Nuclear news roundup for July 12, 2009

It ain’t "game over" over until the fat lady sings

A lot of people think Exelon at Victoria, TX, has taken its bat, ball, and glove, and hit the showers over its plans for twin GE-Hitachi 1,350MW ABWR reactors there. This has been a hard luck site for the giant Chicago based utility. First, it spent tens of millions on a license application to the NRC referencing the GE-Hitachi ESBWR, but later bid that design goodbye when it turned out the Department of Energy ranked Exelon’s application lower for loan guarantees because the ESBWR isn’t ready for prime time. It is still deep in the design certification process at the NRC. Switching to the ABWR didn’t help. Exelon still found itself out of the running.

More recently, Exelon told the NRC to stop reviewing its licensing application. Instead, Exelon said it will develop an Early Site Permit which will preserve its place at the table for as long as 20 years, but not require it to spend lots more money updating the license application with a new reactor.

Most observers felt Exelon was basically mothballing the site until either Congress expanded the loan guarantee program or Wall Street came to its senses over new nuclear power plants or both.

It came as a big surprise when the Victoria Advocate reported that Exelon may not be so deep into mothball territory after all. The utility has renewed its options for 75,000 acre feet of water from the Guadalupe River for another year or possibly longer. What’s more, Exelon has a grip on what are called “senior water rights” which means in dry years, if they choose to exercise them, they would get water first from the river before other people.

This revelation has got farmers and environmental groups pretty stirred up. The utility isn’t moved by the fervor over its position. Craig Nesbit, a spokesman for the firm, told a San Antonio newspaper, “These water rights exist whether we build a plant or not. The only question is how you plan to use them.”

Exelon has paid the San Antonio River Authority $1.1 million for the rights for another year with a reported understanding it will negotiate a longer term deal. The utility also points out nuclear reactor cooling systems aren't a "consumptive use" since the water goes through one time and is returned to the source. About 5% is lost of evaporation through the cooling towers.

So hang on to your hats in Victoria, TX, because if you think Exelon’s story there is over, think again. No one pays a million bucks for water rights they don’t intend to use. We’ll watch this space.

Vermont Yankee passes latest relicensing test

The NRC’s Atomic Safety & Licensing Board has denied an intervenor’s request not to renew the 20-year license for Entergy’s Vermont Yankee nuclear power plant. Reuters reports that the NRC will likely make a decision on the license renewal application later this year.

Several green groups said that various components of the reactor no longer worked properly and demanded additional tests. Entergy went ahead and conducted the tests and the parts passed, but that was not the result the green groups hoped for so they filed another round of protests. This latest group of contentions are what were thrown out by the licensing board.

The NRC now has clear running room to make a decision on the merits of the license renewal application since all pending contentions, at least for the moment, have been denied.

Indian Point tagged for fish kills

Environmental groups in New York have found a new way to raise the price of electricity for customers of Energy’s Indian Point plant. They want the utility to spend at least $700 million on new cooling systems that won’t kill so many fish.

The New York Daily News reports that the new York State Department of Conservation (DEC) agrees with Riverkeeper, an arch foe of the Indian Point plant, that its cooling intakes kill lots of fish eggs and hence lots of fish.

The reactor uses 2.5 billion gallons of Hudson River water daily, 2 million gallons per minute, in a system that pulls in and kills fish eggs, bug larvae, and plant life. Note that the water goes in, but also comes out, albiet a lot warmer.

Entergy has gone to court over the price tag for the new cooling system. A company spokesman said the plant already has spent more than $100 million to protect fish by installing special screens to reduce the number of fish pulled inside the system.

The DEC estimates a new cooling system would cost $740 million, and $145 million a year to run. That comes out to 6% of Entergy's annual gross revenue. The costs would be passed on to Entergy's customers. In the meantime, Entergy expects to be back in the State Supreme court with appeals of the ruling by the environmental agency.

Stop Yucca, Stop sign, stop fees?

Bloomberg wire service reports that the nation's nuclear utilities have asked the federal government to be accountable for its actions by suspending payments required to cover the cost of opening Yucca Mountain. Since Senate Majority Leader Nevada Sen. Harry Reid has installed his personal stop sign for the project at the NRC in the form of now chairman Gregory Jazcko, the utilities say they shouldn’t have to pay an estimated $769 million this year. Their claim is that they no longer owe the money because the U.S. is abandoning the Yucca Mountain site and hasn’t settled on another disposal plan.

The Nuclear Energy Institute (NEI), the trade association that represents owners of all 104 operating U.S. reactors, sent a letter to Energy Secretary Steven Chu asking for the payments to be suspended. So far as of this year about $30 billion in fees and interest has gone into the nuclear fund. That's enough money to finance at least five new nuclear power plants at $6 billion each. The utilities want that money back.

Bloomberg also reported that another influential group has also asked that the fees be suspended.

“There is no clearly defined program for disposal of spent nuclear fuel and high-level radioactive waste,” Frederick Butler, president of the National Association of Regulatory Utility Commissioners, said in a separate letter to Energy Sec. Steven Chu. “Therefore, there is no basis to assess the adequacy of fees that continue to be paid into the Nuclear Waste Fund.”

Bloomberg points out that President Barack Obama announced earlier this year in budget documents that the U.S. would no longer seek to build a nuclear waste repository at Yucca Mountain.

Spent fuel and wetlands get NRC attention in Florida

The Tampa Tribune reports that plans by Progress Energy to build a new nuclear power plant in Levy County, Florida, have run into trouble. The NRC gave standing to the Green Party of Florida and two other groups to challenge the plant's federal license application to build two new reactors.

The Tribune reports that in a 112-page ruling, the NRC's Atomic Licensing Board found that the Green Party had successfully raised "certain major issues" about the plant's environmental impact that “deserve a full-fledged legal hearing with oral arguments.”

The first issue is obvious, but also ominous for other license applications pending with the NRC. The board agreed that Progress Energy did not have a long-term plan for disposal of spent nuclear fuel. This means the utility might wind up storing it in dry casks at the reactor for decades while the U.S. either builds and operates a recycling center or some other solution.

It seems to be a circular argument by the board since the federal government is the entity that has cancelled Yucca Mountain without providing an alternative. Holding the utility responsible looks like blaming the victim.

The board also found that the utility may have a problem with impacts on a floodplain. It may have to fill and pave hundreds of acres of wetlands, which may hurt both the underground aquifer and the Withlacoochee River. it would also have impacts on wildlife species that depend on them. The utility's plans call for filling 765 acres of wetlands, according to the Army Corps of Engineers.

The Green Party also challenged the design of the plant's cooling towers and water transfers locally to cool the reactor.

The utility hasn't decided how to respond to the ruling. "Progress Energy Florida has received and will review the ruling. We'll soon make a decision on whether to file an appeal," spokesman Tim Leljedal wrote in an e-mail to the Tampa Bay Tribune

The Green Party of Florida, the Nuclear Information and Resource Service and the Ecology Party of Florida have joined to try to stop the plant from being built. However, it doesn't look like these contentions are fatal.

