Podcast - Hot Topics in Nuclear Waste

Andy Kriha: Hello and welcome to today's episode of "An Energized Exchange" where we will be talking about a very timely topic, nuclear waste. My name is Andy Kriha. I am an associate at Holland & Knight in the D.C. office, and I work on nuclear energy issues, and I'm joined today by Liz.

Liz Craddock: Hi, everybody. Liz Craddock, I'm a partner here at Holland & Knight, and I've been working on energy policy in D.C. for about two decades now. Spent time working for Senator Mary Landrieu of Louisiana on energy policy in the personal office and also as staff director of the Senate Energy and Natural Resources Committee. So I've looked at nuclear issues for a long time here in D.C., and really happy to be here today talking about this hot topic with you, Andy.

Andy Kriha: Great. Thanks, Liz. So I guess I'll go ahead and get started by providing some brief background on the case. So we're starting here today by talking about a Supreme Court case. The Supreme Court granted cert in NRC vs. Texas earlier this month. The case will be heard some time in the spring, briefing, and is currently scheduled to last through mid-February, which means the oral argument will occur likely in March or April of this year with a decision next summer, in the summer of 2025. So what this all stems from is the NRC licensed a temporary nuclear waste storage facility, a privately owned facility in Texas, and it purported to do this pursuant to its Atomic Energy Act authority, which allows it to license the possession of source material, byproduct material and special nuclear material. The state of Texas and a private group with nearby land interests challenged the NRC's authority to issue that license, first in the Fifth Circuit and now, of course, it's going to the Supreme Court.

The way the NRC's process works is there's kind of two separate pieces, at least two separate pieces that are relevant to this challenge. Parties have an opportunity to intervene first in the adjudicatory process where the NRC actually makes the technical decisions on the license, and then also there is the separate environmental process, the NEPA process. So this private group did attempt to intervene in the adjudicatory process but was denied. Texas did not attempt to intervene in that process, and both parties submitted comments on the NEPA process. So the NRC ignored their comments saying that this facility shouldn't be licensed, went ahead and licensed the facility anyway, and they brought it to the Fifth Circuit with one main argument as to why they should be allowed to issue the license, and that raised a separate issue from the NRC. So the first issue is this Hobbs Act issue. The Hobbs Act is a statute that, among other things, determines who is allowed to challenge certain agency actions, and we'll talk about that a little bit more later. But there is a major question as to whether or not these two parties are even allowed to sue. And then, of course, the second question is if these parties are allowed to sue, whether or not the NRC has authority to issue the license under the Atomic Energy Act and the companion statute, the Nuclear Waste Policy Act.

Liz Craddock: Thanks, Andy, for that background. That's really helpful in sort of understanding what's happening in these cases. On the Hobbs Act question in particular, what are the possible outcomes and how would each impact the NRC and the nuclear industry?

Andy Kriha: Sure. So first, a little bit of background on the Hobbs Act question. The Hobbs Act states that the only people who can sue for an agency action, in this case an NRC licensing decision, are aggrieved parties, and the NRC has argued that "aggrieved parties" has a very specific meaning in the context of the Hobbs Act, and that that meaning is a party that actually successfully intervened in the adjudicatory process. The private group and Texas disagree. They argue that really you only have to have any sort of attempts to participate in the process at all, that their submission of comments and the NEPA review was enough, or if not, certainly the land group's attempts to intervene in the adjudicatory process was enough. The Fifth Circuit did state that it agreed in principle with the challengers that any attempt to participate whatsoever qualifies a party as an aggrieved party that can sue under the Hobbs Act. But it actually didn't even do a full analysis. It recognized that other circuits disagreed with that stance and then said we don't actually need to resolve this tension between the view we just stated and the other circuits, we're actually going to rely on this ultra vires exception — ultra vires being unnecessary Latin for judge-made exception — and it pointed to the history of cases that say when you're challenging an agency's statutory or constitutional authority to make a decision at all, you are allowed to bring that challenge even if you were not a party to the underlying proceeding. And you can imagine some theories for why that would make sense. You know, perhaps it's futile to try to intervene in a proceeding below where the agency doesn't even have authority to make that decision in the first place. Actually, it's an extraordinarily interesting history as to how this ultra vires exception came to be. I don't think we really have time to go through it in this podcast, it would be an entire episode of a legal history podcast, starting with a 1910 case by the Commerce Court about grain elevators. But it is quite fascinating, and I think when you go through the whole history, it, it really reveals that this exception probably should not exist or at least should be rethought in the context of this case.

