⚛️ Our nuclear problem: A Quick Q&A with … economist Eli Dourado on NRC overreach

'The costs of Nuclear Regulatory Comission compliance are simply too high for nuclear to be relevant going forward.'

Mar 25, 2025

What is perhaps the only thing more frustrating than not having a nearly limitless source of safe, clean energy? Having a nearly limitless source of safe, clean energy — and not being allowed to use it.

For decades, red tape has delayed and blocked the construction of nuclear reactors in the US, preventing us from catching up with surging energy needs, not to mention meeting our climate goals.

Eli Dourado outlines the dilemma in his article, A Lawless NRC Obstructs Safe Nuclear Power:

Building any new commercial reactor in the U.S. has become almost impossible. Only three have been built in 28 years, all behind schedule and over budget. The reason isn’t lack of demand or technology but the NRC’s licensing regime, which, as the plaintiffs argue, “does not really regulate new nuclear reactor construction so much as ensure that it almost never happens.”

Now, Texas and Utah are suing the main culprit, the Nuclear Regulatory Commission, in hopes of allowing small modular reactors to be built and operated with greater independence.

I asked Eli a few quick questions about the implications of this suit, reactor governance, and the future of the US energy landscape.

Eli is chief economist at the Abundance Institute. He was formerly a senior research fellow at the Center for Growth and Opportunity and head of global policy and comms at Boom. Prior to that, he was a senior research fellow at the Mercatus Center at George Mason University, as well as director of its Technology Policy Program.

You can check out his Substack here.

. . . NRC today claims complete and total power over all reactor construction and operation licensing, but I don’t think such claims will withstand challenge, because the Atomic Energy Act is clear.

1/ How did the NRC gain so much power over reactor licensing?

The NRC inherited its power over reactor licensing from the Atomic Energy Commission, which was set up after World War II. In 1974, AEC’s portfolio was split up — NRC took on the regulation of civil nuclear activities, while an agency that was later absorbed into the Department of Energy took on nuclear R&D, nuclear weapons, and naval reactor activities.

In the early days after World War II, Congress locked down nuclear development as a matter of national security — all civil nuclear activities required a federal license. However, in the 1950s, America realized that nuclear technology could play a major civilian role. Eisenhower delivered his famous Atoms for Peace speech in 1953, and the modern Atomic Energy Act was passed in 1954. This was deliberately a deregulatory effort. One major change in this Act is that Congress explicitly said that not all reactors would require a license, and it ordered the AEC to create carveouts for small and safe reactors.

While initially the AEC acknowledged the change in policy, it eventually decided to simply ignore Congress and maintain a license requirement for any reactor, regardless of size and safety. NRC has inherited that decision, which is now being challenged in court in Texas v. NRC. So NRC today claims complete and total power over all reactor construction and operation licensing, but I don’t think such claims will withstand challenge, because the Atomic Energy Act is clear.

State-level regulation would allow some SMRs to go forward in a more favorable regulatory environment, potentially reaching a scale that could lower costs and make nuclear a major factor.

2/ What’s your argument for leaving SMR regulation to states, and what effect might that have on larger projects?

The best argument for leaving at least some SMR regulation to states is that it is what federal law requires. If reactors are small enough not to affect the supply of material for our nuclear arsenal and safe enough not to impose credible risk on the public, they are not allowed to be federally licensed, full stop.

In addition to this, many states have experience regulating radiological materials under delegation of authority from the NRC through contractual agreements. When SMRs pose negligible risk, the states already possess the expertise to do it.

Finally, state-level regulation could provide an escape valve for overly burdensome NRC licensing. It is difficult to see how, under the status quo, nuclear energy would ever play a bigger role in our energy mix than it currently does. The costs of NRC compliance are simply too high for nuclear to be relevant going forward. State-level regulation would allow some SMRs to go forward in a more favorable regulatory environment, potentially reaching a scale that could lower costs and make nuclear a major factor. Friendly states like Texas and Utah have sufficient market demand to scale SMRs to the point where they could be the cheapest electricity source, potentially even cheaper than solar.

The international experience shows that if you really want to do nuclear right, you need both a favorable regulatory environment as well as social and political support.

3/ Is NRC overreach a uniquely American issue, or do other countries face similar bureaucratic issues when deploying nuclear energy sources?

Most countries, the vast majority, have zero nuclear reactors. Many other countries have largely copied NRC rules and practices — even China directly adapted some US standards, although they have much higher process efficiency, which has enabled them to deploy new nuclear rapidly. A few countries like the UK have more performance-oriented standards, although they have struggled to deploy reactors for social and political reasons. The international experience shows that if you really want to do nuclear right, you need both a favorable regulatory environment as well as social and political support.

Society advances in lockstep with energy availability.

4/ What effect would deregulating nuclear reactors, big and small, have on the overall American economy?

Nuclear is expensive mainly because it’s hard to iterate and scale. Deregulation would enable a proliferation of cheap test reactors, which could be used to empirically validate the performance of various designs, figure out which subsystems can be deleted, figure out where off-the-shelf components offer equivalent performance to nuclear-rated ones, and generally how to simplify the designs. These perfected designs could then be built over and over again. This is not how we’ve done nuclear so far, and it is why new nuclear is one of our most expensive power sources. In addition, a thriving nuclear industry would build better and more robust supply chains and develop more nuclear experts.

