Brattle Economists Recommend Implementing A U.S. Federal Dry Storage Program For Spent Nuclear Fuel By 2020

CAMBRIDGE, Mass., Aug. 13, 2012 /PRNewswire/ -- Following the August 7, 2012 decision by the Nuclear Regulatory Commission to suspend approving nuclear license extensions until it has taken a deeper look at the safety of on-site spent nuclear fuel, economists at The Brattle Group have released a new study examining the appropriate size, pace, and economics of a new federal spent fuel handling program in the United States. The report recommends that the government restart a spent fuel handling program at one or a few centralized, interim dry storage facilities by 2020 to avoid adverse engineering and economic consequences.

This recommendation takes into account important lessons learned from the March 2011 earthquake and tsunami in Japan. As a result of that event, the housing for four spent fuel pools at Fukushima was badly damaged, with the potential to result in catastrophic radiation release.  In sharp contrast, the nine casks of spent fuel held in dry storage experienced no material damage and posed no safety concerns. The President's Blue Ribbon Commission on America's Nuclear Future took note of the problem of large quantities of fuel being stored in wet pools, recommending that one or more centralized interim storage sites be developed pending a permanent geologic repository.

The paper presents several assessments of how a new program could be designed to address alternative priorities for improved spent fuel handling. The authors find that a program beginning in 2020 and capable of handling 6,000 metric tons of uranium per year could, within a decade, effectively end unnecessary at-reactor storage costs, clear out fuel from all decommissioned sites, and reduce the density of fuel in wet pools.  They also show that the program's likely costs could be funded comfortably with the annual amounts being collected from nuclear plant operators, and evaluate how delaying a federal waste management program could impact the costs and ability to meet future objectives and goals.

The report finds that as the backlog of unmoved, spent at-reactor fuel continues to pile up in the United States, the costs of maintaining numerous facilities would continue to accumulate as a federal liability. While it is possible to argue about optimal program design, there are clear benefits from starting soon and allowing exchanges to determine the most economical use of the program's capabilities.

"Delaying a program much beyond 2020 would have adverse engineering and economic consequences in the U.S.," said Brattle principal and co-author Frank Graves. "This is a situation where 'the perfect would be the enemy of the good.' The knowledge and technology to produce a safe and successful program at a reasonable cost already exist, without any uncertainties in areas that should pose a barrier to action. The U.S. government should find the political will to act soon."

The paper, "Centralized Dry Storage of Nuclear Fuel: Lessons for U.S. Policy from Industry Experience and Fukushima," was authored by Brattle economists Frank Graves and Mariko Geronimo and physicist Glen Graves. It is available for download at www.brattle.com.

The Brattle Group provides consulting services and expert testimony in economics and finance to corporations, law firms, and public agencies worldwide.  Areas of expertise include antitrust and competition, valuation and damages, utility regulatory policy and ratemaking, and regulation and planning in network industries. For more information, please visit www.brattle.com.

SOURCE The Brattle Group