But all that said, there are basically three different ways that the Supreme Court could ultimately come out on this Hobbs Act question. The first would be that it says, yes, this ultra vires exception that the Fifth Circuit says exists that no other circuit has acknowledged has merit, and it could do that in a relatively non-controversial fashion by pointing to two Supreme Court cases from 1919 and 1923, but I don't think that's, that's really fully supported. However, they couldn't do that. That could be the result. And what that would mean for the industry is that any party that is arguably aggrieved, would not need to make any attempt whatsoever to participate in this underlying agency proceeding. As long as they're challenging the statutory or constitutional authority of the agency, they can just come in at the end after all of this process has already played out and just add an additional layer of litigation. It would be somewhat limited because it would only apply where there is a question about the agency's statutory or constitutional authority. So as we'll see when we get to the merits question a little bit later, there are cases where the NRC's licensing authority has not been called into question, and if you're getting one of those types of licenses that's not questionable where there clearly is authority, you'd still be in the clear, you wouldn't have to worry about this additional layer of litigation. But if you you're a party seeking a license that was a little more questionable, like the one in this case, you're going to have to just buckle up for some additional litigation every time you go looking for your license.

Option two is that the Supreme Court says no, this ultra vires exception does not have merit and we're going to kick it back to the Fifth Circuit to decide the question of what a party aggrieved means in this situation. So that would add additional time and uncertainty to the ongoing process. First, the Fifth Circuit would have to make a decision. It has already stated that it believes that any amount of participation makes you a party aggrieved. And so it would likely reach that same result on remand, but it would have to explain that further and give more of a basis for the Supreme Court to uphold it. And then, of course, you would have to, you know, potentially go back to the Supreme Court again, so possibly just adding a couple additional years of litigation to this process.

Option three, where the Supreme Court says no, the ultra vires exception does not have merit, but you have given us enough information to determine that this is an aggrieved party. Based on the statements the Fifth Circuit has already made, Supreme Court could say we have a live controversy here, we have enough to make the decision and these parties are in fact aggrieved parties. The result there would essentially be the same as option one, adding this additional layer of litigation. Parties would not be able to just completely ignore the underlying agency proceeding and come in with litigation at the end, but the amount of engagement they'd have to have would be pretty nominal, right? They'd just have to submit a single comment to the underlying proceeding and then be able to sue at the end.

And then option four would be to say that the ultra vires exception does not have merit, and also these parties are not aggrieved parties. They agree with the NRC's interpretation of what that means under the Hobbs Act. That would be the ideal outcome for the nuclear industry. The court would not even reach the merits question on the ADA and NWPA, it would simply say this isn't a live controversy and so the NRC's authority would be preserved, at least until a party that does have authorization to sue could challenge it at some point in the future.

Liz Craddock: Well, that's pretty complicated. Number two definitely sounds like Groundhog Day. I mean, I can't imagine a scenario where it gets kicked back to the Fifth Circuit and they essentially just kick it back up with the, you know, basically the same thought process that they had underlying in the first place. I mean, I have Bill Murray running through my head on Groundhog Day for sure on that one.

Andy Kriha: Absolutely. But that's, you know, that's how our system works.

Liz Craddock: Yeah, no, I get that. Well, let's move to the sort of second question at hand here. Maybe the one that's more in the weeds on, you know, what does the actual Nuclear Waste Policy Act say, and, you know, the interplay between that and the Atomic Energy Act, you know, what are the possible outcomes on this for the court, and if the court does uphold the Fifth Circuit's decision, what is the impact for the NRC and the nuclear industry if it upholds it or if it actually decides that the Fifth Circuit is incorrect in its analysis here?

Andy Kriha: Yeah. So the Nuclear Waste Policy Act is the law that Congress came up with to deal with nuclear waste once, you know, the industry had developed for a couple of decades and they realized that recycling wasn't going to be a viable option — or at least a viable option in the short term — and that something actually needed to be done about this waste. And the ultimate goal of the WPA is to develop a long-term repository, a permanent geologic repository that was supposed to be Yucca Mountain. It may still be Yucca Mountain one day, who knows? We'll get into that when I ask you about policy in a while. But, the executive branch has not really shown any interest in doing that statutory duty and coming up with that long-term permanent repository. So in the short term, until that is developed, the Nuclear Waste Policy Act also gives a couple of other options, the main one being onsite storage at a licensed reactor. And then there are a few other limited instances in which the DOE can provide offsite temporary storage, neither of which would apply here because this is private storage. It is absolutely silent on private storage with the exception of there being one policy statement within the law that says this is not meant to encourage offsite private temporary storage, but it also does not expressly prohibit offsite private temporary storage away from a reactor, and it also expressly states that it's not meant to curtail the existing authority under the Atomic Energy Act.

