May 16, 2018

Ep 19: Amy Roma - Lawyer, Hogan Lovells

Hogan Lovells
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Show notes

Nuclear Law
How did you become interested in nuclear law?
After law school, Amy Roma interviewed with Steve Burns from the Nuclear Regulatory Commission who was recruiting for the NRC’s Office of General Council. She completed a two-year clerkship with the NRC and worked for the Atomic Safety and Licensing Board, the NRC’s internal court. The Atomic Energy Act provides the NRC with jurisdiction over licensing.

For one year of her clerkship she worked on the Private Fuel Storage (PFS) case. PFS was the first company that applied for a license for a consolidated interim storage facility and was licensed by the NRC.

After her two-year clerkship, Amy went into private practice. Now her purview includes nuclear export control, investment, due diligence, decommissioning, bankruptcy, and liability.

Price-Anderson Act
Can you tell us about nuclear liability and the Price-Anderson Act?
The Price-Anderson Act covers nuclear liability. In the event of a radiological incident, it provides a network of applicable federal laws. It provides liability caps; quick compensation to someone who’s been injured or whose property has been damaged; and channels the liability to the nuclear operator through their insurance policy. There are two international conventions that control nuclear liability: the Vienna Convention on Nuclear Liability and the Paris Convention. They both have the same principals: put a liability cap program in place, channel liability to the operator; set up financial compensation through an insurance program; and ensure quick compensation to a victim in the event of an incident.

Is this the way that the nuclear regulatory regime worldwide has typically formed-- that the US will come up with something and then international standards mirror it?

A: The US developed a robust commercial nuclear power program first. The US has about 100 operating power plants and a regulator with about three thousand people that oversee those plants. The US put in place a nuclear liability law relatively early, and this enabled these businesses to overcome the risk or perceived risk of entering the field.

Have we had a disaster that’s called for liability caps in the US?
A: Three-Mile Island called for liability caps in the US. It’s worth noting that Price-Anderson covers injury and damage that occurs offsite. It’s difficult to establish, especially in the instances in the US.

Advanced Reactors
When we think about advanced reactors, what’s the market you design for that
and considerations for that?

For people who are new to the industry, which these emerging companies are, there’s a learning curve. When small modular reactors started emerging around 2006, these companies didn’t think they needed lawyers but they were speaking with foreign countries to deploy technology abroads. You need to be mindful of the Nuclear Export Control Regime. There’s a clear definition of what can and cannot be provided in DOE’s Part 810 regulations. If it’s publicly available information like marketing material you can export it. But if you’re going to sign an NDA and share technical information then you're moving into the Part 810 space. If it’s generally authorized, you can share Part 810 nuclear export controlled information and file a report with DOE within 30 days.

Let’s say you’re a US reactor designer and you want to sell technology abroad. The first thing you need to think about is: do we have a 123 Agreement in place with them? The 123 Agreement is named for section 123 of the Atomic Energy Act, a bilateral agreement for nuclear cooperation. This is important for two reasons. First, in order to sell nuclear equipment and material, the 123 Agreement needs to be in place. It doesn’t necessarily need to be in place to share technical information abroad.

A lot of the countries looking at advanced reactors don’t have the infrastructure to support large scale nuclear and we don’t have 123 Agreements with them. These are developing countries that weren’t part of the conversations when the agreements were put in place.

123 Agreement
When an advanced reactor company is in its early stages and comes to you wanting to export, what do you advise them on beyond the regulatory approval?
When an advanced reactor company is in its early stages and comes to Amy Roma wanting to export, she advises them to first get a 123 Agreement in place. Second, the company needs specific authorization from the Secretary of Energy. There’s a political element to this. The Secretary will consider the technology and who will receive it. The other issue is, is there a nuclear regulator on the other end? If not, who will ensure the technology is used safely? If they don’t have one, how are they getting up to speed? Have they engaged with the international community to develop their nuclear power program? That has to develop in parallel with you developing your technology. Then the company should consider who its customer is. The company needs an experienced nuclear operator and a technically qualified entity to operate your plant. Lastly, for countries that aren’t used to nuclear, they need to understand what nuclear safety culture is. As an example, anyone within the nuclear operation needs to feel comfortable voicing a safety concern.

Exporting Nuclear Reactors
How do you advise advanced reactor companies to even begin to manage
the early stages of exporting?
When advanced reactor companies wish to export, they give Amy Roma a list of countries they’re considering. It’s marked green for go if it’s generally authorized. If it’s specifically authorized it’s a yellow box. If it’s not going to happen, it’s a red box. If there’s no bilateral agreement for cooperation, it’s a red box. If it’s under negotiation, it’s a yellow box. If it’s already in place, it’s a green box. Are they a member of the nuclear suppliers group? Is there a domestic nuclear liability law in place that aligns with international standards? If there’s not a domestic nuclear liability law in place that aligns with international standards, then no one will go into that jurisdiction.

