New insurance subsidies for nuclear industry?

New insurance subsidies for nuclear industry?
Do the operators of the World’s Largest Above Ground Nuclear Waste Facility
pay for only $6 million of insurance?

By Normand de la Chevrotiere

One used fuel bundle freshly removed from a “Candu” nuclear reactor is about the size of a fireplace log, and is so toxic that a person standing within a metre of it would be dead within an hour.

Ontario Power Generation (OPG) plans to store some 750,000 such bundles (roughly 18,000 tons of high level nuclear waste) at what is to-date the largest planned above ground nuclear waste storage facility in the world, just over a kilometer from the shoreline of Lake Huron. According to a letter written by the then Chairman of Ontario Hydro at the time of the development of the project, the waste will remain in storage on the Lake Huron shore until at least 2088.

Just how much insurance should a facility containing such deadly, toxic material be required to carry? You might like to know a little more before assigning an amount.

Canada’s Yucca Mountain on the Great Lakes shore…
The Western Waste Management Facility (WWMF) at the Bruce Nuclear Complex on the Lake Huron shoreline is 160 kilometres northwest of Toronto in the hamlet of Inverhuron.

The WWMF is operated by OPG and currently stores all the low and medium level nuclear waste produced by all of OPG’s nuclear stations. That means all the paper, clothing, rags, sludge, resins, filters and used reactor parts that have had contact with sources of radiation. Much of the low level waste is incinerated and ashes stored at the site, while the medium level waste is mostly buried in in-ground containers.

As well, the WWMF recently started storing high level nuclear waste (used fuel bundles) in above ground silos. The WWMF is projected to ultimately store over 18,000 tons of this high level waste. That is about half the projected total of 36,000 tons that will be generated at the Bruce Nuclear Complex over its operating lifetime.

36,000 tons is almost half the tonnage of high level waste which the U.S. plans to bury at the controversial Yucca Mountain site in Nevada. Under the current proposed plan, 90% of the high level waste slated for Yucca will come from U.S. commercial nuclear power reactors, of which just over 100 are still operating.

Lake Huron is in the heart of the Great Lakes basin, which is home to some 36 million people. Cities like Detroit, Flint, London, Sarnia and many more draw their drinking water from Lake Huron.

Thus, the ability of the nuclear industry to clean up a possible accident or terrorist incident is a matter of growing concern for civic officials.

Nuclear Liability Act and nuclear waste
Under the Canadian Nuclear Liability Act, the maximum liability for any facility defined by the Canadian Nuclear Safety Commission (CNSC) as a “nuclear installation” is set at $75 million.

In a decision released late in 2002, the CNSC designated the WWMF a “nuclear installation” under the Nuclear Liability Act. Thus, OPG’s maximum liability for the WWMF facility is set at $75 million, or about one hundred dollars per deadly, toxic used fuel bundle.

Nuts and Bolts – Canadian Coverage “A” risks — Basic vs. Supplementary insurance
The Nuclear Insurance Association of Canada (NIAC) provides the insurance coverage for Canadian nuclear installations, with over 50 insurance companies sharing the risk. The Insurers’ Advisory Organization (IAO) administers the NIAC plan.

The WWMF must carry $75 million of insurance to cover risks of property damage and bodily harm (Coverage “A” risks). This coverage is obtained from a combination of “basic” and “supplementary” insurance.

Basic insurance is purchased by the operator of the facility (OPG). The CNSC set the basic insurance coverage to be maintained by OPG for the WWMF at $6 million (about eight dollars per deadly fuel bundle). CNSC considered factors such as containment, material type, on and off-site population density and the perceived risk of the facility relative to other nuclear installations (e.g. nuclear power generating stations). OPG obtains this coverage from NIAC, and presumably pays premiums to NIAC.

That leaves $69 million of “supplementary” coverage. This coverage is provided by NIAC, but fully reinsured with the Federal Government. After numerous inquiries and conversations with individuals at the Federal Treasury Board, CNSC, OPG and IAO, this writer was unable to ascertain whether OPG is required to pay premiums for the “supplementary” coverage, or is subsidized in this endeavor by Canada’s taxpayers. No one at any of these agencies could or would clarify this matter.

Coverage “B” risks
The Nuclear Liability Act also specifies $75 million of insurance for Coverage “B” risks, including personal injury or damages by emissions. Once again, these risks are divided into basic and supplementary coverage.

CNSC set the basic insurance for Coverage “B” risks (to be held by OPG alone) at the nominal amount of $100, or about the price of a decent seat to a Toronto Maple Leafs hockey game.

The supplementary coverage of $74,999,900 is again provided by the Federal Government, and possibly Canadian taxpayers.

An insurance claim for an accident can be made only under Coverage “A” or Coverage “B” stipulations, but not both. Thus $75 million is the maximum exposure of the Western Waste Management Facility or any of Canada’s commercial nuclear power generation facilities.

Why only $75 million liability?
One could be forgiven for doubting if $75 million is sufficient to clean up the Great Lakes and the surrounding area should the world’s largest planned above ground high level nuclear waste storage area be subject to an accident or terrorist attack.

In fact, when compared with international standards, the $75 million dollar liability limit as set under the Canadian Nuclear Liability Act is grossly low. Under the U.S. Price Anderson Act, operators of each U.S. reactor are liable up to $13 billion Can in the event of a nuclear incident. And even that amount has been called “inadequate” by industry critics.

Natural Resources Canada says it is reviewing the Nuclear Liability Act. But most observers feel any potential expansion of coverage appears years away at best.

Real costs in a too real world
In these times of global strife and uncertainty, coupled with Candu nuclear operations that have been fraught with performance and safety problems, more robust insurance coverage doesn’t seem like a bad idea.

Neither would it be a bad idea if the industry were to factor the costs of reasonable insurance and the escalating costs of waste storage over hundreds of thousands of years into cost estimates for nuclear powered electricity production. The real cost of waste storage, when added to the real expense of production (considering numerous cost overruns and poor efficiency records), would put honest comparisons with other energy production systems on a level playing field.

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