And so that then raises the second question: If it is allowed under the NWPA, this offsite private storage, is it allowed under the Atomic Energy Act? The NRC says that it has the authority to license these three types of nuclear material, special source and byproduct, which are the three types of material that are contained within nuclear waste. And the challengers argue that while the NRC can license that possession, there's a few reasons why that, you know, within the greater context of the ADA and the end of NWPA, that's not necessarily the case for waste. And the Fifth Circuit agreed with the challengers. It said first that the NWPA provides a comprehensive scheme. This is a concept in law where there is a specific statute that creates a comprehensive scheme meant to govern an entire area, even if there is a separate statute that is more general and arguably provides broader authority, that this more specific, comprehensive statute was made to the exclusion of any other authority that could be interpreted in a more broad manner. And then they say, even if the Supreme Court disagrees with us, the ADA's authority to license these special types of material has an enumerated list of the types of facilities that can be licensed. And then there is this catch-all provision that says, you know, or anything else that the NRC deems necessary or appropriate to carry out the purposes of this act. And so that brings us to a second concept in law that when there is a catch-all that is attached to a list, the catch-all has to be interpreted within the context of that list. If the list implies some sort of closed universe, the catch-all is meant to capture anything else in that same universe, but not to capture anything. And the Fifth Circuit went through an analysis with, you know, with various degrees of credibility in which it said that, you know, this enumerated list was a closed universe, that waste storage was not like the other things in the list and thus was not captured by the catch-all.

What could happen here? Well, it honestly is going to be kind of a tough decision for the court, I think, if they reach this merits question. When you have these different legal theories like the comprehensive scheme theory versus, you know, the canon of interpreting lists and catch-all provisions in lists, that is when you tend to see these types of decisions where any outcome can be justified and sound correct and sound objective. And so individual justices kind of just weigh these different theories differently in order to get the outcome that they want. These are also the types of cases where it's not at all uncommon to see split decisions that aren't necessarily along party lines. This could very easily be a 5-4 or, you know, even a 6-2-1, any sort of breakdown. And so it's really going to be interesting. But I think here there are three potential outcomes, really.

The first one is a finding that the NWPA is a comprehensive scheme. If they find that they don't even need to reach the Atomic Energy Act question — so the NRC's authority under the Atomic Energy Act outside of waste is at least temporarily safe — there would be no question there, but it would definitively state that the NRC cannot license these types of offsite waste storage facilities, and so it would be very bad for the industry in terms of hindering development, right? Because right now, I'm sure we'll talk about more as we go on here, we're running out of space. These existing facilities weren't built to have unlimited space to handle waste. They were built on sites that assumed the waste would be taken to a permanent repository sooner rather than later, and new facilities are going to be built in more congested areas, right? These SMRs that are small modular reactors that are being proposed are on sites of data centers and on sites of industrial facilities where there might not be any space at all, or even some of these designs are designed to be defueled on site. They're designed to just take the entire reactor core away and replace it with a new core after some number of years. And so the concept of onsite waste wasn't even contemplated in the design of the reactor. And then, of course, we have, you know, kind of the most absurd result where there are sites where there was a reactor at one point, but that reactor is now decommissioned, has been disassembled and gone. Is that no longer onsite at a licensed reactor where there's already waste that exists? So I'm a little bit afraid of this option because I think the Supreme Court will view it as kind of the compromise option, where they get to curtail agency authority while only doing damage in this one niche area, but it's a very important area that could hinder the entire industry.

Option two would be that the court says the Nuclear Waste Policy Act is not comprehensive and there's no authority under the Atomic Energy Act. So this is kind of the chaos outcome. This would call into question all of the NRC's licensing authority for ancillary activities that are not on that enumerated list. And so there's all manner of licenses that could be challenged, existing licenses that can be challenged when they're up for renewal, new activities that need to take place to support this new nuclear supply chain, and the entire licensing process could just be ground to a halt.

And then lastly, option three would be that Nuclear Waste Policy Act is not comprehensive, but there is authority under the Atomic Energy Act. And of course, this would be the best outcome for industry. It would maintain the NRC's authority to issue whatever licenses are necessary in order to grow the industry and make sure it is completely supported. And before I go on to asking you some policy questions, there is just one other thing that I want to note about this case. The Fifth Circuit did raise the issue of the major questions doctrine, and I think some people are gonna try to make a little bit of hay out of this. I don't think this is going to come up at all. I don't think it's going to impact the decision in any way. I think what we need to remember is that this case was decided by the Fifth Circuit before, almost a year before the Loper Bright decision got rid of the Chevron doctrine. So this, I think, was just the Fifth Circuit's way of trying to head off any sort of argument that you should defer to the agency's authority or that the court should defer to the agency's interpretation. But since Chevron doctrine is now gone, there was no risk of that happening anyway. I don't think the major questions doctrine is really going to come up at all.

