At least twice in the past few days, I have been challenged about the value of nuclear energy with something close to the following comment posted on during a recent Google+ discussion about energy choices.
A good way to measure the safety of nuclear power in America, using objective criteria, would be to require nuclear plant operators to pay market rates for liability insurance, rather than getting free coverage from the US government.
This issue has been a part of the antinuclear talking points for decades. The best response, I think is to document the reality and to share that document with as many people as possible. That way, whenever the issue comes up in public meetings, internet conversations or even private discussions, more people will be able to respond effectively. Myths will die when they are constantly challenged with verifiable facts.
Here is the response I provided. If any of you have any additional information or comments that might help to build this into an effective response that can be shared widely, feel free to participate in the comment thread.
The mythology associated with nuclear plant insurance is difficult to stamp out. Here is a link to a fact sheet about the structure of the industry funded insurance pool that was enabled by federal legislation called Price Anderson:
The federal government got involved in the earliest days of the industry primarily because the US government had declared a 13 year long monopoly on nuclear knowledge following WWII whose penalty for violation ranged as high as death for treason. The insurance industry thus was not ALLOWED to even START developing technical knowledge or actuarial tables before 1954, but there was a need to start building new nuclear plants.
By 1956, the US government really got interested in having an alternative to oil from the Middle East during the Suez Canal crisis. Eisenhower even sent an emissary named Robert Anderson to King Saud to tell him not to back the Egyptians. The emissary was directed to inform the Kind that such an action would encourage the US to unleash atomic energy into the world market to give customers an alternative to oil. (Source: Daniel Yergin’s The Prize: The Epic Quest for Oil, Money and Power, pg 488.)
The concept of mutual insurance pools and shared liability was developed. That arrangement also required federal dispensation to allow an exemption from antitrust laws – just like Major League Baseball needs that kind of exemption to function properly.
Price-Anderson has continued to be a good deal for the US taxpayers. We have never spend a dime for the coverage. Managing the insurance pool for nuclear plants is a profitable business. Here is a quote from an email received yesterday from a USNA classmate who has been in that business for more than 20 years:
“Rod – All claims have been paid by the reserve fund – 75 percent of annual premiums set aside to pay claims. On a rolling 10 year basis anything not used is returned to the plant owners. The annual premium paid – less 25 percent for profit and expenses – has never been insufficient to cover claims (meaning no insurer has ever had to dip into its coffers to support the industry). Sorry for mislead – they do pay 3 to 4 claims per year, and TMI is largest with 75 mil over about 15 years. Incidentally, insurers get all interest on the reserve fund and count that toward additional profit.”