risk)is much smaller than the extra risk of getting cancer from living in a major city. The pollution in major cities is so big you can easily get over 10% added risk of cancer there.
Yet no one has so far suggested to evacuate New York, Sydney or London. Not to mention all places that have major highways (dangerous particulate matter and NOx).
And note that the 1% cancer risk per 100 mSv is an unproven hypothesis of the linear no threshold theory (which is used around the world as standard radiation risk method, though there is no evidence for this theory at all).
Yeah sorry Barry I did screw that up. But the point remains:- the Japanese government has forbidden access to these areas and is apparently preparing to either buy up or rent long term the properties involved. Decades of exclusion is being contemplated in a rich agricultural and fishing area.
The government has also banned consumption of food from the prefecture, and placed less comprehensive restrictions on food distribution from surrounding prefectures. These are not insignificant losses. They are substantial. And the Japanese have no historical record of being quick about these things, quite the opposite. So Luke’s assertion of hysteria is badly misplaced.
And the basic fact is that levels closer to the site are even higher.
You can’t minimize this, there are real and very large losses associated with this accident. The market has marked down TEPCO by around 60B and it no longer has the ability to service its obligations, and its shareholders are very close to being wiped out entirely.
It’s bonds, which account for about 8% of the entire Japanese market, are now selling somewhere near 50% on the dollar which is default territory.
TEPCO is broke but being supported by the government just for the sake of keeping the lights on. The public is wearing the loss because there is no private capacity standing behind it.
And all of those numbers place a floor in the value of the loss, they are not a maximum.
MODERATOR
BJ – as per BNC policy, please supply references for all your assertions otherwise they are merely personal opinion. Other commenters have supplied references which state the opposite.
Following.
BJ, what was your economic cost estimate (including lost sales revenues from crops)?
Cyril made an excellent point early on about the problem of losing the regional power grid (though he tried to make it hypothetical by talking about a ‘solar powered grid’ the point is valid).
Weather (actually ‘space weather’) will at some point cause a widespread longterm loss of both grid power and fuel sources.
I’ve looked and not found any mention of this as included in any Probabilistic Risk Assessment. Pointer welcome if someone knows.
Sources on the problem:
http://davidbrin.wordpress.com/2011/04/14/our-worst-frailty-an-electromagnetic-hit/
http://science.nasa.gov/science-news/science-at-nasa/2008/06may_carringtonflare/
I’m not aware of anyone using Ramsar as the new public safety standard for low dose exposure to very high levels of background radiation (or sudden elevated doses from a nuclear reactor accident). If local populations have become “adapted” over their course of their lifetimes to higher than average levels of background radiation, or have developed some unique genetic characteristic (such as a more robust and targeted immune system) to fend off cytogenetic damage, chromosomal aberrations, and other cellular and genetic impacts from radiation (evolved over many generations), that sounds like an interesting case study in human genetic variation and adaptation to environmental risk factors (and not a new radio-protective public safety guideline). The ICRP and IAEA recommends that “individual dose [levels] must be kept as low as reasonably achievable,” and that “the numbers of people exposed [to higher than background levels of radiation] are too small to expect to detect any increases in health effects epidemiologically.”
555,000 becquerels per sq meter was the compulsory resettlement standard set by the IAEA in response to the 1986 Chernobyl accident. The area surrounding Fukushima exceeding this soil contamination level (in some places by a factor of 10) is some 600 square kilometers (according to Bloomberg News reporting on Nuclear Waste Management Organization of Japan report). Researchers involved with this report recommend quick action (over the next three years) to prevent the area from becoming a permanent dead zone, “‘so people can return as soon as possible.’” This involves removal of contaminated soil, and use of chemicals and “planting of crops to absorb radioactive materials.” Waiting for the courts to revolve any liability claims (in the absence of national or industry specific liability or insurance mandates) would likely hinder some of these easy to anticipate evacuation, remediation, and resettlement efforts (and could also add to future long term costs, born by the taxpayer, and hardship for local residents). It would also likely hinder the efforts of the industry, and even the government itself, to regain the public trust (and bounce back quickly from an accident of this size and scope).
EL, I didn’t raise Ramsar in this context. I was simply responding to the miscalculation of BJ, which stated incorrectly that Fukushima radiation was 4 orders of magnitude high than Ramsar. It isn’t and I pointed it out.
BJ, @ 24 August 2011 at 6:36 PM
I’d tend to agree with Luke.
My impression is that the health consequences from Chernobyl would have been much less if the people in affect areas (at least the less contaminated areas) had been given factual information about the risk of staying versus moving and been given the choice to make their own decision whether to stay or move. I expect the same is true of Fukushima. I realise there is a lot more too all this such as the effects of goods, especially food, that might be produced in contaminated areas and shipped out. But I wonder if the evacuations of Chernobyl or Fukushima were the right policy. I have difficulty understanding the reasoning behind evacuating people from sites contaminated with low levels of radioactivity but not from sites evacuated with chemicals when the latter have much greater health consequences, forever (no half life) and are added to the biosphere forever.
