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Nuclear Liability in the Shadow of Bhopal

3441138290_40ed634316 There’s been a lot of work done to expand the relationship of the United States and India, one part of which allows nuclear trade and technology to flow between the two countries. President George W. Bush’s administration worked through a lot of the issues, culminating in a so-called 123 agreement in 2008 opening nuclear trade.

This agreement took so much effort because India has avoided anti-proliferation treaties and harbors nuclear warheads – resulting in a two decade moratorium – so the determinative factor was whether India in the interim had proved to be a good actor on the international stage. Answer: good enough.

But one remaining piece of the puzzle was about liability concerns – whether most liability should lie with the supplier (which might be American) or with the operator (most certainly Indian). While every country hoping to operate in India wants to contain liability on suppliers, it’s especially true for the United States, which does not have a state-run nuclear industry. That can hinder trade  – and most countries cap liability on suppliers to remove the hindrance.

And now the Indians, intending to pass a bill that limited liability – have done – the opposite. What’s the old saying? - Cutting off your nose to spite your face.

Now the question is whether foreign or even Indian energy companies will be willing to come in to provide the expertise India needs to expand, because of the liability guidelines codified in the legislation in case of a nuclear accident.

Why?

But the Indian law bucks international norms and makes suppliers potentially liable, too. Indian industrial groups have already expressed reservations, while analysts warn that many private foreign energy companies may now decide not to take part.

And some of the reactions are pretty sour.

“This makes the fruits of the Indo-U.S. deal go to waste,” said G. Balachandaran, a security analyst in New Delhi with a specialty in nuclear issues. He added: “It may well be the end of civil nuclear growth in India.”

Let’s be fair here. India suffered a ghastly incident of corporate malfeasance.

In Bhopal, thousands of people were killed after an explosion in December 1984 at the Union Carbide pesticide factory unleashed a poisonous cloud over the city. India sought $3.3 billion in damages from Union Carbide, since purchased by Dow Chemicals, but would later settle for $470 million. Much of the money has not been distributed, and many victims have gotten only nominal payments.

And that was 26 years ago. Let’s leave aside the risk of a nuclear power plant creating a disaster on this level – vanishingly low – to note that there are decided differences between two such scenarios. Not least among them is that Union Carbide owned and operated the Bhopal plant and the Indian government will own the nuclear energy plants. So the nationalist concerns and feeling of grievance made the debate and subsequent discussion flow in an unmistakably wrong direction. Indians will be in charge of the nuclear plants top-to-bottom and the beneficiaries of emission-free electricity.

But I cannot bring myself to discount Bhopal or the shadow it casts on India’s relations with foreign entities. Consider:

Meanwhile, Warren M. Anderson, the former chairman of Union Carbide, has never been prosecuted, and he still lives in the United States, which has declined to extradite him.

Should an Indian legislator (any Indian) feel warm about this? Of course not.

The New York Times story is very detailed on the Indian politics behind this terrible legislation. What the story almost gets is that Indians really want trade in nuclear materials with the United States and if this law is as bad as it seems – and it is - it is unlikely to stand. Cooler heads will prevail – hopefully. We’ll see.

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A nice op-ed from the Sarasota Sun Sentinel (try that three times fast):

Currently, FPL nuclear plants provide 21 percent of our power demands in South Florida. Nuclear power plants have both immediate and safe shutdown procedures, in addition to leak- and crash-proof containments. These safeguards will avoid a widespread environmental disaster like the one we witnessing in the Gulf.

Written by Stan Davidson, a retired Westinghouse nuclear licensing engineer, his attempt to join nuclear advocacy to the BP oil spill is a little problematic:

To alleviate our demands on both domestic and foreign oil, we should build more nuclear power plants and reduce our reliance on offshore drilling for oil and the potential hazards it creates.

Nuclear does have a place here – electric cars and hybrids are on the horizon – but nuclear and petroleum really don’t weigh on each other all that heavily - yet. But so what? – it is a local story hook – and Davidson does get the salient facts right and make his case. We’ll take it.

Going up! The Kudankulam Nuclear Plant in India.

Comments

Bankrupt said…
The U.S. Congress needs to fix this problem that places U.S. nuclear vendors at a competitive disadvantage with France, Japan, Korea, Russia, and soon China in nuclear exports.

The U.S. is continuing to import vastly more than it exports. In family terms, consuming far more wealth than you create (e.g., running up big credit card bills) leads to bankruptcy.

The neat thing about bankruptcy is that you can erase your debt, and then you have to do your own work since no one will end to you any more (e.g. exports will not be greater than imports anymore).

At least then the U.S. will be producing as much as it consumes, rather than continuing to mortgage our children's future by importing more than we export.

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