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Lectures delivered by Dr. Tabrez Ahmad in Nuclear Energy Law

Lectures delivered by Dr. Tabrez Ahmad in Nuclear Energy Law

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  • 1. Dr. Tabrez Ahmad Professor of Law Dr. Tabrez Ahmad, http://energylex.blogspot.in 1
  • 2. Agenda 1. Laws and regulatory frameworks for safety and energy policy matters 2. Issues of ongoing struggle of legal processes to come to terms with nuclear aspirations, nuclear fears and some semblance of reality 3. International-USA Scenario 4. Indian Scenario 5. Concept of Liability 6. Nuclear Liability Dr. Tabrez Ahmad, http://energylex.blogspot.in 2
  • 3. Primary Federal Legal Structure for Nuclear Regulation (Safety)  Atomic Energy Act of 1954 as amended  Fundamental organizational framework and statutory standards;  Licensing process  Energy Reorganization Act of 1974  Nuclear Nonproliferation Act of 1978  Nuclear Waste Policy Act of 1982 Dr. Tabrez Ahmad, http://energylex.blogspot.in 3
  • 4. Regulatory Framework  International Atomic Energy Agency (IAEA)  Nuclear Regulatory Commission (NRC)  Formerly Atomic Energy Commission (AEC)  State utility regulatory commissions (PUC, PSC, PSB)  Environmental Protection Agency (EPA) Dr. Tabrez Ahmad, http://energylex.blogspot.in 4
  • 5. Functions of the NRC Dr. Tabrez Ahmad, http://energylex.blogspot.in 5 5 Commissioners Licensing Nuclear Material Safety Inspection and Enforcement Research Appeals Board Hearing Boards
  • 6. The Atomic Energy Act of 1954  Allowed private companies to own and operate nuclear facilities  Licensing by AEC  Standards “adequate protection” or “no unacceptable risk”  Duty both to promote and to regulate Dr. Tabrez Ahmad, http://energylex.blogspot.in 6
  • 7. 1957 Amendments to the AEA  Price-Anderson liability limits;  Preemption of states from health and safety regulation;  Right of the public to extensive hearings and information access in reactor licensing proceedings. Dr. Tabrez Ahmad, http://energylex.blogspot.in 7
  • 8. 1974 Energy Reorganization Act  Broke up the Atomic Energy Commission;  Terminated the Joint Committee on Atomic Energy  Revived effective Congressional oversight of nuclear regulation. Dr. Tabrez Ahmad, http://energylex.blogspot.in 8
  • 9. Issue #1: The New Licensing Process  The Mythology: The old licensing process was a major factor in the collapse of nuclear power in the U.S.  It has now been repaired by changes in law and regulatory policy, paving the way for the renaissance. Dr. Tabrez Ahmad, http://energylex.blogspot.in 9
  • 10. The Operating Experience Gap  By 1970, the U.S. industry had 4.2 GW operating and 72 GW on order.  And the AEC was forecasting 1000 plants (GW) by the year 2000.  The smallest plant on order was more than twice the size of the largest plant in operation.  Absence of standardization, in contrast to France and Japan. Dr. Tabrez Ahmad, http://energylex.blogspot.in 10
  • 11. Issue #1: The U.S. Licensing Process, cont’d.  The Reality:  The U.S. licensing process led to the building of more nuclear plants than the next four countries combined as of 1980 (and issued construction permits for twice as many as were built);  AEC/NRC never turned down a power plant application;  U.S. total still almost equals France and Japan combined.  Plants were built while hearings continued.  The real villains in the cost escalation story:  Operating experience (including Three Mile Island)  Slowing of demand growth leading utilities to slow construction  Falling fossil fuel prices Dr. Tabrez Ahmad, http://energylex.blogspot.in 11
  • 12. NRC “TMI Action Plan” Illustrating the Regulatory Reaction to Adverse Experience  Significant modifications of requirements as to  Operator training;  Control room design and instrumentation;  Emergency preparedness;  Single administrator in emergencies (so no transcript). Dr. Tabrez Ahmad, http://energylex.blogspot.in 12
  • 13. Issue #1: The Reformed U.S. Licensing Process, cont’d.  Today’s licensing process  Combines CP & OL  Drastically limits scope of public involvement  Areva plant in Finland  First advanced (EPR) plant built in a liberalized electricity market;  License issued in February, 2005;  By December 2006 project was 18 months behind and approximately $1 billion over budget Dr. Tabrez Ahmad, http://energylex.blogspot.in 13
