Nuclear Security Represents $4 Billion Annual Subsidy In US, Trillion For Fleet For Full Lifecycle

The nuclear industry requires, but doesn’t pay much of the price of, several overlapping layers of security on its international and national supply chains, generation sites, and waste management. It’s spread across a hard to fathom number of budget lines, and there doesn’t appear to have been any attempt to consolidate the costs prior to this article. This was covered recently in a CleanTech Talk with Paul Werbos, formerly with the US National Science Foundation, and he agreed that the costs were large and mostly under the radar.[1]

Per reactor annual costs appear to be in the range of $50 million USD per year, with half or less of that paid by the nuclear operator. This equates to a roughly $4 billion annual subsidy to the US nuclear industry, in addition to the $1.6 billion in permanent tax breaks in the US federal tax code.

For this analysis, the expenditures are broken into international fuel and components supply chain security, national/state/municipal security, and finally generation site security.

This will be put in context of costs across the 135 US nuclear reactors that include 94 in operation, 2 in construction, and 39 no longer operating.[2] Nuclear power plants take an average of 10 years to be constructed, operate for 40 years, and are currently taking 100 years to decommission.[3] While these are US costs, they should be reasonably easy to extend to other countries with nuclear generation.

International Costs

There are international security costs for nuclear supply, waste, and materials chains, coordinated through the International Atomic Energy Association (IAEA). The US provides the majority of the IAEA’s annual budget, about $200 million USD.[4] That turns into roughly $1.5 million per reactor per year, or about $220 million for the full lifecycle of each reactor.

The Department of Defense (DOD) undoubtedly spends part of its $637 billion annual peacetime base budget on security for the global nuclear supply chain.[5] Bernie Sanders’ campaign estimated that $81 billion of DOD’s annual budget was effectively oil and gas security forces globally, with a strong concentration in the Middle East.[6] The nuclear war ships and armaments of the us military share supply chains with civilian nuclear reactor fuel and many components. The portion of military budgets devoted to nuclear supply chain security isn’t published, but it is possible to make at least a rough estimate. Compared to the 13% for oil and gas, 0.5% for nuclear supply chains security globally seems reasonable, of which 20% can be allocated to civilian reactors. That still turns into a very large number, about $640 million, or $5 million per reactor per year with a full lifecycle cost of about $700 million per reactor.

The Central Intelligence Agency (CIA) undoubtedly spends part of its time and money dealing with international security threats to the nuclear supply chain. Its annual budget was revealed to be in the range of $53 billion.[7] Assuming it spends 1% of its budget on international nuclear supply chain security and 50% is allocated to civilian reactors, that’s about $265 million annually, or about $2 million per reactor per year and $300 million over the full lifetime.

This suggests that US international expenditures on security total $1.1 billion annually, or about $8 million per reactor per year, or about $1.2 billion over the full lifecycle of the reactor.

National, State, & Municipal Security

Nuclear energy is the only form of energy with its own regulatory agency in most countries, and with specific call outs in budgets of other agencies. In the US, the Nuclear Regulatory Commission (NRC) is responsible for providing all of the regulatory standards and approving nuclear plants. It’s become slightly less expensive over the past few years, and currently has an operating budget of $863 million per year with 2,900 full time equivalent staff.[9] That’s about $6.4 million per reactor per year, as the ones in construction and operation have to continue to file regulatory paperwork.

Note that the NRC is expected to charge the operators fees to cover 90% of its budget.[9] In the US, there has only been one reactor commissioned since 2010 and only two in construction, so most paid the higher regulatory costs, which we’ll assume is around $900 million per year. That equates to about $6 million annually for reactor operators in filings, most of which starts occurring at the beginning of the process, and must proceed through full decommissioning. This suggests that full lifetime cost of regulatory oversight for a single reactor is equal to the total annual budget of the NRC, about $900 million.

The US taxpayer is subsidizing the additional 10% of costs, which is about $0.7 million per year, or roughly $100 million per reactor over its entire lifecycle.

The next security cost factor is the US Department of Energy’s National Nuclear Security Administration (NNSA). It provides some security for both nuclear generation and nuclear weapons in the US. It has an annual budget much higher than the NRC’s, $19.8 billion.[10]

The line items pertinent to nuclear generation include:

• Uranium Enrichment Decontamination and Decommissioning (D&D) Fund – $715 million, assumed to be 80% for civilian reactors or about $570 million per year (note that it’s down from well over $800 million in 2018, which isn’t necessarily comforting.
• Nuclear Waste Disposal (26M in DNWF 050) – once again, 80% so about $21 million
• Departmental Administration – $117 – assumed to be 50% civilian so about $59 million
• Inspector General – $54 million – assumed to be 50% civilian so about $27 million
• International Affairs – $36 million – assumed to be 50% civilian so about $18 million
• Salaries – $435 million – assumed to be 80% civilian, so about
• Nuclear non-proliferation – $1,993 million – assumed to be 20% civilian, so about $400 million
• Power Marketing Administrations – $78 million, assumed to be 100% civilian

That adds up to about $1.5 billion more per year for security provisions for nuclear power generation in the US. That money is not recovered from operators, but should be considered a complete subsidy for nuclear generation in addition to the nuclear tax code permanent tax breaks of $1.6 billion annually.

Over the 135 reactors in operation, that turns into a per reactor cost borne by US taxpayers of $11.3 million, and a full 150-year lifecycle cost of about $1.7 billion.

