WEBVTT 00:00:00.000 --> 00:00:01.943 align:middle line:90% [SQUEAKING] 00:00:01.943 --> 00:00:03.867 align:middle line:90% [RUSTLING] 00:00:03.867 --> 00:00:07.234 align:middle line:90% [CLICKING] 00:00:07.234 --> 00:00:10.220 align:middle line:90% 00:00:10.220 --> 00:00:14.600 align:middle line:90% LECTURER: So let's get started. 00:00:14.600 --> 00:00:21.040 align:middle line:84% So far, we have focused exclusively on market dynamics 00:00:21.040 --> 00:00:22.640 align:middle line:90% of energy systems. 00:00:22.640 --> 00:00:25.360 align:middle line:84% But of course, there are a lot of non-market issues 00:00:25.360 --> 00:00:30.000 align:middle line:84% that we have to also consider in our hypothetical cost-benefit 00:00:30.000 --> 00:00:35.060 align:middle line:84% calculation, which we largely call externalities. 00:00:35.060 --> 00:00:41.240 align:middle line:84% So coal pollutes with sulfur and PM10, and wind farms 00:00:41.240 --> 00:00:42.780 align:middle line:90% make noise and kill birds. 00:00:42.780 --> 00:00:46.400 align:middle line:84% And nuclear reactors very, very rarely 00:00:46.400 --> 00:00:50.760 align:middle line:84% have accidents and release radiation to the environment. 00:00:50.760 --> 00:00:55.360 align:middle line:84% So to do our assessment strictly on an economic basis 00:00:55.360 --> 00:00:57.960 align:middle line:90% isn't entirely fair. 00:00:57.960 --> 00:01:00.120 align:middle line:84% So we're going to look in part two 00:01:00.120 --> 00:01:04.360 align:middle line:84% of the course at these issues, not only does it 00:01:04.360 --> 00:01:06.040 align:middle line:84% factor in, at least theoretically 00:01:06.040 --> 00:01:08.920 align:middle line:84% into the calculation, but it also 00:01:08.920 --> 00:01:13.640 align:middle line:84% is an issue for the social debate around nuclear energy. 00:01:13.640 --> 00:01:18.160 align:middle line:84% So we need to know these things no matter what. 00:01:18.160 --> 00:01:20.400 align:middle line:84% So let's just start at the abstract level 00:01:20.400 --> 00:01:24.160 align:middle line:84% because I know you guys love economics. 00:01:24.160 --> 00:01:25.340 align:middle line:90% So what is an externality? 00:01:25.340 --> 00:01:28.280 align:middle line:84% I think you probably all know it's a cost can actually also 00:01:28.280 --> 00:01:29.020 align:middle line:90% be a benefit. 00:01:29.020 --> 00:01:32.360 align:middle line:84% Any kind of value that is incurred 00:01:32.360 --> 00:01:37.720 align:middle line:84% by someone who did not choose to incur it, and by which they mean 00:01:37.720 --> 00:01:41.240 align:middle line:84% is not exchanged in the marketplace. 00:01:41.240 --> 00:01:43.600 align:middle line:90% So this is an externality. 00:01:43.600 --> 00:01:47.320 align:middle line:84% So I may be happy with a few kilowatts of nuclear power, 00:01:47.320 --> 00:01:51.080 align:middle line:84% but I really didn't plan, when I was buying that nuclear power 00:01:51.080 --> 00:01:55.480 align:middle line:84% to also be forced to live next to a nuclear reactor that 00:01:55.480 --> 00:01:56.400 align:middle line:90% was unsafe. 00:01:56.400 --> 00:01:59.420 align:middle line:84% So that would be the externality. 00:01:59.420 --> 00:02:01.280 align:middle line:84% So we talked a lot about social welfare 00:02:01.280 --> 00:02:04.600 align:middle line:84% and the idea of why we're doing this cost benefit calculation is 00:02:04.600 --> 00:02:09.479 align:middle line:84% to maximize what we call consumer surplus-- essentially 00:02:09.479 --> 00:02:15.480 align:middle line:84% a measure of how resources are allocated so that the society 00:02:15.480 --> 00:02:17.160 align:middle line:90% benefits the most. 00:02:17.160 --> 00:02:19.840 align:middle line:84% And what externalities do is they make 00:02:19.840 --> 00:02:22.360 align:middle line:90% that calculation incorrect. 00:02:22.360 --> 00:02:23.920 align:middle line:84% So there's always, of course, a trade 00:02:23.920 --> 00:02:25.380 align:middle line:90% off between cost and benefits. 00:02:25.380 --> 00:02:29.940 align:middle line:84% Things like pollution and safety risks are just more costs. 00:02:29.940 --> 00:02:33.160 align:middle line:84% But the issue is that they should 00:02:33.160 --> 00:02:36.780 align:middle line:84% be factored into the cost of the supply curve. 00:02:36.780 --> 00:02:41.420 align:middle line:84% So that supply curve is, in theory, too low down. 00:02:41.420 --> 00:02:43.100 align:middle line:90% It should be higher per unit. 00:02:43.100 --> 00:02:45.600 align:middle line:84% So we could raise it, and that would 00:02:45.600 --> 00:02:49.560 align:middle line:84% be the value of the externality that we raised it by. 00:02:49.560 --> 00:02:51.320 align:middle line:84% And what we see here is that leaves us 00:02:51.320 --> 00:02:53.320 align:middle line:84% with this interesting little triangle. 00:02:53.320 --> 00:02:56.400 align:middle line:90% So this is the quantity. 00:02:56.400 --> 00:02:59.440 align:middle line:84% Let me just maybe go back a second. 00:02:59.440 --> 00:03:02.640 align:middle line:84% This was the equilibrium condition between the supply 00:03:02.640 --> 00:03:03.740 align:middle line:90% and demand, right. 00:03:03.740 --> 00:03:09.440 align:middle line:84% So the first person to buy the first unit of electricity 00:03:09.440 --> 00:03:13.080 align:middle line:84% had enormous value because they're 00:03:13.080 --> 00:03:15.040 align:middle line:84% engaged in some activity that absolutely 00:03:15.040 --> 00:03:16.200 align:middle line:90% must have electricity. 00:03:16.200 --> 00:03:19.120 align:middle line:84% So the demand is high regardless of the price. 00:03:19.120 --> 00:03:23.700 align:middle line:84% And then as the price comes down, the demand begins to fall. 00:03:23.700 --> 00:03:30.160 align:middle line:84% And so the quantity demanded goes up 00:03:30.160 --> 00:03:31.800 align:middle line:84% and up and up as the price comes down. 00:03:31.800 --> 00:03:34.360 align:middle line:84% And the opposite is true of supply. 00:03:34.360 --> 00:03:36.620 align:middle line:84% So there's some equilibrium condition. 00:03:36.620 --> 00:03:40.480 align:middle line:84% And the first theory of welfare economics says that equilibrium 00:03:40.480 --> 00:03:44.900 align:middle line:84% condition, this is where we will achieve Pareto optimality, 00:03:44.900 --> 00:03:49.000 align:middle line:84% which is this idea that you cannot improve any person's lot 00:03:49.000 --> 00:03:51.380 align:middle line:84% without also harming somebody else's lot. 00:03:51.380 --> 00:03:54.360 align:middle line:84% It doesn't mean that resources are optimally distributed 00:03:54.360 --> 00:03:55.260 align:middle line:90% between individuals. 00:03:55.260 --> 00:03:57.920 align:middle line:84% It just means that, on the whole, 00:03:57.920 --> 00:04:01.840 align:middle line:84% there will be a 0 sum game of moving around resources. 00:04:01.840 --> 00:04:05.560 align:middle line:84% So this is what we call the equilibrium quantity that 00:04:05.560 --> 00:04:07.000 align:middle line:90% is purchased in the market. 00:04:07.000 --> 00:04:09.240 align:middle line:84% And if we now put the externality in we 00:04:09.240 --> 00:04:10.100 align:middle line:90% see what happens. 00:04:10.100 --> 00:04:13.360 align:middle line:84% The true equilibrium-- the socially optimum quantity 00:04:13.360 --> 00:04:15.960 align:middle line:84% that should have been consumed is actually less. 00:04:15.960 --> 00:04:18.660 align:middle line:84% And so all of these units were produced, 00:04:18.660 --> 00:04:20.320 align:middle line:90% but they shouldn't have been. 00:04:20.320 --> 00:04:28.200 align:middle line:84% And the value of them was lower than the supply cost. 00:04:28.200 --> 00:04:32.760 align:middle line:84% So the height of this little bar here, 00:04:32.760 --> 00:04:38.360 align:middle line:84% dq, is the wasted social value, if you will, 00:04:38.360 --> 00:04:42.720 align:middle line:84% that got misappropriated because the market did not 00:04:42.720 --> 00:04:44.540 align:middle line:90% include the correct price. 00:04:44.540 --> 00:04:47.560 align:middle line:84% And so if we integrate that up to the value that is actually 00:04:47.560 --> 00:04:51.200 align:middle line:84% produced, we get the total value lost 00:04:51.200 --> 00:04:54.400 align:middle line:84% to society, the total loss of social welfare. 00:04:54.400 --> 00:04:56.400 align:middle line:90% And this has a special term. 00:04:56.400 --> 00:04:58.920 align:middle line:84% This is called the deadweight loss. 00:04:58.920 --> 00:05:03.100 align:middle line:84% So this is the first problem that externalities have. 00:05:03.100 --> 00:05:06.280 align:middle line:84% They create this deadweight loss in the market. 00:05:06.280 --> 00:05:08.480 align:middle line:84% But there's a second problem also. 00:05:08.480 --> 00:05:13.000 align:middle line:84% So if we just look at this yellow rectangle 00:05:13.000 --> 00:05:15.900 align:middle line:84% and think about it for a second, what is this? 00:05:15.900 --> 00:05:19.840 align:middle line:84% This is the total quantity produced 00:05:19.840 --> 00:05:22.840 align:middle line:84% times the value of the externality that 00:05:22.840 --> 00:05:24.220 align:middle line:90% was not included in the market. 00:05:24.220 --> 00:05:29.040 align:middle line:84% So this is the total value of the harm that 00:05:29.040 --> 00:05:31.360 align:middle line:84% was being done by that externality that 00:05:31.360 --> 00:05:34.520 align:middle line:84% was paid by someone who didn't buy the electricity. 00:05:34.520 --> 00:05:37.840 align:middle line:90% It was paid by someone else. 00:05:37.840 --> 00:05:40.800 align:middle line:84% And this is what the person who bought-- 00:05:40.800 --> 00:05:44.320 align:middle line:84% or the people who bought the electricity actually paid. 00:05:44.320 --> 00:05:50.388 align:middle line:84% And so this value here is only a fraction of the total cost. 00:05:50.388 --> 00:05:52.180 align:middle line:84% And so what you have is the second problem, 00:05:52.180 --> 00:05:54.880 align:middle line:84% which is that you have this involuntary wealth transfer, 00:05:54.880 --> 00:05:57.480 align:middle line:84% where the yellow people are being forced 00:05:57.480 --> 00:06:00.600 align:middle line:84% to pay for some cost that really should be attributed 00:06:00.600 --> 00:06:02.200 align:middle line:90% to the green people. 00:06:02.200 --> 00:06:06.200 align:middle line:84% And so this is a kind of an ethics problem. 00:06:06.200 --> 00:06:10.760 align:middle line:84% So these are the two issues that we have to deal with. 00:06:10.760 --> 00:06:13.600 align:middle line:90% So this is the general case. 00:06:13.600 --> 00:06:16.040 align:middle line:84% But in fact, the electricity market 00:06:16.040 --> 00:06:20.200 align:middle line:84% is slightly modified because these supply and demand 00:06:20.200 --> 00:06:22.020 align:middle line:90% curves aren't realistic. 00:06:22.020 --> 00:06:24.120 align:middle line:90% They're just pictorial. 00:06:24.120 --> 00:06:28.560 align:middle line:84% So here is closer to what the electricity market looks like. 00:06:28.560 --> 00:06:31.280 align:middle line:84% So we have what's called inelastic demand, which 00:06:31.280 --> 00:06:33.480 align:middle line:90% is to say that the demand-- 00:06:33.480 --> 00:06:35.800 align:middle line:84% the quantity demanded is relatively 00:06:35.800 --> 00:06:37.720 align:middle line:90% insensitive to the price. 00:06:37.720 --> 00:06:41.017 align:middle line:84% People come home and they turn on their lights, 00:06:41.017 --> 00:06:42.100 align:middle line:90% and they need electricity. 00:06:42.100 --> 00:06:48.600 align:middle line:84% And they don't really think, oh, is this really worth $0.65 00:06:48.600 --> 00:06:51.520 align:middle line:84% a kilowatt hour to run my microwave to heat up 00:06:51.520 --> 00:06:53.972 align:middle line:90% this old cup of coffee? 00:06:53.972 --> 00:06:55.430 align:middle line:84% That calculation is not being done. 00:06:55.430 --> 00:06:56.590 align:middle line:90% They just use electricity. 00:06:56.590 --> 00:07:01.890 align:middle line:84% And as a result, it's fairly insensitive to the price. 00:07:01.890 --> 00:07:04.190 align:middle line:84% You can argue that this is only true in the short run, 00:07:04.190 --> 00:07:07.510 align:middle line:84% and then in the long run that people will slowly accommodate. 00:07:07.510 --> 00:07:09.810 align:middle line:84% And all of that is true, but we generally 00:07:09.810 --> 00:07:11.890 align:middle line:90% look at it in this sense. 00:07:11.890 --> 00:07:13.510 align:middle line:84% So let's just redo that calculation. 00:07:13.510 --> 00:07:14.760 align:middle line:90% We'll put in that externality. 00:07:14.760 --> 00:07:15.260 align:middle line:90% Boom. 00:07:15.260 --> 00:07:16.210 align:middle line:90% There it is. 00:07:16.210 --> 00:07:18.550 align:middle line:90% And now look what happened. 00:07:18.550 --> 00:07:22.330 align:middle line:84% The deadweight loss actually gets very small. 00:07:22.330 --> 00:07:26.850 align:middle line:84% So the suboptimal distribution of resources 00:07:26.850 --> 00:07:30.050 align:middle line:84% because of externalities associated with electricity 00:07:30.050 --> 00:07:32.770 align:middle line:84% production, whether it's nuclear, or wind, or anything 00:07:32.770 --> 00:07:37.010 align:middle line:84% else, is actually typically very small. 00:07:37.010 --> 00:07:40.530 align:middle line:84% It's important to make that electricity no matter what. 00:07:40.530 --> 00:07:44.730 align:middle line:90% But this problem is the same. 00:07:44.730 --> 00:07:47.490 align:middle line:84% So this is the primary thing that we 00:07:47.490 --> 00:07:53.930 align:middle line:84% are trying to deal with when we think about externalities. 00:07:53.930 --> 00:07:57.330 align:middle line:84% So how do we deal with this problem? 00:07:57.330 --> 00:07:59.990 align:middle line:84% Well, people have had all sorts of ideas. 00:07:59.990 --> 00:08:04.330 align:middle line:84% This first one is that there are certain winners and losers. 00:08:04.330 --> 00:08:07.670 align:middle line:84% People getting the cheap electricity benefit. 00:08:07.670 --> 00:08:11.270 align:middle line:84% People who live next to the polluting coal plant get harmed. 00:08:11.270 --> 00:08:13.810 align:middle line:84% We should just have the winners transfer some value 00:08:13.810 --> 00:08:15.130 align:middle line:90% to the losers. 00:08:15.130 --> 00:08:17.890 align:middle line:84% And that's the Caldor-Hicks approach. 00:08:17.890 --> 00:08:21.650 align:middle line:84% But this is very, very problematic. 00:08:21.650 --> 00:08:26.770 align:middle line:84% So first of all, what is the dollar value 00:08:26.770 --> 00:08:28.490 align:middle line:90% that you're going to transfer? 00:08:28.490 --> 00:08:33.250 align:middle line:84% Remember, value-- sorry, the price of something 00:08:33.250 --> 00:08:37.750 align:middle line:84% is something that really reflects scarcity, not utility. 00:08:37.750 --> 00:08:39.690 align:middle line:84% And what is being lost is some utility. 00:08:39.690 --> 00:08:43.250 align:middle line:84% Some health impact will be some loss of utility. 00:08:43.250 --> 00:08:45.490 align:middle line:84% But as we pointed out earlier in this class, 00:08:45.490 --> 00:08:49.250 align:middle line:84% water has tremendous utility to you. 00:08:49.250 --> 00:08:52.250 align:middle line:84% Diamonds do not, yet water is cheap 00:08:52.250 --> 00:08:53.850 align:middle line:90% and diamonds are expensive. 00:08:53.850 --> 00:08:57.810 align:middle line:84% So there's no necessary relationship between the price 00:08:57.810 --> 00:09:00.270 align:middle line:90% of something and its utility. 00:09:00.270 --> 00:09:03.850 align:middle line:84% And that makes the valuation of those damages very, very 00:09:03.850 --> 00:09:07.330 align:middle line:84% difficult. Price really just reflects scarcity. 00:09:07.330 --> 00:09:11.690 align:middle line:84% The second thing is that even if you could figure out 00:09:11.690 --> 00:09:16.530 align:middle line:84% dollar value that was equivalent to the utility lost, 00:09:16.530 --> 00:09:19.690 align:middle line:90% that's not generalizable. 00:09:19.690 --> 00:09:22.090 align:middle line:84% If I have to compensate you-- let's 00:09:22.090 --> 00:09:25.520 align:middle line:84% say I do something that makes you sick for a day, 00:09:25.520 --> 00:09:26.770 align:middle line:90% and you miss all your classes. 00:09:26.770 --> 00:09:28.395 align:middle line:84% And you say, well, I need compensation. 00:09:28.395 --> 00:09:32.290 align:middle line:84% And I say, would you accept $1,000? 