Moving nuclear from proactive to reactive regulation

Pursuit of the unattainable goals of zero risk and legal proof of perfection has had a paralyzing effect on effective engineering and construction management. Ironically, this pursuit is not only causing the evolution of less than satisfactory design and construction approaches, it may also be degrading safety margins both by diverting attention from more important considerations and by accumulation of complexities which stretch the capability of man and machine to perform reliably and effectively.[John Crowley, 1982]

Figure 1. Proactive regulation in the UK from 1865 to 1896

There are two basic forms of regulation:

1) Proactive
2) Reactive

Proactive Regulation

Proactive regulation attempts to prevent harm before it happens. In direct proactive regulation, kings, dictators, or politicians mandate behavior. The UK Red Flag Act of 1865 was direct proactive regulation. It required self-propelled vehicles on roads to travel at less than 4 MPH with a man walking 60 yards ahead waving a red flag. The 1974 55 MPH speed limit on the Interstates was a mild, modern form of the Red Flag Act.

Once direct proactive regulation becomes obviously inimical to overall societal welfare, it can be changed. The Red Flag Act was repealed in 1896. Society accepted the tens of thousands of deaths annually from motor vehicle travel in return for the benefits. In democratic societies, where politicians are at least partially responsive to the will of the people, this can happen fairly quickly. The 55 MPH speed limit was changed to 65 in 1987 and completely repealed in 1995. Deaths on rural interstates jumped 9.1%.\cite{friedman-2009}[p 1626] Most states accepted the tradeoff as net beneficial.

An increasingly common form of proactive regulation is delegated proactive. This is the situation in which lawmakers decline to regulate directly. Rather they set up a bureaucracy whose mission is to prevent the regulated activity from producing harm. That agency then writes and enforces the actual regulations.

This sets up a conflict between the regulators' incentives and societal well being. The regulator gets no credit for the activities' benefits, no matter how large or how transformative; but he bears the blame for any harm. The regulator's goal becomes zero harm from the regulated activity. Harm from alternative sources of the beneficial product is ignored. Worse, when a casualty happens, the regulatory system is deemed to have failed. Something must be done.

This creates increasingly restrictive and expensive regulation. Often such regulation takes the form of rigid procedures and voluminous paperwork, which documents that all procedures have been followed religiously. The goal is to show that, whatever happens, it's not the regulator's fault. But the effect is to squash competition, stifle technical progress, demoralize workers, and divert management. Quite often, the result is shoddy quality.

In the US, the NRC requires an ASME N stamp on all nuclear safety related components. An N-stamp is what makes nuclear quality, nuclear quality. If it has an N-stamp, it's nuclear quality. If it doesn't, it's not. But an N-stamp certifies a vendor's Quality Assurance (QA) program, not his product. An ASME N-stamp does not say the product has been inspected by ASME. It does not say his product has been inspected at all. All it says is this vendor has promised to build his stuff according to ASME code; and he has implemented a QA program that has been approved by an ASME authorized inspection service.

But the paperwork required by such a QA program is so onerous and disruptive very few vendors are willing to spend the money and time to get an N-stamp. As a result, there is little serious competition among nuclear vendors. The N-stamp holders can both charge far more than the market and produce lousy product.

At the Vogtle project, the vendor who won the contract to provide the plant's prefabricated sub-modules was Shaw Industries in Lake Charles. Shaw was the holder of three of the prized N-stamps. In Shaw's case, the quality of the product was execrable. The sub-modules were not even close to Spec. They could not be fitted into the structure. They either had to be junked or undergo extensive rework. This was not discovered until the sub-modules reached the site, because of the faith Westinghouse had in N-stamp paperwork. Incredibly, Westinghouse had no inspectors at Lake Charles.

A particularly pernicious aspect of delegated proactive is often the regulator is free to change the rules or write nebulous rules that allow the regulator freedom to impose whatever requirements he feels are needed. The Atomic Energy Act explicitly gives the NRC this power in Section 187. This has led to ALARA the regulatory principle that no level of radiation exposure is acceptable if the plant can afford to reduce if further. No engineer can design to ALARA. No rational investor can allow himself to be exposed to ALARA, unless he can somehow control the process, perhaps by suborning the regulator. The result is either corruption or stagnation or both.

