The $30 Billion Nuclear Waste Storage Headache


Barack Obama wants clean energy sources powering the country. There’s no energy source that can produce cleaner energy more consistently than nuclear power. Yet, nuclear power is a heavily politicized issue stemming in large part from figuring out what to do with nuclear waste, which is why Harry Reid hailed the closing of Yucca Mountain last week, despite the monstrous headache that comes with it.

Without Yucca Mountain, or an alternative centralized location, wasted fuel will just be scattered around the country at nuclear power plants in dry storage holding facilities. While that’s a fine enough solution, nuclear utilities were forced in 1982 to sign a contract with the DOE to deliver about $1 million annually, or 1/10 of cent for every kilowatt hour generated, to a fund that was going to be used to build a central storage site, like Yucca Mountain. The total pot of money is over $30 billion at this point.

The contract the utilities signed stipulated that by 1998 the DOE would start gathering spent fuel for storage. That day came and went, and there was no facility in place. Instead they constructed their own facilities at $20-35 million a pop, as well as having to spend $1 million per cask to hold the waste. That was supposed to be the government’s responsibility, so utilities are suing for damages. The DOE estimates that the government’s liability is at $11 billion.

We spoke with Kenneth P. Metcalfe*, president of The Kenrich Group LLC, about this predicament. He’s a consultant who’s represented approximately 20 nuclear utilities, testifying in the Court of Federal Claims on nuclear waste.

Who has the money now that the utilities have contributed?

The interesting twist is that like Social Security, the money is there on paper, but the actual cash is already spent for the general fund of the United States. So it’s a liability that the United States has to the utilities to incur some solution to the problem. But it’s interesting that it’s not a fund that’s actually used by the Department of Energy. So, for example, the Department of Energy has actually testified several times before Congress that over the years, even before the cancellation of Yucca Mountain, they would have to go before the Congress and the President for new appropriations every year and those appropriations were generally significantly less than what they were asking for to complete Yucca Mountain. The DOE themselves thought it was crazy that they had this fund they couldn’t get access to, instead they had to go through the appropriations process. There’s a bunch of things that make it politically interesting, but economically kind of ridiculous. So the utilities are spending in essence billions, billions of dollars, to not have performance from the DOE and then go do it on their own sites.

Any plans for nuclear waste, besides reusing or just letting it sit there?

It could be reprocessed, that in itself is an expensive effort, because we don’t have the facilities to do it in the United States, since that program was canceled in the seventies. Those facilities could be built. The term “spent fuel” is a misnomer, because you really have more than well over 90% of the energy in that fuel, but it’s not in a usable form until its reprocessed. So reprocessing is a definitely a way to go, but the only people that have the ability to reprocess is the federal government. So until they were to take that up as an alternative there’s nothing you can do but keep it on your facility or send it off to some other interim or permanent storage place.

When does the contract between the DOE and utilities expire?

It’s supposed to end when they’re done with the fuel. So the plants in existence that signed that contract, it will end at the end of their licence life. Now most of these plants have either applied for, or are applying for licence extensions. And all the applications made this far have been granted. So you’re talking about what was a 40-year plant life going out to 60, and there’s talk extending beyond that, because they can last longer and because they’re well maintained. So, technically the contract runs until all fuel from those existing plants is removed at some point in the future by the Department of Energy. Now, in the new nuclear plants, there’s been at least 8 new contracts signed, but I think its much fairer today, because new plants haven’t been built yet and the DOE is making them sign a contract but everybody knows from the utility standpoint, what they can trust the DOE to deliver, so, probably, they will all be in the new plants building sufficient capacity to hold spent fuel for duration of the plant’s life as well, rather than having to trust DOE, in terms of performing. At least at this, at this point in time, everyone’s eyes are wide open, on both sides, as opposed to having it forced on them like back in 1983.

Explain the lawsuits a little more, please. How long can they last?

Unfortunately, it takes a long time, the first lawsuits were filed, if not Jan 31, 1998, then Feb 1, 1998, or the first business day right after, so its been going on for 11 years plus. The utilities, it was decided in some of our early cases, the utilities could only sue for past damages, these are damages that continue over time. So what happens is, I’ll use one example, Southern Nuclear, they have three plants, Farley, Hatch and Vogtle, they sued for damages, we testified for costs through 2004, they won their damage case for about $80 million for costs that had been incurred up to that time. Since then, there’s been a lot more damages incurred, they are filing another case at the end of this month. Other utilities are also filing their second cases. It’s a slow drawn out process, the awards from the court of federal claims, so far, have been over three quarters of a billion dollars, but very little has been paid out because most of the cases are on appeal. Then, there’s a separate group of cases that have settled with the federal government. They have been settled on a basis of some rules that are more favourable to the feds, but they are also hundreds of millions of dollars of settlement costs that are being paid as well.

Where does this go? What happens in the next 10 years?

If you asked me when we started this, I would never expected it to last this long, I would not be a good prognosticator about where it’s going to go from here. There is no indication that there will not be continued litigation for some time in the court of federal claims for utilities to recover their cost of this breach related handling of their spent fuel. As for the Yucca Mountain piece, as for what will ultimately happen to the spent fuel that is on site, as you know, they’re alleging they’re putting together this commission to look at their alternatives. There aren’t many alternatives, technically speaking. We’re not talking about lot of fuel. All the spent fuel that’s ever been created in the United States, would fill a football field about 6 yards deep, so this is not a lot of stuff. But it is obviously politically charged, and it is hard to believe they are going to come up with any kind of a solution that is a quick solution, because the Department of Energy is continuing to be held to that contract, they are going to continue to incur damages by all this delay.

What are some alternatives to Yucca? What can be done? What’s a solution?

From a technology standpoint, and a common sense standpoint, the most technically feasible is to reprocess, and regain some of the energy from the used energy that’s out there and not go to a deep geological facility like Yucca Mountain. But, again, given quantity we’re talking about, a deep geological facility would work fine, Yucca Mountain would work fine, would still work fine, remember Yucca Mountain was chosen out of a group of three to five. So one alternative is to find a place that’s willing to take this relatively small amount fuel for a long period of time and get paid well for doing so. Clearly Nevada is not, you would’ve thought that Yucca Mountain which is just a few miles from where they had hundreds of above ground and under ground nuclear bomb tests in the fifties and sixties, you would think that would be ideal place that nobody would’ve cared about, but again the politics is ruling the day and, really again, there is only two technical options, to have some sort of a storage facility and to reprocess. So however long the commission takes to decide what to do next, that’s really their two physics bounded options.

What about people that say Yucca is not geologically suited to store the waste?

They’re raising standards that are to me not legitimate. Part of the problem with Yucca is that was the EPA that raised its standards to prove you can be fine for 10 thousand years. You can’t do that with any facility.  But you can always go back in if you find there’s a problem. You got to see these casks to see how hard it is for a problem to occur, Even if there was a problem was to occur, they would be monitoring, they’d be buried under ground, they’d be monitored, so you’d have plenty of time to switch out casks, or do whatever you needed to do to take care of the fuel. Remember, there are now hundreds and hundreds of these casks around the country, this is not something that is new, and it is far better than the way that our military nuclear waste has been treated. From technical scientific standpoint, this is not a tough solution. From political standpoint, it was and continues to be, but something has to be done with the fuel. Right now it stands at all the plant sites around the country. Is that any better? I don’t know.

*An earlier version of this post referred to Mr. Metcalfe as a lawyer, who represented 50 utilities. He is not, we erred. We apologise, and have update his description.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.