  • 14. The 15 Wedges (Scientific American, 9/06) Dr. Tabrez Ahmad, http://energylex.blogspot.in 14
  • 15. Issue #2: Resource Selection  A state responsibility, conditioned by PURPA and the 1982 California Supreme Court decision;  Cost recovery is through markets, not rate base;  No new nuclear plants have been bid;  Deregulation is not what has happened;  Cost caps and competitive bidding screens;  Some states prohibit new nuclear plants. Dr. Tabrez Ahmad, http://energylex.blogspot.in 15
  • 16. A Market Oddity  Power from existing units “costs” about 1.5 cents/kwh in markets that pay 5+ cents;  But power from new plants may cost 8-11 cents/kwh (per recent Keystone Center report). Dr. Tabrez Ahmad, http://energylex.blogspot.in 16
  • 17. 0 20 40 60 80 100 120 140 160 0 200000 400000 600000 800000 Capacity Energy c U.S. Nuclear Output and Nuclear Capacity, 1973-2005: Productivity Improvement in the Face of Competition Dr. Tabrez Ahmad, http://energylex.blogspot.in 17
  • 18. Setting Regulated Rates the Old Fashioned Way RR = E + r(I - D) RR = Required Revenue E = Operating Expenses r = Return on Investment I = Amount of investment D = Depreciation Dr. Tabrez Ahmad, http://energylex.blogspot.in 18
  • 19. Lessons of the 1970s, Now Being Studiously Unlearned 1) Markets adjusted for externalities are smarter than regulators. 2) Who bears risks of runaway costs? Dr. Tabrez Ahmad, http://energylex.blogspot.in 19 1970s 1980s and 1990s Today (for first new units) customers investors taxpayers and customers
  • 20. Energy Policy Act of 2005  Loan guarantees up to 80% of project costs, shifts risk and therefore lowers cost of capital (but not of project)  Production tax credit (1.8 cents/kwh for 6000mw)  Delay insurance ($500 million for 2 plants, 250 million for next 4)  Price-Anderson renewal  Licensing cost sharing  EPAct05 shifts costs/risks. It does not lower them.  Plants built this way are not a “renaissance”. Dr. Tabrez Ahmad, http://energylex.blogspot.in 20
  • 21. Retreat from Market Principles in Some States  Abrogate competitive bidding requirements;  Charging plants to customers before completion. Dr. Tabrez Ahmad, http://energylex.blogspot.in 21
  • 22. Nuclear Has Received Bulk of Federal R&D Support (Earth Track05) Dr. Tabrez Ahmad, http://energylex.blogspot.in 22 Federal Energy R&D, 1950-1993 22% 49% 13% 10% 6% 0% Fossil Fission Fusion Renewables Conservation Other Federal Energy R&D, 1998-2005 28% 18% 14% 19% 18% 3% Fossil Fission Fusion Renewables Conservation Other
  • 23. Dr. Tabrez Ahmad, http://energylex.blogspot.in 23
  • 24. Issue #3: Nonproliferation  India’s 10-15kt “peace bomb” of May, 1974  Pakistan declared that it would develop a nuclear explosive “if we have to eat grass”.  US efforts to deny use of US heavy water;  In contrast to Canadian cut-off  Ford/Carter reassessment of reprocessing and breeder reactors  Passage of the U.S. Nonproliferation Act of 1978 Dr. Tabrez Ahmad, http://energylex.blogspot.in 24
  • 25. The NNPA of 1978  NRC approval of exports only if  Assurance against use in explosives  Adequate physical security  Approval over retransfer  Approval over reprocessing  “Full scope” safeguards Dr. Tabrez Ahmad, http://energylex.blogspot.in 25
  • 26. Recent Setbacks  GNEP reverses U.S. position on reprocessing while doing nothing to strengthen the IAEA.  Arrangement with India required modifying of NNPA to eliminate full scope safeguards requirements for a demonstrated proliferator.  Implications for Iranian situation Dr. Tabrez Ahmad, http://energylex.blogspot.in 26
  • 27. Issue #4: Yucca Mountain  “Waste confidence” as a basis for reactor licensing;  Role of the EPA standard:  There is no EPA standard  There is high likelihood of more litigation even before application is filed Dr. Tabrez Ahmad, http://energylex.blogspot.in 27
  • 28. Issue # 5; The Quality of Nuclear Regulation  "Our great hazard is that this great benefit to mankind will be killed aborning by unnecessary regulation." AEC Commissioner Willard Libby, 1955;  TMI Report Conclusion – “Fundamental changes in the attitudes of the NRC and the industry are necessary”;  NRC is made up primarily of dedicated and capable staff, but quality of leadership and Congressional oversight are again in question. Dr. Tabrez Ahmad, http://energylex.blogspot.in 28
  • 29. Power allocation in India 68% 8% 15% 3% 6% Coal Gas Hydro Nuclear Others Dr. Tabrez Ahmad, http://energylex.blogspot.in 29
