Nuclear Power and the Free Market

To talk about nuclear power policy is to talk about risks. Today, especially since the breakdown at the Three Mile Island nuclear plant in Pennsylvania, nearly everyone is talking about risks. All the same, some important points keep getting missed, with the result that the application of free market principles to the nuclear issue is being badly distorted. Many people now believe that Dr. Petr Beckman is the definitive spokesperson for the libertarian community on this issue, and that all who oppose a pro-nuclear public policy are socialists. This is simply not the case. Some of Dr. Beckman’s arguments are seriously flawed, and he seems to take no notice of the heavy involvement of the federal government in producing the nuclear power industry as we know it today.

One consistently missed point is the difference between the level of a risk and the severity of the thing(s) risked. Probabilities—risk levels—can be objectively calculated, but they can only be compared with complete objectivity to things of roughly equal severity. Virtually all the risks involved in the large-scale use of nuclear power are risks of very large, even unmanageable problems and accidents. That the risks are small, often very small indeed, is true, as Beckman and others often point out, but this is largely beside the point. In formulating long-range public policy, there simply must come a point where we say “No, this is simply too severe a disaster to risk; we must not add any to its probability.” The risk of a core meltdown, or a fire, or any other mishap which would release radiation from a nuclear reactor may be very small, but if it did happen, the resulting disaster would be of gargantuan proportions, beyond most people’s psychological ability to cope, perhaps beyond the human race’s genetic ability to cope, and certainly beyond the ability of the government to cope with the social and political results. Even without the release of any radioactivity, any breakdown of a nuclear plant will knock it out of operation (as Three Mile Island currently is), not just briefly, but for a long time. The Three Mile Island reactor will be shut down for at least three years, according to President Herman Dieckamp of General Public Utilities. If we depend upon a relatively small number of huge nuclear generating stations for most of our electricity, losses of power might be few, but those which did occur would be huge and long-lasting. How can this be reasonable policy?

Then, too, there is the cost. The Three Mile Island reactor now represents a huge capital loss. It is unuseable. It will cost millions to clean up and decontaminate. This one accident—consistently described by Dr. Beckman and his sympathizers as minor—has drastically increased the cost of producing electricity in Pennsylvania. The capital loss, in fact, is so huge that the nominally private company responsible has already asked for a federal bailout, openly admitting that it cannot afford to clean up after itself and maintain proper financial liquidity. The Three Mile Island complex is owned by General Public Utilities (a public/private utilities conglomerate) and Metropolitan Edison, one of GPU’s wholly-owned subsidiaries. In a statement to stockholders on the 9th of May, 1979, GPU Board Chairman William Kuhns said that, without new money, “in a few months, the entire GPU system would face insolvency.” GPU is seeking bank loans and rate increases as well as federal help and has cut employment, salaries and construction budgets, all to try to meet the skyrocketing costs which have resulted from the Three Mile Island breakdown. Even so, the company is on the brink of financial disaster. How can it be sane public policy to go ahead with developments which create problems for which those involved cannot shoulder the responsibility? And remember, this was a minor accident; what about a really big one?

We shall return to this economic point. But first, some of the technological arguments used to promote nuclear power need to be subjected to realistic criticism.

Dr. Beckman recently stated that “there never was a time when a meltdown was close” at Three Mile Island. It all depends on what one wants to call “close.” The reactor core was partially exposed (that is, deprived of its high specific heat coolant), and was badly damaged. Several unpredictable, nonsensical human errors let things get that bad after initially minor problems had developed. Though two or three additional things would have had to go wrong in order to melt the core, those things weren’t any different in character from the mistakes which were made. Given the inter-weaving of design flaws in the reactor and human operator errors, it seems quite reasonable to say that the reactor core came close to melting down. In the final analysis, it was just blind luck that it didn’t.

Pro-nuclear people have also downplayed the fact that a hydrogen bubble formed inside the reactor, and some of it apparently exploded. Dr. Beckman says this shows how strong and safe is the containment building which with-stood the explosion. But what he ignores is that all the computer-model tests of nuclear plant safety systems (which was all there was until Three Mile Island) indicated that the formation of a hydrogen bubble was impossible. No one expected it to form. No one expected it to explode. So one must ask: “How many other problems which may occur are completely unforeseen by the nuclear planners?” We just don’t know.

It has repeatedly been stated, by Dr. Beckman and others, that no one died as a result of the Three Mile Island accident. The truth is that no one has died yet, which is an altogether different matter. A rather large amount of water was heavily contaminated with radiation due to the errors made in responding to the initital breakdown. That water has to go somewhere, carrying its radioactivity with it. If any more mistakes or errors of judgment should occur in the cleanup process, or if the storage of this radioactive waste should prove in any way faulty, there may well be casualties as a result of this accident. Either workers involved in the cleanup process or some innocent persons living or working near a waste disposal site could be exposed to radiation. One of the worst aspects of this is that, if the “disposed of” radiation ever leaks, people could contract cancer and die without ever realizing the ultimate cause of their disease.

Comparisons have been made, too, between the levels of radiation released at Three Mile Island and that which is present from various natural background sources, principally the sun. But these comparisons, like those of risk levels, have an apples-and-oranges side to them. The radiation coming from the radioisotopes contained and bred in a nuclear reactor is not qualitatively identical to what falls on us from the sun. It is highly concentrated around just a few specific frequencies (wavelengths). This may make it much more dangerous to organic tissue per quantitative unit than background radiation, which is more spread out over a broad spectrum.

