Unsafe at Any Price

If Terrorists Take Down Nuclear Plants, You Pay—By the Hundreds of Billions

Just the "remote chance of a singular high-severity event" rules out fully privatized insurance for nuke plants, he concludes. And don't go looking to your homeowner's insurance for help if you live downwind of a reactor—read the fine print. "In nearly every insurance policy there are nuclear exclusions and acts-of-war exclusions," Hartwig adds.

Gretchen Schaefer, spokeswoman for the American Insurance Association, agrees Price-Anderson is destined for extension, because "I can't imagine any insurer out there willing to take on the risk."

Already, reinsurers are sending out a wave of nonrenewal notices on contracts that expire at the start of 2002, Schaefer says. For businesses that might become targets of terrorism—think skyscrapers and shopping malls—the idea of using Uncle Sam as a backstop looks more and more attractive. Companies across the board want to form pools specifically to cover terrorism losses, she says, and in the end the federal government is going to have to become the "reinsurer of last resort."

Illustration by Rich Borges

Just months ago, those whispering of desire for new reactors were gaining greater voice in Washington, thanks to high oil prices. Then the pinch at the pump began loosening just when it seemed suburbia might realize the truly patriotic response would be to turn that American flag-festooned SUV into a backyard shed.

But more, at least cheaper, oil won't provide an easy out for the United States. Washington can't blow smoke in the face of its allies for the war on terrorism. By replacing coal, nukes might cut greenhouse emissions enough to gain goodwill internationally. At present, nuclear power plants generate 700 billion kilowatt hours of electricity per year, or 20 percent of U.S. needs, or two-thirds of the nation's emissions-free output. We'll need even more of that juice as we wean ourselves off gasoline with electric cars, or turn toward fuel cells powered by hydrogen, the production of which requires copious electricity.

Nukes, bolstered by new technology and steady market forces, are coming back.

"An obvious major alternative . . . is nuclear power," Federal Reserve Chairman Alan Greenspan told a Rice University gathering on energy policy two months after the attacks. "Its share of electricity production in the United States increased from less than 5 percent in 1973 to 20 percent about a decade ago and has since maintained that share. Given the steps that have been taken over the years to make nuclear energy safer and the obvious environmental advantages it has in terms of reducing emissions, the time may have come to consider whether we can overcome the impediments to tapping its potential more fully."

Then Greenspan added monumental caveats, acknowledging a few flakes in a blizzard of ifs. "Up front, of course, are the concerns of making plants safe from terrorist attacks. More difficult is the challenge of finding an acceptable way to store spent fuel and radioactive waste. If this problem can be resolved and if some of the long-deferred research and development efforts to make nuclear power more economical were to bear fruit, the potential for this source of energy could doubtless be much enlarged."

Greenspan doesn't factor in public opinion, but the pro-nuke Blinder anticipates it may be a major factor in the bottom line. "Additional security costs are obvious," he said. "If serious efforts to expand nuclear energy are made, I imagine there will be high legal costs as well."

The Nuclear Energy Institute is still bullish on its prospects. The group emphasizes the flip side of a world awash with radicals—"In a volatile world, you'd damn well better have reliable energy supplies," says spokesman Steve Kerekes.

A report from the lobbying group foresees by 2020 "the addition of 50,000 megawatts of electricity to the U.S. power supply from new nuclear plants and an additional 10,000 megawatts from improvements to existing nuclear plants."

But even before September 11, bringing a new plant on-line was projected to take five years, "much as we'd like a faster timeline," says Kerekes. During the delay, he says, engineers could work on "some enhanced design elements to safeguard the reactor."

A presidential study to determine how companies and the federal government might protect nukes is under way, Kerekes says. No-fly zones have been established around reactors. Senator Hillary Clinton has joined senators Harry Reid and Joe Lieberman and Representative Markey in proposing that sodium iodide be distributed to communities surrounding power plants to protect against radiation poisoning in the event of an attack. They're also asking that security at plants be federalized, to prevent attacks or the theft of radioactive material that could be used for dirty bombs. Markey asked President Bush to assign National Guard troops in the meantime, but hasn't gotten a response.

Some proposals are startlingly simple and require great faith, like one to construct cages that would block or shred incoming planes.

Officials at Exelon, the largest reactor operator in the United States, think the public holds overblown fears about reactor vulnerability. "You would be amazed how many people are calling for antiaircraft," says spokesman Craig Nesbit. "The notion of having antiaircraft missiles aimed at commercial airlines' planes is not a comforting thought for me."

While no one can guarantee that a brutal assault won't breach a reactor wall, he's confident "nothing built by man is stronger than these containment structures. It's almost inconceivable to me that [a September 11-style attack] would be successful."

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