Delegated proactive regulation is almost impossible to reverse. Perversely, the bureaucracy becomes larger and stronger with each ``failure". The incumbent vendors who have navigated the regulatory maze become the system's strongest supporters. They will defend their hard won regulatory moat with all means available. The poster child victim of delegated proactive regulation is nuclear power. For nuclear, the conflict between the regulators' incentives and societal well-being has become auto-genocidal.

Reactive Regulation

Reactive regulation attempts to balance an activity's benefits and harm by ensuring that the harmer pays for any third party harm he causes. This is the way we regulate most beneficial, but hazardous activities. It's the way we regulate ocean transportation and high pressure steam, two activities which have transformed the human condition.

Under this system, operators of hazardous activities are required to purchase insurance, which insurance will be used to compensate harmed third parties. The availability and price of that insurance will depend on how safely the insured operates. This sets up a mechanism where the cost of potential third party harm becomes part of the operator's calculations. If (and only if) regulation/law sets the compensation appropriately, we end up with a level of activity and harm which comes close to maximizing overall societal well being. For highly beneficial but inherently hazardous activities, that optimal harm is never zero.

In most such activities, the benefits are spread over an entire population. They are continuous, normal, and no matter how transformative, such as say electric power, in a matter of months they are taken for granted. The harm is episodic, and borne by a few unfortunate souls, sometimes grievously. The more infrequent the harm, the more newsworthy the tragedy for these people is.

This is just how human nature works. It's the way we are hardwired. It is not going to change. Reactive regulation can handle this emotive imbalance. In a casualty, the victims or their heirs are compensated. In cases of negligence or worse, the perps are fined or imprisoned; but the basic system is unchanged. The approximate balance between benefit and harm is maintained.

The Trump administration is a once in a lifetime opportunity to switch nuclear from proactive to reactive regulation.

Here's the plan.

1) Replace LNT with SNT. This can be done by an Executive Order. Since LNT was adopted by the bureaucracy and not specified by Congress, this should be constitutional. The EO will be challenged in court, but the worst that can happen is we run into a string of pro-bureaucrat judges until we get to the Supreme Court.

2) Recompute the dose rate limit regs based on the existing EPA Maximum Individual Risk (MIR) and SNT. For example, the EPA clean up target of 0.15 mSv per year goes to 0.11 mSv per day, which will kill all the current radiation clean up programs. Redo all the SOARCA release analyses assuming SNT, no evacuation, and a far better plume model than MACCS, such as CALPUFF or Hy-Split. Provided the plants have adequate buffer zones, we will find that no evacuations will be required in anything short of a Chernobyl, and long term exiles never. This step will be almost automatic once SNT is adopted.

3) Transfer nuclear plant regulation to the EPA, replacing proactive regulation with reactive. INPO and the insurers will keep the plants honest. The NRC disappears which Trump et al will deem a plus. The only Congressman whose district is directly affected is Jamie Raskin, who was not going to vote for any Trump administration bill anyway. This will require rewriting the AEA.

4) Replace the tort system with a fixed radiation exposure compensation system based on each individual's dose rate profile and SNT. This will be a tough one. It may have to depend on a debilitating black-out. Nuclear liability is now commercially insurable. We can repeal the Price-Anderson suicide pact.

5) Enforce tight anti-monopoly measures on the nuclear vendors. Competition will push nuclear down to its should-cost. This may be the toughest step of all. An important step will be to let the Koreans bid on any projects. They will show us what's possible.

6) 3 cents or less kWh nuke will automatically drive fossil off the grid except for a bit of peaking. while making everybody especially the poor wealthier. Electrification of major non-grid markets now becomes actually possible.

(1) and (2) are not only feasible; they should not be that difficult. (3) requires Trump to recognize that the Golden Age requires cheap nuke. He’s not there; but he will soon find that you can't have both cheap oil and gas and a lot more oil and gas. The only way to cheap oil and gas is a lot of cheap nuke. If and only Trump gets fully behind getting rid of the NRC, it should happen. The NRC does not have a lot of friends in the Trump coalition. Given the tort lawyer lobby and the makeup of Congress, (4) will probably require public outcry. But the black outs are coming. If we have (1), (2) and (3) done when the lights go out, (4) becomes doable.