Indeed, when we look at the total risk calculations offered up by Dr. Beckman, we can see that, although he does his math correctly, there is still a heavy subjective component in his reasoning. He says that nuclear power is the safest known form of electrical power, comparing potential plant breakdowns to, for instance, the breaking of a hydroelectric dam or mining deaths from mining coal. But he gives no weight at all to, for example, the diminution of civil liberties which must accompany growing government involvement in the production, transportation, storage and use of nuclear fuels. While he figures in miners’ lung diseases, he makes no allowances for the lives which might be lost to terrorists attempting to steal plutonium or to the lives which might be lost or disrupted by the actions of government agencies trying to foil their plans. Even on a purely mathematical level, it seems naive at best to presume that we have accumulated enough data to predict reliably what the frequency of various kinds of mistakes and accidents will be in an indefinite, nuclear-dominated future.

Finally, we come to the most politically significant flaw in all the risk calculations used to sell nuclear power to the American public. They are all strictly macroeconomic. They assume that one and only one decision must be made for everyone. They tacitly or explicitly push a centralized source of power for everyone. They talk about economies of scale, assuming that everything will work as planned, while ignoring all the diseconomies of scale which stem from the fact that complex plans never work out exactly as planned. And they clearly embody the collectivist notion that all of us, as a unit, must make one unified decision. This is particularly distressing when it comes from someone like Dr. Beckman, who describes himself as ‘pro-free enterprise’ and who is increasingly seen as the voice of the libertarian community on this issue.

The ugly political reality, when all the debates over technology are done, is simply that anyone who proposes that this country’s existing nuclear development plans be continued or expanded is not just pushing nuclear power, but is pushing government-supported, government-regulated, and government-controlled nuclear power. That’s all we’ve ever had, and, in all probability, all we ever can have.

Nuclear power: creature of government

The nuclear industry as it exists today is absolutely not a creature of free enterprise. It is a creature of the federal government and its monopoly-oriented cronies in business and industry, and it was brought into existence, not through the operation of market forces, but through political intervention in the economy.

We can see very clearly that this is the case once we note the existence of the Price-Anderson Act, which limits by law the total liability of nuclear plant operators to $560-million in the event of any kind of reactor accident, and makes the federal government liable for the bulk of even that figure. The nuclear developers knew from the beginning that they could not afford to assume the full responsibility for the results of their schemes. So did the insurance industry, which flatly refused to insure nuclear plants, until the Price-Anderson Act was passed. Proponents of nuclear energy like Dr. Beckman never, never, never talk about the Price-Anderson Act. One is driven to ask: “If nuclear power is really all that safe, why do those who expect to profit from the successful operation of a nuclear plant insist on being allowed to wash their hands of their responsibilities if the operation turns out to be unsuccessful?”

The conclusion seems inescapable that the free market probably would not support a nuclear industry of any significant size. The costs and risks are just too high. But the government does support the nuclear industry, because it can pass the risks on by law to the general public and the taxpayers. (Those interested in a more quantitative analysis of the politics and economics of nuclear power should see my article, “Market Prospects for Nuclear Power,” which appeared in the January/February 1978 issue of Libertarian Forum.)

The nuclear industry continues to lobby heavily for the continuation of the Price-Anderson limitation, even as costs rise out of sight. Several years ago, projections estimated the dollar value of damage done by a major nuclear plant disaster to be anywhere from one to thirty billion dollars in property damage and medical costs. And yet people like Dr. Beckman continue to support the continued government subsidization of an industry which flatly refuses to take responsibility for its actions, even while it talks about “free enterprise.”

To repeat: The free market probably would not support a nuclear industry of any significant size, and those who advocate the continued existence of the nuclear power industry are advocating, not a free market phenomenon, but the nurturing of a cartelized industry controlled and subsidized by the federal government.

When it comes down to what to let people do, I’m in superficial agreement with Dr. Beckman: let anyone who wants to develop all the nuclear plants he wants. But he must do it with his own money, and he must assume full liability for anything which goes wrong. If Dr. Beckman were right, he shouldn’t have any problems. Unfortunately, the market has already spoken, and he has problems aplenty. When it comes down to what policy the government should adopt, I am equally disinterested in pro-and anti-nuclear policies. There is no need for an anti-nuclear government policy to put a stop to nuclear power development; the market will do it for us. And for reasons having to do both with economics and with civil liberties, the American people should rise up in vehement anger at the government’s current policy of subsidizing, protecting, and lying for the nuclear power industry. To turn our future over to the centralized planners who have created the existing nuclear boondoggle, to allow them to make each one of us dependent upon their unpredictable, politically-dominated, centralized power source, will be political and economic suicide, whatever the technological figures show. But if the movement to derail the federal nuclear juggernaut isn’t kicked into high gear soon, it may well be too late. For this reason if no other, I welcome the outrage which has arisen in response to the breakdown at Three Mile Island and the upsurge of anti-nuclear protests it has provoked. It is, unfortunately, true that many of the individuals involved in these protests have an understanding of economics that can charitably be described as inadequate, and that many of them firmly believe in various strains of socialism. They wrongly blame corporations, instead of government, for the mess we are now in. But those who push nuclear power are, whether they realize it or not, supporting a scheme which is a manifestation of socialism in its worst form: fascism. A government in control of nuclear power is a government far too dangerous to fool around with.

Patrick Lilly is a free lance writer and State Party Secretary for the Colorado Libertarian Party.