As the US attempts to dig out from economic collapse, a little-known nuclear industry liability could seriously derail Obama's attempt to revive our finances.
It is the federal disaster insurance on 104 rickety atomic reactors. Because the industry cannot get its own insurance, we taxpayers are on the hook.
There is no "rainy day" fund to finance the clean-up after a reactor disaster. No one in government or industry can reasonably explain how we would pay for such a catastrophe.
Chernobyl's lethal cloud began pouring into the atmosphere 23 years ago this week. Dr. Alexey Yablokov, former environmental advisor to the late President Boris Yeltsin, and president of the Center for Russian Environmental Policy, estimates the death toll at 300,000.
It also gutted the regional economy, and accelerated the Soviet collapse. By conservative accounts Chernobyl's explosion has so far cost a half-trillion dollars, with its financial toll continuing to accrue.
A disaster at a US reactor could dwarf that number.
Chernobyl exploded in a remote rural region in an impoverished country. Eighty kilometers away, Kiev was heavily dusted with radiation.
Most American reactors are in what were once considered remote regions. But Indian Point is about half as far from Manhattan as is Chernobyl from Kiev. Likewise San Onofre from Los Angeles, Turkey Point from Miami, Byron from Chicago, Grand Gulf from Baton Rouge, Seabrook and Pilgrim from Boston, Limerick and Peach Bottom from Philadelphia, Calvert Cliffs from Baltimore, Perry from Cleveland, Prairie Island and Monticello from Minneapolis.
All these reactors were designed and built decades ago. Not one has private insurance beyond a tiny percentage of the potential damage.
When the nuke power industry first got going, utility executives refused to invest, citing the insupportable costs of a potential disaster.
Back then, the Sandia Laboratory's WASH-740 Report warned that a melt-down at an American reactor could permanently irradiate a land mass the size of Pennsylvania. The fiscal costs, like the potential death toll, were essentially inestimable.
So reactor backers got Congress to pass the 1957 Price-Anderson Act, which protected utilities from all but a tiny portion of the potential damage. The industry assured the public that "within a few years" atomic technology would have advanced so far that private insurers would clamor for the business.
That was 52 years ago. No private insurer has stepped up to cover that first generation of reactors (check your home-owners policy for the standard exclusion clause). Neither will they do so for future reactors. The entire "new generation" of atomic plants now being so mightily hyped is also to be insured by the federal government, ie you and me.
The potential financial impact is beyond comprehension. The cost of abandoning several thousand square miles of the Hudson Valley down to Manhattan, or the Atlantic shore north of and into Boston, or the coastal regions along and into Los Angeles and the California central Valley, simply cannot be calculated. Mere trillions---2? 5? 20?---become meaningless. The collapse of the currency, the utter chaos of the economic system, the burial of health care, the devastating impact on millions of lives...all defy description.
All will be the responsibility of the federal government. By limiting responsibility of the reactor owners it has forced us to assume liability for the claims of those who survive long enough to sue.
There is no contingency plan for this in the federal budget. No secret reserve. No magic monetary bullet. Should one of these plants melt or explode, American economic life as we have known it could be essentially over.
Thus the re-licensing of rickety old reactors like New Jersey's Oyster Creek, Vermont Yankee and dozens more now exceeding their 40-year design span is a horrifying game of Chernobyl Roulette. Likewise the building of new ones, which also can't get private insurance.
The owners assure us the odds on an accident are "acceptable." But they are not the ones liable. They are betting our everything against their pittance.
Against which the hundreds of billions in Obama's stimulus plan seem a pitiful penny. Our current fiscal mess pales in comparison to what could come from the irresponsible gamble on these perilous machines.
Our money and our lives are being wagered in a game where the house---OUR house---simply cannot win.