My question is are we being rational and balanced with our decisions about when to evacuate? Are the decisions being made to minimise nuclear phobia? Are the officials avoiding making the correct rational response because of the known effects of nuclear phobia?
Peter, you’re not particularly well informed re. Fukushima. Most of the early evacuations were entirely voluntary and occurred within the first few days. The initial evacuation zone of 20km was not announced until a week or two later and not made mandatory for quite some time.
The wider 30km zone remains voluntary but the government provides assistance to those who wish to leave – most have. The government has subsequently been evacuating people from hot spots outside those two zones.
This “government policy caused the problems and made the cost worse” is a furphy. If anything the government acted, and continues to act, slowly and perhaps with too much of an eye on limiting costs.
> sites evacuated with chemicals when the latter have much greater health consequences, forever (no half life) and are added to the biosphere forever.
I think you need to justify the first half of this statement “greater health consequences”. Even quite dangerous chemicals such as petrochemicals do not have anything like the carcinogenic or mutagenic effects as radioactive daughter products. If you walk around a city today you are inhaling hydrocarbon vapour and burnt residues from cars. These have an effect but nothing like the inhalation of radioactive dust.
The second part “no half life” is simply nonsense. Chemicals react, degrade and are transformed (that’s the very process that makes them dangerous), often quite quickly. Elements don’t. At all. Unless they are radioactive which is when half lives become important.
And I think you might be operating from the wrong premise here:
> he health consequences from Chernobyl would have been much less if the people in affect areas (at least the less contaminated areas) had been given factual information about the risk of staying versus moving and been given the choice to make their own decision whether to stay or move
My understanding is that people within the exclusion zone at Chernobyl were forcibly removed within a few days at most. I don’t know how letting them remain exposed would have lessened the health effects.
Perhaps you could elucidate that point?
JM, on 25 August 2011 at 10:23 AM — Seems to me that you and Peter are off-topic on this thread. There is a current open thread for this exchange. But also, I find your remarks insufficiently quantitative for credence’s sake.
MODERATOR
Agreed – I logged on to the blog at 4PM and am just catching up. I will advise the participants in the radiation discussion that it is OT
@ JM
I realise it’s not straight forward, but I refer you to the WHO 2005 Chernobyl report media release
“Alongside radiation-induced deaths and diseases, the report labels the mental health impact of Chernobyl as “the largest public health problem created by the accident” and partially attributes this damaging psychological impact to a lack of accurate information. These problems manifest as negative self-assessments of health, belief in a shortened life expectancy, lack of initiative, and dependency on assistance from the state.”
You also said
Is this true? How would the average increased cancer risk from living in the Chernobyl zone compare to living next to a major highway, coal power plant or heavy industrial area? Or how would it compare to the sum of every other mutagen and carcinogen we are all exposed to every day? What is the quantity of average exposure to other toxic compounds compared to radionuclides? There is no evidence linking exposure to elevated radiation levels with congenital disorders – the same cannot be said for things such as lead (Pb) or alcohol.
The point is that the media and advocacy groups making such an exceptional case for radiation exposure and scaring the shit out of people has done enormous harm.
I should add that the exceptional treatment of radiation exposure has also extended to politics and decision making, due largely to the fear campaigns run by these groups (IMHO).
> Is this true? How would the average increased cancer risk from living in the Chernobyl zone compare to living next to a major highway, coal power plant or heavy industrial area?
Yes it is true. Refer to the Material Data Safety Sheets (MDSS) for petroleum products, any of the oil companies will send them to you for free if you ring and ask.
The fact is that no-one lives (or only a very few old people) live in the Chernobyl exclusion zone even after 25 years. You cannot compare that to the danger (or rather lack of) from petroleum products and their waste. Not even for a second.
I presume you filled your car with petrol at a self service station sometime during the last week or so? Then your exposure to petroleum fumes exceeds by several orders of magnitude your exposure from travelling through the Chernobyl exclusion zone.
But the danger is far, far less. If you had inhaled the same quantity (by mass) of Uranium and it’s daughter products as you did of petrol vapour during those couple of minutes – you would be dead the next day.
Peter’s contention and premise is ridiculous.
JM,
At the risk of continuing off topic and repeating what I posted on another thread.
UK Department for Environment Food and Rural Affairs:
http://www.defra.gov.uk/environment/quality/air/air-quality/impacts/
Is this risk higher or lower than that from radiation in the Chernobyl exclusion zone? One could also ask questions about “hot spots” of air-pollution.