So now that I have gone into way too much detail about the case, I do want to ask you, Liz, about policy. So before we get into the more specific pieces here, just stepping back, nuclear waste policy more broadly. I mean, nuclear, at least from my perspective, seems like one of the issues that has the most bipartisan support right now. We've had two major pieces of bipartisan legislation in the last five years, including the ADVANCE Act just a couple of months ago. Maybe that's not entirely true, that it's completely bipartisan. You know, there might be still some environmental groups out there that don't like it, and I think Trump made some comments the other day that we're not quite as bullish as some past comments. But, the big question here is, is there any appetite in Congress at all to deal with the nuclear waste issue, or is this just completely a political nonstarter?

Liz Craddock: Thanks, Andy. Appreciate all of that. Yeah, you know, nuclear is such a hot topic these days, and I think you're right. I do think there's a lot of bipartisan support, but it's really on the generation side, the power generation side. When you start to get into what to do with the waste, I think then it becomes more of a political hot potato, if you will, pun intended. But, but it, you know, I think everybody in Congress recognizes that we're going to need more energy from all of the above sources in our future. I mean, we're seeing such load growth in the United States. We've obviously seen some pretty exciting developments from, you know, Amazon, Google, Microsoft saying that they're going all in on nuclear energy and they really want to marry sort of their data centers to nuclear energy as its power source because Duke Energy's great energy. Right. It's a, it's a great sort of stable base power that you can have. And if you can actually put some of these potentially smaller modular reactors next to it, you can get a lot of bang for your buck as far as a power source out of nuclear energy in a carbon-free, from a carbon-free source. So I think that nuclear energy and the generation of it is, is such a such a hot topic. And we have seen a lot on, on the topic. You know, Congress has enacted two laws over the past year, which is, probably hasn't happened in over a decade. So there's a lot happening. But if we shift gears and we go to the nuclear waste problem, I mean, Congress has been trying to solve this problem since the '70s. And I dare say that we are no closer today in solving this problem than we were in the '70s.

So it's, to go back and do a little walk down memory lane, as Andy had mentioned earlier, the Nuclear Waste Policy Act was enacted in 1982. It was the premier law to determine how our country was going to do with nuclear waste in the United States. Obviously, we just can't put nuclear waste anywhere. So the law was instructive in helping determine 10 locations and six states that they had identified that would be good for nuclear waste. Eventually, that list was whittled down to three sites: Hanford, Washington, Smith County, Texas, and Yucca Mountain. I think everybody probably listening to this podcast has realized that Yucca Mountain was eventually selected as the official site from amendments made to the act in 1987. Although the federal government has apparently been studying Yucca Mountain as its repository since 1978, so for a long time now. Congress officially approved Yucca Mountain as the official repository in 2002. And then we go on a series of appropriation bills that provide funding to establish the repository. And if you go there today, you'll see a very, very sort of high-tech repository that has been built that obviously isn't being, being used at the moment. Congress has spent a lot of money in, in the development of, of Yucca, but due to politics that is no longer being funded. And it seems like politics on both sides of the aisle have declared that Yucca is no longer going to be the official repository, although Congress has not done anything to amend the Nuclear Waste Policy Act to sort of take that stance down officially at law. So officially in law, Yucca is still the place that the nuclear waste should be heading, sort of after Congress stopped providing appropriations for, for the repository in Nevada. That happened in about 2011. So pretty much after Congress stopped funding the project in 2011, the Obama Administration created a blue ribbon commission in 2012 with the urgent need to find a suitable site, and they wanted to do this via more of a consent-based approach. So instead of the federal government forcing a repository on a location, they were hoping that states and communities would come together and, and wanting to bring the repository to, to their area. Now, that was in 2012 and we're now in 2024. And no community has raised its hand in over a decade to take on housing nuclear waste in and within its borders.