"If it rules in their favor after those arguments, NRC spokesman Joey Ledford said, the utility "would have to amend their application to satisfy the shortcomings that had been found."

Progress plans to complete the plant, which involves two Westinghouse AP1000s, and have them in revenue service by 2016.

Arizona lawmaker supports uranium mining
but has problems with U238 decay

Arizona State Sen. Sylvia Allen isn't what you would ordinarily think of as an Internet video star. That assumption was overturned this week when she became a hit on You Tube for her extemporaneous remarks that the earth is 6,000 years old. [See video below]

She also supports uranium mining in the state, but discounts scientific evidence based on U238 decay that the earth is actually billions of years older than her estimate.

Allen's confusion of geological time scales occurred during a June 25 hearing of a legislative panel working on rural development issues. The legislators were drafting a nonbinding resolution asking Congress to insure access to public lands for traditional uses including cattle grazing and mining.

Allen spoke up on behalf of uranium miners in her district which includes her tiny community of Snowflake, Ariz. She said more economic development would occur if uranium mining were given more support by the federal government. Then she unloaded this bombshell.

"The Earth has been here for 6,000 years, long before anybody had any environmental laws, and somehow it hasn't been done away with."

The Arizona Republic posted a 43-second video clip on its web site and the images also made their way to MSNBC where liberal pundit Keith Oberman gave it a prime time roasting.

Arizona State Senator Sylvia Allen on the age of the earth

Allen is not upset by the attention. She says she is shrugging off the comments noting that her district has one of the world's largest copper deposits and all she cares about is whether anyone will be able to work there despite growing pressure from green groups.

# # #

Sphere: Related Content

Italy’s nuclear renaissance becomes real

Next steps – select sites and build

Under a new law now approved by its parliament this week, Italy will in the next six months identify candidate sites for new nuclear reactors. The law also requires the government to set up a regulatory authority to manage the process of building the plants and administering the safe storage of spent nuclear fuel.

Energy Minister Claudio Scajola (left) told the Italian wire service ANSA that the country will break ground for its first new nuclear reactor in 2013 and that the plant is expected to enter revenue service five years later.

These changes, which have taken place in less than two years, are a stunning turn around for a country that abandoned its nuclear power stations in the late 1980s following the Chernobyl accident. What has driven the country to take this unprecedented step is that it has the highest costs for electricity in Europe. Italy relies on oil and gas imports for 80% of its energy use. Last year when oil prices spiked, the country went into economic shock.

Can you build it if they come?

The biggest difficulty is no longer authority to do the work, but actually doing it. Political observers point out the country’s local government system is dysfunctional and beset by a ferocious case of “not in my backyard” or NIMBY. Some provincial authorities are deeply suspicious of nuclear energy and have already stated they will not host the plants. The government says it will pay people to allow the plants to be built in their communities.

Another problem is to find investors who will take the risk of building the plants. Italy’s biggest utility Enel SpA wants in on the action, but is heavily in debt and cannot pay for the new project out of current cash holdings. Government loan guarantees, which are not yet in the picture, could make it possible for the utility to put together financing for new plants.

There’s plenty of opportunity for investors if the sites can be found in the densely populated country. Energy Minister Scajola isn’t kidding when he says Italy needs to build at least eight-to-ten new nuclear power plants (10-12 GWe) to significantly reduce its dependence on imported oil and natural gas. However, the country also needs to avoid building more coal-fired power plants. One of the earliest options may be to buy a 12% share in a new Areva 1,600 MW EPR being built in France.

What is the real green case against nuclear energy?

Like other countries, the battle between greens and nukes isn’t always about ideas. More often it is about who gets capital for investment. Environmental organizations have been howling over the government’s full fledged commitment to the nuclear renaissance. However, in this case the debates over “green values” are about money.

According to ANSA, Roberto Della Seta (left), a spokesman for one of Italy’s greener political parties, claimed the country would spend as much as 25 billion euros ($34.8 billion) on new plants but that they would only account for 5% of the country’s energy use. He claimed that renewable energy sources such as wind and solar could be built much faster and with energy efficiency measures have a far greater impact.

Legambiente, another leading Italian environmental group. used as a springboard U.S. President Obama’s reluctance to fully embrace nuclear energy as being part of the solution to the challenge of global warming. In a gross distortion of what the White House has said, the Italian group asserted that Obama’s opposition is based on the fact that nuclear energy is “polluting and unsafe.”

The government of Premier Silvio Berlusconi isn’t taking abuse or political distortions from Legambiente or any other green group. Italian Senate leader Maurizio Gasparri told ANSA the decision to move forward with nuclear energy “is a turning point, a courageous choice.”

In Brussels Foratom, an association of Europe’s nuclear industry, said new nuclear power plants in Italy would help that nation meet its climate change obligations. Foratrom’s director-general said the decisions taking place today in Italy “will inspire other countries considering a similar political path to press ahead.”

* * *

People are pretty excited about the changes taking place in Italy. Here’s some renaissance music if you want to get up and dance.

# # #

Sphere: Related Content

Show me the money

Senate hearing is long on sound bites, short on financial commitment

In a rare display of political firepower, the Obama Administration sent four of its leading lights this week to testify before the Senate Environment and Public Works Committee on the subject of controlling greenhouse gases. As everyone knows, the House passed a massive bill that lumbered its way through a muddy mine field of lobbyists and special interests to celebrated passage in record time. It now faces an uncertain fate in the Senate.

There has been considerable speculation of how the Obama Administration will approach Senate passage of a measure which could define not only its place in history, but also help put the nation on the path of saving the planet. It is a daunting challenge, and it will have to be met with more than the "if wishes were fishes" philosophy of green groups about renewable energy.

One of the key issues for Senate Republicans is that the House bill has no real support for nuclear energy. So it was with considerable interest that Sen. Lamar Alexander (TN) and Sen. Mike Crapo (ID) asked Energy Secretary Steven Chu about his views on the subject. To his credit, Chu (right) was ready for them.

He told the committee, “I think nuclear power is going to be a very important factor in getting us to a low carbon future.” He added, “Quite frankly, we want to recapture the lead on industrial nuclear power . . . we want to get it back.”

That’s wonderful stuff, but something is missing. It is support for expanded loan guarantees for the 17 applications pending with the Department of Energy worth a staggering $188 billion in new construction of nuclear power plants in the U.S. Support for the loan guarantees won’t cost the taxpayers a nickel since the industry would pay for the insurance the same way farmers pay for crop insurance.

But neither Chu nor the other administration policy makers said one word about the key subject that really matters. It’s not soup yet for the Democrats as long as they stick to the intoxicating illusions promoted by FERC’s Jon Wellinghoff that renewable energy sources along can save the planet.

The general political consensus is that if the Obama wants a greenhouse gas emissions control bill out of the Senate in time for a global confab on the subject to be held in Copenhagen, Denmark, in December, he has to make a move on nuclear energy.

