Analysis of the Financial Assurance Plan in the License Application for a Low-Level Radioactive Waste Disposal Facility
Hayden, F. Gregory, Fullwiler, Scott T., Journal of Economic Issues
Our purpose is to evaluate the efficiency of the financial assurance plan in the license application  submitted by American Ecology Corporation (AEC) to site, design, and build a new technological facility in Boyd County, Nebraska, for the disposal of low-level radioactive waste (LLRW). Efficiency means the ability to accomplish desired effects. Thus, efficiency considerations begin with social beliefs and ethics in order to know what is desirable. "Ethics can be considered a system of guidance designed to assist in living within a society.... That we must live together installs the positive requirement of doing good for one another" (Anderson and Englehardt 2001, 6-7). Humans in a social system are immersed in obligation to one another (8). "Ethics seeks to resolve the problems of what is harm and what is help and to unravel the complexities of moral choice" (9). In a socioeconomic system, choices and decisions are about organizational actions. "Action is behavior under the governance of some larger under standing..." (9).
For sodality, a society is immersed in obligations, rules, and requirements which force decision makers to determine ethical actions. This requires decision makers to complete efficiency evaluations in order to make judgments based on criteria drawn from social beliefs. As the court stated in Ohio v. Interior, efficiency means "the result that achieves the greatest value to society" (1989). The efficiency criteria applied here are the legal criteria that have been codified by national and state laws, rules, and regulations; judicial decisions; and corporate contracts.
Level of Financial Assurance for Corrective Action or Cleanup
According to the Nuclear Regulatory Commission, financial assurance is required to cover costs associated with any corrective action or cleanup of real or personal property on or off site if a release of a radioactive material occurs during the operative life, closure, stabilization, or institutional control (CRF 10. 61, Subpart E). Paul Smith provided guidance and a model for how to evaluate the adequacy of finances planned for particular corrective actions and cleanups (1993). The Nebraska Department of Environmental Quality (NDEQ) converted AEC's application into Smith's model, creating a database that can be utilized to make an assessment of the adequacy of cost estimates for corrective actions and cleanups for three particular eventualities: premature vault failure, flooding, and cancer.
With regard to waste vault failures, AEC assumed there will be no vault failure for the first fifty years. Beyond that period, the estimated cost for vault repair as presented in the application is in table 1. AEC did not indicate or explain how the costs were determined, which is inconsistent with the requirements of the National Environmental Protection Act (Mandelker 1984). However, it is clear from the information in table 1 that the level of estimated funds needed is inadequate. For example, if the facility were to become operational five years from 1998, eighty years of operations would be eighty-five years from 1998. If inflation, at 4 percent per year, is taken into consideration, and the $13,100,000 for the repair in 2083 of a vault to contain B and C radioactive waste is discounted to the present, it is equal to $467,130 in 1998. It is not credible that a failed B/C vault could be repaired for only $467,130 in 1998; thus, the $13,100,000 is a vast underestimation. That number is even less credible when it is realized that the repair estimate is to include the high cost of relocating the B/C waste to another location.
The same lack of credibility exists with respect to the cost of vault repair for class A waste. The estimate for the year 2083 to repair a class A vault is $3,100,000 (table 1). That would mean the estimated cost for repairing the class A vault in 1998 is only $110,542. Not believable!
As presented in table 1, AEC assumed that the cost of vault repair remains constant for eighty-four years after year 51. …