  • 30. Indian Scenario • India is the 4th largest economy in the world. • India has the 2nd largest GDP amongst developing countries based on purchasing power parity. • Buoyant economy – growth still expected to be in the region of 6-8%. • Availability of electricity a key factor in sustaining growth. • 5th largest electricity generation capacity in the world – over 1,90,592 MW. • Worlds 3rd largest transmission and distribution network. • Country continues to suffer from massive demand-supply gap particularly during peak hours. • 8-10 hours of “load shedding” even in industrialised states. July ‘12 power grid failure – affected over 600 million people. • Great scope for nuclear power – potential value of sector in India at USD 150 Billion. Dr. Tabrez Ahmad, http://energylex.blogspot.in 30
  • 31. NSG – Exemptions to India • As a nuclear weapons country, India was excluded from the Nuclear Non- Proliferation Treaty – hence excluded from the nuclear trade by the Nuclear Suppliers Group (NSG). • India could join NPT only if it disarmed and joined as a Non-Nuclear Weapons State – politically impossible. • Owing to an impeccable record of nuclear non-proliferation and strategic economic considerations, India was afforded a clean waiver. • IGAs with France (Sept. 2008), Russia (Dec. 2008) and the US (Oct. 2008) • India – Specific Safeguards Agreement signed in Feb. 2009. Additional protocol signed in May 2009. • Agreements also signed with Canada, Kazakhastan, UK, South Korea, Mongolia, Australia, Argentina. Negotiations on with Japan and EU. • Recognition that India has no obligation from treaties and arrangements to which it is not party (NPT, CTBT, etc.) and the importance of India having assured fuel supplies. • All agreements for peaceful purposes, but do not affect India’s unsafeguarded nuclear activities. Dr. Tabrez Ahmad, http://energylex.blogspot.in 31
  • 32. Nuclear energy in india • As of today • About 3-4% of the total electricity produced (approx. 4800 MWe) • Fully indigenous PHWRs • Active collaboration with Russia on Kudankulam NPP (2*1000 MWe) – possible to upscale to another 2*1000 MWe). • The Future • NSG exemptions resulted in about 17% increased outputs in existing plants. Uranium already imported and used in existing PHWRs. • High capacity reactors for imports being negotiated with France, US, Russia, Germany and others. • JV with AREVA and NPCIL for 6*1000 MWe in implementation phase. • DAE projects – 30000 MWe by 2020 and 60,000 MWe by 2032. Dr. Tabrez Ahmad, http://energylex.blogspot.in 32
  • 33. CIVIL Nuclear Liability law • The Civil Liability for Nuclear Damages Act, 2010 and the Rules, 2011. • Background – Bhopal Gas Tragedy (Union Carbide), 1984. • Many features of the Act similar to the Convention on Supplementary Compensation for Nuclear Damage, 1997 (CSD) – India has signed but not ratified. • Liability Caps • NPPs equal to or > than 10 MWe – about USD 330 Million. • Spent fuel reprocessing plants – about USD 66 Million. • NPPs < than 10 MWe, fuel cycle facilties, transportaion of nuclear material, etc. – About USD 22 Million. • Anything over the above caps would be paid by the Government subject to a limit of 300 Million SDR (about USD 450 Million) • Sufficient ? Union Carbide paid over USD 1 billion for the Bhopal Disaster. • Some significant departures from the CSD • While primary liability is on the operators (NPCIL, BHAVINI – both state owned entities), operators may claim a right of recourse in some situations against the supplier. • Section 46 – Act is supplemental – other laws to also apply. Therefore, opening suppliers to actions in Tort, other environmental laws and even criminal liability. Dr. Tabrez Ahmad, http://energylex.blogspot.in 33
  • 34. Supplier liability – Changing international nuclear liability jurisprudence  Section 17: “ The operator of the nuclear installation, after paying the compensation for nuclear damage..shall have a right of recourse where – (a) Such right is expressly provided for in a contract in writing; (b) The nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services; (c) The nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage”. • Exact reproduction of Article 10 of CSC except sub clause (b). Dr. Tabrez Ahmad, http://energylex.blogspot.in 34