The single most important move he can make is to expand loan guarantees for nuclear power plants. Right now the $18.5 billion available might cover three or four plants. A shift to three or four times that amount would allow as many as 12 to move forward and enter revenue service by the middle or end of the next decade. Now that’s real soup.

Right now the Obama Administration’s cautious if unstated policy appears to be something like this . . . ‘let’s see if they can build a couple of them, and then we’ll let future administrations support a more determined roll out of new plants.” In the meantime, the White House can keep its political base intact with billions tossed to subsidize solar and wind energy projects. By the time everyone realizes you can’t light the nation’s cities and power its factories this way, we will have pushed real progress for nuclear energy back 20 years.

The Nuclear Energy Institute, the trade association for the industry, says that development of a ‘Clean Energy Bank’ separate from the Department of Energy would be the way to go. It would provide immediate support for nuclear energy as well as renewable technologies.

In fact, and in principle, one of Obama’s policy makers got it exactly right. Lisa Jackson, the head of the Environmental Protection Agency, told the Senate Committee . . .

“Clean energy is to this decade and the next what the space race was to the 1950s and 60s and America is behind. Governments in Asia and Europe are ahead of the U.S. in making aggressive investments in clean energy technology.”

She’s cleared all ten pins with that one. Bravo Ms. Jackson. Just look at what is happening in the UK, India, China, and even Italy and you can see the nuclear renaissance is underway big time. Now Jackson may not have had nuclear energy exactly on her mind when she made this comment, but the shoe definitely fits. Hopefully, it was part of her thinking.

It is only in the U.S., and in Germany, where green groups have a near strangle hold on government financial commitments to new nuclear power plants. Statements of support from people like Steven Chu and Lisa Jackson are a start to change that situation.

There has to be more change if there is going to be legislation similar to the House coming out of the Senate this Fall. So far statements of principle by Sec. Chu, however appealing, aren’t enough. President Obama has got to show us the money. It’s too soon to know whether the White House will do it, but the opportunity is there if they will take it.

* * *

So here's some techno fusion as inspirational music for the Obama team - Vanessa Mae playing "red hot." Five on the Scoville scale. "Fasten your seatbelts" - VM.

# # #

Sphere: Related Content

Texas nuclear industry heats up ~ Exelon's hot pursuit of NRG

• Exelon raises the stakes for its hostile takeover of NRG
• NRG raises the costs of STP units 3 & 4, but CPS Energy stays in at 40%
• Exelon pulls out of Victoria, TX, NRC license process for two ABWRs

The nuclear industry in Texas more closely resembles the West of oil wildcatting days than corporate, button down corner offices. That's because Exelon, which is based on Chicago, is not going to accept "no" for an answer from NRG. Exelon has been trying to force an all stock hostile takeover of NRG since last October, but without so much as a hat tip from the object of its desire.

Instead, NRG has dug in its spurs, so to speak, and advised its shareholders not to accept a modest premium for the stock from Exelon. The firm has said repeatedly that Exelon’s previous all stock offer was “inadequate and uncertain.” However, NRG also said it was open to a deal at a fair price, and, undoubtedly, for cash.

Some of NRG's investors agreed, especially several with more than 5% of NRG's shares, and said the only way they'd participate in the deal is if Exelon sweetened it to their liking.

That's exactly what happened this week when Exelon Corp (NYSE:EXC) announced on July 2 an increase in its offer to acquire all of the outstanding NRG common stock in an all-stock transaction with a fixed exchange ratio of 0.545 of a share of Exelon common stock for each NRG (NYSE:NRG) share, a 12.4% increase over the initial exchange offer of 0.485. Exelon said its increased offer represents value of over $3 billion to NRG shareholders.

Exelon’s stock closed July 2 at $49.37/share. A swap of 0.545 shares for each share of NRG stock, which closed July 2 at $24.80/ share, would come in at $26.91. The difference of would be a 6.1% premium at the market close prices of 7/2.

The CFO class math gets a bit complex here. The size of the premium is not based on stock prices at market close, but on stock valuations offered by Exelon. For instance, the New York Times Dealbook Blog reported that Exelon addressed this difference by pricing NRG’s stock at $28.10/share which is a hypothetical price that exists only in the pages of Exelon’s corporate presentation.

So while Exelon has increased the amount of stock it is willing to offer for NRG’s hypothetically more valuable shares, the premium still remains quite modest and may not prod NRG’s investors to buy in to the deal. As these NRG stockholders have stated in the past, they see more of an upside associated with NRG’s expected growth in the future than they do with Exelon’s “bird-in-hand” all stock deal today.

The premium may not be very attractive to NRG stockholders given the performance of Exelon’s stock. It has been volatile dropping from a Feb 6 price of $57.81 to a March 11 price of $40.15 and then rising slowly since then to its close 7/2 of $49.37 down from a mid-day high of $51.00.

Exelon has another rabbit in its hat

Exelon also filed the SEC an investor presentation that will be used as part of the company’s proxy solicitation for the election of nine new, independent directors to the NRG board of directors. In the presentation, Exelon cited approximately $1.5 billion of additional newly identified synergies as the primary reason for the increase. The new offer also reflects the value of NRG’s recent acquisition of the Reliant Energy retail business.

“We listened to NRG investors and balanced their views with the best interests of Exelon shareholders. An exhaustive analysis by our internal team, informed by the best third-party experts, resulted in additional synergies, allowing us to increase our offer to NRG shareholders,” said John Rowe, chairman and chief executive officer of Exelon.

“This is our best and final offer, and we will use the time leading up to the NRG annual meeting on July 21 to communicate the value of our new offer to NRG shareholders, encouraging them to vote for nine new independent directors who can unlock that value.”

In the presentation, Exelon also shared details on its financing plan to maintain its investment grade credit ratings while optimizing long-term shareholder value. Exelon says it is confident, based on discussions with its outside advisors, that the company will be able to meet all financing needs associated with the transaction, including the re-financing of $4.7 billion of NRG’s senior notes and other NRG debt, if necessary, while maintaining investment grade credit ratings.

The Wall Street Journal reported July 3 that if the deal does go through, Exelon would issue $1.1 billion in new stock and sell $1.6 billion in assets. Exelon already had planned to sell several power plants as part of the deal but added NRG's Louisiana and international assets to its divestiture list.

The moves is designed to help Exelon protect its credit rating if the deal closes, credit analysts told the WSJ. Exelon told the newspaper it is confident it will retain its investment-grade ratings after the transaction, under which Exelon could have to refinance $4.7 billion of NRG's senior notes and other debt. Last month Exelon laid off 500 people for a cost savings of $350 million. More layoffs would likely occur at both companies if the deal closes July 21.

STP Units 3 & 4 may run $13 billion

When NRG filed its license application with the NRC in September 2007, it priced the cost of twin GE-Hitachi 1,350 MW reactors at $2,000/Kw. That price has gone up quite a bit since then. This week new estimates by CPS Energy of San Antonio, one of NRG’s investors, put the price at $13 billion, including interest, or $4,800/Kw more than two times the original estimates.