00:09:32.290 --> 00:09:36.110 align:middle line:84% I coughed in your face, and you missed a day of classes. 00:09:36.110 --> 00:09:39.570 align:middle line:84% Would you accept $1,000 and feel it was fair? 00:09:39.570 --> 00:09:40.550 align:middle line:90% STUDENT: Yeah. 00:09:40.550 --> 00:09:43.430 align:middle line:84% LECTURER: Do you think if I said that to Bill Gates, 00:09:43.430 --> 00:09:45.570 align:middle line:90% he would accept $1,000? 00:09:45.570 --> 00:09:47.355 align:middle line:90% No, he would say get lost. 00:09:47.355 --> 00:09:49.730 align:middle line:84% I'm charging you $1,000 for having this conversation with 00:09:49.730 --> 00:09:50.330 align:middle line:90% me. 00:09:50.330 --> 00:09:52.610 align:middle line:90% So this is the problem-- 00:09:52.610 --> 00:09:55.570 align:middle line:84% that actually, because of different wealth, 00:09:55.570 --> 00:09:58.910 align:middle line:84% money has differing utilities for different individuals. 00:09:58.910 --> 00:10:01.930 align:middle line:84% So if you're trying to compensate someone with money, 00:10:01.930 --> 00:10:02.790 align:middle line:90% you can't do it. 00:10:02.790 --> 00:10:07.110 align:middle line:84% If you can say, well, look, I had to use someone-- 00:10:07.110 --> 00:10:12.490 align:middle line:84% I had to bulldoze somebody's house to put in a gas pipeline 00:10:12.490 --> 00:10:15.330 align:middle line:84% to deliver some natural gas to some power plant, 00:10:15.330 --> 00:10:17.650 align:middle line:84% and you buy them another house in essentially 00:10:17.650 --> 00:10:19.630 align:middle line:84% the same neighborhood, in the same town, 00:10:19.630 --> 00:10:22.290 align:middle line:84% and it's functionally equivalent, or maybe a little 00:10:22.290 --> 00:10:23.910 align:middle line:90% better, have you compensated? 00:10:23.910 --> 00:10:26.730 align:middle line:84% Arguably, yes, apart from their emotional attachment 00:10:26.730 --> 00:10:28.070 align:middle line:90% to that particular house. 00:10:28.070 --> 00:10:33.130 align:middle line:84% But as soon as you start to try to do it with dollars, 00:10:33.130 --> 00:10:36.130 align:middle line:90% it breaks down. 00:10:36.130 --> 00:10:38.910 align:middle line:84% And then finally, some losses are really non-marketable. 00:10:38.910 --> 00:10:44.170 align:middle line:84% There's no way to really put a price tag on them. 00:10:44.170 --> 00:10:46.530 align:middle line:84% Like, I asked about your health, and I 00:10:46.530 --> 00:10:49.490 align:middle line:84% could do what we just did is called a contingent value 00:10:49.490 --> 00:10:50.030 align:middle line:90% survey. 00:10:50.030 --> 00:10:51.810 align:middle line:84% I could go around and ask people, 00:10:51.810 --> 00:10:56.650 align:middle line:84% but if statistically I'm going to kill you. 00:10:56.650 --> 00:10:58.430 align:middle line:84% And I said, well, but if I kill you, 00:10:58.430 --> 00:11:00.850 align:middle line:90% I will compensate you for that. 00:11:00.850 --> 00:11:05.250 align:middle line:84% I don't really care because money has no value to me 00:11:05.250 --> 00:11:06.370 align:middle line:90% once I'm dead. 00:11:06.370 --> 00:11:10.490 align:middle line:84% So how do I deal with these types of losses? 00:11:10.490 --> 00:11:13.250 align:middle line:90% How do I do this compensation? 00:11:13.250 --> 00:11:17.290 align:middle line:90% So that's the naive way. 00:11:17.290 --> 00:11:20.070 align:middle line:84% And we try and basically never do this. 00:11:20.070 --> 00:11:21.662 align:middle line:84% This is what courts do if you sue. 00:11:21.662 --> 00:11:23.370 align:middle line:84% And this is why court settlements are all 00:11:23.370 --> 00:11:25.670 align:middle line:90% crazy and all over the place. 00:11:25.670 --> 00:11:30.250 align:middle line:84% But this is not how we deal with it, as a matter of routine. 00:11:30.250 --> 00:11:35.010 align:middle line:84% The second approach is kind of an intermediate step. 00:11:35.010 --> 00:11:36.768 align:middle line:90% This is the economist solution. 00:11:36.768 --> 00:11:38.310 align:middle line:84% They say, oh, yes, we remember those. 00:11:38.310 --> 00:11:40.190 align:middle line:84% We were interested in social optimization. 00:11:40.190 --> 00:11:42.890 align:middle line:84% And we want to get rid of that triangle the deadweight loss. 00:11:42.890 --> 00:11:46.610 align:middle line:84% And what we could do is we could put a tax such 00:11:46.610 --> 00:11:49.430 align:middle line:84% that we could fix the quantities and get the correct number 00:11:49.430 --> 00:11:51.530 align:middle line:84% and, therefore, there would be no deadweight loss. 00:11:51.530 --> 00:11:53.610 align:middle line:84% And I'll show you how that works in a second. 00:11:53.610 --> 00:11:56.390 align:middle line:84% And that is fine for dealing with social welfare, 00:11:56.390 --> 00:11:59.930 align:middle line:84% but it doesn't fix the reallocation problem. 00:11:59.930 --> 00:12:01.570 align:middle line:84% And the third is that we could just 00:12:01.570 --> 00:12:05.650 align:middle line:84% try to ban or limit the existence of that externality 00:12:05.650 --> 00:12:06.590 align:middle line:90% in the first place. 00:12:06.590 --> 00:12:08.350 align:middle line:84% And that's where regulation comes in. 00:12:08.350 --> 00:12:10.970 align:middle line:84% I'm going to spend the rest of the class talking about that. 00:12:10.970 --> 00:12:14.050 align:middle line:84% So very quickly, what is number two of how 00:12:14.050 --> 00:12:15.470 align:middle line:90% do you fix the quantities? 00:12:15.470 --> 00:12:18.250 align:middle line:90% This is called a Pigouvian tax. 00:12:18.250 --> 00:12:19.770 align:middle line:84% It's the same idea, except now, what 00:12:19.770 --> 00:12:24.630 align:middle line:84% we're going to do is we're going to apply a tax 00:12:24.630 --> 00:12:29.570 align:middle line:84% so that the supply cost, which is the cost at which you can buy 00:12:29.570 --> 00:12:32.410 align:middle line:84% the good, is the cost charged by the company making it 00:12:32.410 --> 00:12:36.690 align:middle line:84% plus the tax, which happens to be just the right amount 00:12:36.690 --> 00:12:39.930 align:middle line:84% so that this moves back down to here. 00:12:39.930 --> 00:12:43.770 align:middle line:84% And then that deadweight loss goes away. 00:12:43.770 --> 00:12:44.610 align:middle line:90% That sounds great. 00:12:44.610 --> 00:12:47.370 align:middle line:84% But you, of course, still have a problem 00:12:47.370 --> 00:12:49.590 align:middle line:84% in that you are now collecting a tax equal-- 00:12:49.590 --> 00:12:50.870 align:middle line:90% does this is have the yellow? 00:12:50.870 --> 00:12:53.010 align:middle line:90% No, it does not. 00:12:53.010 --> 00:13:00.250 align:middle line:84% You are now collecting a tax equal to that yellow box that 00:13:00.250 --> 00:13:02.090 align:middle line:90% used to be here. 00:13:02.090 --> 00:13:04.750 align:middle line:90% And what you do with it? 00:13:04.750 --> 00:13:07.330 align:middle line:90% 00:13:07.330 --> 00:13:10.850 align:middle line:90% Did this get a lot louder? 00:13:10.850 --> 00:13:14.090 align:middle line:84% If it's too loud, raise your hand. 00:13:14.090 --> 00:13:19.090 align:middle line:84% So one of the things-- this is the basic problem with Pigouvian 00:13:19.090 --> 00:13:20.530 align:middle line:84% tax is that you don't really know 00:13:20.530 --> 00:13:24.250 align:middle line:90% how to do the redistribution. 00:13:24.250 --> 00:13:29.650 align:middle line:84% It's very difficult to identify who paid the externality when 00:13:29.650 --> 00:13:32.090 align:middle line:84% you're talking about something like pollution 00:13:32.090 --> 00:13:36.530 align:middle line:84% or distributed harm to the environment. 00:13:36.530 --> 00:13:42.067 align:middle line:84% And then even if you could identify who bore the burden, 00:13:42.067 --> 00:13:43.650 align:middle line:84% we still have all those other problems 00:13:43.650 --> 00:13:46.510 align:middle line:84% associated with utility in dollars, not being equal, 00:13:46.510 --> 00:13:47.690 align:middle line:90% and so on and so forth. 00:13:47.690 --> 00:13:52.730 align:middle line:84% So the general view is that you take the revenues from this tax, 00:13:52.730 --> 00:13:56.650 align:middle line:84% and you use it for political ends, which 00:13:56.650 --> 00:14:01.930 align:middle line:84% are generally consistent with offsetting other regressive 00:14:01.930 --> 00:14:07.530 align:middle line:84% taxes associated with wealth inequalities or phenomena 00:14:07.530 --> 00:14:09.410 align:middle line:90% associated in this market. 00:14:09.410 --> 00:14:14.450 align:middle line:84% So maybe if you taxed electricity, 00:14:14.450 --> 00:14:16.930 align:middle line:84% you would take the revenues and do something 00:14:16.930 --> 00:14:20.370 align:middle line:84% that helped the poorest people who suffered, maybe 00:14:20.370 --> 00:14:22.670 align:middle line:84% lived next to the coal plant or something like that. 00:14:22.670 --> 00:14:24.545 align:middle line:84% But you're not going to be able to compensate 00:14:24.545 --> 00:14:26.450 align:middle line:84% each individual correctly, but you try 00:14:26.450 --> 00:14:28.750 align:middle line:90% to do something in that vein. 00:14:28.750 --> 00:14:34.490 align:middle line:90% 00:14:34.490 --> 00:14:37.170 align:middle line:84% I just also want to point out that the calculation of the tax 00:14:37.170 --> 00:14:38.912 align:middle line:90% is not necessarily equal. 00:14:38.912 --> 00:14:40.370 align:middle line:84% It looks in this plot like it would 00:14:40.370 --> 00:14:43.010 align:middle line:84% be equal to the value of the externality. 00:14:43.010 --> 00:14:46.290 align:middle line:84% But that's only because here, the externality has 00:14:46.290 --> 00:14:49.690 align:middle line:90% the same value for every unit. 00:14:49.690 --> 00:14:53.630 align:middle line:84% And if that's not true, then actually, 00:14:53.630 --> 00:14:56.170 align:middle line:84% the tax does not necessarily equal 00:14:56.170 --> 00:14:58.650 align:middle line:90% the value of the externality. 00:14:58.650 --> 00:15:02.330 align:middle line:84% Also, you have to remember that the demand curve in the presence 00:15:02.330 --> 00:15:04.690 align:middle line:90% of a tax may also shift. 00:15:04.690 --> 00:15:07.990 align:middle line:84% So don't think of it as the value of the externality. 00:15:07.990 --> 00:15:11.550 align:middle line:84% It's just some value that is adjusting the quantity. 00:15:11.550 --> 00:15:14.280 align:middle line:90% 00:15:14.280 --> 00:15:16.770 align:middle line:84% So we still have the distributional issue. 00:15:16.770 --> 00:15:20.490 align:middle line:84% But that issue is avoided if we can somehow 00:15:20.490 --> 00:15:23.590 align:middle line:84% prevent the externality from happening in the first place. 00:15:23.590 --> 00:15:25.730 align:middle line:84% And that's where we get to regulation. 00:15:25.730 --> 00:15:29.970 align:middle line:84% So before we get to regulation, let's talk about one 00:15:29.970 --> 00:15:37.150 align:middle line:84% of the most difficult issues in measuring the cost of damages. 00:15:37.150 --> 00:15:41.130 align:middle line:84% Earlier I gave this example of this contingent value survey 00:15:41.130 --> 00:15:44.300 align:middle line:84% but said, what do you do when you're killing someone? 00:15:44.300 --> 00:15:46.050 align:middle line:84% Well, you need an answer to that no matter 00:15:46.050 --> 00:15:48.810 align:middle line:84% what, because ultimately, you like 00:15:48.810 --> 00:15:51.570 align:middle line:84% to do a cost benefit analysis for any kind 00:15:51.570 --> 00:15:53.530 align:middle line:90% of regulatory policy. 00:15:53.530 --> 00:15:55.490 align:middle line:84% And that still requires that you have some way 00:15:55.490 --> 00:15:58.650 align:middle line:90% to estimate the harm. 00:15:58.650 --> 00:16:07.490 align:middle line:84% So we have this idea of a value of a statistical life. 00:16:07.490 --> 00:16:11.890 align:middle line:84% So these are the values of a statistical life 00:16:11.890 --> 00:16:14.130 align:middle line:90% over different years. 00:16:14.130 --> 00:16:16.650 align:middle line:84% And for different regulatory agencies-- 00:16:16.650 --> 00:16:19.995 align:middle line:84% the Environmental Protection Agency, the Food and Drug 00:16:19.995 --> 00:16:21.870 align:middle line:84% Administration, Department of Transportation, 00:16:21.870 --> 00:16:24.610 align:middle line:84% Consumer Product Safety Commission, Federal Aviation 00:16:24.610 --> 00:16:27.370 align:middle line:84% Commission, and the Nuclear Regulatory Commission. 00:16:27.370 --> 00:16:30.250 align:middle line:84% And you can see how they have changed. 00:16:30.250 --> 00:16:34.290 align:middle line:84% And if you ever wanted a cold and heartless calculation 00:16:34.290 --> 00:16:37.650 align:middle line:84% that showed the world is getting better, this is it. 00:16:37.650 --> 00:16:40.210 align:middle line:84% This is in constant 2020 dollars. 00:16:40.210 --> 00:16:42.790 align:middle line:84% And so this is all inflation adjusted. 00:16:42.790 --> 00:16:46.290 align:middle line:84% You can compare dollars in different years. 00:16:46.290 --> 00:16:51.090 align:middle line:84% And what you see is that, over time, 00:16:51.090 --> 00:16:53.450 align:middle line:84% in general, regulatory agencies think 00:16:53.450 --> 00:16:55.730 align:middle line:90% that human life is worth more. 00:16:55.730 --> 00:17:00.090 align:middle line:84% And that arises because of a number of issues. 00:17:00.090 --> 00:17:02.950 align:middle line:84% One is that society has become more affluent, 00:17:02.950 --> 00:17:05.530 align:middle line:90% so we are literally worth more. 00:17:05.530 --> 00:17:10.569 align:middle line:84% But also the view that we can, as an affluent society, take 00:17:10.569 --> 00:17:12.890 align:middle line:90% measures to protect people. 00:17:12.890 --> 00:17:15.450 align:middle line:84% During the construction of Hoover Dam, 00:17:15.450 --> 00:17:18.310 align:middle line:84% lots and lots of people died building that dam, 00:17:18.310 --> 00:17:21.609 align:middle line:84% and no one blinked an eye because that was just 00:17:21.609 --> 00:17:23.010 align:middle line:90% how it was. 00:17:23.010 --> 00:17:24.849 align:middle line:90% And we could not do that today. 00:17:24.849 --> 00:17:29.370 align:middle line:84% Society socially is not in that position. 00:17:29.370 --> 00:17:34.010 align:middle line:84% So all of that is true for everyone except for the NRC. 00:17:34.010 --> 00:17:39.530 align:middle line:84% And the reason why that is the NRC doesn't do it 00:17:39.530 --> 00:17:40.870 align:middle line:90% like everyone else does it. 00:17:40.870 --> 00:17:44.570 align:middle line:84% They don't say they put a certain value per life. 00:17:44.570 --> 00:17:47.030 align:middle line:84% What they do is put a value per unit REM, 00:17:47.030 --> 00:17:50.530 align:middle line:84% which is a measure of radiation exposure-- 00:17:50.530 --> 00:17:54.770 align:middle line:84% value of $2,000 per unit REM avoided. 00:17:54.770 --> 00:17:58.210 align:middle line:84% And from that, you can then calculate 00:17:58.210 --> 00:18:01.870 align:middle line:84% the statistical probability of a unit REM killing you, 00:18:01.870 --> 00:18:03.510 align:middle line:90% and then you can back out this. 00:18:03.510 --> 00:18:07.390 align:middle line:84% But they never actually talk about it in these terms. 00:18:07.390 --> 00:18:10.370 align:middle line:84% And so when there's public discourse about how 00:18:10.370 --> 00:18:12.570 align:middle line:90% to increase the vessels. 00:18:12.570 --> 00:18:15.930 align:middle line:84% They kind of fly under the radar screen. 00:18:15.930 --> 00:18:18.070 align:middle line:84% There has been during the Obama administration-- 00:18:18.070 --> 00:18:23.170 align:middle line:84% the NRC did propose to rectify this problem. 00:18:23.170 --> 00:18:27.650 align:middle line:84% So currently, the NRC says you're worth about $3.2 million 00:18:27.650 --> 00:18:29.410 align:middle line:84% versus other entities, saying that you're 00:18:29.410 --> 00:18:35.050 align:middle line:90% worth $15 to $20 million. 00:18:35.050 --> 00:18:38.290 align:middle line:84% But NRC during the Obama administration 00:18:38.290 --> 00:18:42.450 align:middle line:84% wanted to revise that upwards to $8.5 million. 00:18:42.450 --> 00:18:47.270 align:middle line:84% It doesn't really affect the price of building reactors, 00:18:47.270 --> 00:18:51.110 align:middle line:84% but it does affect the price of these changes after the fact, 00:18:51.110 --> 00:18:55.610 align:middle line:84% because those changes are enforced according 00:18:55.610 --> 00:18:59.290 align:middle line:84% to the back fit rule, for which they do this calculation that we 00:18:59.290 --> 00:19:01.430 align:middle line:90% just did an example. 