  • 35. Supplier liabilities - ambiguities • To mollify international community, the government introduced Rule 24  “ (1) A contract referred to in clause (a) of section 17 of the Act shall include a provision for right of recourse not less than the extent of the operator’s liability or the value of the contract itself, whichever is less;  (2) The provision for the right of recourse referred to in sub-rule (1) shall be for the duration of initial license issued under the Atomic Energy (Radiation Protection) Rules, 2004 or the product liability period, whichever is longer.” • Does not refer to situations in Section 17(b). • Serious ambiguity – no supplier, Indian or foreign happy. • Price escalation – Russian Government and Kudankulam 1,2,3 and 4. • Other countries opposed to supplier liability. GE-H, Westinghouse, Areva, sought changes to the law. • Westinghouse says it will await India’s ratification of the CSC before offering to supply equipment to India. • Activist Indian Judiciary. Dr. Tabrez Ahmad, http://energylex.blogspot.in 35
  • 36. A pro-people legislation?  (Pic: Courtesy, the Hindu, A. Shaikhmohideen Dr. Tabrez Ahmad, http://energylex.blogspot.in 36
  • 37. Nuclear Liability Law- PUBLIC Perception • Major protests at Kudankulam and Jaitapur (site of Areva project). • Some NGOs believe that apparent limits on liability of supplier unacceptable. • Hunger strikes, storming of NPP, police strong handedness in combating protests. • Pending PIL against Act and Rules in Supreme Court. • Significant change in India’s civilian nuclear power policies post 2008. Earlier NPPs set up in the 80s and 90s near major cities like New Delhi and Chennai witnessed no protests – Why? • Lack of public awareness and engagement with the people on the issue of nuclear power. • Sudden engagement compounds fears – an example of Kudankulam. • Many fears arising out of misinformation – Indian government alleges NGOs of certain countries intentionally spreading misinformation. Dr. Tabrez Ahmad, http://energylex.blogspot.in 37
  • 38. Concept of Liability  Fault Liability  No Fault Liability- strict Liability  Ryland v. Fletcher- 1867 House of Lords  Absolute liability  MC Mehta v. Union of India 1987 Supreme Court of India-  Oleum Gas Tragedy Dr. Tabrez Ahmad, http://energylex.blogspot.in 38
  • 39. Calculation of damages  Nominal damages  Exemplary damages  Vindictive damages  Learned Hand formula of Calculation of Damages Dr. Tabrez Ahmad, http://energylex.blogspot.in 39
  • 40. Imp. International Instruments Governing Nuclear Energy  IAEA- International Atomic energy Agency  ICRP-Commission on Radiological Protection  UNSCEAR-United Nations Committee on effect of Atomic Radiation  WHO  ILO  OECD  AAEA-Arab Atomic Energy Agency  BSS-International Basic Safety Standards  NEA-  FAO  PAHO-Pan American Health Organisation  NUSS-Nuclear Safety Standards  ICNS-International convention on nuclear Safety  TMI-Three Mile Island-1979- nuclear accident  Chernobyl Accident- 1986  RADWASS-1991- Radio Active Waste Safety Standards Dr. Tabrez Ahmad, http://energylex.blogspot.in 40
  • 41. Current Global Scenario of Nuclear Energy  With a population of 1.2 billion,  the tenth largest economy in terms of GDP, and the  third largest in PPP terms,  India today is the fourth largest primary energy consumer, after China, U.S. and Russia.  Yet, in per capita terms, India’s consumption is 585 kilogram of oil equivalent (KGOE);  the global average is 1800,  China stands at 1700 while  the US leaders with 7000+.  Incidentally, I may add that Japan comes in at approximately 4000 KGOE which only goes to show that there is considerable elasticity even at the level of highly developed economies. Dr. Tabrez Ahmad, http://energylex.blogspot.in 41
  • 42.  Though our economy has grown annually at an average rate of 7 per cent since 2000,  approximately 35 per cent of the national population is still considered to be below poverty level.  Nearly a quarter of the population lacks access to electricity and energy poverty has been identified as a hindrance to economic development.  in terms of power generation, with an installed capacity of 4.8 GW, it accounts for slightly over 2 per cent of the total installed capacity,  estimated at 225 GW covering thermal, hydel and renewables. Dr. Tabrez Ahmad, http://energylex.blogspot.in 42