It’s a daunting set of numbers, but what’s interesting is that CPS Energy, which will own 40% of the new plant, feels nuclear energy is the most cost effective solution for its customers. CPS Energy must take its numbers to the city council in October.

This new estimate produced predictable cries of “foul” from green groups who claim renewables will cost less. However, Steve Bartley CPS general manager told the San Antonio Express, “We believe the long-term lowest price option is nuclear.”

The San Antonio utility will keep rates down by selling half of the capacity it will own, or 20%, on the wholesale electricity market. Construction of the two new plants will begin in 2012 and they will enter revenue service in 2015 and 2016.

Exelon mulls future of Victoria new build

While Exelon continued its hot pursuit of NRG and its current and future reactor operations, the Chicago utility was cooling off its activities in Victoria, TX, where it planned to build two GE-Hitachi ABWRs. The new plants would have sent electricity to San Antonio and Houston. However, Exelon clearly sees a faster time to market with its hostile takeover of NRG which will service the same markets.

Exelon has postponed work on its NRC COL application and instead will pursue an early site permit (ESP). This move will preserve Exelon’s options to develop the site for the next two decades. The Victoria site was one of two “greenfield” sites among COL applications submitted to the NRC last year.

Exelon Corp. said it has called off plans for now to build a new nuclear plant in Texas because of worries over the economy and the limits on federal loan guarantees.

Earlier this year it bid goodbye to GE-Hitachi’s new ESBWR reactor design when it learned the Department of Energy ranked its applications out of competitive range for loan guarantees. Switching to ABWRs didn’t improve Exelon’s chances. The result is the company is not going forward with the project absent the loan insurance.

"We just aren't in a place to pursue the nuclear project," John Rowe, Exelon's chairman and CEO, told The Associated Press.

Exelon said some activity may continue at its site in Victoria, but major preconstruction work such as road upgrades and site preparations will be deferred.

Under the ESP process, the NRC evaluates site safety, environmental impact and emergency planning regarding a proposed nuclear plant. By issuing an ESP for a specific site, the NRC is certifying that the site satisfies the criteria in these areas. If the company later chooses to pursue construction, the ESP becomes part of the COL application, which requires a separate review and approval by the NRC.

Exelon has informed the NRC that the company will not submit a revision to the COL application submitted in September 2008, which referenced the ESBWR. This move saves Exelon a boat load of money since the firm will not have to update the license application with new information about the ABWR reactor. That’s money it could probably use if it is successful in its hostile takeover of NRG.

Update 07/11/09

The New York Times reports a proxy firm has advised NRG shareholders not to accept Exelon's offer saying it is too low.

# # #

Sphere: Related Content

GE-Hitachi files with NRC for laser enrichment plant

If licensed it will be the 4th uranium enrichment plant slated for start-up by 2014

The clock is ticking on the U.S. Russian “Megatons-to-Megawatts” program which ends in 2013. Once it wraps up there could be as many as four uranium enrichment plants slated for start-up in 2014.

There could not be a clearer signal that investors see the U.S. nuclear industry expanding than the commitments to these four plants which come in at a minimum of $2 billion each. This is not just about replacing the supply of commercial fuel coming from blending down of Russian HEU. It is a series of multi-billion dollar bets that by 2020 the US will have four-to-eight new nuclear plants, or 5-10 GWe, coming into revenue service with as many as another 10-12 (12-15 GWe) in new reactors coming behind in a second wave of construction.

The first fuel loads for new reactors are always the largest buys that a reactor makes so U.S. demand for nuclear fuel will spike significantly during the next two decades. The demand profile in this country will be mirrored in other nations like China, India, and the UK, which also have plans for massive new builds for nuclear reactors.

The latest entry into the commercial enriched uranium market for U235 to 3-5% is Global Laser Enrichment (GLE), a business unit of GE-GHitachi and Cameco, who announced June 30 they submitted a license application to the U.S. Nuclear Regulatory Commission (NRC). The application is for a first-of-a-kind laser enrichment plant based on technology acquired by GE-Hitachi from Silex, and Australian firm. [fact sheets]

Cameco took a 24% stake in the Ge-Hitachi project for $125 million in June 2008. It is one of the world’s largest producers of uranium mostly from mines in Canada. Note that GLE will hold the license for the plant assuming the NRC issues one. The NRC has no experience with licensing a commercial plant using a laser enrichment process so it will fall on GLE to take the agency up the learning curve.

For a technical explanation of the differences between laser enrichment and gas centrifuge uranium enrichment processes, see this blog post by Brian Wang at Next Big Future and his graphic below,

Some of the critical technical issues are how much U235 can be produced in how much time, and how efficient the process is, e.g. tails assay at the end. GE-Hitachi has for proprietary reasons not released any of this information.

Before GE-Hitachi can break ground, the NRC must “docket” the application and complete a 30-month review of safety and environmental issues. Docketing means the regulatory agency must determine that the application is complete. Once that happens, the clock starts ticking on the review process which includes several public hearings.

GE-Hitachi said in a press statement the plant will be built in Wilmington, NC, adjacent to an existing commercial nuclear fuel fabrication plant and the GE-Hitachi nuclear energy business unit which makes and markets the firm’s reactors to global markets.

New plant will seek loan guarantees

In a surprise move the GLE said it will seek federal loan guarantees for its new uranium enrichment venture. This move will put it in direct competition with USEC and Areva both of which are also building new uranium enrichment plants in the U.S. and have applied for the same federal insurance.

Bloomberg wire service reported that the firm thinks it can come out on top in what appears to be a “winner take all” outcome for the $2 billion insurance pot.

Tammy Orr, CEO of GLE, said in a telephone interview with Bloomberg . . .

“We are closely working with the government on the next round of loan guarantees and would be very interested in participating,” Orr said. “We believe nuclear energy is a worthwhile energy to invest in from a stimulus perspective.”

She declined to disclose the project’s estimated cost. However, she noted that the plant would employ 300 workers once built. Assuming there is some basis for comparison between number of permanent employees and plant size, this suggests an initial capacity of approximately 3 million SWU/year. A gas centrifuge plant that size would like cost between $2.5-3.0 billion to build. Because the laser enrichment plant is a first-of-a-kind, there isn’t an industry benchmark to estimate its costs.

GLE is currently building a test-loop for the laser enrichment plant at its Wilmington, NC, facility. The test loop will be used to confirm the commercial feasibility of the technology, help design the plant equipment, and layout production processes with the facility. GLE will make a go/no-go decision to proceed with full construction of the laser enrichment plant based on results achieved at the test loop.

The other three plants already slated production in the U.S. are Louisiana Energy Services (LES) in Eunice, NM, Areva’s Eagle Rock Enrichment Facility in Idaho Falls, ID, and USEC’s American Centrifuge Facility for Piketon, OH. The plants range in size from 2.0-3.8 million SWU/year.

