State Seal
1802 N. Carson Street, Suite 252
Carson City, Nevada 89701
Telephone: (702) 687-3744
Fax: (702) 687-5277
Executive Director

Monday, June 08, 1998



Bob Loux

In 1996, the U.S. Department of Energy announced plans for a report to be released late in 1988 that purports to examine just the question, "Are Yucca Mountain and the federal high-level nuclear waste program viable?" The DOE "Viability Assessment" is being billed as a document that will provide decision makers with information on a number of important aspects of the current federal high-level nuclear waste program, including the costs associated with a Yucca Mountain repository and how those costs contribute to the program’s overall feasibility.

If past DOE efforts at developing realistic up front cost estimates for major projects, including Yucca Mountain, are any guide, the cost component of the Viability Assessment can be expected to understate substantially the real cost of the high-level waste program, not only to utility ratepayers, who contribute to the federal Nuclear Waste Fund through a fee assessed on nuclear-generated electricity, but also to taxpayers in general.

In 1982, DOE’s initial estimates for characterizing three potential repository sites under the original Nuclear Waste Policy Act was in the neighborhood of $80 million per site. To date, almost $4 billion has been spent on Yucca Mountain alone, with the total cost for simply characterizing - not constructing or operating - a single repository site now estimated at over $5 billion.

In its most recent Total System Life Cycle Cost Assessment for the high-level radioactive waste program in 1995, DOE estimated the overall cost of the program at just over $34.7 billion (in 1996 dollars). As high as this number is, the question remains whether it is accurate and whether DOE can be trusted to tell the American people what the real cost of the high-level nuclear waste program will be. Nevada has learned through painful experience not to expect honesty from DOE in this matter any more than accurate and impartial science can be expected in determining Yucca Mountain’s suitability.

Nevertheless, an objective evaluation of total system costs is essential if one is to have any basis for judging the veracity and credibility of past and future DOE cost estimates. To that end, the State of Nevada has, over the past year, put together a report titled, "AN INDEPENDENT COST ASSESSMENT OF THE NATION’S HIGH-LEVEL RADIOACTIVE WASTE PROGRAM." This report, which was released publically on May 1st, was prepared by a highly qualified team of contractors and reviewed for accuracy and reasonableness by the accounting firm, KPMG Peat Marwick.

What the State’s study found, when compared to what DOE would have the country believe about program costs, is truly astounding. The bottom line is that the total cost of the federal high-level waste program is at least $53.9 billion. Assuming that all currently operating commercial nuclear power reactors operate and generate fee revenues for their full licensed lifetimes - an assumption that is conservative in the extreme given the likelihood that high operating costs and cutbacks due to electric deregulation will cause many reactors (by some estimates more than 40 of the 100 functioning reactors) to be shut down well before their licenses expire - the Nuclear Waste Fund will generate at most $28.1 billion.

Despite the clear intent of the Nuclear Waste Policy Act of 1983 that the generators of spent fuel and high-level waste should pay fully for the cost of managing and disposing of the waste, the American taxpayer will be on the hook for a whopping $25.8 billion or more if this federal program goes forward.

For those who would argue that the investment already made in funding the current program, including the characterization work at Yucca Mountain, makes it imperative that the country stay the course (an argument often used by federal agencies to protect pet projects), the State’s independent report found that only 11% (or $6.1 billion) of the total system costs have already been incurred, and that 89% (or $47.8 billion) are future costs.

As noted above, the assumptions used in the Nevada cost study were deliberately conservative to assure that program costs were not overstated or potential revenues understated. The final cost of $53.9 billion could and probably will be considerably larger while fee-generated revenues will likely be smaller.

Consider that Congress, in its wisdom, is at this moment considering legislation that would let the commercial nuclear power industry even further off the hook for program costs by reducing the amount of funds to be collected in nuclear waste fees. For every dollar not collected in fees, several additional dollars will be lost in investment income generated by Waste Fund balances. So instead of a $29 billion taxpayer liability, Congress may well leave the country with a $40 billion or more unfunded obligation if this new and ill-considered legislation should become law.

Any delays in DOE’s current program schedule will mean additional costs that have not been estimated. Likewise, the State’s assessment assumes that all of the hardware procured for this first of a kind program - including transport and disposal canisters, robotic equipment for handling waste packages, and other very expensive and unique equipment - will be defect free and will not require replacements. In the real world, however, it is certain that some equipment will be defective and need to be replaced, adding perhaps additional billions to the total.

Should problems occur in the repository after the waste has been emplaced - something that is certainly possible and even likely given the geologic setting and the serious geo-technical problems identified at Yucca Mountain - the cost of retrieving all or part of the waste would be extraordinary, perhaps approaching the cost of putting the waste into the facility in the first place. None of these potential retrieval costs have been included in the State’s overall cost estimate.

DOE’s track record in estimating costs for other programs would seem to indicate that cost escalation rather than cost reduction is to be expected when this federal agency is in charge. For example:

The estimated cost of DOE’s highly touted Supercolliding Super Conductor project in Texas went from $5.9 billion when it was started in the late 1980's to $11 billion - and still rising - when the program was canceled in 1993.

The waste vitrification plant recently completed at DOE’s Savannah River Site in South Carolina was 62% over budget and 6 ˝ years behind schedule.

The Fuels and Materials Examination Facility at the Hanford site in Washington was 39% over budget.

The list goes on and on. In fact the U.S. General Accounting Office has documented 80 major DOE projects that suffered significant cost overruns and schedule slippages. One would be hard pressed to find even a single program run by DOE that has come in anywhere near the original DOE cost projection.

What we are seeing with respect to the spent fuel and high-level waste program being promoted by the commercial nuclear power industry and pursued unquestioningly by DOE is a fiscal and scientific disaster in the making.

It seems that almost every other week there is some new revelation about technical problems at Yucca Mountain. Just recently, scientists at the California Institute of Technology reported that the risk of earthquakes and volcanic activity at the site is substantially greater than DOE has estimated, calling into question the wisdom of locating a high-level waste facility there.

During the past year, new data has confirmed the presence of fast groundwater pathways at Yucca Mountain capable of moving waste off site and contaminating underground aquifers - something Nevada scientists have been saying for years.

Several years ago when he addressed DOE’s annual high-level nuclear waste conference, Nevada Governor Bob Miller remarked about the politically driven science that characterized DOE’s high-level waste program. That was before the revelations about seismic and volcanic risk, groundwater flows, and DOE’s absurd new waste "isolation" philosophy that relies on the pollution of the aquifers underlying southern Nevada.

Add to this the likelihood that costs for the federal program are likely to escalate substantially while available revenues will continue to shrink, you have the makings of a perverse and unconscionable new burden on American taxpayers.

The time has long passed for tolerance when it comes to DOE’s Yucca Mountain project and the current federal high-level nuclear waste program.

The program is dangerous to the health and safety of Nevadans and residents of 43 other states along radioactive waste shipping routes. It is an environmental disaster waiting to happen. And it is a multi-billion taxpayer liability this country doesn’t need and certainly can’t afford.

Bob Loux is Executive Director of the Nevada Agency for Nuclear Projects, a component of the Nevada Governor's Office that is responsible for overseeing the federal Yucca Mountain repository project and other high-level radioactive waste activities in the State. He has been involved with the nuclear waste program since 1983.

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