00:19:01.430 --> 00:19:06.130 align:middle line:84% So the kind of story that I like to talk about 00:19:06.130 --> 00:19:09.050 align:middle line:90% is during after Fukushima. 00:19:09.050 --> 00:19:11.690 align:middle line:84% So Fukushima was a boiling water reactor, 00:19:11.690 --> 00:19:15.090 align:middle line:84% and it has a small volume containment. 00:19:15.090 --> 00:19:21.410 align:middle line:84% And when the reactor overheats, it-- 00:19:21.410 --> 00:19:24.138 align:middle line:84% all sorts of steam is vented into this containment. 00:19:24.138 --> 00:19:25.930 align:middle line:84% In the case of those reactors, there's also 00:19:25.930 --> 00:19:28.330 align:middle line:90% a torus and some other things. 00:19:28.330 --> 00:19:33.290 align:middle line:84% And this concrete containment can't take all the steam 00:19:33.290 --> 00:19:35.490 align:middle line:90% pressure after a couple of days. 00:19:35.490 --> 00:19:39.300 align:middle line:84% So what they have to do is they have to vent some of the gases 00:19:39.300 --> 00:19:42.640 align:middle line:84% to the atmosphere, which contain radionuclides. 00:19:42.640 --> 00:19:44.940 align:middle line:84% And that's where all of the radiation released 00:19:44.940 --> 00:19:46.980 align:middle line:84% from Fukushima basically came from. 00:19:46.980 --> 00:19:50.120 align:middle line:84% And so someone had this idea, well, 00:19:50.120 --> 00:19:52.220 align:middle line:84% why are we venting it to the atmosphere? 00:19:52.220 --> 00:19:58.340 align:middle line:84% Why don't we put a pipe and then have a big trench full of sand 00:19:58.340 --> 00:20:02.280 align:middle line:84% and water, and you bubble the gases through here, 00:20:02.280 --> 00:20:04.860 align:middle line:84% and then the radionuclides will adsorb 00:20:04.860 --> 00:20:08.680 align:middle line:84% onto the surfaces of the sand or dissolve into the water, 00:20:08.680 --> 00:20:11.660 align:middle line:84% and then clean gas or much cleaner gas 00:20:11.660 --> 00:20:14.100 align:middle line:90% will come out of this big pit. 00:20:14.100 --> 00:20:18.580 align:middle line:84% How expensive is it to take a big pit 00:20:18.580 --> 00:20:20.067 align:middle line:90% and fill it with sand and water? 00:20:20.067 --> 00:20:21.900 align:middle line:84% I mean, it's going to be millions of dollars 00:20:21.900 --> 00:20:24.192 align:middle line:84% because there's going to be some kind of control system 00:20:24.192 --> 00:20:27.660 align:middle line:84% and so on, but it's a relatively cheap upgrade. 00:20:27.660 --> 00:20:33.760 align:middle line:84% And all the European BWRs decided, absolutely, 00:20:33.760 --> 00:20:37.700 align:middle line:84% we need to do this to minimize damages to humans. 00:20:37.700 --> 00:20:39.860 align:middle line:84% And RC did a calculation, and they 00:20:39.860 --> 00:20:42.160 align:middle line:84% adopted their very low value of statistical life. 00:20:42.160 --> 00:20:44.900 align:middle line:84% And they said, ah, it turns out that according 00:20:44.900 --> 00:20:48.100 align:middle line:84% to our calculations, it's not worth a pit of sand. 00:20:48.100 --> 00:20:52.740 align:middle line:84% And so in the United States, we don't have this upgrade 00:20:52.740 --> 00:20:54.360 align:middle line:90% because of this calculation. 00:20:54.360 --> 00:20:57.000 align:middle line:90% 00:20:57.000 --> 00:20:58.500 align:middle line:90% So that's how it affects-- 00:20:58.500 --> 00:21:01.960 align:middle line:84% how the industry saves money with this. 00:21:01.960 --> 00:21:06.897 align:middle line:84% So if we want to do something, regulation-- 00:21:06.897 --> 00:21:08.980 align:middle line:84% if we want to prevent these things from occurring, 00:21:08.980 --> 00:21:10.820 align:middle line:90% regulation is the way to do it. 00:21:10.820 --> 00:21:14.480 align:middle line:84% And it doesn't usually eliminate them. 00:21:14.480 --> 00:21:16.220 align:middle line:84% What it really tries to do is just 00:21:16.220 --> 00:21:19.220 align:middle line:84% minimize them to what we deem through policy 00:21:19.220 --> 00:21:21.980 align:middle line:90% to be an acceptable level. 00:21:21.980 --> 00:21:23.920 align:middle line:90% So what is it exactly? 00:21:23.920 --> 00:21:28.740 align:middle line:84% It's a set of administrative rules that governments 00:21:28.740 --> 00:21:32.100 align:middle line:84% or standards that governments can put into place 00:21:32.100 --> 00:21:34.820 align:middle line:84% and have essentially the force of law. 00:21:34.820 --> 00:21:36.240 align:middle line:90% They aren't passed by Congress. 00:21:36.240 --> 00:21:38.087 align:middle line:84% They're written by agencies, but they 00:21:38.087 --> 00:21:40.420 align:middle line:84% go through this special process, and then they basically 00:21:40.420 --> 00:21:43.700 align:middle line:90% have the force of law. 00:21:43.700 --> 00:21:48.540 align:middle line:84% So in total, in the United States have about 165,000 pages 00:21:48.540 --> 00:21:49.900 align:middle line:90% of regulations. 00:21:49.900 --> 00:21:54.900 align:middle line:84% We have over 330,000 full-time federal employees who enforce 00:21:54.900 --> 00:21:56.380 align:middle line:90% the regulations. 00:21:56.380 --> 00:21:58.320 align:middle line:84% Arguably, depending on how you do the math, 00:21:58.320 --> 00:22:02.900 align:middle line:84% it costs roughly 50% of the US budget 00:22:02.900 --> 00:22:07.060 align:middle line:84% to maintain and enforce regulations-- 00:22:07.060 --> 00:22:08.660 align:middle line:90% the US Federal budget. 00:22:08.660 --> 00:22:14.860 align:middle line:84% And the average household pays about $15,500 for this pleasure 00:22:14.860 --> 00:22:19.340 align:middle line:84% in taxes for regulation to basically keep our standard 00:22:19.340 --> 00:22:23.820 align:middle line:84% of life where it is today, which is a lot of money. 00:22:23.820 --> 00:22:28.940 align:middle line:84% So it's easy to see why there's a lot of critique 00:22:28.940 --> 00:22:31.180 align:middle line:84% about regulations, and especially from businesses 00:22:31.180 --> 00:22:34.900 align:middle line:84% where it directly increases their costs. 00:22:34.900 --> 00:22:38.100 align:middle line:84% In the abstract, it sounds like a lot. 00:22:38.100 --> 00:22:40.080 align:middle line:84% And keeping regulation going is a challenge. 00:22:40.080 --> 00:22:44.380 align:middle line:84% But it's also hard to remember how important regulation is. 00:22:44.380 --> 00:22:48.660 align:middle line:84% If you woke up this morning because your cell phone 00:22:48.660 --> 00:22:52.980 align:middle line:84% alarm went off, let's just walk through what happened. 00:22:52.980 --> 00:22:56.020 align:middle line:84% That cell phone received its signal 00:22:56.020 --> 00:22:59.940 align:middle line:84% because of a regulation that required certain standards 00:22:59.940 --> 00:23:03.100 align:middle line:84% with the communication infrastructure. 00:23:03.100 --> 00:23:04.780 align:middle line:84% The radios didn't get zapped because 00:23:04.780 --> 00:23:06.740 align:middle line:84% of regulations that limit the RF output 00:23:06.740 --> 00:23:10.720 align:middle line:90% of other electronic noise. 00:23:10.720 --> 00:23:13.780 align:middle line:84% You didn't get a rash when you woke up because Consumer Product 00:23:13.780 --> 00:23:15.198 align:middle line:84% Safety Commission had regulations 00:23:15.198 --> 00:23:17.240 align:middle line:84% about what kind of stuff went into your mattress. 00:23:17.240 --> 00:23:18.480 align:middle line:90% You went and brushed your teeth. 00:23:18.480 --> 00:23:20.730 align:middle line:84% There are regulations of what goes in your toothpaste. 00:23:20.730 --> 00:23:22.660 align:middle line:90% It can't be ground glass. 00:23:22.660 --> 00:23:26.540 align:middle line:84% And the number of regulations that you incur, 00:23:26.540 --> 00:23:28.500 align:middle line:84% that you benefit from the moment you wake up 00:23:28.500 --> 00:23:30.250 align:middle line:84% to the time you get to class would take me 00:23:30.250 --> 00:23:31.600 align:middle line:90% hours to go through. 00:23:31.600 --> 00:23:34.420 align:middle line:84% It just affects-- it is what creates 00:23:34.420 --> 00:23:35.880 align:middle line:90% the modern standard of living. 00:23:35.880 --> 00:23:41.660 align:middle line:84% So it is expensive, but it is also really important. 00:23:41.660 --> 00:23:47.220 align:middle line:84% So historically, for the nuclear industry, 00:23:47.220 --> 00:23:49.600 align:middle line:84% this meant paying a lot of money. 00:23:49.600 --> 00:23:54.500 align:middle line:84% And typically, to get a brand new reactor design license 00:23:54.500 --> 00:23:59.300 align:middle line:84% can cost as much as $1 billion before the first plant ever gets 00:23:59.300 --> 00:24:02.940 align:middle line:90% built. And that's a big deal. 00:24:02.940 --> 00:24:06.500 align:middle line:84% And there are huge sums of money at stake. 00:24:06.500 --> 00:24:09.340 align:middle line:84% So cost of a nuclear power plant in the US 00:24:09.340 --> 00:24:11.380 align:middle line:90% might be around $10 billion. 00:24:11.380 --> 00:24:13.140 align:middle line:84% A site where they typically build two 00:24:13.140 --> 00:24:14.620 align:middle line:90% at a time, $20 billion. 00:24:14.620 --> 00:24:18.380 align:middle line:84% And that means they have a lot to lose if the regulation gets 00:24:18.380 --> 00:24:19.260 align:middle line:90% in the way. 00:24:19.260 --> 00:24:20.660 align:middle line:84% And when you have that much money 00:24:20.660 --> 00:24:28.460 align:middle line:84% involved, $10 or $20 billion, well, now, you can do something. 00:24:28.460 --> 00:24:30.860 align:middle line:90% That kind of money speaks. 00:24:30.860 --> 00:24:35.740 align:middle line:84% Maybe you can buy a political campaign, get some law changed. 00:24:35.740 --> 00:24:41.300 align:middle line:84% This stuff is actually happening for a small fraction of what 00:24:41.300 --> 00:24:43.020 align:middle line:90% it costs to build the plant. 00:24:43.020 --> 00:24:48.060 align:middle line:84% So you have, for nuclear, this problem that the regulator 00:24:48.060 --> 00:24:50.160 align:middle line:84% is subject to industry influence, 00:24:50.160 --> 00:24:53.540 align:middle line:84% because the cost of the industry to change the regulation 00:24:53.540 --> 00:24:55.820 align:middle line:84% is basically small compared to the numbers 00:24:55.820 --> 00:24:58.660 align:middle line:90% that they're dealing with. 00:24:58.660 --> 00:25:00.965 align:middle line:84% Nuclear regulations are also complicated by the fact 00:25:00.965 --> 00:25:02.340 align:middle line:84% that, in principle, we want to do 00:25:02.340 --> 00:25:05.540 align:middle line:90% these cost-benefit calculations. 00:25:05.540 --> 00:25:08.900 align:middle line:84% But who's to say what the harms will be? 00:25:08.900 --> 00:25:13.540 align:middle line:84% We don't really know how safe these reactors are. 00:25:13.540 --> 00:25:16.220 align:middle line:84% We don't really know if we make this change what 00:25:16.220 --> 00:25:18.840 align:middle line:90% the effect will be on people. 00:25:18.840 --> 00:25:21.140 align:middle line:84% We don't really know what the effect of radiation 00:25:21.140 --> 00:25:22.360 align:middle line:90% is on people. 00:25:22.360 --> 00:25:27.300 align:middle line:84% All of these problems make the calculation 00:25:27.300 --> 00:25:32.180 align:middle line:84% of a convincing cost-benefit subject to interpretation, 00:25:32.180 --> 00:25:37.820 align:middle line:84% and that makes the regulations easily influenced 00:25:37.820 --> 00:25:41.980 align:middle line:84% by different political perspectives. 00:25:41.980 --> 00:25:44.180 align:middle line:84% So all of that means-- it's just a way 00:25:44.180 --> 00:25:48.460 align:middle line:84% to say that nuclear regulation is particularly 00:25:48.460 --> 00:25:52.180 align:middle line:90% challenging subject area. 00:25:52.180 --> 00:25:56.420 align:middle line:84% So let's talk about how our current system came about. 00:25:56.420 --> 00:26:01.120 align:middle line:84% We began the nuclear age with the Atomic Energy Commission. 00:26:01.120 --> 00:26:03.420 align:middle line:84% This is the bad old days of nuclear. 00:26:03.420 --> 00:26:06.900 align:middle line:84% AEC was mother, father, judge, jury, and executioner 00:26:06.900 --> 00:26:08.340 align:middle line:90% of all things nuclear. 00:26:08.340 --> 00:26:10.340 align:middle line:84% They determine what information was secret, what 00:26:10.340 --> 00:26:12.460 align:middle line:90% information was not, et cetera. 00:26:12.460 --> 00:26:15.040 align:middle line:84% And at the top of the AEC were these commissioners. 00:26:15.040 --> 00:26:17.660 align:middle line:84% I showed you a picture of them in the first lecture. 00:26:17.660 --> 00:26:19.580 align:middle line:84% And they really had this idea that they 00:26:19.580 --> 00:26:23.180 align:middle line:84% were going to give birth to this transformative industry, 00:26:23.180 --> 00:26:26.860 align:middle line:84% and that would set the world free from its energy burdens. 00:26:26.860 --> 00:26:31.660 align:middle line:84% And so they didn't want things getting in the way. 00:26:31.660 --> 00:26:33.812 align:middle line:84% And there was no regulator per se, 00:26:33.812 --> 00:26:36.020 align:middle line:84% but there was something called the Advisory Committee 00:26:36.020 --> 00:26:37.900 align:middle line:90% on reactor safeguards. 00:26:37.900 --> 00:26:41.340 align:middle line:84% And they didn't have legal authority 00:26:41.340 --> 00:26:43.120 align:middle line:84% to enforce standards like a regulator, 00:26:43.120 --> 00:26:46.140 align:middle line:84% but they were supposed to help direct the design of reactors 00:26:46.140 --> 00:26:48.940 align:middle line:90% to be safer. 00:26:48.940 --> 00:26:53.220 align:middle line:84% So they came up with some really good ideas. 00:26:53.220 --> 00:26:56.740 align:middle line:84% They came up with the idea of the containment. 00:26:56.740 --> 00:26:57.880 align:middle line:90% What else did they do? 00:26:57.880 --> 00:27:00.460 align:middle line:90% 00:27:00.460 --> 00:27:03.300 align:middle line:84% Nothing else comes to mind, but they 00:27:03.300 --> 00:27:08.780 align:middle line:84% did like the baseline ideas of reactor safety. 00:27:08.780 --> 00:27:12.460 align:middle line:84% Then, in the 1960s, the US government started doing a bunch 00:27:12.460 --> 00:27:14.820 align:middle line:84% of crazy experiments where they would actually melt down 00:27:14.820 --> 00:27:15.860 align:middle line:90% reactors. 00:27:15.860 --> 00:27:19.580 align:middle line:90% And they learned a lot. 00:27:19.580 --> 00:27:23.300 align:middle line:84% So for example, prior to 1966, it 00:27:23.300 --> 00:27:26.620 align:middle line:84% was believed that if the fuel melted because 00:27:26.620 --> 00:27:31.660 align:middle line:84% of some kind of reactivity excursion got too hot, 00:27:31.660 --> 00:27:34.500 align:middle line:84% it would melt and just sit on the bottom of the pressure 00:27:34.500 --> 00:27:35.780 align:middle line:90% vessel. 00:27:35.780 --> 00:27:38.677 align:middle line:84% And then we discovered, thanks to our experiments, 00:27:38.677 --> 00:27:40.260 align:middle line:84% that, oh, no, it's actually hot enough 00:27:40.260 --> 00:27:42.680 align:middle line:84% that it just melts right through the pressure vessel 00:27:42.680 --> 00:27:44.080 align:middle line:90% and keeps going. 00:27:44.080 --> 00:27:46.923 align:middle line:84% And this became known as the China syndrome. 00:27:46.923 --> 00:27:48.340 align:middle line:84% And people had these visions of it 00:27:48.340 --> 00:27:50.465 align:middle line:84% melting all the way through the center of the Earth 00:27:50.465 --> 00:27:53.440 align:middle line:84% and coming out in China, such nonsense. 00:27:53.440 --> 00:27:56.860 align:middle line:84% But we learned that the pressure vessel was not 00:27:56.860 --> 00:27:58.820 align:middle line:90% a sufficient barrier. 00:27:58.820 --> 00:28:02.260 align:middle line:84% And so this discovery led to attempts 00:28:02.260 --> 00:28:05.820 align:middle line:84% to find ways to prevent this from happening. 00:28:05.820 --> 00:28:08.860 align:middle line:84% And so Westinghouse came up with the idea 00:28:08.860 --> 00:28:13.100 align:middle line:90% of basically putting a giant-- 00:28:13.100 --> 00:28:19.220 align:middle line:84% it's a ceramic concrete underneath the reactor pressure 00:28:19.220 --> 00:28:21.140 align:middle line:90% vessel called the core catcher. 