Market share among plants

USEC is the most problematic of the three plants as it has experienced difficulty attracting investors. It has issued formal statements that it cannot build the plant without getting the federal loan guarantee. The other two plants do not have financing issues. LES has not applied for a loan guarantee, but Areva has based on its worldwide need for capital.

Taken together they could account for approximately 75% of the market share of expected demand of 13-15 million SWU in 2014 or about 10-12 million SWU. This would leave three-to-five million SWU on the table. If GE-Hitachi succeeds with its new process, that would be the initial target market share for the firm.

Both LES and Areva has announced plans to double the size of their plants by 2018 as a marketing contingency. Actual construction of the additional plant capacity is relatively straight forward and will depend entirely on domestic and international demand.

# # #

Sphere: Related Content

AECL future? Who’s really ‘dysfunctional’ in Canada?

It's time for the crown corporation to stop being an Ottawa sucker and act like an Ice Road Trucker

Conservative Prime Minister Stephen Harper may come to regret his blunt language reported in the Economist June 18 in which his spokesman called Atomic Energy Canada Limited (AECL) “dysfunctional.” The insulting language, which will undoubtedly affect at least 30,000 votes in Ontario for the next election, came after a series of calamitous events involving AECL’s repeated failures to keep the flow of medical isotopes moving from Chalk River and a pre-emptive vote of no confidence from Ontario’s Energy Minister over AECL’s expensive bid for the $22 billion Darlington project.

Chalk River and Darlington projects

The situation has developed in several parts, but all the pieces come together, but not in a cohesive whole, at AECL’s doorstep. The first, and most visible problem, is that ultimately the failures at Chalk River and with the Maple Reactors, while blamed on AECL, in fact represent a failure of political leadership that hits the Harper government with the same force as Harry Truman’s famous characterization of accountability – “The Buck Stops Here.”

For years the Harper government and previous administrations have ignored AECL's calls for replacement of Chalk River, built in the 1950s, with a modern facility. The fact that the isotope business made money hand-over-fist seemed lost on the government. The failure of the Maple Reactor projects is also in reality a failure of political leadership because the government allowed the future of a critical medical service, with global importance, to be turned into a sandbox for scientists instead of a focused project.

The second, and more damaging development relative to AECL’s long-term future, is the action taken by Ontario’s Energy Minister George Smitherman. He suspended negotiations with AECL over its bid for the $22 billion Darlington new nuclear build claiming the crown corporation had failed to adequately sharpen its pencil on price. He also rejected bids by Areva and Westinghouse as being “noncompliant” with the tender. If AECL cannot close a deal on its home turf of Ontario with its new ACR1000 reactor, it is unlikely it will ever sell any for export.

Who will stand behind costs and why?

Smitherman should be forgiven, at least in part, for assuming that since AECL is a creature of the Canadian federal government, and as crown corporation, that it would stand behind any cost over runs on the Darlington project. PM Harper said nothing doing and warned that Ontario should not expect a subsidy for its energy needs. The fact that the liberals in Ontario and the conservatives in Ottawa hate each others' guts has plenty to do with the dysfunctional nature of the lack of an agreement on costs.

At the same time the Harper government also threw the future of AECL into further turmoil by announcing a plan to split the organization into two parts. The first part, which is the isotope operations, would shut down Chalk River, along with its $7 billion cleanup bill, and perhaps build a smaller, conventional reactor for the lucrative medical isotope business.

In the process, Lisa Raitt, the Harper government’s minister for energy issues, was caught on tape speculating how her career might be advanced by resolving the isotope shortfalls caused by the Chalk River shutdown. She also left sensitive government documents about the Darlington bid at a TV station resulting in the premature release of confidential business information. She offered her resignation, but it was refused and a 20-something aide took the fall. Understandably, Mr. Harper is not going to brand one of his own ministers as being “dysfunctional” even if her behavior clearly merits the label.

The second part of the Harper/Raitt plan is to sell off for whatever it can get for AECL’s nuclear engineering capabilities including services to the global fleet of CANDU reactors. The second step is clearly dysfunctional since it subverts the value proposition of AECL in several ways.

Even a used car salesman would do a better job

Instead of supporting AECL to provide a winning bid at Darlington, Harper harried it by calling its history of cost overruns a fiscal “sinkhole.” This is the equivalent of a used car dealer telling a potential customer the ride in question is a “beater.”

In terms of the conventions of salesmanship, there could not be a more “dysfunctional” approach to the problem. It pre-disposed Smitherman to ratchet up the volume on controlling costs setting up all the bidders for failure. Tens of millions in engineering time has been wasted by all three bidders on a dysfunctional process.

In a press release June 29 Smitherman said the AECL bid was “complaint,” but was too expensive. In order to achieve a workable deal with AECL, he wants the firm to address reactor new build costs as well as the lifetime cost of power. Normally, with nuclear plants, once they have been depreciated, they are venerable cash cows. The key issue is that AECL bid an untried reactor, one that has never been built before, and which is still in the middle of the design process.

How to really handle ‘first-of-a kind’ nuclear new builds

Since no one knows what it will really cost to build one of the ACR1000s, Smitherman turned to the Harper government to share the risk of getting at least one unit into revenue service. His assumption was that whatever cost over runs the Harper government might incur at Ontario, they would make it up in volume with export earnings. The idea is build the first-of-a-kind reactor in Ontario, make it a show piece, and then sell it globally. It was an eminently useful idea and the Harper government turned it down flat.

The fact that the Harper government didn’t buy it illustrates an incredible fit of narrow mindedness. It is a classic formula for the wheels coming off any deal between the provincial Ontario government and AECL. Ms. Raitt, the government’s energy minister, told AECL is must build the new reactors at Darlington at a commercially attractive price that would cover all costs. Once that happened, the Harper government said would be happy to reap the export earnings that would follow.

This is also a case of wanting the cake and frosting and both for free. Anyone who knows anything about the nuclear industry also knows that construction of first-of-a-kind reactors always has risks of cost over runs. Developing workable means of sharing these risks can produce success for all parties. Zero sum political posturing, which is what has happened in Canada, has left all parties concerned with giant headaches and bad feelings about their ability to get along.

AECL must manage upwards

What it will take for AECL to succeed is to manage upwards convincing the opportunistic Ms. Raitt and the parsimonious Mr. Harper that it has a plan to put the organization on the right track. It must re-capture its global leadership position for medical isotopes and win the Ontario new reactor bid with the full political support of the federal government.

To do this AECL must mount a national campaign to convince Canada’s voters that it is in the nation’s national interest to revitalize the crown corporation as a technology leader in the global nuclear industry.

It will take business horse sense, technology vision, and real determination to achieve these results. A nation that can convince ice road truckers to brave the winter driving season in the Northwest Territories ought to be able to tackle a few politicians in Ottawa. ACEL has heard the ice cracking underneath its wheels. It should take a lesson from the fact that these truckers wouldn’t be able to do the job if they weren’t some of the toughest guys out there. It’s time for AECL to get tough.