This is what you need to actually drive the cost down. The effect of low-cost nuclear would be catalytic. Society advances in lockstep with energy availability. We have progressed by using building materials with higher embodied energy fractions — from mud and sticks to concrete and aluminum. We have progressed by increasing the number of vehicle-miles traveled, both with more vehicles and with faster speeds. This all costs energy. Actually cheap new nuclear energy would be a game changer, delivering new materials, new transportation modes, cheap desalination, and healthier food.

The global energy market is massive, so geothermal will do great if it can hit its cost and performance targets.

5/ On a separate topic, where do you think advanced geothermal lands as part of our energy mix over the next decade?

I think that even if everything goes great for nuclear energy in the United States, advanced geothermal will still play an important role globally because of proliferation risk. If US companies can eventually do geothermal anywhere for $30/MWh, they will have booming business all over the planet, even if nuclear SMRs can scale and hit $10/MWh. We are not going to allow nuclear reactors to be built in, say, the Central African Republic. But we will absolutely allow US companies developing deep geothermal to operate in unstable countries, assuming they are OK with the risks from a business perspective. The global energy market is massive, so geothermal will do great if it can hit its cost and performance targets.

If not everything goes well for nuclear in the US, then advanced geothermal plays a critical backstop role, enabling cheap, firm power potentially anywhere and with a small land use footprint. Solar and batteries could get quite cheap, but the ability to decrease land use and reduce transmission costs will make geothermal pretty attractive.

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Micro Reads

This presenttion squares with my anecdotal experience that fission stationary power generation has a strong attraction to a subset of commentators, usually male and often with a professional background in engineering, who frequently make the argument that it's irrational to be distrustful of such a statistically benign power source, especially as it's easy to demonstrate that most of the alternatives are inflicting significant harm.

I’ve never been entirely convinced by what I view as the common (and weak) form of the argument as presented above. And I’ve never seen anyone make the strong one: that the worst reasonably foreseeable accidents occurring at the with the highest likely foreseeable frequency still have a better cumulative result than “business as usual” outcomes from the alternatives.

I won’t argue the point, though, because the people making the weak form of the argument have generally convinced themselves that the reasonably foreseeable accidents serious enough to matter have a very low probability of occurring, and I can’t prove otherwise other than to point out that there have been several “near misses” and that, in general, highly complex technologies that depend on modulating unstable conditions are inherently prone to fail in unforeseen ways. (1)

And there’s also this: I’ve always suspected that technological complexity strongly attracts this sort of person and that the “rational” argument masks an “irrational” preference.

In the last few years, we have begun to put my suspicion to a helpful test: as the cost of reliable solar + wind + storage has reached near parity with alternatives in many cases and is already below their LCOEs in others, and the relative cost curves increasingly diverge, will the same people who are enamored of fission stationary power on the grounds of “rational analysis” now embrace a lower risk, lower cost alternative?

To paraphrase J.M. Keynes, “When the facts change, will they change their opinions?”

In my experience, the majority do not.

Now, I get this: for engineering minds that have spent a lifetime regarding instantaneously dispatchable capacity matched to peak demand as the basis for rational planning, a curve that says that if your feedstock is free, then your optimum peak generating capacity is 2- 5x times the average demand is DEEPLY counterintuitive.

(For a brief explanation of why such "overproduction" makes sense, jump to 7:33 here: https://www.rethinkx.com/energy/in-depth/swb-regional-analysis ).

But once you “get it”, it’s beautiful, elegant, and above all supremely practical, and they “logically” ought to embrace the concept.

Usually, they do not.

For example, you get arguments that intermittency is an insurmountable barrier or that “real soon now”, a new generation of fission technology is going to drive that pesky cost curve back down below that of the emerging alternatives—although even assuming only incremental progress, the cost of the best other options is going to decline a minimum of a further 25-30% by the end of the decade.

This attraction remains mysterious to me. It’s not like this is fusion power, which has a very good chance of eventually supplanting all other sources of utility-scale power generation based on cost and environmental considerations—this is FISSION power, which is to the 21st century what coal-fired power generation was to the 20th century.

And ultimately, I'm left with a strong suspicion that attraction to stationary fission power generation is some hubristic attachment to taming the elemental forces of nature, partnered with an innate love of deviously ingenious complexity in the service of doing the same.

_________________________

(1) It's seldom noted in such discussions that the judgment that nuclear power is statistically very “safe” (or not) should be made in the context of relative risks.

For example, the total cumulative operating hours for US commercial reactors without loss of life due to radiological release—(as best I've been able to determine, around 32 million hours, or roughly 3,500 "reactor years" )—might initially seem to demonstrate that such reactors are very safe.

However, that’s close to the cumulative hours commercial passenger aircraft fly worldwide every two weeks.

Even if we define “severe” events at US power plants as requiring at least a partial core meltdown, there have been two such accidents (Three Mile Island and Fermi 1).

Would we regard commercial aviation's safety record as “acceptable” if major structural airframe failure with the potential to cause an aircraft's loss occurred weekly?

I don’t think we would.

There’s also the other significant variable in the equation: the maximum potential damage from an incompletely contained meltdown is, very conservatively, at least three orders of magnitude greater than from a catastrophic airframe failure over a densely populated area.

So, at least to me, viewed in the context of relative risks, two partial core meltdowns in 32 million hours of operation are anything but reassuring.

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⚛️ Our nuclear problem: A Quick Q&A with … economist Eli Dourado on NRC overreach

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