  • 43.  The IEP estimates that India’s primary energy supply will need to increase by 4 to 5 times and  electricity generation capacity by 6 to 7 times – in order to deliver a sustained growth rate of 9 per cent up to 2035.  What does this imply in terms of figures? It means that in the most optimistic scenario, nuclear power generation could go up to 80 GW, out of a total of 1,200 GW, i.e., less than 7 per cent.  Incidentally, the IEP projection is based on the assumption that by 2011 our nuclear generating capacity would have been 11 GW, twice of what it is today!  In other words, nuclear power will continue to account for only a small fraction of India’s energy mix. Dr. Tabrez Ahmad, http://energylex.blogspot.in 43
  • 44.  However, energy security is also a key element of the IEP and defined as follows:  “We are energy secure when we can supply lifeline energy to all our citizens irrespective of their ability to pay for it as well as meet their effective demand for safe and convenient energy to satisfy their various needs at competitive prices, at all times and with a prescribed confidence level considering shocks and disruptions that can be reasonably expected.” Dr. Tabrez Ahmad, http://energylex.blogspot.in 44
  • 45.  Further, even with this growth rate, India’s per capita electricity consumption currently at approximately 600 KWH will only rise to approximately 2,600 KWH  which incidentally is China’s today per-capita consumption whereas the OECD average today is more than 8000 KWH per capita.  Given that the fuel mix for power generation in 2035 would remain fairly similar to what it is today, with fossil fuels being the dominant resource –  it implies, in turn, a growing import dependency.  Therefore, even though nuclear energy will remain a small part of the overall energy mix, it is a critical part in addressing our energy challenges, mitigating carbon emissions and enhancing energy security in terms of reducing dependence on foreign energy sources. Dr. Tabrez Ahmad, http://energylex.blogspot.in 45
  • 46.  The nuclear issue often attracts more than its due share of controversy .  In order to understand the challenges that India’s nuclear energy programme has faced, we need to have a historical perspective.  Broadly, India’s nuclear story can be divided into four phases –  phase 1 (1947 to 1974),  phase 2 (1974-1998),  phase 3 (1998-2008), and  phase 4 (post-2008). Dr. Tabrez Ahmad, http://energylex.blogspot.in 46
  • 47. phase 1 (1947 to 1974),  During the first phase, the Atomic Energy Commission was set up in 1948,  the Department of Atomic Energy established in 1954,  the Atomic Energy Act passed in 1962,  the first research reactors – Apsara , Cirus and Purnima set up and the  Tarapur power station went online.  It was the period of ‘Atoms for Peace’ when international cooperation was actively promoted.  Indian nuclear science benefited from this open environment even though we had decided to stay out of the NPT in 1968. Dr. Tabrez Ahmad, http://energylex.blogspot.in 47
  • 48. phase 2 (1974-1998),  Phase 2 marked by the 1974  PNE changed things dramatically.  Proliferation was seen as a threat,  Nuclear Suppliers Group was set up and  India was isolated from global nuclear industry and technology.  Indian nuclear scientists embraced ‘self-reliance’, leading to inevitable delays.  The second nuclear power plant in Rajasthan was delayed by eight years (from 1973 to 1981), Dr. Tabrez Ahmad, http://energylex.blogspot.in 48
  • 49.  the Fast Breeder Test Reactor by nine years (from 1976 to 1985) and  the Kalpakkam and Narora Power Plants also faced similar delays.  During the 1990s, there were other developments – further tightening of export controls on dual use technologies, the indefinite extension of the NPT,  Pakistan’s nuclear weaponisation and missile proliferation in our neighbourhood.  This was the period when India sought to safeguard its ‘nuclear option’ and the programme, including the civilian side, attracted secrecy. Dr. Tabrez Ahmad, http://energylex.blogspot.in 49
  • 50. phase 3 (1998-2008),  The third phase began with our nuclear tests in mid-1998 when India declared itself a nuclear weapon state.  Initially, the international reaction was strong in terms of UN Security Council sanctions. However, with sustained diplomatic efforts and changes in the international environment, we were able to come out of the isolation. Dr. Tabrez Ahmad, http://energylex.blogspot.in 50
