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While Nuclear Waste Piles Up in U.S., Billions in Fund to Handle It Sit Unused

Energy companies have been suing the government over a lack of a long-term fix for nuclear waste -- costing taxpayers millions and potentially billions.

While the nuclear crisis in Japan has focused attention on the risks of spent fuel piling up at the U.S.'s reactors, one curious fact has gone largely unnoted: There is $24 billion sitting in a "nuclear waste fund" that can't actually be used to pay for a safer way to store the waste at reactors.

In 1982, Congress passed the Nuclear Waste Policy Act, and the federal government effectively struck a deal with the nuclear industry: Reactor operators and their customers would pay a tax on the waste they produced, and the government would use the money to create a safe place to store it for generations. The idea at the time was to build a repository inside volcanic rock on Yucca Mountain, about 100 miles northwest of Las Vegas. That plan proved to be wildly controversial and was eventually abandoned by the Obama administration in 2010. After 29 years, there are billions of dollars in the fund and no plan for the waste.

To compound the problem, the 1982 law only allows the money to be spent on a permanent solution, such as Yucca, and it can't be used for what many experts say is the best interim solution: taking spent fuel out of increasingly crowded cooling pools and encasing them in concrete and steel. So, nuclear companies have begun doing that themselves -- and have been suing the government for not holding up its side of the bargain. The companies have filed dozens of lawsuits, for $6.4 billion in total claims, according to figures maintained by the Department of Justice. The government has already paid out $956 million. It's also spent nearly $170 million simply defending itself against the claims.

"Basically lawyers are getting rich and nobody is really better off, as far as I can tell. That seems to be the bottom line," Allison MacFarlane, a professor at George Mason University, said at a February meeting of the Blue Ribbon Commission on America's Nuclear Future, a federal advisory committee on which she sits.

Department of Energy statistics show that new lawsuits and other costs could eventually push the government's legal liability to $16.2 billion.

Senate Majority Leader Harry Reid, D-Nev., who opposes storing waste at Yucca Mountain in his home state, introduced legislation in 2007 to amend the law so the fund could be used for interim waste storage. But the bill never came to the floor for a vote. Reid's office didn't respond to questions about whether he intends to re-introduce the bill.

"The whole story is a black mark on the system," said Jay Silberg, a Washington, D.C.-based attorney who has been representing utilities in these cases for more than a decade. "It's bad for society, bad for taxpayers, bad for ratepayers and bad for the government."

Spent fuel is contained in zirconium-clad rods that remain highly radioactive for years after they've been heated inside a reactor core to produce energy. In order to cool, the rods first have to be immersed in large pools of water.

There is about 70,000 tons of spent fuel stored at reactor sites around the country. Three-quarters of the material sits in cooling pools. Reactor operators have been re-racking the rods so they can fit more of them in the pools -- a practice that makes the pools more radioactive and potentially more dangerous in the event of an accident.

The pools in the United States have been criticized by nuclear industry watchdogs who say they are too crowded and in some cases have been known to leak low levels of radioactive water.

Some reactor operators have begun building large tomb-like structures called dry casks to contain the waste after the rods have cooled for five years or more in the pools. The dry casks are considered a safer way to store the rods.

But the industry has been reluctant to use dry casks on a large scale because it's extremely expensive to transfer the radioactive rods. A 2003 study by a former Energy Department official and a team of nuclear experts concluded it would cost at least $3.5 billion to move all rods that had been in pools for over five years.

Critics of the industry have urged the Nuclear Regulatory Commission to require reactor operators to begin moving all spent fuel that has cooled for five years or more into dry casks, because the pools are more vulnerable to terrorist attacks and the loss of a small amount of water could cause a radiation field to grow large enough to prevent emergency workers from mitigating a full-blown meltdown in the pool.

But the NRC has argued that the safety risks of keeping the fuel in pools aren't severe enough to warrant the amount of money it would cost to move the rods into dry storage.

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