# # #

Sphere: Related Content

Short week news stack for 7/03/09

Ameren calls it quits

Ameren switched gears this week asking the NRC to stop its review of the utility’s license application for a new nuclear power plant at Callaway, MO. The action by Ameren probably means the Callaway II new nuclear build is dead. It is an exasperating defeat for pro-nuclear business groups in Missouri. The experience had all the grace and finesse of a state fair demolition derby.

Ameren spokesman Mike Cleary told the St. Louis Post Dispatch on July 2, “We decided it was not prudent to have the NRC continue its review.”

The firm says it is giving up because the Missouri General Assembly refused to overturn a 1976 law that banned “Construction While in Progress” or CWIP. Had the legislature acted in Ameren’s favor, the utility would have been able to recover construction costs while the new reactor was being built avoiding costly interest charges.

The cost of the new reactor was pegged at $6 billion or $3,750/KW. Had it gone forward the utility would have broken ground in 2011 with revenue service available in 2016.

The legislative initiative failed in large part because Ameren failed to understand and respond to rate payer concerns about how it would control costs for the new build. It’s largest customer, the Noranda aluminum mill, actively lobbied against the change to the CWIP ban as did a coalition of anti-nuclear and consumer groups.

Ameren entered the front end of the legislative session with political leaders in both houses championing its cause, but by the end of the session, these same politicians, who took Ameren’s $300,000 in campaign contributions in the last election, were running for cover. The reason was the utility’s initial positions on a broad range of rate payer rights issues. Even the Public Utilities Commission, which is nominally neutral in such matters, came out against the measure as drafted by the utility.

In July 2008 Ameren filed electronically 8,000 pages with the NRC in a license application on which it says it spent $75 million. It is now seeking to recover those costs from the rate base. Ameren will likely sell off its place in line with Japan Steel Works for large forgings for an Areva 1,600 MW EPR. Those contractual obligations, the utility says, are liabilities worth $85 million.

Ameren still has to figure out what it will do about its next base load electric generation plant. While the current recession may put a crimp on growth in demand for electricity, by 2018-2020 the utility is going to need those 1,600 MW in one form or another. A federal carbon tax and cap-and-trade program, if implemented in 2010, will by 20178 surely make coal a very expensive choice.

Japanese utilities fade on MOX use

Japanese utilities confirmed to NucNet that their program to spin up the use of MOX fuel at 18 nuclear power plants has been delayed by at least five years. The Japan Atomic Industrial Forum (JAIF) announced that the Federation of Electric Power Companies made the decision on June 12.

The key reason is that the start of operations of a MOX fuel fabrication plant by Japan Nuclear Fuels has been pushed back from October 2012 to June 2015. The plant is is still scheduled to break ground in 2009, but this date itself is two years behind schedule. Construction of the plant at Rokkasho in Aomori prefecture is also opposed by a broad swath of local government groups. In Japan these political entities have standing to block such projects.

The original plan was for 11 Japanese utilities operating 18 nuclear plants to start using MOX fuel by April 2010. The delay will likely increase costs to Japanese ratepayers as the country is in a world wide race to secure uranium for nuclear fuel.

Paradoxically, Japan developed its plans for a plutonium fueled electric utility industry in order to get out of competition with China for Middle Eastern fossil fuels. Now with the focus on global warming, and China’s massive commitment to building new nuclear power plants, MOX fuel seems to like a plausible competitive advantage. The strategy will only work if the Japanese can extricate themselves from endless bureaucratic delays.

MHI to get Comanche Peak order?

One bright note for Japan’s nuclear industry is the Bloomberg wire service reported on June 28 that Mitsubishi Heavy Industries (MHI) is said to be on the verge of receiving an order for two of its new 1,700 MW Advanced Pressurized Water Reactors (APWR) from Luminant, a Texas based private equity owned nuclear utility. The order, expected to be worth approximately $6.3 billion, would be for Luminant’s Comanche Peak plant.

Luminant is in an unusual position in the Federal loan guarantee program. It is in the 5th position relative to four firms that are short-listed for the loan guarantees. If one of them drops out, they move up. The APWR reactor is still undergoing design certification review at the NRC.

Meanwhile, Bloomberg also reports that MHI will double the number of its employees in the U.S. to 200 people. Additional employment growth is forecast if the order to Luminant goes through. Construction could begin sometime in the 2011/2012 timeframe with revenue service set for 2020 at the latest.

China sets new nuclear energy goal at 86 GWe

China is reportedly revising its plans for new nuclear power plants. A new estimate, still be be made official by the government, calls for 86 GWe of nuclear generation capacity. This is a nearly 10 fold increase from its current capacity of 9 GWe.

According to the China Daily for July 2, an English language newspaper, the plan "will call for the government to accelerate nuclear power development in coastal provinces and autonomous regions, namely Liaoning, Guangdong, Zhejiang, Fujian, Guangxi, Jiangsu, Shandong and Hainan," the sources said.

In order to achieve the goal, the government will also set up a "reasonable number of nuclear power plants in inland provinces in Jiangxi, Anhui, Hunan and Hubei", the anonymous sources said.

According to an assessment by World Nuclear News, the plan for 86 GWe would place China’s eventual build at second rank globally behind the U.S. fleet which is now at 100 GWe but ahead of France at 63 GWe and Japan at 46 GWe. These rankings could change over time depending on how the other nations pursue nuclear energy as a response to global warming.

There is some skepticism as to whether China has the internal manufacturing capability to build the equivalent of seven more 1200 MW plants by the end of the next decade. The country will likely have to build its own large forgings plant, which would be a multi-billion dollar endeavor. Also, it will have to train at least 300-500 nuclear engineers a year for at least ten years. The need for skilled crafts people capable of delivering nuclear grade concrete and steel fabrication services will be a serious challenge.

China National Nuclear Corp, the biggest nuclear power operator in the country, China Guangdong Nuclear Power Holding Co Ltd and China Power Investment Corp, the parent company of the Hong Kong-listed China Power International Development Ltd, are currently the only players in the nuclear power sector. How they will meet the demands for people and materials will be interesting to see.

By comparison in the U.S the Nuclear Energy Institute (NEI) sees only four-to-eight new nuclear power plants being built in this country by 2020. The same capacity issues face the U.S. nuclear industry.

# # #

Sphere: Related Content

In Congress July 4, 1776

We hold these truths to be self-evident . . .

John Trumbell's painting "Declaration of Independence" was placed in the Capitol Rotunda in 1826.

The original Declaration of Independence was signed on July 4, 1776. Here are the opening lines of text.

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.--Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

& & &

Blogging on nuclear energy topics will resume in a few days. Enjoy a safe and happy fourth!

Sphere: Related Content

GE-Hitachi briefs Congress on PRISM reactor

Objective is to turn spent nuclear fuel into an asset

PRISM is GE’s proprietary name for the Integral Fast Reactor, a design that was developed in Idaho by the nuclear scientists at Argonne West (ANL-W), a field office for Argonne National Laboratory located on the Arco desert 26 miles west of Idaho Falls, ID. In 2005 ANL-W was merged with the Idaho National Laboratory (INL)

There has been a a series of coincidental developments in the past two weeks that brought this technology into the spotlight.