  • 51. phase 4 (post-2008)  The US-India civil nuclear cooperation agreement of 2008, also called the 123 Agreement, marks the beginning of phase 4.  Since then, a number of bilateral cooperation agreements have been signed, including with France and Russia.  India has also adopted its Nuclear Liability Act, though this is a subject on which the suppliers’ community has posed some questions.  This short account would perhaps indicate both why the Indian nuclear programme remained shrouded in secrecy and the nuclear power programme often suffered delays and cost overruns.  It is only in the fourth phase post 2008 that the situation started changing after we began to move in the direction of separating the civilian part of the nuclear sector from the weapons and security- related side with more facilities being brought under IAEA safeguards.  Understandably, the weapons programme will always remain classified whereas the civilian programme will attract growing scrutiny and accountability in order to enjoy public support.  This is the major change that has taken place but it is still work-in- progress. Dr. Tabrez Ahmad, http://energylex.blogspot.in 51
  • 52.  It is in this context that your meeting today assumes significance. As I mentioned, present nuclear power capacity is 4.8 GW, consisting of 20 reactors all of which are primarily indigenous PHWRs except for the two initial LWRs at Tarapur. Seven more reactors, including a prototype fast breeder reactor, are expected to more than double the capacity by 2017. The Twelfth Five Year Plan foresees a major expansion in the nuclear power generation with more than 10 indigenous PHWR reactors and as many as 10 LWR reactors with international collaborations with France, Russia and US. This would be a major transition because it would also involve the technology demonstration marking the second stage of India’s nuclear programme. Dr. Tabrez Ahmad, http://energylex.blogspot.in 52
  • 53.  The nuclear civilian cooperation agreements signed in recent years have enabled us to improve generation at the existing nuclear plants thanks largely to enhanced fuel supply.  It is expected that by the end of stage 2, India would have an installed capacity of nearly 30 GW, ready to undertake the transition to stage 3, which is the thorium generated U-233 cycle, self-sustaining in view of our extensive thorium reserves. Dr. Tabrez Ahmad, http://energylex.blogspot.in 53
  • 54.  Naturally, this is a highly ambitious programme and bound to be questioned, both with regard to technical and economic feasibility.  It explores new technologies because no other country has the same stakes in working on the thorium cycle as we have. At the same time, post-Fukushima anti-nuclear sentiment has grown, including in India, although there are some reports that the Japanese government is now softening its opposition to nuclear power.  Therefore, while transparency and accountability on the part of the nuclear establishment is essential in order to develop public support and confidence, it is equally important that we refrain from falling into either the ‘anti-nuclear trap’ or the traditional criticisms of the last 30 years when even the civilian aspect of the programme was classified.  Today, while there is a strong case to be made out for nuclear power both in terms of energy security and mitigating carbon emissions, concerns over safety aspects as well as cost effectiveness will have to be satisfactorily addressed.  Therefore, public engagement and risk assessment become important. Our citizens must have confidence in the regulatory processes.  AERB has already been strengthened and further strengthening of regulatory mechanisms is foreseen under the Nuclear Safety Regulatory Authority Act. Dr. Tabrez Ahmad, http://energylex.blogspot.in 54
  • 55.  Regarding the Liability issues. I think we all understand how nuclear liability laws have evolved and why liability was channelled exclusively to the operator.  In the 50s, only the US had a nuclear industry and the US private sector needed this protection in order to establish itself at a global level.  Today, the situation is different and there is a growing feeling that this exclusive channelling is no longer helpful.  The Indian law, in this regard may not be consistent with existing practice but it is certainly much more in consonance with the spirit of the times.  The idea of some measure of supplier liability is an idea that can no longer be bypassed.  However, what we need to ensure is that it does not become ‘infinite’ or ‘open ended’. What is, therefore, needed is a genuine effort to address the concerns of the suppliers’ community so that their liability is not ambiguous and open ended but can be quantified in a manner that does not raise costs to prohibitive levels.  Such an approach would actually advance international nuclear liability law. Dr. Tabrez Ahmad, http://energylex.blogspot.in 55