National Security
The feedback I get from my conversations is that a lot of these laws are outdated. Do you things changing on the legal front as the government is looking to support US companies in exporting nuclear technology?

We’re seeing active support for US nuclear companies to compete abroad. People see that it’s a national security threat if we don’t have an active presence abroad. If US reactors aren’t deployed abroad, then we lose a strong voice in the nonproliferation discussions. The US has great technology and safety standards, and when that isn’t used abroad, there can be lesser safety standards and less robust technology put in place. When we see a decline in the commercial nuclear power industry, fewer people go to school to become nuclear engineers and we lose our capability in that area. That’s important not just because those engineers become thought leaders, but also because they support our nuclear weapons program. We’re seeing an active administration on that point, driven by security concerns.

Legally speaking, Part 810 just had an overhaul in 2015, and Amy Roma doesn’t see that being revisited. To receive specific authorizations can take two years or longer. Amy Roma has had clients who submitted and never received a formal answer.

With regards to Agreement 123, we’re seeing a big political conversations about what the bilateral agreement for nuclear cooperation should look like. Agreement 123 contains the Gold Standard Provision, the restriction on enrichment and reprocessing. When the nuclear nonproliferation treaties were negotiated in the 1950s, and the US decided to share its commercial nuclear technology with the world, on the basis that, “if we don’t share this technology then Russia will, and we lose our ability to shape that conversation,” Now we’re at the same junction. Most of the nuclear power plants under construction in the world are Russian. Russia is exporting to Turkey, Egypt, and other places the US doesn’t want Russia to have influence.

Right now, the US is considering a bilateral agreement for nuclear cooperation with Saudi Arabia. In our agreement with the UAE, we had a provision that said, “No enrichment and reprocessing in the UAE. But if someone else in the Middle East does it, we’ll take yours out.”
In the agreement we’re negotiating right now with Saudi Arabia, Saudi Arabia doesn’t want the enrichment and reprocessing restriction included. They want the ability to enrich nuclear material. One of the things to keep in mind is that, when we agreed to share this technology with the world in the Atoms for Peace speech in the 1950s, we agreed that if you forego developing nuclear weapons, we will share peaceful uses of nuclear technology. The agreement permitted other countries to pursue peaceful uses of commercial nuclear power, and that includes enrichment and reprocessing. That was actively negotiated at the time. We’re seeing a lot of pushback, and that doesn’t necessarily mean that the country pushing back wants to make nuclear weapons. Enrichment and reprocessing helps ensure security of domestic energy supply. If you can’t enrich, you can’t fuel your own reactors, Take Iran for example. Iran argued that it used a research reactor to produce medical isotopes and ran out of fuel. The US and the international community refused to provide more fuel, so they decided to develop their own enrichment program. The takeaway is that there is more to that story than people realize.

Investing in Nuclear
A lot of these export considerations are important not only for the companies building technology but also people who want to invest in these technologies. Do you play a role in the investor due diligence aspect as well?
Amy Roma often represents advanced reactor technology companies pitching an investor and addresses the commercial aspects tied into the nature of the technology. She is also often engaged by an investor to evaluate the viability and risk of a project.

How have you seen investors understand this technology?

A: Amy Roma has seen an evolution in the identify of the investors. It started with a rich guy who was a technology person. People who are in the technology field, made a significant amount of money in that field, and looking to invest and change the world. Sometimes he formed a fund with other technology guys. In the last few years, Amy Roma has seen more people emerge who are impact investors from a broader range of fields. Nuclear is something big that has the ability to provide huge amounts of power.

Do these impact investors bring you back for a second meeting?

A: It depends on the investor and what stage they’re in whether or not Amy Roma is asked back to a second meeting. She’s done the advisement for the technical fund and the impact investor, and now she’s seeing something new and surprising. Amy has been doing diligence for private equity on mainstream nuclear, particularly for nuclear decommissioning, there's usually a large pot of money in a decommissioning trust fund. They ask if they can decommission and keep the corpus of the fund. In the course of those discussions, people will ask Amy what she knows about advanced reactors.

Future of Nuclear
Can you help paint what you see for the next 5-10 years of nuclear?
Amy Roma is excited about the next 5-10 years of nuclear. According to Amy, it’s a fun yet challenging area to work on from a legal perspective because she’s always putting on a strategic hat. She believes we’re going to see more discussion in the mainstream about advanced reactors. The more we continue that conversation, the more we have an administration that recognizes that we need to support this emerging market before we lose our leadership here. Right now we have dozens of advanced reactor technologies under development. They can die on the vine or we can support them to ensure they come to commercialization and deployment. Amy Roma sees that cooperative feeling and thinking starting to happen. She has also started to see states and local communities wanting to do something to address climate change. Combining that with increased investor interest in this area and with technology developments and maturity in the advanced reactor area means we’re seeing it all come together to make a lot of progress.

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