Taylor Meehan

Abstract

The following note discusses the Price-Anderson Nuclear Industry Indemnity Act as a model liability insurance system for future clean energy technologies such as carbon sequestration and geothermal energy. The Price-Anderson Act implements a tiered insurance system requiring individual commercial nuclear power plants to secure private insurance for site-specific incidents up to a certain threshold, supplemented by an industry-wide pooling system that indemnifies losses exceeding the primary layer. If the industry pool is exhausted, the federal government serves as the final indemnifier, providing additional compensation when appropriate. This note examines the history, development, and amendments of the Price-Anderson Act since its 1957 enactment and highlights aspects of the system that should be adopted in the future. It argues that carbon sequestration and geothermal energy technologies are presently in a position similar to that of the nuclear industry in the early 1950s. The parallels—particularly the low probability of industrial accidents but extensive potential consequences—support analyzing whether the nuclear indemnity model is transferable to emerging clean energy technologies. Ultimately, the note contends that several core components of the Price-Anderson Act, including its liability cap, federal involvement, no-fault liability structure, federal jurisdiction, and continuously updated policies, are not only suitable for future systems but should be implemented by the insurance industry when underwriting carbon sequestration and geothermal energy risks. The note concludes that the United States urgently needs to restructure its national energy policy, and a key aspect of this effort is creating an adaptable liability system for new clean energy sources; the framework provided by the Price-Anderson Act is America’s best solution.

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