  • 56. The Safety Goal  Individual members of the public should be provided a level of protection from the consequences of nuclear power plant operation  such that they bear no significant additional risk to life and health, and  societal risks to life and health from nuclear power should be comparable to or less than the risks of generating electricity by viable competing technologies and  should not be a significant addition to other societal risks. Dr. Tabrez Ahmad, http://energylex.blogspot.in 56
  • 57. Connecting Ten Dots 1) A 2002 survey of NRC employees says that 40% would be scared to raise significant safety questions. Then Chairman Richard Meserve said this was a big improvement from the 50% of five years earlier. 2) January 2003 - A NY Times story reported that the NRC had ruled that terrorism was too speculative to be considered in NRC licensing proceedings, even as the Bush administration and Congress considered terrorism likely enough to suspend habeas corpus. This position has since been rejected by the 9th Circuit Court of Appeals, but the NRC continues to apply it elsewhere. Incidentally, the original staff testimony taking this position was submitted on September 12, 2001, while the Trade Center and the Pentagon were still smoldering. The licensing board wanted to admit the contention over the staff objection but was overruled by the commission. Dr. Tabrez Ahmad, http://energylex.blogspot.in 57
  • 58. 3) From an NYT editorial of January 7, 2003 - Unfortunately, the regulatory agency that was supposed to ride herd on unsafe plants was equally negligent. A report just released by the N.R.C.'s inspector general concludes that the regulatory staff was slow to order Davis-Besse to shut down for inspection, in large part because it did not want to impose unnecessary costs on the owner and did not want to give the industry a black eye. Although the N.R.C. insists that safety remains its top priority, its timidity in this case cries out for a searching Congressional inquiry into whether the regulators can still be counted on to protect the public from cavalier reactor operators. Dr. Tabrez Ahmad, http://energylex.blogspot.in 58
  • 59. Connecting 10 Dots 4) In 2003 the NRC submitted the name of Sam Collins, the official who had overseen the Davis Besse lapses, to the Office of Personnel for the highest civilian financial award, a 35% bonus - or about $40,000. During the time covered by the award, the NRC inspector general also concluded that Collins had knowingly inserted a false statement into a letter sent by the NRC chair to David Lochbaum at the Union of Concerned Scientists. As Lochbaum observed at the time "The NRC has a safety culture problem. The survey released last December showed that only 51% of the workers felt comfortable raising safety concerns. The Commission can only reinforce the fears by rewarding a person who has falsified documents, chided those who did their jobs, and taken repeated steps to undermine safety". Dr. Tabrez Ahmad, http://energylex.blogspot.in 59
  • 60. 5) Immediately after the September 11 attacks, the NRC rushed out a claim that nuclear power plants were designed to withstand such crashes. This claim, which had not correct, was later withdrawn. 6) Two unprecedented speeches by a Commissioner attacking groups with a history of responsible participation in NRC proceedings. Dr. Tabrez Ahmad, http://energylex.blogspot.in 60
  • 61. Connecting 10 Dots 7) The claim by Senator Pete Domenici that he had successfully persuaded the NRC to reverse its "adversarial attitude" toward the nuclear industry by threatening to cut its budget by one-third during a 1998 meeting with the chair (from Senator Pete V. Domenici, A Brighter Tomorrow; Fulfilling the Promise of Nuclear Energy (Rowman and Littlefield, 1998, pp. 74-75) 8) The fact that the current NRC chair (Dale Klein) appeared in paid industry ads attesting to the safety of Yucca Mountain. When Commissioner Jaczko was appointed from the staff of Nevada Senator Harry Reid, he was required to take no part in Yucca Mountain matters for a year or two. No such requirement was placed on Klein. Dr. Tabrez Ahmad, http://energylex.blogspot.in 61