So, you know, I think the question on whether there's any appetite in Congress to address nuclear waste, I think the answer is, is no. I think that you will find there are members of Congress who want to keep it out of their jurisdictions that are playing a lot of defense. You've definitely seen bills that have been introduced to that effect. You know, the Nevada delegation has a Nuclear Waste Informed Consent Act that they would like to see enacted because nobody in Nevada wants Yucca Mountain to, to become officially operational. I think their motto essentially is they don't actually generate any nuclear power in Nevada. So why should we have to dispose of it there? I think that's, you know, the common sentiment that you hear from the Nevada delegation. We have heard sentiments from former President Trump that he is supportive of nuclear energy and would like to see more of it, although I think he's made some recent comments this October and in opposition to nuclear energy, saying that it can potentially be dangerous. So it's unclear, you know, where the former president stands on nuclear energy. But I think it is fairly clear that he is very much opposed to Yucca Mountain. Looks like his former administration to U.S. officials in May of 2020 had officially stated that Trump is opposed to Yucca Mountain as being our official repository. When it comes to an appetite of whether Congress has one to address nuclear waste, I think that they can't continue to kick this can down the road. I mean, we are clearly going to need more nuclear energy if we're going to maintain the 20 percent baseload power that it's currently generating for the U.S. electric sector. We're going to continue to add in new nuclear production into our grid, whether it's from small modular reactors or the larger reactors in the future. Congress is going to have to officially do something on this nuclear waste matter. But unfortunately, I don't know if Congress will have an appetite anytime soon. We haven't seen one, I dare say, in 40-plus years. So it doesn't seem like they're in any big hurry.

Andy Kriha: So then let's say this Supreme Court case that we talked about comes out against the NRC, they say the NRC does not have authority to license away from the reactor storage facilities. Presumably, there's going to be a lot of communication from the industry at that point saying, hey, we need something. We're running out of space. Certainly the, the SMR community say we absolutely need this to be able to build anything at all, all of these generation goals that you've set out in the ADVANCE Act and in the 2019 law before that just will not come to fruition without some sort of action, even if it's a little bite -ize action, like just saying the NRC can license temporary away from reactor facilities on private land. I mean, if that happens, would Congress take at least that little step, do you think?

Liz Craddock: Yeah, I think if the Supreme Court comes down that way, I mean, Congress is going to have to take some action. And so, I don't think we're going to see any big sweeping actions. I just don't think that, you know, we're looking at the makeup of the next Congress and 119 to be pretty evenly divided, whether Republicans or Democrats have control over the Senate or the House. So in an evenly divided Senate, it's harder to get sort of this big sweeping or an evenly divided House or Senate. It's harder to get those big, sweeping actions. So I think we'd only see some sort of bite size. And if the Supreme Court determines that NRC doesn't have the ability to establish these offsite locations, and it, it is, I think, forcing Congress' hand to take some sort of action here. But it's going to require Congress to be, you know, potentially a little more brave than they have been to date on this issue, and I just don't know if we're going to get a Congress next, next year that's going to want to be a little bit more brave than it's been in the past.

Andy Kriha: And so you kind of alluded to this a little bit in your answer, but I guess for our listeners, you will almost certainly be listening to this after the election, and we're recording about a week before the election. Does your answer at all depend since, you know, we're, we're kind of at that stage where we have to insert the election and everything. So does your answer depend at all? Are there outcomes of the election within realistic ranges that could cause us to go a little bit harder one way or the other?

Liz Craddock: Yeah, you know, I think it does depend a little bit on who's elected. I mean, those in this country, those elected officials who want to move us to more of a carbon emission-free power generation sector would really potentially want to support nuclear energy. And if you want to support nuclear energy, then you have to be willing and recognize that we have to solve the nuclear waste repository problem. So if you see nuclear is part of the solution for clean energy moving forward, then I think you're going to be more invested into wanting to find a solution to what are we going to do with the nuclear waste. On the flip side, if you don't see nuclear energy as a solution, maybe you don't believe in it, maybe you don't want it to push out natural gas or coal or renewables, whatever your opinion may be, if you don't see nuclear as a potential solution, then you're likely not also going to be enthusiastic about coming up with a solution on the nuclear waste problem. So I think it does depend on who is elected and where and how they see nuclear energy in our framework moving forward.

Andy Kriha: All right. Well, there you have it, folks. Typical lawyer podcast, we gave you a lot of "it depends," a lot of different options, but certainly a lot to watch. So as I noted earlier, there's going to be an oral argument in this case, probably March or April. We'll get a decision likely June, maybe as late as first week of July 2025. So I'm sure we'll be putting out more content as we go, and obviously post-election content on the policy side as well. And if anyone wants me to do an episode on the history of the ultra vires exception in the Fifth Circuit, I really want to make that episode, it's just not that relevant to business decisions, but reach out. I'm happy to do it. So with that, thank you for joining us.