00:28:21.140 --> 00:28:26.340 align:middle line:84% And it's a refractory material for which this, 00:28:26.340 --> 00:28:29.380 align:middle line:84% what we call corium-- melted core-- 00:28:29.380 --> 00:28:33.580 align:middle line:84% lava-- will not easily penetrate, and it spreads out, 00:28:33.580 --> 00:28:37.220 align:middle line:84% and then it cools off to the point where it solidifies 00:28:37.220 --> 00:28:40.540 align:middle line:90% and the problem is solved. 00:28:40.540 --> 00:28:42.620 align:middle line:90% So that was the original idea. 00:28:42.620 --> 00:28:45.060 align:middle line:84% But General Electric, who invented the boiling water 00:28:45.060 --> 00:28:48.740 align:middle line:84% reactor, was always looking for ways to save money. 00:28:48.740 --> 00:28:52.580 align:middle line:84% And they said these ginormous ceramic dishes 00:28:52.580 --> 00:28:55.700 align:middle line:84% are going to be very expensive to manufacture and install. 00:28:55.700 --> 00:29:00.340 align:middle line:84% Why don't we just have a sprinkler system instead? 00:29:00.340 --> 00:29:02.840 align:middle line:90% And we'll just spray water. 00:29:02.840 --> 00:29:05.140 align:middle line:84% This is called the emergency core cooling system. 00:29:05.140 --> 00:29:07.060 align:middle line:84% Now of course, the issue with the ECCS-- 00:29:07.060 --> 00:29:09.380 align:middle line:84% Emergency Core Cooling System-- was that now it 00:29:09.380 --> 00:29:10.400 align:middle line:90% was an active system. 00:29:10.400 --> 00:29:11.920 align:middle line:84% You had to have pipes, and sprinkler heads, 00:29:11.920 --> 00:29:14.128 align:middle line:84% and you had to have pumps, and electricity to run it, 00:29:14.128 --> 00:29:15.780 align:middle line:84% and you'd have to turn it on, and all 00:29:15.780 --> 00:29:18.740 align:middle line:84% that has to be done as opposed to this passive, always-present 00:29:18.740 --> 00:29:19.520 align:middle line:90% safety thing. 00:29:19.520 --> 00:29:21.380 align:middle line:84% But that was all a lot cheaper than trying 00:29:21.380 --> 00:29:23.300 align:middle line:90% to build this core catcher. 00:29:23.300 --> 00:29:26.540 align:middle line:84% And so a debate ensued and many nasty accusations 00:29:26.540 --> 00:29:29.300 align:middle line:84% going back and forth about which was more functional 00:29:29.300 --> 00:29:31.780 align:middle line:90% and which was more expensive. 00:29:31.780 --> 00:29:34.200 align:middle line:84% And ultimately, the AEC commissioners, 00:29:34.200 --> 00:29:37.900 align:middle line:84% who cared about the viability of nuclear power said-- 00:29:37.900 --> 00:29:42.440 align:middle line:84% it turns out they didn't really believe that this was an issue. 00:29:42.440 --> 00:29:46.580 align:middle line:84% This guy who's, I think, head of reactor design-- 00:29:46.580 --> 00:29:48.780 align:middle line:90% I think that was his title-- 00:29:48.780 --> 00:29:51.638 align:middle line:84% Milton Shaw, he was like, safety guys are nuts. 00:29:51.638 --> 00:29:54.180 align:middle line:84% They're coming up with all these scenarios that will just not 00:29:54.180 --> 00:29:56.060 align:middle line:90% happen, in his opinion. 00:29:56.060 --> 00:29:59.780 align:middle line:84% And so let's just do whatever's the cheapest. 00:29:59.780 --> 00:30:05.020 align:middle line:84% And so they endorsed the General Electric sprinkler system. 00:30:05.020 --> 00:30:06.940 align:middle line:90% And then the labs-- 00:30:06.940 --> 00:30:08.880 align:middle line:84% Idaho National Laboratory-- said, fine, 00:30:08.880 --> 00:30:11.140 align:middle line:84% we'll do some experiments because that's what we do. 00:30:11.140 --> 00:30:12.620 align:middle line:84% And they did this experiment where 00:30:12.620 --> 00:30:14.120 align:middle line:84% they sprayed hot water on something, 00:30:14.120 --> 00:30:16.020 align:middle line:90% and look what happened. 00:30:16.020 --> 00:30:18.080 align:middle line:84% It was-- or water on something hot, 00:30:18.080 --> 00:30:20.280 align:middle line:84% and this is-- they got the Leidenfrost effect right. 00:30:20.280 --> 00:30:23.980 align:middle line:84% So the water forms a vapor layer instantly on contact, 00:30:23.980 --> 00:30:27.560 align:middle line:84% and basically, the cooling power of the water goes away, 00:30:27.560 --> 00:30:29.820 align:middle line:84% and the water just sheets off the hot fuel 00:30:29.820 --> 00:30:32.660 align:middle line:84% and doesn't do a very good job cooling it. 00:30:32.660 --> 00:30:35.040 align:middle line:84% And then they discovered, oh, actually, 00:30:35.040 --> 00:30:39.420 align:middle line:84% if you spray a lot of hot water on the core 00:30:39.420 --> 00:30:41.572 align:middle line:84% with sufficient force that you actually-- 00:30:41.572 --> 00:30:43.780 align:middle line:84% a lot of cold water on the core with sufficient force 00:30:43.780 --> 00:30:48.940 align:middle line:84% that you can actually cool it, then the fuel cracks, and now 00:30:48.940 --> 00:30:51.440 align:middle line:84% more radionuclides are released into the environment, 00:30:51.440 --> 00:30:52.900 align:middle line:90% and this is even worse. 00:30:52.900 --> 00:30:56.540 align:middle line:84% So this whole idea was problematic. 00:30:56.540 --> 00:31:03.520 align:middle line:84% And so this led to something of a scandal. 00:31:03.520 --> 00:31:06.363 align:middle line:84% And the AEC kind of got its hand slapped by Congress, 00:31:06.363 --> 00:31:07.780 align:middle line:84% and said you need to work this out 00:31:07.780 --> 00:31:10.078 align:middle line:84% before-- you can't just go and install these things. 00:31:10.078 --> 00:31:12.120 align:middle line:84% You need to make sure that they're going to work. 00:31:12.120 --> 00:31:14.100 align:middle line:84% And so they did, and these things still exist, 00:31:14.100 --> 00:31:15.700 align:middle line:90% and they have been worked out. 00:31:15.700 --> 00:31:19.720 align:middle line:84% The EPR in Europe has a core catcher, 00:31:19.720 --> 00:31:22.310 align:middle line:84% and I think the American designs still have Emergency Core 00:31:22.310 --> 00:31:25.510 align:middle line:90% Cooling Systems. 00:31:25.510 --> 00:31:29.590 align:middle line:84% Shortly after that, the AEC began 00:31:29.590 --> 00:31:31.870 align:middle line:84% to double down on their bad behavior, 00:31:31.870 --> 00:31:34.670 align:middle line:84% and they refused to comply with other regulatory laws 00:31:34.670 --> 00:31:38.510 align:middle line:84% that they saw were getting in the way of their vision 00:31:38.510 --> 00:31:39.867 align:middle line:90% of this nuclear future. 00:31:39.867 --> 00:31:41.950 align:middle line:84% So one of those laws is the National Environmental 00:31:41.950 --> 00:31:43.510 align:middle line:84% Protection Act that says you have 00:31:43.510 --> 00:31:47.110 align:middle line:84% to do Environmental Protection, assessment 00:31:47.110 --> 00:31:49.730 align:middle line:84% of the implications of building anything, 00:31:49.730 --> 00:31:52.150 align:middle line:84% basically, including a nuclear reactor. 00:31:52.150 --> 00:31:54.350 align:middle line:84% And they said, eh, we don't have to do that. 00:31:54.350 --> 00:31:57.310 align:middle line:84% And then they got sued-- the US District Court. 00:31:57.310 --> 00:32:01.270 align:middle line:84% And the court ruled, quote, "the AEC is making a mockery 00:32:01.270 --> 00:32:02.910 align:middle line:90% of the law." 00:32:02.910 --> 00:32:05.110 align:middle line:84% They were just very high and mighty. 00:32:05.110 --> 00:32:08.010 align:middle line:84% And in 1972, Congress said, enough is enough. 00:32:08.010 --> 00:32:12.310 align:middle line:84% You guys cannot be maintaining the safety of these reactors 00:32:12.310 --> 00:32:15.970 align:middle line:84% and also clearly promoting them in this unbridled fashion. 00:32:15.970 --> 00:32:17.710 align:middle line:90% This is a conflict of interest. 00:32:17.710 --> 00:32:21.910 align:middle line:84% And so the AEC was dissolved and split into what 00:32:21.910 --> 00:32:24.778 align:middle line:84% became the Department of Energy and an independent-- 00:32:24.778 --> 00:32:27.070 align:middle line:84% the first independent regulator, the Nuclear Regulatory 00:32:27.070 --> 00:32:29.070 align:middle line:90% Commission, 1974. 00:32:29.070 --> 00:32:33.710 align:middle line:84% And that's how the NRC was born, as an independent entity. 00:32:33.710 --> 00:32:37.070 align:middle line:84% And so what are the requirements for a strong regulator? 00:32:37.070 --> 00:32:39.130 align:middle line:84% So this is what the academic literature says. 00:32:39.130 --> 00:32:41.750 align:middle line:84% You need to have independent operations. 00:32:41.750 --> 00:32:44.590 align:middle line:90% You can't depend on-- 00:32:44.590 --> 00:32:48.310 align:middle line:84% you can't have Boeing inspecting their own airplanes 00:32:48.310 --> 00:32:50.190 align:middle line:84% and then telling you that they're safe. 00:32:50.190 --> 00:32:53.070 align:middle line:84% Now, there is a proposal right now in the nuclear industry 00:32:53.070 --> 00:32:54.670 align:middle line:90% to do this. 00:32:54.670 --> 00:32:58.710 align:middle line:84% But for now, we have independent inspectors-- 00:32:58.710 --> 00:33:01.630 align:middle line:84% the NRC employees who inspect nuclear sites. 00:33:01.630 --> 00:33:03.890 align:middle line:84% They're supposed to have independent finances, 00:33:03.890 --> 00:33:08.517 align:middle line:84% so they're not dependent on the company for their operations. 00:33:08.517 --> 00:33:10.350 align:middle line:84% They're supposed to have independent sources 00:33:10.350 --> 00:33:13.710 align:middle line:84% of information, meaning they can run their own codes. 00:33:13.710 --> 00:33:15.790 align:middle line:84% They have their own competency to figure out 00:33:15.790 --> 00:33:17.670 align:middle line:84% what the truth of the matter is, and they 00:33:17.670 --> 00:33:19.270 align:middle line:90% should have legal authority. 00:33:19.270 --> 00:33:22.830 align:middle line:84% These are the metrics for a good regulator. 00:33:22.830 --> 00:33:25.990 align:middle line:84% Unfortunately, not all of these hold 00:33:25.990 --> 00:33:32.110 align:middle line:84% true to the maximum extent for the NRC. 00:33:32.110 --> 00:33:36.910 align:middle line:84% So by its very mission, of course, the NRC 00:33:36.910 --> 00:33:39.250 align:middle line:84% will increase the cost of nuclear power. 00:33:39.250 --> 00:33:42.830 align:middle line:84% So for example, every nuclear power plant has-- 00:33:42.830 --> 00:33:46.790 align:middle line:84% large nuclear power plant has two inspectors assigned to it 00:33:46.790 --> 00:33:48.430 align:middle line:90% on a full-time basis. 00:33:48.430 --> 00:33:52.430 align:middle line:84% And for that privilege, the NRC invoices the power-- 00:33:52.430 --> 00:33:56.790 align:middle line:84% that reactor $4.5 million every year 00:33:56.790 --> 00:33:59.630 align:middle line:90% for their inspectorial services. 00:33:59.630 --> 00:34:02.550 align:middle line:84% If a reactor owner decides they need 00:34:02.550 --> 00:34:05.410 align:middle line:84% to make some change to their plant, 00:34:05.410 --> 00:34:08.510 align:middle line:84% they can submit a request to the NRC. 00:34:08.510 --> 00:34:14.550 align:middle line:84% And the NRC will happily review that request for $272 an hour. 00:34:14.550 --> 00:34:18.772 align:middle line:84% So you can see how it feels to the industry positively 00:34:18.772 --> 00:34:21.230 align:middle line:84% masochistic that these people are both telling you what you 00:34:21.230 --> 00:34:24.550 align:middle line:84% can and cannot do, and you have to pay them for the privilege. 00:34:24.550 --> 00:34:27.030 align:middle line:90% They don't like this. 00:34:27.030 --> 00:34:31.190 align:middle line:84% So does it make sense to charge-- for the NRC 00:34:31.190 --> 00:34:36.150 align:middle line:84% to charge the private industry for what is going on? 00:34:36.150 --> 00:34:39.510 align:middle line:84% Well, it's unfortunately written into the law. 00:34:39.510 --> 00:34:44.750 align:middle line:84% The law says that the NRC must recover 100% of its operating 00:34:44.750 --> 00:34:45.810 align:middle line:90% expenses-- 00:34:45.810 --> 00:34:48.346 align:middle line:90% 00:34:48.346 --> 00:34:50.429 align:middle line:84% yeah, of its operating expenses with the exception 00:34:50.429 --> 00:34:55.590 align:middle line:84% of a few exclusions from the industry through these fees. 00:34:55.590 --> 00:34:58.830 align:middle line:84% But in an attempt to prevent these fees 00:34:58.830 --> 00:35:02.910 align:middle line:84% from becoming a mechanism that causes them to just keep 00:35:02.910 --> 00:35:07.310 align:middle line:84% charging like lawyers do more than they should, 00:35:07.310 --> 00:35:08.948 align:middle line:84% they don't get the money directly. 00:35:08.948 --> 00:35:10.490 align:middle line:84% That money goes into the US Treasury, 00:35:10.490 --> 00:35:13.910 align:middle line:84% and then the Congress allocates the NRC's budget 00:35:13.910 --> 00:35:15.070 align:middle line:90% the following year. 00:35:15.070 --> 00:35:19.870 align:middle line:84% So in principle, that break is supposed to get, basically, 00:35:19.870 --> 00:35:21.470 align:middle line:90% the budget as they need. 00:35:21.470 --> 00:35:25.730 align:middle line:84% And the money just goes back into the Treasury. 00:35:25.730 --> 00:35:28.690 align:middle line:84% So it can't charge a little more and make a little more. 00:35:28.690 --> 00:35:32.830 align:middle line:84% In principle, they can't do that. 00:35:32.830 --> 00:35:39.130 align:middle line:84% Is there good otherwise philosophical idea for this? 00:35:39.130 --> 00:35:40.550 align:middle line:90% Well, yeah, there is actually. 00:35:40.550 --> 00:35:43.150 align:middle line:90% 00:35:43.150 --> 00:35:46.230 align:middle line:90% Safety is an externality. 00:35:46.230 --> 00:35:48.230 align:middle line:84% And the basic problem with externalities 00:35:48.230 --> 00:35:49.790 align:middle line:90% is that they are external. 00:35:49.790 --> 00:35:52.810 align:middle line:84% They're not incorporated into the cost. 00:35:52.810 --> 00:35:57.710 align:middle line:84% And if you make the industry pay for the process of making 00:35:57.710 --> 00:36:02.950 align:middle line:84% their reactors safe, you are internalizing that externality, 00:36:02.950 --> 00:36:06.230 align:middle line:84% which is fundamentally what you want to be doing. 00:36:06.230 --> 00:36:12.110 align:middle line:84% So arguably, this is the ideal, but you 00:36:12.110 --> 00:36:16.990 align:middle line:84% do have this issue of the conflict of interest 00:36:16.990 --> 00:36:19.010 align:middle line:84% that the budgetary thing is supposed to solve. 00:36:19.010 --> 00:36:21.090 align:middle line:84% But there's one more problem that emerges, 00:36:21.090 --> 00:36:24.310 align:middle line:84% and that is this fee-for-service attitude. 00:36:24.310 --> 00:36:30.790 align:middle line:84% So you now have this idea that the industry looks at the NRC 00:36:30.790 --> 00:36:33.510 align:middle line:84% partly as their adversaries, but partly 00:36:33.510 --> 00:36:38.310 align:middle line:84% as people who are working for them. 00:36:38.310 --> 00:36:41.570 align:middle line:84% Because look, we paid you to do this review. 00:36:41.570 --> 00:36:44.030 align:middle line:84% Do it the way we want you to do it. 00:36:44.030 --> 00:36:46.710 align:middle line:84% And the NRC says that's not our job. 00:36:46.710 --> 00:36:49.790 align:middle line:84% And they say, but you can see how it still 00:36:49.790 --> 00:36:53.310 align:middle line:84% changes the perception of the relationship 00:36:53.310 --> 00:36:56.610 align:middle line:90% because the NRC is paying-- 00:36:56.610 --> 00:36:58.550 align:middle line:90% sorry, the industry is paying. 00:36:58.550 --> 00:37:03.470 align:middle line:84% And that problem becomes worse if the NRC staff come out 00:37:03.470 --> 00:37:05.950 align:middle line:84% of industry, because now you have people 00:37:05.950 --> 00:37:08.870 align:middle line:84% with that mindset inside the NRC saying, 00:37:08.870 --> 00:37:10.310 align:middle line:84% oh, yeah, you're right-- well, we 00:37:10.310 --> 00:37:12.670 align:middle line:84% should do this in a favorable way. 00:37:12.670 --> 00:37:15.110 align:middle line:90% And you paid for it, after all. 00:37:15.110 --> 00:37:17.150 align:middle line:84% And that has happened, basically. 