  • 62. 9) The NRC has dramatically curtailed the opportunities for public participation. To give but one of many examples, lawyers can no longer cross examine in most cases. They must submit their questions to the licensing board chair, who decides whether or not to ask them. 10) "The top U.S. nuclear regulator vouched for the safety of a new Westinghouse nuclear reactor - yet to be built anywhere in the world - in a sales pitch to supply China's growing power industry.....U.S. Nuclear Regulatory Commission Chairman Nils Diaz said the U.S. $1.5 billion AP1000 reactor made by Westinghouse Electric Co. is likely to receive regulatory approval in the next few months." Associated Press, October 19, 2004 Dr. Tabrez Ahmad, http://energylex.blogspot.in 62
  • 63. An Unfortunate Reality  The nuclear power programs that actually unfold are never the idealized programs that nuclear proponents envision.  Just look at the Energy Policy Act of 2005, NRC biases, the Global Nuclear Energy Partnership, the recent deal with India Dr. Tabrez Ahmad, http://energylex.blogspot.in 63
  • 64. Sensible Energy Policy that Might Improve Nuclear Power Prospects and Command Broad Political Support  Implement climate change policy that creates (or recognizes) value of all carbon reducing technologies, including carbon sequestration, energy efficiency and renewable energy  Carbon caps and markets  Carbon taxes  Carbon reducing set asides (portfolio standards) and/or production tax credits  Remove Price-Anderson liability limitations for future projects  Use neutral market mechanisms to choose least costly approaches among these  Avoid “pin-the-tail-on-the-donkey” energy policy making  Take the time to deal sensibly with waste, proliferation and safeguards;  Rigorous prioritization of options for research purposes – effective, efficient, expeditious;  Recreate the Nuclear Regulatory Commission as an impartial and widely respected regulatory body. Dr. Tabrez Ahmad, http://energylex.blogspot.in 64
  • 65. Global Issues and Challenges: The global legal order for the atom's safe and peaceful uses is grounded on a mix of binding norms and advisory regulations 1. The safe use of nuclear energy- 1. Radiation protection 2. Safety of nuclear power plants 1. Nuclear safety convention 3. Notification of a nuclear accident and emergency assistance 4. Radioactive waste management 5. Steps toward convention on radioactive  waste management  Transport of radioactive material  Safety standards for nuclear merchant ships 6. Civil liability for nuclear damage 7. Physical protection of nuclear material 8. Armed attacks against nuclear installations Dr. Tabrez Ahmad, http://energylex.blogspot.in 65
  • 66. 9. The peaceful uses of nuclear energy 10. IAEA safeguards system  Safeguards objectives 11. Categories of safeguards agreements 12. Technical features and measures  Reporting to the UN Security Council 13. IAEA verification under the UN Charter 14. Other verification initiatives 15. A changing progressive picture Dr. Tabrez Ahmad, http://energylex.blogspot.in 66
  • 67. The way forward • Ambiguities regarding supplier liability have to go – Government must bite the bullet one way or the other. • Politically, very difficult to remove supplier liability altogether, but clarity would help. • Suppliers can then determine the extent of liability, have price negotiations and take out insurance. • Insurance pools – needs to be created. Presently no nuclear insurance pool in India due to restrictions on inspection of facilities by international pools. • Contractual negotiations on supplier liability must be encouraged. Can the Indian government contractually waive its right of recourse against a supplier? • Generation of positive public opinion and detailed engagement with the public. • Tremendous potential for exploiting Nuclear energy in India. India can be an exporter of reactors. Massive potential yet to be tapped. Dr. Tabrez Ahmad, http://energylex.blogspot.in 67
  • 68. 68Dr. Tabrez Ahmad http://corpolexindia.blogspot.in
  • 69. Dr. Tabrez Ahmad http://corpolexindia.blogspot.in 69
  • 70. 70 Dr. Tabrez Ahmad http://corpolexindia.blogspot.in