After the Shutdown: Oyster Creek Nuclear Generating Station

December 23, 1969, was a blustery day in Ocean County, with winds gusting up to 20 miles per hour across Barnegat Bay and the temperature dipping into the teens. It was a slow news days as the country paused to celebrate Christmas. Reports emerged that a federal grand jury had issued new subpoenas in a corruption probe that would ultimately take down Newark mayor Hugh Addonizio. In Chicago, anti-war activist Abbie Hoffman took the stand in the notorious trial of the Chicago Seven. Across the Pacific, the Viet Cong agreed to a three-day Christmas truce as President Richard Nixon vowed to wind down the Vietnam War. On the U.S. pop charts, Peter, Paul and Mary’s “Leaving on a Jet Plane” reigned as number 1.

Two years behind schedule, way over budget and with little fanfare, Jersey Central Power & Light put its Oyster Creek nuclear generating station online that day at 12:01 am, producing more than 500 megawatts of electrical power. It marked the first operational use of General Electric’s Mark 1 boiling-water reactor, promoted as a smaller, cheaper alternative to its predecessors. 

Nuclear power was already old hat. Oyster Creek, located in Forked River, an unincorporated community in Lacey Township, was the nation’s 16th commercial nuclear-fission power plant; another 48 reactors were under construction, and 41 were in the planning stage. The Oyster Creek startup garnered only a brief mention on page 33 of the New York Times.

Over its lifetime, Oyster Creek would generate more than 192 terawatt hours of electricity—enough to continuously power about 600,000 homes for five decades. It would also produce 750 metric tons (1.7 million pounds) of radioactive nuclear waste. It experienced no major operational problems.

At noon this past September 17, operators shut down the Oyster Creek turbine. Three minutes later, two “scram” buttons were simultaneously pushed, inserting 122 control rods into the reactor core and aborting the nuclear reaction inside the vessel. After nearly a half-century of operation, the nation’s oldest active nuclear power plant went offline for good. 

That began the onerous task of decontaminating and dismantling the plant—a process known as decommissioning. The shutdown also created severe financial angst among local officials, who had grown dependent on Oyster Creek’s tax revenue. And it offered the latest painful reminder that the United States lacks a plan to deal with a growing stockpile of radioactive nuclear waste. 

The shutdown left New Jersey with three operating nuclear reactors, which produce 37 percent of the state’s electricity. With the emergence in recent years of cheap and abundant natural gas, along with a growing appetite for renewable energy, plants like Oyster Creek have lost their competitive edge. The nuclear age is on the wane in the United States, at least in the commercial energy sector. Today, there are 60 active U.S. nuclear plants with 98 reactors, down from a high of 112 operational plants in 1991. Only two reactor plants are under construction.

Oyster Creek’s license was to expire in 2029. But in 2010, the state Department of Environmental Protection ordered the plant to build cooling towers to protect Barnegat Bay from its warm-water discharges. After estimating the cost at more than $800 million, Exelon Corp., the current owner/operator, reached an agreement to close the plant in 2019. That was advanced to 2018 in part to manage costs.

Courtesy of Holtec

A CHANGE IN PLANS

Shortly after the shutdown, plant employees began the process of cooling down the reactor and removing all nuclear fuel for storage in the plant’s used-fuel pool, a bath of highly purified, chemically balanced, fresh water. The 40-foot-deep pool—with reinforced concrete walls 2-feet thick—contains 2,430 fuel assemblies, more than half of the spent fuel that has accumulated over five decades.

Exelon estimated decommissioning would take 60 years. Its method, a process known as SAFSTOR, includes waiting for the radiation—both in the fuel pool and the reactor—to diminish naturally over decades, reducing the contamination risk for workers dismantling the facility. That plan changed dramatically last summer when Exelon reached an agreement to sell the plant to Holtec International, which has a technology campus in Camden, and proposes to complete the task in less than eight years by expediting the transfer of the spent fuel from the pool to dry storage casks before its radiation has appreciably decayed. Holtec and Exelon have asked the U.S. Nuclear Regulatory Commission for an expedited approval of the sale by May 1,  prompting concern among environmentalists. 

“What’s the big hurry?” asks Janet Tauro, board chair of Clean Water Action NJ. “Holtec may be the best thing in the world, but we’re talking about 1.7 million pounds of nuclear waste.” Lacey Township, the Sierra Club and Concerned Citizens of Lacey have asked the NRC to hold a public hearing. Tauro and Clean Water Action New Jersey have asked the state attorney general for a review of the Exelon/Holtec deal.

“The NRC will try to complete a review of the application by May 1,” says NRC spokesman Neil Sheehan.  “But we have made it clear to Exelon and Holtec that achieving that will be contingent upon us receiving the information we need.” That could include information about technical aspects of the decommissioning and adequacy of funding for the project.