Eric Loewen, who worked on reactor designs for sodium cooled reactors (large graphic) in Idaho, and now is a senior scientist with GE-Hitachi (GEH) in Wilmington, NC, talked with the news media about the technology last week.

At the same time, Lisa Price, a senior VP at GE Hitachi, testified before the House Science and Technology Committee encouraging lawmakers to support R&D needed to complete the technology for recycling nuclear fuel.

At the annual meeting of the American Nuclear Society, held in Atlanta, GA, the science organization awarded engineer Charles Boardman the prestigious Cisler Medal for his decades of leadership in the development of GEH’s “Generation IV” PRISM reactor technology.

This week venture capitalist Steve Kirsch published a long and very detailed article online at the Huffington Post on the history of the IFR reactor design and operational work at ANL-W interviewing many of the principal scientists who worked on the project including John Sackett and Charles Till.

Eric Loewen

Eric Loewen (right) briefed a group of reporters this week on PRISM, which is GE-Hitachi’s name for the IFR design. He explained the benefits of the technology is that it burns spent nuclear fuel and in the event of a problem simply shuts down safely due to the way the reactor uses heat and its liquid sodium metal coolant. Here’s a link to a set of Loewen’s slides to the Virginia chapter of the American Nuclear Society from 2007 which provide additional details on how the reactor works.

Loewen told the media the PRISM reactors can be build in small modular units of about 400 MW each. They could be very attractive to owners of existing coal plants because they could replace the boilers while using the same turbines, condensers, and grid infrastructure that are already there. You would need a new control room, but Loewen says the total investment is still a lot less than a brand new plant.

Loewen is adept at telling the nuclear industry story. In 2007 he briefed a group of Wall Street investment bankers leading off with this line, “We’re burning dead dinosaurs at an extraordinary rate.”

So far no one has built or tested a PRISM reactor which brings up to the testimony by Ms. Price.

Lisa Price

As the White House and U.S. Congress create a new national strategy for managing used nuclear fuel, GE Hitachi Nuclear Energy (GEH) is encouraging lawmakers to support the research and development necessary for recycling nuclear fuel.

Testifying before the U.S. House of Representatives’ Science & Technology Committee, Lisa Price, a GEH senior vice president, briefed lawmakers on GEH’s proposed Advanced Recycling Center (ARC). The concept offers a timely solution to the industry’s most significant public policy and environmental challenges by turning used nuclear fuel into an asset.

“The nation faces a choice today: We can continue down the same path we have been on for the last 30 years, or we can lead a transformation to a new, safer and more secure approach to nuclear energy,” said Price, GEH Senior Vice President for the Nuclear Fuel Cycle and CEO of Global Nuclear Fuel LLC.

“We need an approach that brings the benefits of nuclear energy to the world while reducing concerns about nuclear waste.”

GEH is offering the ARC, comprised of a “PRISM” sodium-cooled reactor, combined with an electrometallurgical or dry nuclear fuel recycling facility. Approximately 95% of the material in used nuclear fuel from light water reactors is considered untapped energy that could be used to generate electricity in different kinds of next-generation nuclear reactors, such as GEH’s “Generation IV” PRISM design.

GEH’s proposed ARC system would permit much of this remaining used fuel to be recycled in the PRISM reactor to generate additional electricity. As a result, utilities also could reduce the amount of used fuel that needs to be stored on-site.

GEH’s technology offers important non-proliferation advantages because it employs a different method of recycling used fuel compared to other proposed technologies or existing reprocessing systems, Price said.

Charles Boardman

The American Nuclear Society (ANS) announced June 16 it has honored engineer Charles Boardman with the prestigious Cisler Medal for his decades of leadership in the development of GEH’s “Generation IV” PRISM reactor technology.

“Charles Boardman’s commitment to the development of advanced nuclear reactor and fuel recycling technology could provide significant benefits for the United States for many decades to come,” said ANS President William E. Burchill.

“Recycling would address one of the challenges raised by the resurgence of nuclear energy, retrieving large amounts of energy from used fuel and greatly reducing radioactive waste.”

The ANS awarded Boardman the Walker Lee Cisler Medal during the organization’s annual conference in Atlanta. The ANS is a not-for-profit, international scientific and educational organization covering nuclear science and technology. The Cisler Medal recognizes leadership in the field of “fast reactor” technology and its potential applications for power generation.

Steve Kirsch

This article published online at the Huffington Post is a long read, but it is well worth your time if you want to know the science history of the IFR. It includes interviews with some of the principal scientists and agency officials who worked on the technology before it was cancelled in the mid-1990s. There are plenty of links to source materials. Access is free but you must register to post comments.

Kirsch (right) is an unusual author for this topic because he is a successful venture capitalist, entrepreneur, and businessman who has no background in nuclear energy. His article has somewhat of a “booster” flavor to it because he has little patience with government bureaucracy.

One of the people Kirsch interviews is Ray Hunter, a former high level official at the Department of Energy. Now retired, Hunter offers a frank assessment of why reactor technologies with promising futures, like the IFR, get shuffled aside in the agency.

In the mid-1990s I was a project manager at the Idaho National Laboratory working on development of new programs for the lab. Hunter was hired by the lab as a consultant to develop these ideas both in terms of market research and for use in a business plan. I worked with Hunter and found him to be a straight shooter who had a unqiue outlook on the art of the possible in government energy programs. Here’s what he wrote about that experience.

“The main reason that nuclear energy development is so screwed up in DOE is that critical elements e.g. nonproliferation, waste, and nuclear R&D are in separate organizations all reporting to the Secretary. It requires real head knocking to integrate the pieces to have a rational program and there is no one in DOE sufficiently interested in nuclear to perform this task.”

“The Lockheed-Martin Idaho Technology Company (LMITCO) contracted with me to prepare a projection on the future of nuclear energy and technology and a possible role for the INEEL in this future. Following interviews with LMITCO employees and contacts with DOE program offices, universities, industrial organizations, and foreign entities; a report was provided that identifies potential nuclear energy opportunities for INEEL. These opportunities are germane today.”

What he’s talking about is the IFR reactor design. Kirsch writes that although the IFR was cancelled in 1994, it has popped up repeatedly in evaluations of future reactor R&D by DOE’s Generation IV R&D program and both the Russians and Chinese are intensely interested in the technology.

Read the rest of Kirsch’s article not only for the fascinating history of a missed opportunity, but also for the potential to recover what was lost and to complete its development as a commercial product.

# # #

Sphere: Related Content

Idaho congressional delegation on a nuclear roll

Simpson reports substantial increases in nuclear R&D funding and for cleanup

Idaho Congressman Mike Simpson, (right) a member of the House Appropriations Subcommittee on Energy and Water Development, on June 25 announced substantial increases in funding for the Idaho National Laboratory (INL) and the Idaho Cleanup Project (ICP) as part of legislation funding the Department of Energy in Fiscal Year 2010. The legislation was approved by the Subcommittee.