00:37:17.150 --> 00:37:23.130 align:middle line:84% A lot of the staff level people can be independent, 00:37:23.130 --> 00:37:25.390 align:middle line:84% but the commissioner's more and more so 00:37:25.390 --> 00:37:28.710 align:middle line:84% do seem to be ex industry people. 00:37:28.710 --> 00:37:30.910 align:middle line:84% Despite this, the NRC has really done 00:37:30.910 --> 00:37:34.350 align:middle line:90% a very good job over the years. 00:37:34.350 --> 00:37:37.470 align:middle line:84% American reactors are the most robustly operated reactors 00:37:37.470 --> 00:37:39.390 align:middle line:90% in the world. 00:37:39.390 --> 00:37:45.370 align:middle line:84% And the NRC approval process, by which new reactors are licensed 00:37:45.370 --> 00:37:47.550 align:middle line:84% is still considered the gold standard 00:37:47.550 --> 00:37:49.330 align:middle line:90% by all countries in the world. 00:37:49.330 --> 00:37:51.070 align:middle line:84% There are many countries who don't 00:37:51.070 --> 00:37:53.070 align:middle line:84% want to build a reactor unless the US 00:37:53.070 --> 00:37:54.650 align:middle line:90% NRC has approved that design. 00:37:54.650 --> 00:37:58.510 align:middle line:84% They don't really care what the French regulator says. 00:37:58.510 --> 00:38:01.390 align:middle line:84% US NRC approval is what they want. 00:38:01.390 --> 00:38:08.030 align:middle line:84% So it has issues, as usual, but it is also considered 00:38:08.030 --> 00:38:11.550 align:middle line:90% to be the best there is. 00:38:11.550 --> 00:38:14.230 align:middle line:84% And you know you're doing a good job when the other side is 00:38:14.230 --> 00:38:15.170 align:middle line:90% kind of pissed off. 00:38:15.170 --> 00:38:19.230 align:middle line:84% So here is a quote from the 1990s from the Nuclear Energy 00:38:19.230 --> 00:38:20.350 align:middle line:90% Institute. 00:38:20.350 --> 00:38:21.570 align:middle line:90% We talked about NEI before. 00:38:21.570 --> 00:38:23.870 align:middle line:84% They're the lobbying arm of the nuclear industry. 00:38:23.870 --> 00:38:27.870 align:middle line:84% And they said the NRC is "a serious threat to American 00:38:27.870 --> 00:38:30.620 align:middle line:84% nuclear energy resources by distracting plant managers, 00:38:30.620 --> 00:38:32.370 align:middle line:84% undermining public trust in nuclear power, 00:38:32.370 --> 00:38:35.070 align:middle line:84% and pricing nuclear power out of the competitive energy 00:38:35.070 --> 00:38:37.910 align:middle line:90% marketplace." 00:38:37.910 --> 00:38:41.990 align:middle line:84% They really love to blame the NRC for the fact 00:38:41.990 --> 00:38:43.710 align:middle line:90% that nuclear is expensive. 00:38:43.710 --> 00:38:49.190 align:middle line:84% And maybe it is the reason why nuclear is expensive. 00:38:49.190 --> 00:38:51.870 align:middle line:90% Does it matter? 00:38:51.870 --> 00:38:53.550 align:middle line:90% That's up to you. 00:38:53.550 --> 00:38:57.230 align:middle line:84% If the NRC is doing its job in a fair and efficient way, 00:38:57.230 --> 00:39:03.310 align:middle line:84% and these are the true social costs of making a reactor safe, 00:39:03.310 --> 00:39:07.030 align:middle line:84% then it's just internalizing the externality and it's fine. 00:39:07.030 --> 00:39:11.110 align:middle line:84% On the other hand, if it's not a fair process or not 00:39:11.110 --> 00:39:16.230 align:middle line:84% an efficient process, then yeah, it should be improved. 00:39:16.230 --> 00:39:19.150 align:middle line:84% So that has been the tension forever. 00:39:19.150 --> 00:39:21.270 align:middle line:84% And there's constant lobbying efforts 00:39:21.270 --> 00:39:25.575 align:middle line:84% to try to do things to change how the NRC does business. 00:39:25.575 --> 00:39:27.950 align:middle line:84% And they have had their effect, and we'll talk about some 00:39:27.950 --> 00:39:29.075 align:middle line:90% of them a little bit later. 00:39:29.075 --> 00:39:32.670 align:middle line:84% But most recently, there have been some pretty big changes 00:39:32.670 --> 00:39:34.490 align:middle line:84% brought on by the Trump administration. 00:39:34.490 --> 00:39:38.950 align:middle line:84% The NRC is supposed to be an independent agency. 00:39:38.950 --> 00:39:41.990 align:middle line:84% It is not supposed to be subject to political manipulations 00:39:41.990 --> 00:39:44.490 align:middle line:84% by who is elected into the White House. 00:39:44.490 --> 00:39:47.110 align:middle line:84% It's supposed to be a technical entity with technical experts 00:39:47.110 --> 00:39:50.110 align:middle line:90% making technical judgments. 00:39:50.110 --> 00:39:53.390 align:middle line:84% That began to change in July of this year 00:39:53.390 --> 00:39:59.590 align:middle line:84% when Trump first removed the NRC commissioner and replaced him-- 00:39:59.590 --> 00:40:03.350 align:middle line:84% Chris Hansen-- replaced him with someone who was more in line 00:40:03.350 --> 00:40:05.070 align:middle line:90% with the White House's views. 00:40:05.070 --> 00:40:11.990 align:middle line:84% And then another commissioner, Annie Caputo, resigned. 00:40:11.990 --> 00:40:14.390 align:middle line:84% And it's not like these commissioners 00:40:14.390 --> 00:40:16.710 align:middle line:90% were anti-nuclear people. 00:40:16.710 --> 00:40:21.830 align:middle line:84% So Hansen, the guy Trump fired, was endorsed 00:40:21.830 --> 00:40:24.670 align:middle line:90% by the NEI, the lobbying arm. 00:40:24.670 --> 00:40:26.730 align:middle line:84% And they publicly congratulated him. 00:40:26.730 --> 00:40:29.590 align:middle line:84% And he was all for reforms in the NRC and risk 00:40:29.590 --> 00:40:33.070 align:middle line:84% based licensing approaches, big advocate of advanced reactors 00:40:33.070 --> 00:40:38.630 align:middle line:84% and promoting those reactors, but it was not enough for Trump. 00:40:38.630 --> 00:40:41.710 align:middle line:84% After that, Trump then appointed a new NRC commissioner, 00:40:41.710 --> 00:40:44.990 align:middle line:90% a person named-- 00:40:44.990 --> 00:40:46.950 align:middle line:90% what was his name? 00:40:46.950 --> 00:40:48.470 align:middle line:90% I'm blanking on his name. 00:40:48.470 --> 00:40:50.270 align:middle line:84% He was the head of Regulatory Affairs 00:40:50.270 --> 00:40:52.870 align:middle line:84% for Southern Company, the company that runs the new Vogtle 00:40:52.870 --> 00:40:53.770 align:middle line:90% reactors. 00:40:53.770 --> 00:40:56.310 align:middle line:84% So basically took the person whose principal job 00:40:56.310 --> 00:41:00.710 align:middle line:84% was arguing with the regulator from the largest, 00:41:00.710 --> 00:41:04.590 align:middle line:84% from the newest nuclear utility, and put him on the commission. 00:41:04.590 --> 00:41:12.590 align:middle line:84% Then, Trump issued Executive Order 14300, 00:41:12.590 --> 00:41:16.390 align:middle line:84% and that mandates that the NRC not just be concerned 00:41:16.390 --> 00:41:19.110 align:middle line:84% with the technical health and safety 00:41:19.110 --> 00:41:22.190 align:middle line:84% of our nuclear infrastructure, but also consider 00:41:22.190 --> 00:41:25.470 align:middle line:84% the promotion of nuclear power, which 00:41:25.470 --> 00:41:29.110 align:middle line:84% was exactly what happened-- exactly why the AEC was 00:41:29.110 --> 00:41:32.490 align:middle line:84% dissolved in 1974, because this was a conflict of interest. 00:41:32.490 --> 00:41:35.670 align:middle line:84% And Trump is trying to create that conflict once again. 00:41:35.670 --> 00:41:40.830 align:middle line:84% He then directed the NRC to fire technical experts 00:41:40.830 --> 00:41:43.430 align:middle line:84% from the Advisory Committee on reactor safeguards, which 00:41:43.430 --> 00:41:45.630 align:middle line:84% are where you get all your material scientists, 00:41:45.630 --> 00:41:49.948 align:middle line:84% and neutronics experts, and so on to the statutory minimum. 00:41:49.948 --> 00:41:52.490 align:middle line:84% By law, there's a certain number of people they have to have, 00:41:52.490 --> 00:41:55.230 align:middle line:84% but he wanted it reduced to the minimum. 00:41:55.230 --> 00:41:58.310 align:middle line:84% And also they reduced the overall workforce 00:41:58.310 --> 00:42:00.910 align:middle line:90% of the NRC thanks to DOGE. 00:42:00.910 --> 00:42:04.750 align:middle line:84% So of course, this is a problem for the industry 00:42:04.750 --> 00:42:11.150 align:middle line:84% because they now need to get their licenses approved. 00:42:11.150 --> 00:42:14.050 align:middle line:84% But there's no one to do it, or fewer people to do it. 00:42:14.050 --> 00:42:18.390 align:middle line:84% And so why don't they oppose this? 00:42:18.390 --> 00:42:20.590 align:middle line:84% Because it's yet another provision. 00:42:20.590 --> 00:42:26.230 align:middle line:84% So the executive order caps the time 00:42:26.230 --> 00:42:30.870 align:middle line:84% that the NRC can spend reviewing to 18 months 00:42:30.870 --> 00:42:33.070 align:middle line:90% and also caps the fees. 00:42:33.070 --> 00:42:35.443 align:middle line:84% And you can say, well, maybe 18 months is enough time. 00:42:35.443 --> 00:42:36.610 align:middle line:90% Maybe it is, maybe it isn't. 00:42:36.610 --> 00:42:37.830 align:middle line:90% I don't really know. 00:42:37.830 --> 00:42:41.550 align:middle line:84% But basically, that ensures that you have smaller staff and less 00:42:41.550 --> 00:42:42.850 align:middle line:90% time to review things. 00:42:42.850 --> 00:42:44.910 align:middle line:84% And of course, that means those reviews are not 00:42:44.910 --> 00:42:49.750 align:middle line:84% going to be as independent and complete as they used to be. 00:42:49.750 --> 00:42:51.710 align:middle line:84% So the NRC in the United States is no longer 00:42:51.710 --> 00:42:52.730 align:middle line:90% an independent body. 00:42:52.730 --> 00:42:55.990 align:middle line:84% It is now operating according to the dictates of the White House. 00:42:55.990 --> 00:42:57.970 align:middle line:84% And given these capped timelines, 00:42:57.970 --> 00:43:00.830 align:middle line:84% the NRC is going to have to increasingly just take 00:43:00.830 --> 00:43:03.030 align:middle line:84% the things that the industry gives them 00:43:03.030 --> 00:43:05.070 align:middle line:90% and trust them on faith. 00:43:05.070 --> 00:43:08.710 align:middle line:90% And that is a problem. 00:43:08.710 --> 00:43:11.710 align:middle line:90% But this is not new. 00:43:11.710 --> 00:43:14.510 align:middle line:84% These kinds of changes, manipulations 00:43:14.510 --> 00:43:16.830 align:middle line:84% have been happening maybe less dramatically 00:43:16.830 --> 00:43:19.110 align:middle line:84% than the executive order, but they 00:43:19.110 --> 00:43:21.870 align:middle line:84% have been happening for the last 40 years. 00:43:21.870 --> 00:43:24.070 align:middle line:84% So the reactor licensing process is probably 00:43:24.070 --> 00:43:30.070 align:middle line:84% the place where these changes have been most dramatic. 00:43:30.070 --> 00:43:34.470 align:middle line:84% So let me just tell you a little bit about some of these changes. 00:43:34.470 --> 00:43:39.350 align:middle line:84% Originally, nuclear power plants were licensed in a two-part 00:43:39.350 --> 00:43:43.830 align:middle line:84% process, which we call part 50, which refers to the part 00:43:43.830 --> 00:43:47.190 align:middle line:90% of the federal-- 00:43:47.190 --> 00:43:50.067 align:middle line:90% what's the word-- 00:43:50.067 --> 00:43:51.150 align:middle line:90% STUDENT: CoTa regulations. 00:43:51.150 --> 00:43:52.330 align:middle line:84% LECTURER: CoTa federal regulations. 00:43:52.330 --> 00:43:52.830 align:middle line:90% Thank you. 00:43:52.830 --> 00:43:55.470 align:middle line:84% Their part of the CoTa Federal Regulations. 00:43:55.470 --> 00:43:59.350 align:middle line:84% And part 50-- first, the utility would submit an application 00:43:59.350 --> 00:44:01.270 align:middle line:90% for the construction of a plant. 00:44:01.270 --> 00:44:04.110 align:middle line:84% And if it was approved, it could then build the plant. 00:44:04.110 --> 00:44:06.160 align:middle line:84% And it actually had a lot of flexibility 00:44:06.160 --> 00:44:07.880 align:middle line:90% in how it built the plant. 00:44:07.880 --> 00:44:10.600 align:middle line:84% And then once the plant was nearing completion, 00:44:10.600 --> 00:44:12.920 align:middle line:84% that company would apply for a second license 00:44:12.920 --> 00:44:14.600 align:middle line:90% to operate the plant. 00:44:14.600 --> 00:44:17.600 align:middle line:84% And they would review the plant build. 00:44:17.600 --> 00:44:19.880 align:middle line:84% And then if it passed safety inspection, 00:44:19.880 --> 00:44:22.480 align:middle line:84% they would begin power uprates, and testing, 00:44:22.480 --> 00:44:24.860 align:middle line:84% and proceed all the way to full operation. 00:44:24.860 --> 00:44:27.120 align:middle line:90% It was a 2-step process. 00:44:27.120 --> 00:44:30.320 align:middle line:84% It seems like a very perfectly reasonable way to proceed, 00:44:30.320 --> 00:44:32.920 align:middle line:84% but it had something that the industry turned out not to 00:44:32.920 --> 00:44:35.600 align:middle line:84% and that is it left something to chance. 00:44:35.600 --> 00:44:41.360 align:middle line:84% So you see, after the Three Mile Island accident in Pennsylvania, 00:44:41.360 --> 00:44:45.520 align:middle line:84% the NRC determined that many of the plants that were then 00:44:45.520 --> 00:44:48.640 align:middle line:84% being constructed had inadequate safety. 00:44:48.640 --> 00:44:51.880 align:middle line:84% And so they changed the rules while these plants 00:44:51.880 --> 00:44:53.280 align:middle line:90% were being built. 00:44:53.280 --> 00:44:56.460 align:middle line:84% And that caused cost overruns and delays, 00:44:56.460 --> 00:44:59.160 align:middle line:90% and nobody liked that. 00:44:59.160 --> 00:45:02.240 align:middle line:84% So this was an issue because now this 00:45:02.240 --> 00:45:05.560 align:middle line:84% presented significant financial risk to the investors. 00:45:05.560 --> 00:45:09.240 align:middle line:84% You go get a bank to invest in your plant, 00:45:09.240 --> 00:45:11.720 align:middle line:84% and you can't promise them that this plant is going 00:45:11.720 --> 00:45:13.983 align:middle line:90% to go online and make money. 00:45:13.983 --> 00:45:15.400 align:middle line:84% So now, they're like, oh, well, we 00:45:15.400 --> 00:45:18.680 align:middle line:84% have to charge you more interest because you can't guarantee us 00:45:18.680 --> 00:45:21.840 align:middle line:84% that you're going to be able to finish this plant for the price 00:45:21.840 --> 00:45:23.640 align:middle line:90% that you say you are. 00:45:23.640 --> 00:45:26.560 align:middle line:90% And so this was a big problem. 00:45:26.560 --> 00:45:31.400 align:middle line:84% And so this began a long process to limit the NRC's ability 00:45:31.400 --> 00:45:33.060 align:middle line:90% to demand changes. 00:45:33.060 --> 00:45:36.200 align:middle line:90% And here's how it happened. 00:45:36.200 --> 00:45:39.120 align:middle line:84% So after Three Mile Island, the NRC-- 00:45:39.120 --> 00:45:41.475 align:middle line:84% I'll quote an internal document here-- 00:45:41.475 --> 00:45:43.600 align:middle line:84% said that the process, quote, "vividly demonstrated 00:45:43.600 --> 00:45:46.360 align:middle line:84% the deficiencies in existing procedures for coping with 00:45:46.360 --> 00:45:51.040 align:middle line:90% an offsite nuclear emergency." 00:45:51.040 --> 00:45:53.865 align:middle line:84% There was confusion and uncertainty among the decision 00:45:53.865 --> 00:45:55.240 align:middle line:84% makers and local authorities, who 00:45:55.240 --> 00:45:57.840 align:middle line:84% were trying to cope with the prospect of a radiation release 00:45:57.840 --> 00:45:58.840 align:middle line:90% from the plant. 00:45:58.840 --> 00:46:01.340 align:middle line:84% That was the principal kind of issue, 00:46:01.340 --> 00:46:03.460 align:middle line:84% if there will be a radiation release, 00:46:03.460 --> 00:46:05.680 align:middle line:84% how do you deal with this problem? 00:46:05.680 --> 00:46:07.860 align:middle line:84% If you don't deal with it in a timely manner, 00:46:07.860 --> 00:46:11.140 align:middle line:84% people will begin to inhale radiation, 00:46:11.140 --> 00:46:13.440 align:middle line:90% so you need to have a good plan. 00:46:13.440 --> 00:46:16.440 align:middle line:84% So Congress requested that the NRC work 00:46:16.440 --> 00:46:19.060 align:middle line:84% to improve this emergency planning process. 