I also wonder about how ridiculous it is to compare toxicity of pollutants per unit mass, rather than by environmental exposure and also whether those pollutants are present due to normal operations or an accident.
quokka, this comment “there is no safe exposure level to PM” is a little ironic coming from someone recently promoting a line of “radiation in low levels is good for you because of hormesis”
But putting that aside, the question is not a comparison of safety between normal operation of a petroleum economy and a normal nuclear one.
It rather is a question of whether or not the Chernobyl and Fukushima exclusion zones are safe to live in – ie. in non-normal circumstances.
And let’s just remember what is being proposed by several on this thread:
Namely that people return to contaminated areas that have radiation levels 500 times higher than safety levels and that the government is considering banning from occupation for decades.
MODERATOR
As per BNC Comments Policy, please supply a reference for your assertion that the government is banning occupation of the land around Fukushima for decades. Links from other commenters suggest otherwise.
JM,
That is because they were forcibly moved out. They were moved out because of regulations that are based on 50 years of nuclear phobia and anti-nuclear scaremongering. The thresholds for evacuation are not technology, toxin or health hazard neutral.
The fact is, nuclear is about the safest of all electricity generation technologies, including allowing for the rare industrial accident (refer figures 1 and 2 and accompanying text here http://bravenewclimate.com/2010/07/04/what-is-risk/ .
So preventing the roll out of nuclear is in effect causing more fatalities world wide. That is what seems to escape those suffering from nuclear phobia.
BJ @10.26PM said
It is nonsense to insist that agricultural land will be unusable for decades or more and this report, from “Nature” News Blog explains why.
http://www.nature.com/news/2011/110712/full/475154a.html
A reminder – this thread is about “Nuclear risk insurance” It is being hijacked by the radiation arguments. Please take this discussion to the Open Thread. As per BNC policy, because we do not have the facility to move comments, further comments off-topic will be deleted.
Luke,
Thank you for this interesting post.
It got me thinking, again, about what is the total cost of all the impediments we have loaded onto nuclear that we have not put on the other electricity generation technologies? My gut feeling is it amounts to around 50% to 75% of the cost of nuclear generation. I don’t know. I am just musing.
I am also musing about what is the real cost to society of the impediments to nuclear. We’ve effectively blocked the development of nuclear for 50 years. What is the cost of that? If not for the blocking of nuclear development it would be much cheaper, safer and more efficient now than it is. World emissions would be some 10% to 20% lower now than they are and we’d be on a much faster path to cutting emissions over the next 40 years or so.
So, I wonder, what is the true cost of the many impediments we impose on nuclear?
This is another example of reasons why when we do begin to set up for nuclear in Australia, it is imperative we do not use the US regulatory system as a basis.
I respect the moderator decision that radiation is off topic here and will refrain from discussing it.
However, it is evident that the amount of radiation tolerated is one important factor determining the amount of damages, and that in turn is decisive for the question if insurance is possible.
A recent German study commissioned by renewable energy interests concluded that the risk is so high that it is impossible to insure:
SPIEGEL article from May, http://is.gd/t9DzUA (in German)
Study at the German renewable energy association website
http://is.gd/Bhkbvi
They assume damages of 6000 billion Euros for a worst case scenario. That is somewhat more than is provided for in insurance.
If someone is interested, I could provide some more information about their assumptions. I personally don’t think they are sound, but they show the background to the “nuclear power is not insurable” position. If you think that 6000 billion Euro damage is possible, well yes, there is no way anyone could insure that.
The Japanese governmental national debt is about that high figure mentioned by Karl above (7500 billion USD). This does not appear to be ‘insured’ by third parties. One might deduce from this that Japan is not insurable.
http://www.creditloan.com/blog/2009/06/05/gdp-vs-national-debt-by-country/
And who has insured the 25,000 people that were killed by the tsunami, or the damage caused to their houses?
A perspective from NNadir:
http://www.dailykos.com/story/2011/07/24/987836/-Were-the-Japanese-Engineers-Who-Built-Fukushima-Incompetent?via=blog_658234
(Deleted. Off topic.)
MODERATOR
As previously advised, this discussion should move to the Open Thread. Please re-post on the appropriate thread.
Several agencies (Moody’s, Fitch, Standard & Poor’s) assess the credit worthiness (or default risk) of government bonds or sovereign debt instruments. It’s a “buyer’s beware” market, which is why investors get rewarded for taking a risk (or agree to debt contracts with a higher rate of interest or yield). If, as an investor, you don’t wish to take this risk, you can purchase a credit default swap, or CDS on your bond. On US treasuries (for example):
The cost of buying CDS protection on federal debt for a one-year duration has roughly doubled since the start of 2011. U.S. CDS prices are currently about 54 basis points (one-hundredths of a percent)—slightly lower than for Germany—but much lower than the cost of CDS protection for Greece, Portugal, and Ireland. A CDS contract covering $1,000 of federal debt at a price of 54 basis points (bps) would require annual payment of $54 (page ii).