The next federal cost to be considered are the Federal Protective Forces.[11] This is a federal nuclear police force, highly trained at military skill levels, but with law enforcement designations. Its responsibility is protection of Category 1 special nuclear material, highly enriched, weapons grade uranium and the like. It is supposed to respond to incidents at DOE facilities like a SWAT team and recover stolen material. Its budget is a bit murkier.

The DOE budget calls out $258 million annually for Specialized Security Activities.[12] Apparently roughly half of that, so approximately $130 million annually, is traditionally for the Federal Protective Forces per one source I found.[13] However, this force is mostly focused on weapons labs. Undoubtedly they interlock for security related to civilian reactors and fuels in an oversight and governance role, but it’s not their primary role. They could reasonably expect to respond to civilian nuclear incidents as well with training and the like. Let’s take 10% of their annual budget and add it to the costs, or another $13 million. That’s roughly $100,000 per reactor per year or $14 million over the life of the reactor.

The NRC coordinates security with the Department of Homeland Security, FBI, intelligence agencies, the departments of Defense and Energy, as well as state and local law enforcement agencies.[14]

So far we’ve covered the DOE, but not Homeland Security or the DOD at the federal level, or state and local law enforcement, all of which participate in nuclear generation facility security. These are difficult to find specific numbers for, so approximations will be used for each.

Nothing at the Department of Homeland Security is cheap and it has an annual budget of $51.6 billion. [15] There’s likely $200 million being spent per year within that organization on nuclear generation facility security monitoring. The FBI’s annual budget is $9.3 billion, and they are likely spending another $50 million on nuclear generation site security.[16] State police are about 1% of state annual budgets, and state annual budgets average around $40 billion, so that’s $0.4 billion for state police, and likely 2% of that is associated with security related to nuclear plants if they have them in the state as 29 do.[17][18] That suggests another roughly $230 million in annual security costs across the US fleet. Then there’s local police, and local police budgets with states run at a total across municipalities of about $2.3 billion per year.[19] Assuming the 29 states where reactors exist see 1% of local police budgets devoted to security for them, that’s another roughly $670 million for local policing annually, about $4.9 million per reactor or about $740 million over the life of the site.

Those security costs add up to $8.5 million per reactor per year, or roughly $1.3 billion over the 150 years of the site’s existence.

The total of national, state and municipal security expenditures within the borders of the US is around $26 million per year, or around $4 billion for the life of the site.

Nuclear Generation Site Security

Only now do we get to the specific site’s annual costs. The budgets are even less transparent for individual reactors. There are aggregated numbers, but not individual budgets as the companies running them are private and not required to disclose that level of detail.

Statista provides a useful chart of operating and maintenance (O&M) costs per MWh, which would include security at the site.[20] The US nuclear fleet generates about 800 million MWh annually.[21] Assuming the nuclear fleet managed to maintain the $30.41 per MWh costs cited by Statista, that turns into about $24 billion in annual O&M costs, or around $260 million in costs per operating reactor. That’s obviously the upper limit on per reactor costs. There are 1.6 reactors per site on average, so site costs are around $410 million annually.

This helps us get to security costs across all reactors including the ones in decommissioning and construction, whose costs aren’t included in the O&M budget.

There are three levels of security for any nuclear reactor site, and the security is shared across the reactors at the site.[22]

“The large outer perimeter, called the “owner-controlled area,” is far enough from the reactor that only minimal security is needed. Other than signs, the security measures in place for the owner-controlled area are not always visible to the public. The “protected area” is fenced and protected by sophisticated security systems and armed security officers. The innermost circle is called the “vital area.” It contains the reactor and associated safety systems, the control room, the used fuel pool, and the main security alarm stations. Access to the vital area is limited and protected by locked and alarmed security doors.”

Then there are the cybersecurity measures on top of that.

IAEA best practices staffing guidelines suggest 20% of staff at nuclear generation facilities are security staff.[23] Plants have 500–1000 staff.[24] For an average facility then, there might be 750 staff and 150 security staff. Assuming an average fully loaded cost per person of $100,000, that’s about $15 million per year per reactor, or about $2 billion annually including construction and decommissioning sites, where security is expected to continue at roughly equal levels while most other operational roles diminish substantially.

Assuming capital and equipment costs of 20% of labor costs, that’s another $3 million per year per reactor, or about $450 million over the life of the reactor.

Total site security costs then are in the range of $18 million per year, or $2.7 billion for the full lifecycle of the reactor. The $18 million is in the range of 5% of total operating expenses, which seems low but possible. For the purposes of this assessment, $18 million will be used.

Total security costs

While there are substantial error bars around these numbers, they are likely reasonable approximations, especially as this assessment undoubtedly missed line items.

Given that the site pays for 90% of NRC licensing costs and its site security, nuclear operators are paying roughly $24 million of the annual $53 million in security costs. The rest, roughly $30 million, can be considered uncounted subsidies of nuclear generation per reactor. That amounts to a $4 billion dollar indirect annual nuclear subsidy in addition to the $1.6 billion in direct tax breaks for the nuclear industry.

It’s possible that some of municipal and state level police costs are funded by nuclear operators, which would shift that number slightly, perhaps up to 50% of total security costs.

Small Modular Reactors

There is nothing about small modular reactors (SMRs) which would indicate that they would have lower security costs than full sized reactors. They would have to be grouped in reactor sites, but with more SMRs per site, in order to spread the operational costs and the like across the reactors economically. They would still require full international, national, state and municipal overlapping layers of protection. They would still require high levels of site security. There is no evidence that decommissioning them will take less time.

Featured image courtesy US DOE Office of Nuclear Energy

Footnotes