Alexander: “Price-Anderson” Model of Nuclear Industry Liability a Good Model for Oil Industry Response to Spills

Says “the entire nuclear industry is responsible for any accident,” but only the spiller is responsible for oil spill cleanup

Posted on June 9, 2010

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.) today during a hearing of the Senate Committee on Environment and Public Works, of which he is a member, pointed to the industry-funded liability insurance of the nuclear industry as a possible model for liability in future oil spills:

“Rather than arbitrarily raising the existing oil spill liability cap for future incidents—or removing it altogether—I would suggest that we consider the Price-Anderson model that the nuclear industry uses. In that case, the entire nuclear industry is responsible for any accident—each of the industry’s 104 nuclear reactors are required to insure each of the other reactors for damages related to a nuclear accident.  This makes each reactor in the entire industry collectively accountable for the actions of others.  If each reactor were forced to carry $12.6 billion of liability insurance on its own, there would be no nuclear industry because nobody could afford the insurance.  If each oil rig were required to carry unlimited liability the same would be true for an American offshore oil industry as well.”

The Price-Anderson Act requires each nuclear reactor to carry $375 million in liability insurance for its own accident and to also be responsible for up to $111.9 million for an accident at any of the other 103 reactors throughout the country, which means the nuclear industry collectively shares the responsibility to cover up to $12.6 billion in total liability. 

“Also, the Oil Pollution Control Act, which was passed in 1990 after the Exxon Valdez spill, has a provision that says the president shall ‘ensure’ the cleanup of an oil spill and have the ‘personnel and equipment’ to do it, instead of – in effect – delegating cleanup to the spiller,” Alexander continued.  “One might ask, ‘What was President Obama’s cleanup plan and where were the ‘personnel and equipment’ be to implement it?’”

Alexander also said, “Some folks might be surprised to learn that there are proposals in the House and Senate to raise the existing oil tax for the Oil Spill Liability Trust Fund to spend it on other government programs instead of using it for its intended purpose - cleaning up oil spills,” Alexander said. “People must be wondering, ‘What is Washington thinking?’”  Alexander is a cosponsor of an amendment that would prevent any increase in the Oil Spill Liability Trust Fund from being used for any purposes other than responding to an oil spill.