Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: $Revision: 1.6.2.16 $; site inmet.UUCP Path: utzoo!watmath!clyde!bonnie!akgua!whuxlm!harpo!decvax!genrad!mit-eddie!think!inmet!nrh From: nrh@inmet.UUCP Newsgroups: net.politics Subject: Re: Orphaned Response Message-ID: <7800341@inmet.UUCP> Date: Tue, 18-Jun-85 13:40:00 EDT Article-I.D.: inmet.7800341 Posted: Tue Jun 18 13:40:00 1985 Date-Received: Sun, 23-Jun-85 01:48:30 EDT References: <337@npois.UUCP> Lines: 72 Nf-ID: #R:npois:-33700:inmet:7800341:177600:3975 Nf-From: inmet!nrh Jun 18 13:40:00 1985 (Sorry for all the quoting here, but it seems something I presented as a fact has been called into question. To get things straight, I'll include both sides (unfortunately, Stubblefield is excerpted by npois!adam -- Stubblefield's original article never made it here). >/**** inmet:net.politics / npois!adam / 4:43 pm Jun 6, 1985 ****/ >Nat Howard says: > >>As for nuclear power plants, the same government you like for giving us >>OSHA also arbitrarily limits the possible damages of a nuclear accident >>to some artificially low figure. Why? Because insurance agencies would >>hardly insure reactors in cities for the amounts of damage they might >>actually cause. As it is, of course, the government has spoken, and it >>is the government, not the market, which must be blamed for any >>artificially imprudent placement or construction of nuclear power >>plants. > >Peter Beckmann (cited by Bob Stubblefield) says: >>"Contrary to widespread misconceptions, liability insurance for nuclear >>accidents is fully private with not a cent either contributed or confis- >>cated by the government (with the unimportant exception of small reactors >>under 100 MW, used mainly at universities and research labs). Liability >>up to $160 million is covered by a pool of private insurance companies, and >>any excess over that figure--which has never materialized and is unlikely to >>occur in the future--would be taken from a fund which utilities would con- >>tribute up to $5 million per licensed reactor or, with the present 92 li- >>censed units, up to $460 million, bringing the liability coverage to a total >>of $620 million." ACCESS TO ENERGY, May 1985 (Vol.12, no.9) Box 2298, Boulder >>CO 80306 > >Bob Stubblefield says: >>I share Nat Howard's loathing of government intervention in economic affairs, >>but my study of the facts has led me to conclude that nuclear power has been >>hamstrung rather than subsidized by the government. The fact that some >>libertarians are quick to rally to the popular anti-nuclear cause is one >>of the things that makes me uneasy about the movement. > Surprised by the implication that nuclear reactors are insured entirely by private industry, I decided to see just how "widespread" the "misconception" that the government is subsidizing liability insurance for nuclear reactors. To find out, I called the public information office of the Nuclear Regulatory Commission in Washington D.C., and spoke with a very helpful man named Frank Ingram. Mr. Ingram told me that under the Price Anderson act of 1957, as amended in 1975 (public law 94197) the current government-imposed upper limit on nuclear liability for a single nuclear accident is $630 million. The figure floats somewhat according to the number of reactors online. It is, of course, a matter of interpretation whether an upper limit on nuclear liability constitutes a "subsidy". It may be that the money is all raised privately, but if the AMOUNT of money that must be raised is artificially lowered by government, I believe you'll agree that this constitutes (rather directly) a subsidy. To make this point just a little clearer: suppose, instead of $630 million, Price-Anderson limited the liability to (say) ten cents. Would it not be obvious that the insurance costs of the reactors were lower than they should be? (say, $0.01/year). One may argue that if the limit were set higher than the actual likely liability, it is not a subsidy, but then, why impose a limit? Note that my contention is NOT that nuclear reactors are evil, or particularly dangerous. I suspect, though, that things about them would be somewhat different were the market allowed to work, and were government not allowed to place an upper limit on liability for a nuclear accident. I suppose it is possible that I misunderstood something you said (I only have, after all, an excerpt of your article) or that Mr. Ingram at the NRC said. I invite suggestions or clarification.