Exelon and Holtec officials are nonetheless optimistic the deal will be approved on their timetable. Soon, the nuclear license and the 700-acre property would be transferred to Holtec—along with control of a nearly $1 billion decommissioning trust fund generated by utility ratepayers over decades. Holtec would assume all liability for the spent nuclear fuel—and any potential accidents.

Jeff Tittel, director of the New Jersey Sierra Club, says he’s fine with the expedited decommissioning schedule. “It’s very doable and it’s been done many times throughout the country,” he notes. But he would like to see the storage site for the nuclear waste elevated and upgraded to withstand potential flooding or a terrorist attack. According to an AP report, the Sierra Club and several community groups also say the $1 billion fund is insufficient for cleanup and storage.

Tittel is “most concerned,” however, about the transfer of Oyster Creek’s ownership from Exelon, an industry behemoth with deep pockets, to Holtec, a relatively small limited-liability company, which will subcontract the work to an even smaller subsidiary. “If there is some kind of accident, there will be no one to hold accountable,” he says. 

Kris Singh, who holds more than 90 patents, mostly related to nuclear energy, founded Holtec in 1986. His company has emerged as an industry leader in the management of spent nuclear fuel. Its dry-cask technology is used at 116 nuclear power plants around the world, including 65 in the United States. Those casks would be used to store Oyster Creek’s spent fuel.

But Singh’s company lacks experience in cleaning up closed nuclear plants. That’s why it teamed with a Canadian engineering firm, SNC-Lavalin, to form Comprehensive Decommissioning International (CDI). Holtec has also reached agreements to purchase nuclear plants in Massachusetts and Michigan and perform expedited decommissioning there. The Massachusetts deal is awaiting NRC approval, and the Michigan deal will be submitted at a later date. 

“CDI, headquartered in Camden, has been established to bring the expertise of both companies together to ensure safe, rapid, and economic nuclear plant decommisioning,” says Holtec marketing and communications specialist Caitlin Marmion.

What’s in it for Holtec? The company would, in effect, hire itself and its subsidiary to clean up the site by drawing fees from the decommissioning fund. Holtec also would purchase its own storage casks for the cleanup. And once the cleanup is done, it can profit from the sale of the 700-acre Oyster Creek site.

An exact replica of the control room at Oyster Creek, which, over five decades, churned out enough electricity to continuously power about 600,000 homes. Courtesy of Stan Honda/ Getty images

SOUNDING THE ALARM

Paul Gunter, a longtime environmental activist, policy analyst and nuclear-reactor watchdog for the advocacy group Beyond Nuclear, has been following activities at Oyster Creek for decades. He is calling for a thorough inspection of the plant’s GE Mark 1 reactor before it’s disposed of, citing its well-documented design flaws and a long history of modifications and retrofits. The reactor came under intense international scrutiny in 2011, after three of the same reactors melted down at the Fukushima Daiichi Nuclear Power Plant in Japan. 

Holtec’s decommissioning plan “is like burying a body without an autopsy,” says Gunter. He notes that 21 GE Mark 1 reactors remain operational in the United States. (Holtec’s Marmion points out that the company’s plans to dismantle and dispose of the reactor are “in accordance with regulatory requirements.”)

Gunter is also alarmed by Holtec’s partnership for the decommissioning work. SNC-Lavalin, Gunter says, currently faces federal corruption charges in Canada. Equally disturbing, he says, the company is “barred from doing any contractual work with the World Bank until 2023—again because of global corruption.”

SNC-Lavalin has had a legal cloud over its head since 2015 (the same year it began collaborating with Holtec) when allegations surfaced that former employees paid $150 million in bribes to officials in Libya to influence government policy and win contracts. In one case, a former SNC-Lavalin vice president is awaiting trial on charges he made bribes to the Gaddafi regime. In a separate case, a former SNC-Lavalin vice president of construction pleaded guilty in July to using a forged document following a widespread corruption investigation involving the construction of a super-hospital in Canada.  And in May, Canadian authorities filed charges against SNC-Lavalin after a multiyear probe related to illegal political contributions.

“Is this the company we want to be handling a $1 billion trust fund?” asks Gunter.

Holtec officials say SNC-Lavalin has cleaned house and put its problems in the past. “We are aware of SNC-Lavalin’s history,” Holtec says in a written response. “Lavalin has reshaped the entire leadership team and transformed the entire culture of their business.…We are confident that the changes made in the years prior to establishing CDI will prevent future bad conduct by rogue employees.”

The decommissioning project is not the only joint venture between Holtec and SNC-Lavalin. The two companies are also collaborating on the design and production of a small, nuclear and modular reactor, called SMR-160, at Holtec’s Technology Campus in Camden. The reactor is planned for operation by 2026.

Last February, Holtec signed an agreement in Camden that calls for the state-run nuclear operator in Ukraine to adopt the SMR-160 technology to meet its energy needs. Shortly after, Holtec announced that Ukraine may also become a manufacturing hub for SMR-160 components.

