Comments on NRC project on foreign ownership of nuclear reactors

Citizens Oversight (2013-09-06) Ray Lutz

This Page: https://copswiki.org/Common/M1382
More Info: Nuclear Energy, Shut San Onofre

• COPS_comment_to_NRC_on_Foreign_Ownership.pdf: Official submission to the NRC.

To: Jo Ann Simpson
Financial Analyst
Financial Analysis and International Projects Branch
Division of Inspection and Regional Support
Office of Nuclear Reactor Regulation
Phone: 301-415-8388
email: JoAnn.Simpson@nrc.gov
cc: Anneliese.Simmons@nrc.gov

Please accept this as a comment to the project considering foreign ownership of nuclear reactors.

Background

The Atomic Energy Act and NRC regulations disqualify any applicant for a nuclear power plant operating license if the applicant is owned, controlled or dominated by a foreign national, a foreign corporation or a foreign government. In recent years, a number of licensing actions before the NRC have involved complex issues of foreign ownership, control and domination. This is likely due to the increased globalization of the electric power industry and complexity of corporate structures generally.

The Commission directed the staff in March to provide its assessment and proposals by Dec. 31. At this time, no specific changes to guidance or regulation are under consideration.

The NRC held a Webinar on Aug. 21 to Discuss Regulations On Foreign Ownership of U.S. Reactors. I was able to participate in this webinar, and additional comments were requested.

Note: We were told that the comment period ended on August 2, 2013, prior to the webinar. This practice of having the comment period close prior to the public comment event does not make any sense and should not be repeated.

Current regulations require that companies that run nuclear reactors much be at least 50% owned by U.S. entities. The Calvert Cliffs plant was proposed to be owned and perated 100% by a company based in France, and actually part of the government of France. See LBP-12-19 for details. This was the reason the NRC opened this project.

Foreign Owners should have a minority position.

The current regulations were formulated prior the events of Sept. 11, 2001 which changed the perceptions of the homeland security, and many related regulations. It is time to respond to these issues by making sure that foreign ownership is a super-minority (<33%) of ownership of these plants, and U.S. citizen ownership should be a super-majority (>66%). Furthermore, the company should be based in the U.S. and subject to our laws (and not just a shell corporation).

We take this position due to safety concerns at these plants and the inherent properties of the regulatory systems utilized in the U.S., including the U.S. NRC, and other political and governmental institutions that operate to help guide policy followed by that institution, as well as political pressure put on owners through other (non-official but extremely important) mechanisms. Let me explain.

1. The NRC is inherently biased against Safety and for increased industry profits

Although the NRC boasts proudly that it holds safety as the number one goal, the systems and culture of the agency are actually constructed the other way. This is not a accusation that the NRC is corrupt or the people who work there are all coopted by the industry. On the contrary, these workers are likely innocently working within the system, but the system itself is constructed such that a severe bias toward profits and against safety exists.

The details of this assertion are contained in this companion document: http://www.copswiki.org/Common/M1381 and attached to this email as Attachment A.

2. Political Pressure is therefore very important

Given the inherent bias against safety which is systemic within the NRC, working "outside the system" is extremely important for those who are advocates for increased safety. These mechanisms include:

• Political pressure through our traditional representative institutions. This mechanism requires that we contact our elected representatives who then may have an effect against the "slippery slope" against safety and toward profits. The effect may include changes in laws, directives to the agency, etc.
• Political pressure outside traditional representative institutions. This mechanism includes attempting to affect the political climate in which all the actors exist, such as the corporations who are (properly) working for increased production (and therefore profits). However, if the climate is such that actions away from safety become unpopular, it will be difficult for those corporations and/or governmental agencies can blindly move in that direction.
• Market Pressure. If a company is marked as being "against safety" it may see its value change in the market. This allows those who are advocates for safety to have an effect on the decisions these companies make, and that can stop the slide down the slippery slope toward profits and away form safety.

If we are dealing with foreign entities, these pressures disappear. For example, in the Calvery Cliffs plant, if it is 100% owned and operated by the French-based organization, the political pressure here in the U.S. would not exist. Any political pressure is all but impossible in such cases.

3. The bias should be toward safety.

As mentioned, internal to the NRC, systems and culture is biased toward profits and away from safety. To offset this, we should make sure that external to the NRC, the mechanisms are biased the other way, i.e. toward safety. To do this, we require that the regulations be tightened up so that any entity that operates nuclear reactors must be owned at a super-majority basis, i.e. 66%.

4. There is a danger that we lose control of the plant.

At an extreme, there is a danger that not only will these operators be immune to political pressure toward maintaining safety, but the plant itself could fall into control by an unfriendly foreign entity through innocent actions to allow control by trusted foreign entities. Say, for example, that we allow France to own the Calvert Cliffs plant. Over time, let's assume that France moves toward more control by religious extremists, say in the Islamic culture, which is actually growing stronger in France all the time. Assume the French government is secretly infiltrated by those extremists unbeknownst to the us. They are operating the plant, and upon a call through religious circles, the plant is used to blackmail the U.S.

Although the scenario above is entirely fictional, it is not that far from reality. The names may change, the religion may change, but the fact remains, that the risk exists.

Conclusion

We therefore conclude that the current regulations are insufficient to fulfill the stated goal of the NRC to put safety as the number one goal. These regulations should he changed to require at least 66% of the owners of the plant be U.S. citizens and residents within the domestic boundaries of the country. Furthermore, the company should be based in the U.S. and subject to our laws (and not just a shell corporation).

Respectfully submitted,

--Ray Lutz National Coordinator, Citizens Oversight

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