00:46:19.060 --> 00:46:22.280 align:middle line:84% And in response, NRC required evacuation plans 00:46:22.280 --> 00:46:26.360 align:middle line:84% for the population within a 10-mile radius of every plant 00:46:26.360 --> 00:46:28.340 align:middle line:84% before granting an operating license, 00:46:28.340 --> 00:46:31.000 align:middle line:84% which sounds like a sensible move. 00:46:31.000 --> 00:46:34.240 align:middle line:84% And they also required that there be plans going out 00:46:34.240 --> 00:46:37.920 align:middle line:84% to 50 Miles for evaluating the effect of fallout 00:46:37.920 --> 00:46:41.440 align:middle line:84% on food production in those areas. 00:46:41.440 --> 00:46:45.180 align:middle line:84% So this is what it would look like in Pennsylvania, 00:46:45.180 --> 00:46:47.600 align:middle line:84% where Three Mile Island accident. 00:46:47.600 --> 00:46:51.080 align:middle line:84% The red zones are the evacuation zones, 00:46:51.080 --> 00:46:57.520 align:middle line:84% and the blue zones are the larger 50 mile 00:46:57.520 --> 00:47:00.880 align:middle line:84% zones for dealing with food ingestion and so on. 00:47:00.880 --> 00:47:03.480 align:middle line:84% And you can see it covers roughly like a third 00:47:03.480 --> 00:47:04.820 align:middle line:90% of the state of Pennsylvania. 00:47:04.820 --> 00:47:08.280 align:middle line:84% It covers 90% of the state of New Jersey. 00:47:08.280 --> 00:47:12.960 align:middle line:84% And so you need to have a lot of local government officials 00:47:12.960 --> 00:47:18.600 align:middle line:84% and a lot of assessment going on to actually do this. 00:47:18.600 --> 00:47:21.760 align:middle line:84% The problem was that the NRC nor-- 00:47:21.760 --> 00:47:25.040 align:middle line:84% neither the NRC nor any private utility 00:47:25.040 --> 00:47:29.840 align:middle line:84% had the power to compel any state or local government to do 00:47:29.840 --> 00:47:33.360 align:middle line:84% the things it wanted to do in an emergency. 00:47:33.360 --> 00:47:36.280 align:middle line:84% The 10th Amendment basically says that these-- 00:47:36.280 --> 00:47:39.160 align:middle line:84% unless it's in the Constitution, these rights are reserved 00:47:39.160 --> 00:47:42.280 align:middle line:90% for states and the individuals. 00:47:42.280 --> 00:47:47.720 align:middle line:84% And so this, in effect, gave tremendous power 00:47:47.720 --> 00:47:52.520 align:middle line:84% to the local municipalities around the plant, 00:47:52.520 --> 00:47:59.080 align:middle line:84% who had to agree on how these evacuations were going to occur. 00:47:59.080 --> 00:48:01.960 align:middle line:90% And so you had this problem. 00:48:01.960 --> 00:48:03.420 align:middle line:90% This is the problem of Shoreham. 00:48:03.420 --> 00:48:05.640 align:middle line:90% This is Long Island, New York. 00:48:05.640 --> 00:48:09.560 align:middle line:84% This is where the Shoreham plant was. 00:48:09.560 --> 00:48:12.200 align:middle line:84% And it was finished in 1983, a few years 00:48:12.200 --> 00:48:14.160 align:middle line:84% after the Three Mile Island accident. 00:48:14.160 --> 00:48:17.118 align:middle line:84% And there had been strong public opposition. 00:48:17.118 --> 00:48:19.160 align:middle line:84% And the Suffolk County government determined that 00:48:19.160 --> 00:48:22.080 align:middle line:84% the population of the red circle cannot be realistically 00:48:22.080 --> 00:48:24.680 align:middle line:84% evacuated if there was a major accident. 00:48:24.680 --> 00:48:29.120 align:middle line:84% Now, I'm not sure if that is true or not true. 00:48:29.120 --> 00:48:33.040 align:middle line:84% It's a relatively unpopulated corner of Long Island. 00:48:33.040 --> 00:48:35.420 align:middle line:84% It's true that there were atypical hazards. 00:48:35.420 --> 00:48:37.920 align:middle line:84% There was a particular hurricane risk hazard. 00:48:37.920 --> 00:48:41.560 align:middle line:84% It was in the flight paths of two commercial airports. 00:48:41.560 --> 00:48:45.260 align:middle line:84% There was also five miles away a Naval weapons testing facility, 00:48:45.260 --> 00:48:47.600 align:middle line:84% and they continuously had military aircraft flying 00:48:47.600 --> 00:48:50.480 align:middle line:90% around running test drills. 00:48:50.480 --> 00:48:53.000 align:middle line:84% And because it was on the edge of the island 00:48:53.000 --> 00:48:56.360 align:middle line:84% where there's a lot of weather, there was a lot of power outages 00:48:56.360 --> 00:48:57.120 align:middle line:90% there. 00:48:57.120 --> 00:48:59.137 align:middle line:84% In fact, during Hurricane Sandy, they 00:48:59.137 --> 00:49:01.720 align:middle line:84% lost power for two weeks, which would have been a real problem 00:49:01.720 --> 00:49:03.260 align:middle line:90% if there were a nuclear plant. 00:49:03.260 --> 00:49:06.200 align:middle line:84% So there were a lot of reasons not to put a nuclear plant 00:49:06.200 --> 00:49:08.280 align:middle line:84% there, but I have no idea if the evacuation 00:49:08.280 --> 00:49:11.240 align:middle line:90% story is the whole story. 00:49:11.240 --> 00:49:13.480 align:middle line:84% So they couldn't get an emergency planning agreement 00:49:13.480 --> 00:49:15.380 align:middle line:84% with the Suffolk County government. 00:49:15.380 --> 00:49:17.680 align:middle line:90% And as a result, the Shoreham-- 00:49:17.680 --> 00:49:21.080 align:middle line:84% as a result of standoff, the NRC actually 00:49:21.080 --> 00:49:22.640 align:middle line:90% changed the rules for them. 00:49:22.640 --> 00:49:25.560 align:middle line:90% They passed something in 1988. 00:49:25.560 --> 00:49:27.640 align:middle line:84% The plant was finished in '83 and just sitting 00:49:27.640 --> 00:49:29.520 align:middle line:90% there waiting for his license. 00:49:29.520 --> 00:49:32.360 align:middle line:84% So in 1988, they passed something called the Realism 00:49:32.360 --> 00:49:33.020 align:middle line:90% Rule. 00:49:33.020 --> 00:49:36.740 align:middle line:84% The Realism Rule said, OK, they don't have to agree. 00:49:36.740 --> 00:49:39.640 align:middle line:84% We'll assume that if there is an accident 00:49:39.640 --> 00:49:41.840 align:middle line:90% that they will cooperate. 00:49:41.840 --> 00:49:45.160 align:middle line:90% And that seems realistic. 00:49:45.160 --> 00:49:48.600 align:middle line:84% But it also meant that you could now 00:49:48.600 --> 00:49:53.560 align:middle line:84% write emergency plans for which the government had no capacity 00:49:53.560 --> 00:49:56.680 align:middle line:84% to execute, no review of whether that plan was 00:49:56.680 --> 00:49:57.740 align:middle line:90% a realistic plan at all. 00:49:57.740 --> 00:50:00.280 align:middle line:84% You just say whatever you want because they didn't actually 00:50:00.280 --> 00:50:01.960 align:middle line:90% have to sign off on it. 00:50:01.960 --> 00:50:07.000 align:middle line:84% And so it made the problem worse in a different way. 00:50:07.000 --> 00:50:09.760 align:middle line:84% The NRC proceeded to issue a license 00:50:09.760 --> 00:50:13.200 align:middle line:84% to operate at 25% power on that basis. 00:50:13.200 --> 00:50:16.300 align:middle line:84% But by the time all of this occurred, it was too late. 00:50:16.300 --> 00:50:18.880 align:middle line:84% The utility was basically filing for bankruptcy. 00:50:18.880 --> 00:50:21.680 align:middle line:84% It had been 15 years since the plant had received 00:50:21.680 --> 00:50:22.860 align:middle line:90% its construction permit. 00:50:22.860 --> 00:50:26.400 align:middle line:84% Costs had skyrocketed to 100 times 00:50:26.400 --> 00:50:29.572 align:middle line:84% the original predicted price for this plant, 00:50:29.572 --> 00:50:31.280 align:middle line:84% and they just decided to cut their losses 00:50:31.280 --> 00:50:33.760 align:middle line:84% and sell the plant to the state of New York, 00:50:33.760 --> 00:50:35.560 align:middle line:90% and plant was never opened. 00:50:35.560 --> 00:50:38.080 align:middle line:84% So the industry said, you know what? 00:50:38.080 --> 00:50:40.360 align:middle line:84% Never again is this going to happen. 00:50:40.360 --> 00:50:44.880 align:middle line:84% So what they decided to do was to eliminate this operating 00:50:44.880 --> 00:50:47.840 align:middle line:84% license that could prevent them from starting 00:50:47.840 --> 00:50:51.720 align:middle line:84% their plant by doing something called the combined operating 00:50:51.720 --> 00:50:55.140 align:middle line:84% license, which is part 52 of the regulations. 00:50:55.140 --> 00:50:57.600 align:middle line:84% And what that does is basically say, 00:50:57.600 --> 00:51:01.600 align:middle line:84% you apply for a license to build the plant 00:51:01.600 --> 00:51:05.480 align:middle line:84% and operate the plant at the beginning. 00:51:05.480 --> 00:51:07.420 align:middle line:84% And once that license is granted, 00:51:07.420 --> 00:51:09.300 align:middle line:84% you're guaranteed the right to operate it 00:51:09.300 --> 00:51:12.200 align:middle line:84% as long as you build what you say you're going to build. 00:51:12.200 --> 00:51:14.600 align:middle line:90% And that's the key thing. 00:51:14.600 --> 00:51:16.960 align:middle line:84% It has to be functionally equivalent. 00:51:16.960 --> 00:51:20.520 align:middle line:84% So the key benefit is once this COL, as we call it-- 00:51:20.520 --> 00:51:24.840 align:middle line:84% Combined Operating License-- is issued, it can't be withdrawn. 00:51:24.840 --> 00:51:26.960 align:middle line:84% It can't be modified if the NRC decides 00:51:26.960 --> 00:51:28.820 align:middle line:90% to change the safety standards. 00:51:28.820 --> 00:51:31.480 align:middle line:84% And that was a key objective of industry. 00:51:31.480 --> 00:51:34.200 align:middle line:84% And more importantly, it all happens 00:51:34.200 --> 00:51:37.660 align:middle line:84% when there's just a green field before anything happens. 00:51:37.660 --> 00:51:40.353 align:middle line:84% Once you start building the cooling towers 00:51:40.353 --> 00:51:42.020 align:middle line:84% and people in the neighborhood are like, 00:51:42.020 --> 00:51:43.700 align:middle line:84% oh, there's a nuclear plant going up there, 00:51:43.700 --> 00:51:45.060 align:middle line:84% and they might have public opposition. 00:51:45.060 --> 00:51:45.768 align:middle line:90% Well, guess what? 00:51:45.768 --> 00:51:46.560 align:middle line:90% Too late. 00:51:46.560 --> 00:51:48.810 align:middle line:84% You should have gone to the hearing when that was just 00:51:48.810 --> 00:51:49.680 align:middle line:90% a green field. 00:51:49.680 --> 00:51:52.680 align:middle line:84% And so that was a way to disenfranchise 00:51:52.680 --> 00:51:55.360 align:middle line:84% local voices, which of course, the industry really 00:51:55.360 --> 00:51:57.560 align:middle line:84% liked because it meant that you were not going 00:51:57.560 --> 00:52:00.720 align:middle line:90% to have public opposition. 00:52:00.720 --> 00:52:03.880 align:middle line:84% So they implemented this rule, and then it 00:52:03.880 --> 00:52:07.840 align:middle line:84% went untested because no one ordered any new plants 00:52:07.840 --> 00:52:09.520 align:middle line:90% for 16 years. 00:52:09.520 --> 00:52:14.460 align:middle line:84% And finally, after the nuclear renaissance in 2005, 00:52:14.460 --> 00:52:15.060 align:middle line:90% that changed. 00:52:15.060 --> 00:52:17.360 align:middle line:84% We had federal loan guarantee program, 00:52:17.360 --> 00:52:21.320 align:middle line:84% and we had a bunch of new plants signing up 00:52:21.320 --> 00:52:23.920 align:middle line:84% to-- a bunch of utilities signing up to build new plants. 00:52:23.920 --> 00:52:26.520 align:middle line:84% And we saw that with the building 00:52:26.520 --> 00:52:31.720 align:middle line:84% of the virtual summer generating station-- two AP1000S, just 00:52:31.720 --> 00:52:36.320 align:middle line:84% like Vogtle, but in South Carolina, not in Georgia. 00:52:36.320 --> 00:52:40.680 align:middle line:84% They filed for their COL in 2008, was issued in 2012. 00:52:40.680 --> 00:52:42.880 align:middle line:84% And the problem was that in the first five 00:52:42.880 --> 00:52:45.320 align:middle line:84% years of construction, as they were starting 00:52:45.320 --> 00:52:48.920 align:middle line:84% to build this plant, they kept discovering that they needed 00:52:48.920 --> 00:52:54.000 align:middle line:84% to make little changes, which meant they weren't building 00:52:54.000 --> 00:52:57.303 align:middle line:84% exactly the plant that they said they were going to build, 00:52:57.303 --> 00:52:58.720 align:middle line:84% which meant every time they wanted 00:52:58.720 --> 00:53:00.920 align:middle line:84% to move the road over here because it turns out 00:53:00.920 --> 00:53:03.960 align:middle line:84% the soil isn't strong enough, and that meant they had to move 00:53:03.960 --> 00:53:07.280 align:middle line:84% this other thing, every one of these required 00:53:07.280 --> 00:53:09.220 align:middle line:90% a modification to the license. 00:53:09.220 --> 00:53:11.640 align:middle line:84% And of course, that had to go back to the NRC. 00:53:11.640 --> 00:53:17.420 align:middle line:84% And it was reviewed at $272 an hour and so on and so forth. 00:53:17.420 --> 00:53:22.640 align:middle line:84% And so between 2012 and 2017, 75 license amendments 00:53:22.640 --> 00:53:26.520 align:middle line:84% were made which, of course, slowed everything way down. 00:53:26.520 --> 00:53:29.220 align:middle line:84% They're paying the interest on the loan during construction. 00:53:29.220 --> 00:53:31.940 align:middle line:84% This is pushing up the budget, right. 00:53:31.940 --> 00:53:33.600 align:middle line:90% This is causing problems. 00:53:33.600 --> 00:53:38.440 align:middle line:84% And so needless to say, costs skyrocketed out of control. 00:53:38.440 --> 00:53:43.120 align:middle line:84% And after spending $9 billion starting the construction 00:53:43.120 --> 00:53:45.480 align:middle line:84% of a nuclear plant, which should have been more 00:53:45.480 --> 00:53:49.265 align:middle line:84% than the total cost of the plant when they originally predicted, 00:53:49.265 --> 00:53:50.640 align:middle line:84% they decided it was still cheaper 00:53:50.640 --> 00:53:53.120 align:middle line:84% to just give up and walk away than to spend 00:53:53.120 --> 00:53:54.880 align:middle line:90% the rest of the money. 00:53:54.880 --> 00:53:56.520 align:middle line:84% And that's because of all the costs 00:53:56.520 --> 00:54:01.960 align:middle line:84% associated with these license changes and delays. 00:54:01.960 --> 00:54:05.938 align:middle line:84% And so the industry blamed many things, but most of all, 00:54:05.938 --> 00:54:06.980 align:middle line:90% they blame the regulator. 00:54:06.980 --> 00:54:09.000 align:middle line:84% They said the COL is problematic. 00:54:09.000 --> 00:54:11.860 align:middle line:84% It's like, well, this is what you wanted. 00:54:11.860 --> 00:54:15.640 align:middle line:90% 00:54:15.640 --> 00:54:17.660 align:middle line:84% They now say it's not flexible enough, 00:54:17.660 --> 00:54:22.020 align:middle line:90% and they want further changes. 00:54:22.020 --> 00:54:26.160 align:middle line:84% One of the current things that is being proposed is that 00:54:26.160 --> 00:54:30.760 align:middle line:84% instead of having a 10-mile evacuation zone and a 50-mile 00:54:30.760 --> 00:54:38.960 align:middle line:84% emergency planning zone region, they now say that the emergency 00:54:38.960 --> 00:54:43.440 align:middle line:84% planning zone should be shrunk to the fence line of the plant, 00:54:43.440 --> 00:54:48.080 align:middle line:84% and that anything beyond doesn't apply. 00:54:48.080 --> 00:54:57.960 align:middle line:84% The NRC was fairly resistant to that for a long time, 00:54:57.960 --> 00:55:02.480 align:middle line:84% but this idea seems to have taken root. 00:55:02.480 --> 00:55:06.280 align:middle line:90% And so how is this possible? 00:55:06.280 --> 00:55:08.460 align:middle line:84% Do they really think if there's a radiation release, 00:55:08.460 --> 00:55:11.400 align:middle line:84% it's not going to cross the fence of the plant? 00:55:11.400 --> 00:55:15.400 align:middle line:84% And the answer is no, they don't think that. 00:55:15.400 --> 00:55:18.280 align:middle line:84% They're using the magic of statistics. 00:55:18.280 --> 00:55:20.760 align:middle line:84% They say that these plants are so 00:55:20.760 --> 00:55:26.520 align:middle line:84% safe that the in expectation value, the probability 00:55:26.520 --> 00:55:30.680 align:middle line:84% of irradiation release going beyond the fence line is small. 