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* U.S. has large concentration of radioactive spent fuel
* Spent fuel danger "no longer abstract issue" after Japan
HOUSTON, May 24 (Reuters) - Japan's Fukushima nuclear disaster has revived a long-simmering dispute about the danger of storing used nuclear fuel at U.S. plants in facilities never designed for long-term storage, an industry critic said on Tuesday.
A report from the Institute for Policy Studies issued Tuesday said the threat of radiation from an accident at a spent nuclear fuel pool could be catastrophic. Spent fuel at many U.S. plants exceeds that stored at the four damaged units at the Fukushima Daiichi plant, said Robert Alvarez, the report's author, who also warned about the vulnerability of spent fuel in 2003.
"We have to stop deluding ourselves into thinking jamming too much spent fuel into pools is a wise idea," Alvarez said on a call with reporters.
"It may save money, but it may not be a wise think to do if something serious goes wrong as we have seen at Fukushima," said Alvarez.
Earlier this month, a federal panel recommended that the country should develop temporary storage facilities for radioactive waste until a permanent burial site can be developed. [ID:nN13248241]
U.S. reactors have generated 65,000 metric tons of spent fuel, mostly held in fuel pools, according to a nuclear industry trade organization.
"No other nation has generated this much radioactivity from either nuclear power or nuclear weapons production," the report said.
Loss of cooling water from a fuel pool could cause a catastrophic radiation fire that would leave many miles around a plant uninhabitable for years, cause thousands of cancer deaths and billions in damage, Alvarez said.
Dominion Resources (D.N) Millstone nuclear station in Connecticut holds the most radioactive spent fuel, according to the report, followed by the Palo Verde station in Arizona, operated by a unit of Pinnacle West Capital (PNW.N); Duke Energy's (DUK.N) Oconee station in South Carolina; and Exelon Corp's (EXC.N) Dresden station in Illinois.
Alvarez, along with David Lochbaum of the Union of Concerned Scientists, called for the U.S. to adopt a policy to move all cooled spent fuel into safer, dry cask storage facilities over the next 10 years at an estimated cost of $3.5 billion to $7 billion.
"We are now in a situation where some of the largest concentrations of radiation on the planet are stored in these pools," Alvarez said. "This is no longer an abstract issue," he said.
"This is a risk that can be significantly reduced by returning pools to their original purpose," Alvarez said.
Reporting by Eileen O'Grady; Editing by Phil Berlowitz