“Holtec is poised to….reinvigorate nuclear power for a world in dire need of a weather-independent and carbon-free source of energy,” CEO Singh told World Nuclear News at the time.  

A nuclear plant technician wears protective gear while working near a used-fuel pool like the one at Oyster Creek. Courtesy of Stan Honda/ Getty images

WASTE PILES UP

The closing of Oyster Creek is more than a local story. It occurs amid the glaring absence of a national strategy for the permanent storage of our growing stockpile of nuclear waste. That stockpile stands at 80,000 metric tons—its radiation lasting thousands of years—and is expected to increase to about 140,000 metric tons over the next several decades as more plants close.

In 1982, Congress directed the Department of Energy to develop a permanent geological repository for used nuclear fuel. In 2002, President George W. Bush signed a law designating Yucca Mountain in Nevada as that site.  In 2010, however, the DOE, after investing $12 billion in the project, shut it down with little explanation. Nevada’s Harry Reid, then the Senate majority leader, is widely credited with scuttling the plan in his home state. 

For now, U.S. nuclear power plants are resorting to on-site storage. Most of their spent fuel is stored in cooling pools and steel-and-concrete casks at 125 sites in 35 states. The NRC claims fuel can be stored safely in this manner for more than 100 years.   

But the U.S. Government Accountability Office informed Congress in April 2017 that “spent nuclear fuel can pose serious risks to humans and the environment….and is a source of billions of dollars of financial liabilities for the U.S. government. According to the National Research Council and others, if not handled and stored properly, this material can spread contamination and cause long-term health concerns in humans or even death.” 

Holtec, which made a name for itself in on-site storage, raised eyebrows last year when it announced its plans to jump into the potentially lucrative decommissioning business. Now, it is looking to take an even bigger leap: It has applied to build and operate a mammoth interim spent-fuel repository on 1,000 acres in New Mexico.  

Holtec initially wants to store 500 canisters of spent nuclear fuel containing up to 8,680 metric tons of uranium from commercial nuclear reactors. If the NRC issues that initial license, Holtec would seek to expand the facility in 9 subsequent phases, each for an additional 500 canisters, to be completed over the course of 20 years. (If the license is approved, Oyster Creek’s spent fuel would be shipped to the site—creating yet another revenue opportunity for Holtec.) If that were to occur, the New Mexico site would swell to 163,700 metric tons—more than double the capacity assigned to Yucca Mountain. 

Opposing Holtec’s interim storage proposal last year became the singular mission of Kevin Kamps, a radioactive-waste specialist at Beyond Nuclear. His reasons are many, but mostly he is concerned that it would establish a “de facto permanent, surface storage dump” without approval by Congress.  

In addition, the interim site, he says, “would expose low-income people of color, communities already heavily polluted by fossil-fuel and nuclear industries, to yet another, major assault to their health, safety, security and environment. And it would launch tens of thousands or more high-risk mobile Chernobyls…down the roads, rails and/or waterways in shipping containers…of questionable structural integrity.”

WHAT ABOUT LACEY?

For plant employees and local officials, the mood was somber on Oyster Creek’s final day of operation in September. Former Lacey Township mayor Gary Quinn (now an Ocean County freeholder) was “sad about the whole situation.”  

Lacey Township is the consummate company town; its seal incorporates a rendering of an atom. Exelon officials say that, over its lifetime, the plant has generated $3.4 billion in wages, taxes and local purchasing. Corporate ownership and employees have donated about $20 million to local charities. 

For decades, the plant has provided as many as 700 jobs. That number has shrunk to 400 and will be reduced by another 100 during the decommissioning. Local government has become reliant on the $2.7 million in annual corporate taxes it collects from the plant. Lacey also receives $11 million annually in state Energy Tax Receipts. That covers about one-third of Lacey’s annual budget.  

Quinn says state officials have assured him the township will continue to benefit from the energy tax for a couple of years, but its share could be reduced drastically, maybe by half, after that. And when it comes time to demolish the buildings, the corporate property tax revenue will decline as well. It’s a troubling picture for Lacey’s financial future. 

With nuclear waste being stored on-site indefinitely, the prospects for residential or commercial projects are virtually non-existent, Quinn says. Township officials have begun discussions with natural gas companies to see if there is interest for a plant there, given that the hookup to the state’s power grid is basically ready to go. Quinn believes it is the best scenario for the township’s financial future. 

A bill coauthored last year by then U.S. representative Tom MacArthur would tap into a $40 billion federal nuclear storage fund to provide economic relief for towns affected by a nuclear-plant closure. The bill breezed through the House but died in the Senate. (In November, MacArthur, a Republican, lost his bid to keep his House seat to Democratic challenger Andy Kim.)

As it stands, there is no plan for the town to get anything other than 1.7 million pounds of radioactive nuclear waste. There it will sit—in steel and concrete canisters in a concrete structure next to a parking lot just off Route 9 and a few miles from the beach—until America comes up with plan.