00:55:30.680 --> 00:55:33.340 align:middle line:84% Now, if there is a release, it will go beyond the fence line. 00:55:33.340 --> 00:55:34.300 align:middle line:90% Not a question. 00:55:34.300 --> 00:55:37.160 align:middle line:84% But because we get to multiply by very low probability 00:55:37.160 --> 00:55:42.840 align:middle line:84% of that safety event happening, then in expectation value, 00:55:42.840 --> 00:55:45.320 align:middle line:90% this plant is super safe. 00:55:45.320 --> 00:55:48.040 align:middle line:84% And the real beauty of this is that we 00:55:48.040 --> 00:55:51.880 align:middle line:84% don't have to deal with any of these public entities, 00:55:51.880 --> 00:55:55.640 align:middle line:84% and therefore, we can just do whatever we want. 00:55:55.640 --> 00:55:59.560 align:middle line:84% Now, this gets us into the question of probabilistic risk 00:55:59.560 --> 00:56:03.480 align:middle line:84% assessment, which is how these calculations are done. 00:56:03.480 --> 00:56:07.800 align:middle line:84% So historically, the way safety was 00:56:07.800 --> 00:56:13.000 align:middle line:84% done in the United States was that we were humble. 00:56:13.000 --> 00:56:16.080 align:middle line:84% We knew we didn't have all the answers. 00:56:16.080 --> 00:56:19.300 align:middle line:84% And so what we had is this idea, which we still teach, 00:56:19.300 --> 00:56:21.960 align:middle line:90% called defense in depth. 00:56:21.960 --> 00:56:24.168 align:middle line:84% Defense in depth is like, this should be safe enough, 00:56:24.168 --> 00:56:26.752 align:middle line:84% but just in case, we're going to have some totally independent 00:56:26.752 --> 00:56:28.100 align:middle line:90% way of also keeping you safe. 00:56:28.100 --> 00:56:29.517 align:middle line:84% And just in case that fails, we'll 00:56:29.517 --> 00:56:31.820 align:middle line:84% have a third independent way of keeping people safe. 00:56:31.820 --> 00:56:34.440 align:middle line:84% And then hopefully these things don't interact. 00:56:34.440 --> 00:56:37.520 align:middle line:84% And that accommodates for the fact that it's impossible for us 00:56:37.520 --> 00:56:39.800 align:middle line:84% to predict everything that will happen. 00:56:39.800 --> 00:56:42.840 align:middle line:84% That's the idea of defense in depth. 00:56:42.840 --> 00:56:46.280 align:middle line:84% And that idea is being slowly dismantled and replaced 00:56:46.280 --> 00:56:50.210 align:middle line:84% with something called the risk-informed approach, which 00:56:50.210 --> 00:56:54.550 align:middle line:84% sounds great because who is opposed to being risk-informed? 00:56:54.550 --> 00:56:57.130 align:middle line:84% I don't want the risk-uninformed approach. 00:56:57.130 --> 00:57:00.730 align:middle line:84% But this is what's really going on is that we are getting rid 00:57:00.730 --> 00:57:05.330 align:middle line:84% of redundancy that is there because of model uncertainty. 00:57:05.330 --> 00:57:09.230 align:middle line:84% So PRA is the mechanism by which this happens, 00:57:09.230 --> 00:57:12.290 align:middle line:84% which stands for Probabilistic Risk Assessment. 00:57:12.290 --> 00:57:15.440 align:middle line:84% And maybe I can tell you a little bit about what you do. 00:57:15.440 --> 00:57:17.690 align:middle line:84% Instead of having all these safety layers, what you do 00:57:17.690 --> 00:57:20.230 align:middle line:84% is you have this big model of how the reactor operates. 00:57:20.230 --> 00:57:21.990 align:middle line:84% You have what we call fault trees. 00:57:21.990 --> 00:57:24.290 align:middle line:84% And you assign probabilities to all kinds 00:57:24.290 --> 00:57:25.890 align:middle line:90% of events that might happen. 00:57:25.890 --> 00:57:28.907 align:middle line:84% And then you multiply a bunch of small numbers less than 1, 00:57:28.907 --> 00:57:30.990 align:middle line:84% and you get a very, very, very small number, much, 00:57:30.990 --> 00:57:32.210 align:middle line:90% much less than 1. 00:57:32.210 --> 00:57:36.027 align:middle line:90% And that's basically the idea. 00:57:36.027 --> 00:57:37.110 align:middle line:90% Where does this come from? 00:57:37.110 --> 00:57:40.690 align:middle line:90% It came from MIT. 00:57:40.690 --> 00:57:46.490 align:middle line:84% In 1975, after some safety incidents, 00:57:46.490 --> 00:57:48.250 align:middle line:84% there was a lot of public concern 00:57:48.250 --> 00:57:50.770 align:middle line:84% that nuclear reactors might not be safe enough. 00:57:50.770 --> 00:57:54.850 align:middle line:84% And George Rasmussen, who was a professor here, 00:57:54.850 --> 00:57:58.330 align:middle line:84% did this study where he built a model 00:57:58.330 --> 00:58:03.675 align:middle line:84% of the safety of a nuclear power plant, which was called WASH-- 00:58:03.675 --> 00:58:05.050 align:middle line:84% the name of the report was called 00:58:05.050 --> 00:58:12.090 align:middle line:84% WASH-1400, which was how report titles were given by the AEC 00:58:12.090 --> 00:58:13.290 align:middle line:90% at the time. 00:58:13.290 --> 00:58:17.250 align:middle line:84% And it reported that the probability of a core 00:58:17.250 --> 00:58:19.450 align:middle line:90% damage event-- 00:58:19.450 --> 00:58:27.490 align:middle line:84% this is like the fuel melting was once every 20,000 years per 00:58:27.490 --> 00:58:29.210 align:middle line:90% reactor. 00:58:29.210 --> 00:58:35.370 align:middle line:84% And you can think to yourself as engineers, the more experience 00:58:35.370 --> 00:58:37.330 align:middle line:84% you'll have, the more maybe this number 00:58:37.330 --> 00:58:39.650 align:middle line:84% will sound just a little crazy to you-- 00:58:39.650 --> 00:58:42.930 align:middle line:84% that everything will just continually operate, 00:58:42.930 --> 00:58:47.890 align:middle line:84% and statistically, it will fail only once every 20,000 years. 00:58:47.890 --> 00:58:50.562 align:middle line:84% After the report was issued, it was roundly criticized. 00:58:50.562 --> 00:58:52.770 align:middle line:84% Berkeley nuclear engineering department took it apart 00:58:52.770 --> 00:58:54.170 align:middle line:90% and said this is-- 00:58:54.170 --> 00:58:56.952 align:middle line:90% they called it inscrutable. 00:58:56.952 --> 00:58:59.410 align:middle line:84% The problem with this is that you have all of these numbers 00:58:59.410 --> 00:59:01.610 align:middle line:84% that you have to multiply together. 00:59:01.610 --> 00:59:05.930 align:middle line:84% And we didn't have data for the real probabilities 00:59:05.930 --> 00:59:07.300 align:middle line:90% of all of these things. 00:59:07.300 --> 00:59:09.550 align:middle line:84% So most of this stuff was just pulled out of thin air, 00:59:09.550 --> 00:59:12.930 align:middle line:84% and it was a garbage in, garbage out kind of phenomenon. 00:59:12.930 --> 00:59:16.970 align:middle line:84% But it was very appealing to the industry 00:59:16.970 --> 00:59:19.110 align:middle line:84% because now you could have this quantitative thing. 00:59:19.110 --> 00:59:22.770 align:middle line:84% We all like math, and it provided proof 00:59:22.770 --> 00:59:24.270 align:middle line:90% that reactors were safe. 00:59:24.270 --> 00:59:28.450 align:middle line:90% And who could resist that? 00:59:28.450 --> 00:59:30.290 align:middle line:90% The NRC was not convinced. 00:59:30.290 --> 00:59:33.890 align:middle line:84% They're like, you guys are crazy. 00:59:33.890 --> 00:59:36.690 align:middle line:90% But during the 1980s-- 00:59:36.690 --> 00:59:37.790 align:middle line:90% and they didn't adopt it. 00:59:37.790 --> 00:59:43.050 align:middle line:84% But then in 1980s, the defense in depth approach was discovered 00:59:43.050 --> 00:59:44.730 align:middle line:90% to have a problem. 00:59:44.730 --> 00:59:46.130 align:middle line:84% The defense in depth is perfectly 00:59:46.130 --> 00:59:49.370 align:middle line:84% fine for when you want to talk about designing a new reactor, 00:59:49.370 --> 00:59:52.170 align:middle line:84% but how do you make changes to reactor? 00:59:52.170 --> 00:59:54.930 align:middle line:84% How do I decide whether a particular change 00:59:54.930 --> 00:59:57.310 align:middle line:84% is worth it, if I should make this change or that change? 00:59:57.310 --> 01:00:00.130 align:middle line:84% If I have two changes, how do I make these trade-offs? 01:00:00.130 --> 01:00:03.130 align:middle line:84% The defense in depth approach doesn't give me any framework 01:00:03.130 --> 01:00:06.130 align:middle line:90% for that kind of thinking. 01:00:06.130 --> 01:00:09.970 align:middle line:84% And so PRA's presented itself as a way 01:00:09.970 --> 01:00:14.650 align:middle line:84% of making these small changes in evaluating what 01:00:14.650 --> 01:00:16.490 align:middle line:90% was the right way to do things. 01:00:16.490 --> 01:00:20.210 align:middle line:84% And in fact, it worked pretty well. 01:00:20.210 --> 01:00:24.090 align:middle line:84% So you a lot of changes that came about because of PRA 01:00:24.090 --> 01:00:26.450 align:middle line:84% assessments have actually improved 01:00:26.450 --> 01:00:31.890 align:middle line:84% the operational reliability of these plants. 01:00:31.890 --> 01:00:36.750 align:middle line:84% And so the US plants have some of the highest capacity factors, 01:00:36.750 --> 01:00:39.530 align:middle line:84% in part, because of changes that we've 01:00:39.530 --> 01:00:43.050 align:middle line:84% made to operating behavior revealed 01:00:43.050 --> 01:00:45.650 align:middle line:90% by PRA-type assessments. 01:00:45.650 --> 01:00:49.570 align:middle line:90% So it's not that PRA is useless. 01:00:49.570 --> 01:00:53.290 align:middle line:84% It's just that at the end of the day, the number that you get out 01:00:53.290 --> 01:00:59.170 align:middle line:84% doesn't actually mean anything in cardinality terms. 01:00:59.170 --> 01:01:03.150 align:middle line:84% It will help you with ordinality, which is to say, 01:01:03.150 --> 01:01:04.930 align:middle line:90% this is better than that. 01:01:04.930 --> 01:01:07.150 align:middle line:84% But you can't take the final number and say, oh, 01:01:07.150 --> 01:01:09.210 align:middle line:90% and this is the safety. 01:01:09.210 --> 01:01:15.592 align:middle line:84% And maybe the best way to convince you of that-- 01:01:15.592 --> 01:01:17.050 align:middle line:84% we can look at the output numbers-- 01:01:17.050 --> 01:01:19.010 align:middle line:84% or as to point out that, when we look 01:01:19.010 --> 01:01:22.170 align:middle line:84% at most of the major nuclear reactor accidents, 01:01:22.170 --> 01:01:26.010 align:middle line:84% those accidents occurred along pathways that 01:01:26.010 --> 01:01:29.010 align:middle line:84% were not in the PRA model at the time 01:01:29.010 --> 01:01:30.378 align:middle line:90% that that accident occurred. 01:01:30.378 --> 01:01:32.170 align:middle line:84% And then they go, oh, yeah, that could also 01:01:32.170 --> 01:01:34.130 align:middle line:90% happen-- we should add that. 01:01:34.130 --> 01:01:37.290 align:middle line:84% The problem is that the fault tree isn't a complete fault 01:01:37.290 --> 01:01:37.790 align:middle line:90% tree. 01:01:37.790 --> 01:01:40.950 align:middle line:84% It has to be hand-pruned and curated by humans. 01:01:40.950 --> 01:01:44.750 align:middle line:84% And these numbers about what happens are human estimates, 01:01:44.750 --> 01:01:47.770 align:middle line:84% and it will never be necessarily complete. 01:01:47.770 --> 01:01:50.370 align:middle line:90% And that is the basic challenge. 01:01:50.370 --> 01:01:52.830 align:middle line:84% 1985, the US government accounting office, 01:01:52.830 --> 01:01:57.690 align:middle line:84% which is the actuarial watchdog for US government entities, 01:01:57.690 --> 01:02:01.450 align:middle line:84% praised the NRC for not using PRA when it 01:02:01.450 --> 01:02:06.690 align:middle line:90% was trying to license reactors. 01:02:06.690 --> 01:02:09.350 align:middle line:84% But this is exactly what the industry is trying to do now, 01:02:09.350 --> 01:02:12.010 align:middle line:84% and they call it the risk-informed approach. 01:02:12.010 --> 01:02:16.690 align:middle line:84% So let's just maybe look at how some of these numbers stack up. 01:02:16.690 --> 01:02:22.890 align:middle line:84% Here are the actual historical rates of a large early release-- 01:02:22.890 --> 01:02:27.250 align:middle line:84% radiation release from BWRs and reactors worldwide-- 01:02:27.250 --> 01:02:30.850 align:middle line:84% 10 to the minus 3 and 3 times 10 to the minus 4. 01:02:30.850 --> 01:02:33.750 align:middle line:84% You just count up reactor years, count up accidents, 01:02:33.750 --> 01:02:37.810 align:middle line:84% and this is your best estimate for the safety of those plants. 01:02:37.810 --> 01:02:39.650 align:middle line:90% Here's what the PRA model says. 01:02:39.650 --> 01:02:41.770 align:middle line:90% It should be 10 to the minus 5. 01:02:41.770 --> 01:02:45.370 align:middle line:84% So, you have somewhere between a factor of 10 01:02:45.370 --> 01:02:49.850 align:middle line:84% to a factor of 100 difference between what is predicted 01:02:49.850 --> 01:02:51.850 align:middle line:90% and what is observed. 01:02:51.850 --> 01:02:55.330 align:middle line:84% These latest reactors have PRA numbers 01:02:55.330 --> 01:03:01.450 align:middle line:84% of like two releases every 100 million years. 01:03:01.450 --> 01:03:05.130 align:middle line:84% And these numbers are starting to look 01:03:05.130 --> 01:03:09.210 align:middle line:90% less and less believable. 01:03:09.210 --> 01:03:10.290 align:middle line:90% So it's kind of like-- 01:03:10.290 --> 01:03:13.210 align:middle line:84% PRA, I think of it as like looking for your keys 01:03:13.210 --> 01:03:14.810 align:middle line:90% under the streetlight. 01:03:14.810 --> 01:03:16.690 align:middle line:84% These are the things you know about, 01:03:16.690 --> 01:03:18.590 align:middle line:84% and you solve those problems really well, 01:03:18.590 --> 01:03:21.570 align:middle line:84% and you can drive those things down to 10 to the minus 8. 01:03:21.570 --> 01:03:23.370 align:middle line:84% But there's all this other stuff happening 01:03:23.370 --> 01:03:24.970 align:middle line:90% that you haven't thought about. 01:03:24.970 --> 01:03:27.570 align:middle line:84% And if you assume that the streetlight-- what 01:03:27.570 --> 01:03:30.430 align:middle line:84% is under streetlight is the entire universe of problems, 01:03:30.430 --> 01:03:33.490 align:middle line:90% well, you're wrong. 01:03:33.490 --> 01:03:34.630 align:middle line:90% So don't be fooled. 01:03:34.630 --> 01:03:36.230 align:middle line:90% It's not more scientific. 01:03:36.230 --> 01:03:38.210 align:middle line:90% It is not more accurate. 01:03:38.210 --> 01:03:40.690 align:middle line:90% It's just more quantitative. 01:03:40.690 --> 01:03:44.210 align:middle line:84% It has the appearance of being scientific, 01:03:44.210 --> 01:03:47.530 align:middle line:84% but it's still fundamentally revealing human biases 01:03:47.530 --> 01:03:49.170 align:middle line:90% and human preferences. 01:03:49.170 --> 01:03:54.090 align:middle line:84% And we have to remember that when we look at these numbers. 01:03:54.090 --> 01:03:55.970 align:middle line:84% Nevertheless, industry has been working hard 01:03:55.970 --> 01:03:58.850 align:middle line:84% to get PRA into the licensing process. 01:03:58.850 --> 01:04:02.650 align:middle line:84% And some of the numbers for small reactors are crazy. 01:04:02.650 --> 01:04:04.310 align:middle line:90% So here's NuScale Power. 01:04:04.310 --> 01:04:06.290 align:middle line:84% They say the likelihood of a core damage 01:04:06.290 --> 01:04:09.410 align:middle line:84% event to a NuScale reactor from equipment failure at full power 01:04:09.410 --> 01:04:12.890 align:middle line:84% condition is one event per module every three billion 01:04:12.890 --> 01:04:14.550 align:middle line:90% years. 01:04:14.550 --> 01:04:17.290 align:middle line:84% This is older than the life of planet Earth. 01:04:17.290 --> 01:04:21.130 align:middle line:84% I really don't believe that number is accurate, 01:04:21.130 --> 01:04:24.730 align:middle line:90% and you should not either. 01:04:24.730 --> 01:04:28.930 align:middle line:84% But this is how you get your evacuation zone to 0. 01:04:28.930 --> 01:04:32.250 align:middle line:84% You multiply times 10 to the minus 9, 01:04:32.250 --> 01:04:34.970 align:middle line:84% and now it doesn't really matter. 01:04:34.970 --> 01:04:38.550 align:middle line:84% So I mentioned PRA has found some uses. 01:04:38.550 --> 01:04:43.262 align:middle line:90% 01:04:43.262 --> 01:04:44.870 align:middle line:84% Let's see if I can go through some. 01:04:44.870 --> 01:04:50.270 align:middle line:84% So in 1985, NRC determined that more than 35% of, quote, 01:04:50.270 --> 01:04:52.650 align:middle line:84% "abnormal occurrences were directly attributed 01:04:52.650 --> 01:04:54.530 align:middle line:90% to maintenance deficiencies." 