Currently, CDS market globally has a notional value of around $62.5 trillion USD (a little above the global GDP for a year). Here’s the tick chart for a CDS on Japanese sovereign debt ending March 14, 2011. At 92 basis points, the annual fee for insurance on the full amount of Japanese sovereign debt ($7.5 trillion) would be about $690 billion/year (if I have all the zeros entered correctly in my calculator).
So when it comes to the government’s share of the costs for tsunami, earthquake, and nuclear damage in Japan … they appear to be covered (or can simply sell off more debt to anybody in the bond community who wants to buy it, and with future Japanese taxpayers picking up the interest payments).
Moderator and others, re. TEPCO being broke. The Economist 30th June
A few quotes:
TEPCO faces unlimited demands for compensation. Its shares have fallen by nearly 90% (see chart).
If TEPCO goes bust, [bond holders] take precedence over those affected by the disaster, a fact that is politically radioactive
Only the government can save TEPCO from bankruptcy.
The long-term solutions being considered include bankruptcy, temporary nationalisation for the purpose of selling off assets, or capping TEPCO’s liability and making it, in addition to an energy provider, a vehicle for compensation payments. TEPCO favours a liability cap.
Not opinion, reality.
MODERATOR
Thank you for the reference.Which is what is required to change personal opinion into fact.
(Off topic as previously advised. . Please re-post on the Open Thread. Also your link was broken please re-submit)
The insurance risk would be greatly reduced if the exclusion areas were defined by a measure of risk rather than radiation level.
The risk from radiation exposure is highly age dependent; therefore mandatory evacuation zones should be age dependent. There would be a very small evacuation zone for seniors, a larger zone for middle aged folks and a much larger zone for infants and children.
In this way nearly all the land around the Fukushima plant could be occupied and maintained. The value of the land would be reduced, and that could be measured by market prices as property is bought and sold, but the value of the property would not go to near zero as happens with a total evacuation.
Bill Hannahan, on 28 August 2011 at 5:52 AM — Discussion of the Fukushima situation does not belong on this thread. There is a current open thread which could be so utilized.
What is wrong with leaving the liability of a worst case accident up to the government, or “taxpayers”? If a utility were to carry coverage for such an accident then the premium cost would be added into the charges for the electricity. Or, if insurance were held the cost would be born by the “rate payers”.
So, lets say for arguments sake that every utility company in the U.S. generated or purchased power from a nuclear power plant. Thus every utility company had costs of insurance to account for. Awesome, the costs of the accident are born by the ratepayers, and me as a taxpayer are off the hook..
OK, now all the taxpayers are happy. But, all the taxpayers are also ratepayers. Both groups are one in the same.
So, this argument is not about who pays, but about the net present value of the money involved.
That is, is it better to save now, or borrow later? Well this all depends upon when the event is going to be, what interest rates are, how is inflation etc.
Luke, sorry it took so long to get back here. The Quakicane disrupted the last week in these parts. The 6.0 magnitude tolerance figure was not media hype but came from a Dominion Power official as quoted earlier in the year in the Richmond Times Dispatch. North Anna is still shut down and the NRC is on site to investigate whether the peak ground acceleration was exceeded. Also 25 spent-fuel storage casks were moved an inch to 4½ inches. I haven’t seen info yet on whether the peak ground acceleration was exceeded. This was the first time, according to press accounts, that a nuclear reactor has been shut down by an earthquake in the US. The earthquake occurred 4 miles deep and the epicenter was 11 miles away from North Anna. I will be reading the NRC report. Thanks for replying. I hope you will have a future blog entry on North Anna when the investigation is completed.
Luke, a quick update –
The following was published in the Richmond Times Dispatch, http://www2.timesdispatch.com/news/2011/sep/02/va-reactors-wont-restart-until-safety-assured-ar-1282292/ :
“Based on preliminary data, the plant did exceed some seismic measures for its site design but was still within safety margins, [Don] Stoddard said.”
and
“The two North Anna reactors are among 27 in the eastern and central U.S. that may need upgrades because those plants are more likely to get hit with an earthquake larger than the one on which their design was based, according to a preliminary Nuclear Regulatory Commission review.”
I am for nuclear power, but it’s got to be smart and safe. Who would insure these 27 reactors?
I will place all subsequent comments on North Anna on an open thread or, hopefully, in comments of a blog article concerning the need to reinforce these reactors. I just wanted to end with the latest information available to me.
[…] insurance, with an industry pool of around $13bn available if needed. As Luke Weston put in in a great post first published to Brave New Climate: If the commercial insurance industry will not provide any […]