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| The '''Price-Anderson Nuclear Industries Indemnity Act''' |
The '''Price-Anderson Nuclear Industries Indemnity Act''' removes the protections victims deserve against companies which by criminal, negligent, or malicious means cause or permit nuclear radiation to harm the public. | ||
| The act makes taxpayers rather than the companies themselves reponsible for ''any radiological incident'' and dramatically lowers liability insurance obligations for fixed nuclear installations in the United States. This limited liability is in contrast to most other industries (which are generally fully liable for difficulties that their products cause), but as with banks claims above the insurance are required to be backed by the ]. The Act is broadly viewed as a requirement for nuclear energy in the United States, and is viewed as enabling private participation. Environmental groups, consumer groups, taxpayer watchdogs and even an agency of the ] have criticized the act as a handout to the nuclear power industry. | |||
| ==How the law works== | ==How the law works== | ||
Revision as of 23:47, 29 October 2005
Template:Totallydisputed The Price-Anderson Nuclear Industries Indemnity Act removes the protections victims deserve against companies which by criminal, negligent, or malicious means cause or permit nuclear radiation to harm the public. The act makes taxpayers rather than the companies themselves reponsible for any radiological incident and dramatically lowers liability insurance obligations for fixed nuclear installations in the United States. This limited liability is in contrast to most other industries (which are generally fully liable for difficulties that their products cause), but as with banks claims above the insurance are required to be backed by the U.S. Congress. The Act is broadly viewed as a requirement for nuclear energy in the United States, and is viewed as enabling private participation. Environmental groups, consumer groups, taxpayer watchdogs and even an agency of the Department of Energy have criticized the act as a handout to the nuclear power industry.
How the law works
In the Act, power reactor licensees are now required to have at least $300 million worth of primary insurance. Also, as of 2005 each power reactor must pay up to $95.8 million in the event any of them has an accident. The pool of money — which as of 2005 stood at about $10 billion — is contributed by the nuclear industry. In the event that claims deplete the pool of funds, Congress is required to consider covering the excess cost - if Congress does not cover them, the Tucker Act may provide a final remedy.
Price-Anderson also covers DOE facilities and contractors such as the USEC uranium enrichment plants, national laboratories and the Yucca Mountain disposal site.
Nuclear insurance pools have paid $151 million ($70 million of which was related to the 1979 Three Mile Island meltdown) and the DOE $65 million since Price-Anderson was enacted.
Background
The Atomic Energy Act, enacted in 1954, three years before Price-Anderson, was intended to spur the development of America's private nuclear power industry by allowing private industry to use atomic power for peaceful purposes, such as generating electricity. Prior to that act, the government had held a monopoly on the use of nuclear power.
Private industry responded to the Atomic Energy Act of 1954 with the development of an experimental power plant constructed under the auspices of a consortium of interested companies. It soon became apparent that profits from the private exploitation of atomic energy were uncertain and the accompanying risks substantial. Although the AEC offered incentives to encourage investment, there remained in the path of the private nuclear power industry various problems - the risk of potentially vast liability in the event of a nuclear accident of a sizable magnitude being the major obstacle. Notwithstanding comprehensive testing and study, the uniqueness of this form of energy production made it impossible totally to rule out the risk of a major nuclear accident resulting in extensive damage. Private industry and the AEC were confident that such a disaster would not occur, but the very uniqueness of nuclear power meant that the possibility remained, and the potential liability dwarfed the ability of the industry and private insurance companies to absorb the risk. Thus, while repeatedly stressing that the risk of a major nuclear accident was extremely remote, spokesmen for the private sector informed Congress that they would be forced to withdraw from the field if their liability were not limited by appropriate legislation.
The constitutionality of the Price-Anderson Act was challenged in 1975 (Duke Power vs. Carolina Environmental Study Group, Inc.) and upheld by the Supreme Court in June, 1978. The suit had challenged the act on two grounds — first, that it violated the Fifth Amendment because it did not ensure adequate compensation for victims of accidents, and that it violated the Fourteenth Amendment because it treats nuclear accidents different than other accidents. The court found that the act did not violate the United States Constitution's equal protection provisions because the importance of nuclear power must be balanced against the burden of those who would potentially be harmed.
Criticisms
The law is not without its detractors, including the libertarian thinktank Cato Institute, Greenpeace International, Public Citizen, Taxpayers for Common Sense and other interest groups, who charge that Price-Anderson has amounted to a giveaway to private industry at the American taxpayers' expense. Public Citizen has been particularly critical of Price-Anderson, arguing that it understates the risks inherent in atomic power and does not require reactors to carry enough insurance — as a result taxpayers would have to foot most of the bill for a catastrophic accident.
The law has also been criticized by environmental groups such as Green Scissors, who asserts that Price-Anderson distorts the energy market by providing companies and their financiers a financial incentive to remain invested in nuclear energy rather than exploring sustainable energy technologies. According to the United States Public Interest Research Group the subsidy to the nuclear industry has been estimated at between $366 million and $3.5 billion annually, or $3.5 million to $33 million per reactor per year
Price-Anderson has been criticized by many of these groups for a portion of the law that indemnifies Department of Energy and private contractors from nuclear incidents even in cases of gross negligence and willful misconduct (although criminal penalties would still apply). "No other government agency provides this level of taxpayer indemnification to non-government personnel," Public Citizen has said. However, the Energy Department counters those critics by saying that the distinction is irrelevant, since the damage to the public would be the same.
The law provides no fault liability for reactor operators, and injured victims are precluded from directly suing vendors or manufacturers responsible for an accident. Its critics argue that it poses legal hurdles to victims seeking compensation by removing state jurisdiction and restricts plaintiffs ability to utilize any state laws which might go above and beyond federal protections.
See Also
External Links
- Cato Institute Discussion
- Industry synopsis of Price-Anderson
- ANS synopsis of Price-Anderson
- GAO report on Price-Anderson
- Congressional Research Service report on Nuclear Energy Policy