Posted on 01/11/2025 6:52:19 AM PST by Twotone
A lawsuit recently filed by Utah, Texas, and Last Energy (a microreactor company) is challenging a Nuclear Regulatory Commission (NRC) rule requiring all nuclear power-producing entities—including those that do not generate enough electricity to turn on a lightbulb—to obtain an operating license from the commission before turning on. If successful, the lawsuit could diminish the federal government's role in the heavily regulated nuclear energy industry.
The requirement, known as the Utilization Facility Rule, can be traced back to the McMahon Act of 1946. This law gave the government a monopoly on nuclear power by granting federal regulators licensing authority over any equipment or device capable of making fissile material or "adapted for making use of atomic energy."
This heavy-handed regulation stunted the growth of commercial nuclear energy in America. Recognizing this, Congress passed the Atomic Energy Act of 1954 to narrow the scope of the federal government's regulatory authority. Rather than allowing federal regulators to oversee all nuclear-related equipment and technologies, the law limited the fed's authority to technologies whose use of "special nuclear material" was deemed a risk to national security and public health and safety.
Despite an order from Congress to pare down its oversight, the Atomic Energy Commission—the NRC's predecessor—adopted a rule in 1956 that allowed it to regulate all commercial nuclear reactors (similar to the McMahon Act), which lives on today through the NRC's Utilization Facility Rule.
The regulation imposes significant costs on all nuclear energy developers, especially startups like Last Energy, which builds 20-megawatt (MW) micro nuclear reactors that are inherently safe and pose no significant risk to the public or environment. Designed to be operational within two years, these reactors fit within "a container that is fully sealed with twelve-inch-thick steel walls, and as such, has no credible mode of radioactive release even in the worst reasonable scenario," according to the lawsuit.
Test reactors on college campuses, which the NRC has recognized present "a lower potential radiological risk to the environment and the public," are also subject to this rule. These include reactors at the University of Utah (100 kilowatts) and Texas A&M University (1 MW and a 5-watt, barely enough to power a small LED lightbulb). Despite the small amount of material required to power these reactors—university test reactors in Texas collectively use less than 1 kilogram of nuclear fuel—they are deemed operation facilities and are under the purview of federal regulators. As a result, universities must pay an annual license fee of $97,200 per reactor. The annual fee for operating power reactors is more than $5 million, although the NRC has stated this could be less for small reactors like the ones that Last Energy produces.
If successful, the lawsuit could exempt some small modular reactor technologies from complying with the Utilization Facility Rule—developers will still need to comply with other NRC regulations—and give more regulatory authority to states.
"This case will determine whether the NRC has the authority to charge hundreds of millions of dollars in fees and enforce billions in design changes in the absence of a safety or security concern. Federal law is clear that it should not," said Bret Kugelmass, founder and CEO of Last Energy, in a statement given to Reason.
Adam Stein, director of nuclear energy and innovation at the Breakthrough Institute, warns the lawsuit "could change the licensing landscape, including by creating some new challenges." These could include fragmented licensing between states and creating new opportunities for legal challenges by opponents. Regardless of the lawsuit's outcome, Jack Spencer, a senior energy researcher at The Heritage Foundation and author of Nuclear Revolution, says Congress should clarify where the NRC's authority begins and ends.
Whatever is decided in court, reform in the U.S. nuclear regulatory system is sorely needed. The Utilization Facility Rule and others like it have forced Last Energy, an American company, to focus on growing its businesses in countries with less stifling regulations. As of 2024, the company has agreements to develop over 50 nuclear reactor facilities across Europe. Last Energy's case is not unique; many advanced nuclear reactor companies have seen costs and project timelines increase as a result of the NRC's onerous and confusing licensing requirements. The lawsuit could represent a major step in decreasing the red tape that has plagued American nuclear power production.
This is the next wave of the tech revolution. Trump and Republicans need to unleash this next great innovation. With AI, this form of energy production is almost a necessity that will also, hopefully, one day bring about individual home power generation.
Heck, I want one powering my car!
Personally, I prefer some level of regulation over nukes, although charging operators doesn’t have to be necessary. I base that on what I’ve seen corporations do when given free run, such as Boeing designing a system that can crash airplanes, but not even build-in any redundancy in it, or our food industry selling foods that get people sick enough to kill them early (to the point that life expectancy is dropping in the US), as long as their sickness drags on long enough - hopefully RFK puts an end to that
I understand you want a check on risky or destructive corporate behavior, but from what I can tell, you have that preference because you do not understand how regulations actually create the problems you expect them to solve. Restructuring civil liability laws, insurance markets, and the conduct of our court system is where this should rightly go.