01:04:54.530 --> 01:04:58.630 align:middle line:84% And many of those problems arose from human errors, 01:04:58.630 --> 01:05:00.170 align:middle line:84% such as failing to follow procedure 01:05:00.170 --> 01:05:02.330 align:middle line:84% and installing equipment correctly. 01:05:02.330 --> 01:05:07.730 align:middle line:84% And so they pass what was called the Maintenance Rule in 1991. 01:05:07.730 --> 01:05:15.410 align:middle line:84% And this required the NRC to identify 01:05:15.410 --> 01:05:19.230 align:middle line:84% deficiencies in how maintenance of reactors was being done, 01:05:19.230 --> 01:05:22.610 align:middle line:84% not just the overall operation of-- the overall design 01:05:22.610 --> 01:05:23.747 align:middle line:90% of the reactor. 01:05:23.747 --> 01:05:25.330 align:middle line:84% And it collected a whole bunch of data 01:05:25.330 --> 01:05:27.270 align:middle line:84% on all these maintenance deficiencies, 01:05:27.270 --> 01:05:30.130 align:middle line:84% and then it built PRA models that they were then 01:05:30.130 --> 01:05:33.810 align:middle line:84% able to target the inspection process 01:05:33.810 --> 01:05:36.250 align:middle line:84% to the types of maintenance defects 01:05:36.250 --> 01:05:38.550 align:middle line:84% that were common-- that commonly occurred. 01:05:38.550 --> 01:05:41.330 align:middle line:84% And as a result, they were more likely to discover problems 01:05:41.330 --> 01:05:43.170 align:middle line:90% and prevent-- 01:05:43.170 --> 01:05:44.770 align:middle line:84% not only prevent accident precursors, 01:05:44.770 --> 01:05:47.890 align:middle line:84% but also prevent the reactor from just shutting down 01:05:47.890 --> 01:05:49.810 align:middle line:84% for an unplanned maintenance event. 01:05:49.810 --> 01:05:54.610 align:middle line:84% And so as a result, here's what happened to US uptime. 01:05:54.610 --> 01:05:58.070 align:middle line:84% In the '80s, we were kind of like the rest of the world. 01:05:58.070 --> 01:06:00.650 align:middle line:90% 65%, 70% operational uptime. 01:06:00.650 --> 01:06:03.650 align:middle line:90% And now, we are way up here-- 01:06:03.650 --> 01:06:09.730 align:middle line:84% 90-plus percent because of this PRA-focused approach on how we 01:06:09.730 --> 01:06:11.110 align:middle line:90% do maintenance. 01:06:11.110 --> 01:06:14.010 align:middle line:90% And that not only is safer. 01:06:14.010 --> 01:06:16.930 align:middle line:84% It actually brings down the cost of nuclear power. 01:06:16.930 --> 01:06:19.030 align:middle line:90% And so that's a good thing. 01:06:19.030 --> 01:06:21.610 align:middle line:84% So this has all been enabled by PRA. 01:06:21.610 --> 01:06:23.322 align:middle line:90% It's a really good tool. 01:06:23.322 --> 01:06:25.030 align:middle line:84% You just have to use it in the right way. 01:06:25.030 --> 01:06:27.570 align:middle line:90% 01:06:27.570 --> 01:06:33.650 align:middle line:84% That brings us to how the NRC does Enforcement. 01:06:33.650 --> 01:06:37.790 align:middle line:84% So the NRC actually has officers with badges and handcuffs, 01:06:37.790 --> 01:06:39.650 align:middle line:84% and they have the power to arrest people 01:06:39.650 --> 01:06:41.410 align:middle line:90% who fail to do their jobs. 01:06:41.410 --> 01:06:44.810 align:middle line:90% They really do. 01:06:44.810 --> 01:06:46.670 align:middle line:84% There is an office of the Inspector General, 01:06:46.670 --> 01:06:50.190 align:middle line:84% and its function is to keep the NRC independent. 01:06:50.190 --> 01:06:52.450 align:middle line:84% Of course, OIGs from across the government 01:06:52.450 --> 01:06:55.290 align:middle line:90% have been fired by Trump. 01:06:55.290 --> 01:06:59.170 align:middle line:84% And the problem is that everything would be fine 01:06:59.170 --> 01:07:02.530 align:middle line:84% if it weren't for the fact that people are basically lazy. 01:07:02.530 --> 01:07:04.970 align:middle line:84% They will lie, and cheat, and generally fail 01:07:04.970 --> 01:07:09.170 align:middle line:84% to do what they're supposed to do, like do their homework, 01:07:09.170 --> 01:07:12.050 align:middle line:84% and this leads to safety problems. 01:07:12.050 --> 01:07:15.730 align:middle line:84% So you might think, well, how often does this really happen? 01:07:15.730 --> 01:07:19.290 align:middle line:84% And so just in case you're curious, here are the data. 01:07:19.290 --> 01:07:24.650 align:middle line:84% The OIG catches about 1 to 200 instances 01:07:24.650 --> 01:07:28.110 align:middle line:84% of this stuff happening in the United States per year. 01:07:28.110 --> 01:07:31.170 align:middle line:84% So that's one plant every six-- one 01:07:31.170 --> 01:07:33.490 align:middle line:84% incident per plant every 6 to 12 months 01:07:33.490 --> 01:07:36.370 align:middle line:90% gets caught by the regulator. 01:07:36.370 --> 01:07:41.370 align:middle line:84% And there are all kinds of different materially false 01:07:41.370 --> 01:07:43.210 align:middle line:84% statements, violations of requirements, 01:07:43.210 --> 01:07:50.610 align:middle line:84% non-independent inspection, and retaliation against employees 01:07:50.610 --> 01:07:53.090 align:middle line:90% for safety concerns. 01:07:53.090 --> 01:07:56.010 align:middle line:84% I'll just read some of these from a 2013 report. 01:07:56.010 --> 01:07:58.312 align:middle line:84% A chemistry manager at Indian Point 01:07:58.312 --> 01:07:59.770 align:middle line:84% deliberately falsified test results 01:07:59.770 --> 01:08:02.810 align:middle line:84% from samples of the diesel fuel in the emergency backup 01:08:02.810 --> 01:08:03.370 align:middle line:90% generators. 01:08:03.370 --> 01:08:06.090 align:middle line:84% And diesel fuel can turn into gel, 01:08:06.090 --> 01:08:08.390 align:middle line:84% and then the diesel generators won't work, 01:08:08.390 --> 01:08:10.570 align:middle line:90% and he just didn't test. 01:08:10.570 --> 01:08:12.830 align:middle line:84% Fire protection coordinator at Kewaunee Plant 01:08:12.830 --> 01:08:15.210 align:middle line:84% failed to conduct fire drills for five years in a row 01:08:15.210 --> 01:08:18.970 align:middle line:84% and submitted falsified fire drill evaluation and critique 01:08:18.970 --> 01:08:19.970 align:middle line:90% forms. 01:08:19.970 --> 01:08:22.370 align:middle line:84% Engineering supervisor at Wolf Creek falsified records 01:08:22.370 --> 01:08:26.430 align:middle line:84% indicate that they inspected the spent fuel on a monthly basis, 01:08:26.430 --> 01:08:29.450 align:middle line:84% and no inspections of the spent fuel pool had actually occurred. 01:08:29.450 --> 01:08:32.290 align:middle line:84% Condenser replacement project superintendent at Columbia 01:08:32.290 --> 01:08:35.660 align:middle line:84% was using drugs and submitted-- fake urine 01:08:35.660 --> 01:08:38.100 align:middle line:90% went to his drug test. 01:08:38.100 --> 01:08:40.380 align:middle line:84% Electric supervisor at Watts Bar conspired 01:08:40.380 --> 01:08:42.897 align:middle line:84% to falsify paperwork which indicated that they had checked 01:08:42.897 --> 01:08:44.439 align:middle line:84% the installation of electrical cables 01:08:44.439 --> 01:08:45.300 align:middle line:84% when, in fact, they never checked 01:08:45.300 --> 01:08:47.779 align:middle line:84% to make sure those cables were installed correctly. 01:08:47.779 --> 01:08:51.580 align:middle line:84% So this is the kind of small stuff. 01:08:51.580 --> 01:08:54.187 align:middle line:84% It's small and generally doesn't have an issue, 01:08:54.187 --> 01:08:55.520 align:middle line:90% but sometimes there is an issue. 01:08:55.520 --> 01:08:57.728 align:middle line:84% That's why these things are there in the first place. 01:08:57.728 --> 01:09:02.300 align:middle line:84% And sometimes these things do lead to cascading problems. 01:09:02.300 --> 01:09:06.300 align:middle line:84% And I think this is really the biggest one here. 01:09:06.300 --> 01:09:09.779 align:middle line:84% The corporation retaliating against employees when 01:09:09.779 --> 01:09:12.380 align:middle line:90% they bring up a safety issue. 01:09:12.380 --> 01:09:16.020 align:middle line:84% That kind of stuff means that more and more people are 01:09:16.020 --> 01:09:18.359 align:middle line:90% going to bury safety issues. 01:09:18.359 --> 01:09:21.660 align:middle line:84% The more of this that happens, the more likely 01:09:21.660 --> 01:09:25.140 align:middle line:84% you are going to have big problems that are not 01:09:25.140 --> 01:09:29.580 align:middle line:84% being reported because people are afraid of losing their jobs. 01:09:29.580 --> 01:09:35.380 align:middle line:84% So this is another reason why PRA can't ever really be right. 01:09:35.380 --> 01:09:38.460 align:middle line:84% Their calculations assume this ideal plant that 01:09:38.460 --> 01:09:40.500 align:middle line:90% is following the procedures. 01:09:40.500 --> 01:09:43.220 align:middle line:84% And if you're not following the procedures, 01:09:43.220 --> 01:09:46.340 align:middle line:84% and it's happening every six months, 01:09:46.340 --> 01:09:48.560 align:middle line:84% yeah, things are going to go wrong. 01:09:48.560 --> 01:09:55.620 align:middle line:90% 01:09:55.620 --> 01:10:00.460 align:middle line:84% This is an important closing message. 01:10:00.460 --> 01:10:03.340 align:middle line:84% It's in the NRC's mission statement. 01:10:03.340 --> 01:10:06.740 align:middle line:84% Nuclear regulation is the public's business, 01:10:06.740 --> 01:10:12.460 align:middle line:84% and it must be transacted publicly and candidly. 01:10:12.460 --> 01:10:14.060 align:middle line:84% And there are all kinds of laws that 01:10:14.060 --> 01:10:16.900 align:middle line:84% prevent, for example, the commissioners from meeting 01:10:16.900 --> 01:10:20.980 align:middle line:84% with each other unless there is a public forum where people 01:10:20.980 --> 01:10:24.132 align:middle line:90% can hear what they're saying. 01:10:24.132 --> 01:10:26.340 align:middle line:84% They're legally not allowed to get together in a room 01:10:26.340 --> 01:10:29.800 align:middle line:90% and conspire about what to do. 01:10:29.800 --> 01:10:32.460 align:middle line:90% 01:10:32.460 --> 01:10:35.140 align:middle line:84% For the most part, the regulatory process in the United 01:10:35.140 --> 01:10:36.360 align:middle line:90% States is an open process. 01:10:36.360 --> 01:10:37.980 align:middle line:84% And you can go to the NRC's website, 01:10:37.980 --> 01:10:39.940 align:middle line:84% and you can look at tons of documents 01:10:39.940 --> 01:10:43.700 align:middle line:84% that are being submitted, and letters submitted by industry 01:10:43.700 --> 01:10:45.420 align:middle line:90% about what they want to do. 01:10:45.420 --> 01:10:49.000 align:middle line:84% But they do protect proprietary information. 01:10:49.000 --> 01:10:54.580 align:middle line:84% And what gets counted as proprietary can be debatable. 01:10:54.580 --> 01:10:59.020 align:middle line:84% So for example, plants have transient events 01:10:59.020 --> 01:11:02.020 align:middle line:84% where there's a power excursion, and sometimes there 01:11:02.020 --> 01:11:04.940 align:middle line:84% may be a scram to shut down the power. 01:11:04.940 --> 01:11:08.980 align:middle line:84% And who knows why these things happen? 01:11:08.980 --> 01:11:13.220 align:middle line:84% And the reason is investigated, but these events are never 01:11:13.220 --> 01:11:15.380 align:middle line:90% reported to the public. 01:11:15.380 --> 01:11:17.060 align:middle line:84% They are kept away from the public 01:11:17.060 --> 01:11:22.180 align:middle line:84% so that they can't be reviewed by independent people. 01:11:22.180 --> 01:11:24.220 align:middle line:84% And you can understand why the industry likes 01:11:24.220 --> 01:11:27.620 align:middle line:84% that, because they don't want the public knowing 01:11:27.620 --> 01:11:31.460 align:middle line:84% that these plants are having these problems. 01:11:31.460 --> 01:11:35.580 align:middle line:84% But this is not a good way to do regulation. 01:11:35.580 --> 01:11:39.160 align:middle line:84% So there's kind of a constant battle going back and forth. 01:11:39.160 --> 01:11:41.660 align:middle line:84% And a few years ago, there's an organization 01:11:41.660 --> 01:11:43.620 align:middle line:84% called the Union of Concerned Scientists, which 01:11:43.620 --> 01:11:45.240 align:middle line:90% is based in Harvard Square. 01:11:45.240 --> 01:11:48.140 align:middle line:84% It was actually founded by professors in the physics 01:11:48.140 --> 01:11:50.140 align:middle line:90% department here at MIT. 01:11:50.140 --> 01:11:54.660 align:middle line:84% And they're kind of like the gadfly that constantly annoys 01:11:54.660 --> 01:11:58.980 align:middle line:84% the NRC and the industry and follows what is going on here. 01:11:58.980 --> 01:12:03.620 align:middle line:84% And they found that some documents that 01:12:03.620 --> 01:12:06.100 align:middle line:84% were-- a lot of documents that were supposed to be released 01:12:06.100 --> 01:12:11.300 align:middle line:90% by the NRC were being withheld. 01:12:11.300 --> 01:12:14.820 align:middle line:84% Starting in 2004, the NRC just kind of stopped 01:12:14.820 --> 01:12:16.660 align:middle line:90% sharing public information. 01:12:16.660 --> 01:12:19.860 align:middle line:84% And this included a bunch of non-sensitive stuff 01:12:19.860 --> 01:12:22.700 align:middle line:84% that the operators of the plant actually 01:12:22.700 --> 01:12:25.720 align:middle line:84% did not make requests to withhold from public view. 01:12:25.720 --> 01:12:30.140 align:middle line:84% The NRC was just doing it for their benefit. 01:12:30.140 --> 01:12:34.980 align:middle line:84% And that is evidence that the NRC is, in a way, 01:12:34.980 --> 01:12:37.260 align:middle line:84% becoming captured by the industry when 01:12:37.260 --> 01:12:41.300 align:middle line:84% they start hiding things on the industry's behalf. 01:12:41.300 --> 01:12:48.020 align:middle line:84% And that really, I think, is a worrisome kind of thing. 01:12:48.020 --> 01:12:51.540 align:middle line:84% What kind of documents were these? 01:12:51.540 --> 01:12:58.420 align:middle line:84% Request for an exemption for complying with fire safety 01:12:58.420 --> 01:13:04.000 align:middle line:84% regulations, for example which was at, 01:13:04.000 --> 01:13:07.480 align:middle line:84% I think the Oconee plant, Turkey Point, Browns Ferry, 01:13:07.480 --> 01:13:10.100 align:middle line:90% Fort Calhoun, and Sharon. 01:13:10.100 --> 01:13:11.080 align:middle line:90% Things like this. 01:13:11.080 --> 01:13:14.940 align:middle line:84% It's not the end of the world, but they're hiding 01:13:14.940 --> 01:13:17.220 align:middle line:90% stuff that doesn't look good. 01:13:17.220 --> 01:13:23.820 align:middle line:84% So this underlines the idea that even the regulator now 01:13:23.820 --> 01:13:28.540 align:middle line:90% treats itself as a problem. 01:13:28.540 --> 01:13:33.020 align:middle line:84% So here are some final closing observations. 01:13:33.020 --> 01:13:37.180 align:middle line:84% Regulation does impose a major cost on industry. 01:13:37.180 --> 01:13:39.660 align:middle line:84% They are imperfect and slow to change, 01:13:39.660 --> 01:13:41.760 align:middle line:84% but they are subject to influence. 01:13:41.760 --> 01:13:45.960 align:middle line:84% And interest groups have really changed how regulation is done. 01:13:45.960 --> 01:13:48.780 align:middle line:84% And there's some bits of evidence 01:13:48.780 --> 01:13:52.620 align:middle line:84% that this is kind of getting out of control when the regulator is 01:13:52.620 --> 01:13:55.660 align:middle line:90% hiding things on their behalf. 01:13:55.660 --> 01:13:57.240 align:middle line:90% The regulation is not all bad. 01:13:57.240 --> 01:13:59.700 align:middle line:84% It has improved, in fact, the safety and profitability 01:13:59.700 --> 01:14:01.500 align:middle line:90% of the industry. 01:14:01.500 --> 01:14:03.300 align:middle line:84% The battlefront is now hiding things 01:14:03.300 --> 01:14:08.060 align:middle line:84% in statistics with this, quote, risk-informed approach. 01:14:08.060 --> 01:14:12.340 align:middle line:84% Despite all this, it still kind of works, 01:14:12.340 --> 01:14:14.960 align:middle line:90% and we ought to keep it going. 01:14:14.960 --> 01:14:20.290 align:middle line:84% We'll talk about other industries in the future. 01:14:20.290 --> 01:14:28.000 align:middle line:90%