But the problem is we have lots of regulation & it doesn’t actually help. Our food industry, for instance, is fully in bed with the regulators, & using chemicals in our food that make us sick. How do we make gov’t regulation sensible & useful?
Wherever human beings are involved, you end up with stupidity, incompetence & corruption. Very little that’s sensible goes on with our regulatory agencies these days.
The operative phrase. Money, power and control. Individuality and independence do not thrive under "commissions" any more than under commissariats.
Let's face it Congress is unlikely to eliminate licensing for micro-reactors any time before the second coming.
All such regs are brought to you by treehuggers — like the ones who prevent all reactors from having a common place to store spent fuel.
I worked in domestic nuke 30 years. The only reason it is a dead industry in the US is ‘cause of these deliberate regs. Not designed to make things safer, only to kill nuke.
I would not call 20 MW “small” albeit it is compared to the 1000+ MW commercial power reactors currently in use. But 20 MW is a lot of energy.
“Restructuring civil liability laws, insurance markets, and the conduct of our court system is where this should rightly go.”
I would agree, but do not think we have the right court structures to do it. There are some subjects that are beyond the critical understanding of most judges and most juries, yet, at present, they would be tasked with ruling on civil suits on these matters. The tort bar will love them, but I do not know that we get the best results.
I’d rather see Congress and Congressional public hearings take more direct control over many “regulations”, leaving more matters to democracy and less to bureaucrats.
Challenge the Feds - they are not friends of America.
When full size, water based reactors first opened, they could be staffed with around 500 people. Now, it’s closer to 2,000 which prices out the individual plants. Utilities with more then one reactor, can share those employees so costs are lower.
We are in full agreement there, and it's Congress' job to set up systems to do that. Unfortunately, the adversary system being "winner take all" is not at all suited to managing competing, uncertain, and unpredictable risks.
There are some subjects that are beyond the critical understanding of most judges and most juries, yet, at present, they would be tasked with ruling on civil suits on these matters.
As I wrote in my first book published 23 years ago:
If 1 MW can provide power to 500-1,000 homes per year, that’s 10,000 to 20,000 homes.
“As claims proliferate, the legislatures and courts are overwhelmed with cases that are technical and difficult to prove. They rely upon opinions from supposedly disinterested experts regarding the supposedly harmful impacts of transformation products. Neither legislators nor courts have the power to enforce a judgement; that power lies exclusively with the executive branch of government. The demand for expediency seduces legislatures and the courts to default upon their Constitutional responsibility to the only civic agency with relevant expertise and police power. Control of use and, thus ownership of that use, is effectively transferred to the executive branch of government.”
The reliance on “experts” in civil suits is as falacious as the reliance on experts as the halmark of the administrative state. Both assume the selected experts are the most “expert” folks that can be heard on a subject. Their pretended provenance, whether for juries, courts or the adminstrative state is irrational and illogical. There can be no presumption in many matters that any one set of experts is superior to all other possible voices that can be heard on a matter.
What needs to be heard on many matters are not “official” experts nor experts hand selected by litigants. Whether in Congressional hearings or the courts what are needed are multiple and different totally indpendent experts with varying views and with good communications skills to break matters down to where intelligent people with good critical thinking can understand the issues at hand. I think Congress has the ability to do that (not that they do), and no I don’t trust the tort bar to be better at it. If it is government decicions we are dealing with, democracy is in the end better than the courts or bureaucrats. At least our elected reps have made the decision and we can vote them out if we are unhappy with that. We seem to be totally unwilling to force our elected officials to impeach lousy judges who make government policy via judicial fiat.
It's worse than that. It's reliance upon the credentialing system by which to determine who is an expert. That puts control of land use in the hands of academics dependant upon Federill dineri.
Take a look at that thesis. There's another way to look at this problem uaing insurance to monetize the relative value of numerous competing risks to intangible assets.
Sure why not. Lets allow every Tom, Dick, and Harry to build nuclear reactors. What could possibly go wrong?
“Take a look at that thesis. There’s another way to look at this problem uaing insurance to monetize the relative value of numerous competing risks to intangible assets.”
Insurers can sue and be sued just like any other parties, resorting also to the tort bar to resolve the disputes. As much as in general insurers seek to monetize risk, they aslo seek to maximize revenue and profits and minimize losses, which can lead to legitimate claims that the insurers experts on those matters put the total interest of the insurer corporation over LEGITIMATE claims - puting things into courts and not finally resolved by insurers monetizing risk.
Under the system I proposed, landowners would gradually supply the definitive validated data. Even then when I wrote it, I was expecting AI to reduce the cost of resolving such disputes dramatically particularly because it would be part of the construction of the contracts involved. Both telemetry and sensor improvements will also reduce the cost of acquiring that data. Then there are private courts and arbitration to compete with the government system.
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