“Thanks to the hard work and dedication of those who work at INL, substantial new resources are headed Idaho’s way to improve facilities, expand reactor development, continue fuel cycle research, and push the development of the Center for Advanced Energy Studies,” said Simpson.

“The new funding in this bill can only be seen as a complete endorsement by Congress of the leadership role INL is playing in our nation’s nuclear renaissance.”

Among its provisions, the Energy and Water Development Appropriations bill includes:

• A $54.03 million increase over the current fiscal year for Idaho National Laboratory facilities. Total Idaho Facilities Management funding is targeted at $194.03 million. The additional funding is available for a variety of uses including new buildings, renovation of existing buildings, equipment purchases, and the Advanced Test Reactor’s operation as a National Scientific User Facility.
• A $76 million increase over the current fiscal year for the Next Generation Nuclear Plant (NGNP) bringing total funding to $245 million. The NGNP is designed to produce both electricity and heat for industrial applications. INL is the Department of Energy’s lead laboratory on research and development of the NGNP.
• $10 million for INL’s Light Water Reactor Sustainability Program. The Program focuses on maintenance and life extension of our nation’s current fleet of nuclear reactors.
• A combined total of $19.34 million is provided for INL’s collaboration with NASA on the supply of energy sources for deep space missions.
• $1 million for equipment purchases at the Center for Advanced Energy Studies at INL.
• $475 million for cleanup activities at INL, which is level funding with the current fiscal year but a $69 million increase over President Obama’s requested amount.

The Energy and Water Development bill is expected to be considered in full committee in two weeks and by the full House sometime in July.

In Idaho Falls, Lane Allgood, Director of the Partnership for Science and Technology, a pro-nuclear business group, praised Simpson’s work in an email to members and said that it showed the community was behind his advocacy for nuclear energy and cleanup programs at the INL.

Allgood reminded the group that the committee report still faces a vote in the full House and a conference committee with the Senate. The Obama administration is working to get the major appropriation bills passed in time for the start of the federal fiscal year which starts October 1st.

Risch votes against energy bill, joins western caucus

For a U.S. Senator brand new to the game in Washington, Idaho’s James Risch (right) has surprised some here in Idaho by jumping on the pro-nuclear cause with determined vigor. He signed on with a dozen or so other republican senators urging congress to expand the federal loan guarantee program for new nuclear power plants. He voted against the Energy Bill being reported out of the Senate Energy & Natural Resources Committee because it didn’t support nuclear energy, and he hired a Ph.D. level nuclear engineer to be his legislative director.

That’s not all. He joined with other western senators, including Idaho’s Sen. Mike Crapo, in a caucus to promote energy development including new nuclear power plants and recycling of spent nuclear fuel. He also issued a statement of support for the Eagle Rock Enrichment Facility as did all other members of the Idaho delegation.

With all the ferment in Washington over energy policy, it takes more than just a partisan position to vote against the juggernaut of measures that are rolling through Congress. Risch, who is the ranking republican on the Senate Energy Subcommittee, voted against the Senate Energy and Natural Resources Committee's energy bill saying it fails to reduce U.S. dependence on foreign oil or to further the development of new emission-free nuclear energy. The bill passed by a vote of 15 to 8. Explaining his vote, Risch said . . .

"America's energy demands are growing and will only increase as the economy gets back on its feet. Nuclear and biomass are proven technologies that are ready now to address those needs and I am disappointed that we did so little to encourage the use of those technologies."

The bill now goes to the full Senate. A floor vote is expected later this year.

What’s even more interesting is over on the House side, Idaho’s lone Democrat in Congress, Walt Minnick, (left) voted against the Obama Administration’s energy initiatives saying they were unfair to western states and failed to promote nuclear energy.

Idaho farmers are worried about increased fertilizer and power costs,” said Rep. Walt Minnick.

“Idaho energy companies believe it lacks proper consideration for hydro power and nuclear technology. Idaho businesses are frustrated with giveaways that rig the system in favor of pollution-heavy industry in the Midwest and California.”

Not another sagebrush rebellion but a coalition

Meanwhile, the Salt Lake City Tribune reports that Risch has joined Utah colleague Bob Bennett, Wyoming Sen. John Barrasso to promote tax incentives for building energy infrastructure, open federal lands for oil shale development and promote recycling of spent nuclear fuel to encourage new nuclear power plants.

While Hatch referred to the largely symbolic political effects of the sagebrush rebellion of the 1970s, the other Senators emphasized how they planned to work together to promote western energy interests.

Idaho Senator Mike Crapo right) said the group is introducing the Clean, Affordable, Reliable Energy Act, known as the CARE Act, this week.

The CARE Act promotes development of new alternative and renewable energy, while expanding domestic oil and gas operations. It seeks to streamline the leasing and permit process for new energy development across many sources, from oil to nuclear power generation.

Nuclear-related provisions of the CARE Act include:

• Language denying federal agencies the ability to stop nuclear power applications for reasons of waste disposal
• The establishment of a new nuclear work group to coordinate new nuclear power efforts

Risch gets a ‘nuke’ as his legislative director

And if you are wondering where Idaho’s Sen. James Risch is getting his advice these days, look no further than Corey McDaniel who is his new legislative director. McDaniel most recently served as senior energy policy advisor to second-ranking Republican U.S. Senator Jon Kyl of Arizona.

"It is very beneficial to have someone of Corey's expertise step into the legislative director position. His vast experience with energy issues, along with his knowledge of the Idaho National Laboratory and Capitol Hill will be invaluable," Risch said in a statement on his Senate web site.

McDaniel will support the Senator's legislative priorities, particularly those related to his committee assignments as the Ranking Member of the Energy Subcommittee on the Energy and Natural Resources Committee and on the Foreign Relations Committee.

Before coming to the Senate in 2005, McDaniel managed a renewable energy development firm. He also served as a nuclear safety analyst at the Los Alamos National Laboratory in his home state of New Mexico.

McDaniel earned his doctorate in environmental science and public policy at George Mason University. He earned B.S. and M.S. degrees in nuclear engineering at Purdue University and the University of New Mexico, respectively.

At the American Nuclear Society annual meeting held Atlanta, GA, June 14-18, McDaniel was already hard at work talking with industry leaders and even nuclear bloggers about critical issues.

In fact McDaniel was moving so fast he hadn’t even had time to print new business cards. He gave out hand-marked up cards from his previous Senate staff post. If you have ideas or questions about energy legislation, he wants to hear from you. Contact Corey at Sen. Risch’s office in Washington, DC.

# # #

Sphere: Related Content

Nuclear news roundup for 6/27/09

News comes in three forms – good, bad, and ugly – catching up from spending a week of live blogging from ANS Atlanta

NRC cites utility shortfalls – says no free rides for decommissioning funds

The Wall Street Journal reported June 20 that six nuclear utilities have until the end of calendar year 2009 to explain how they will make up the shortfall in their decommissioning funds. Another 12 firms are also getting notices from the NRC, but they are not as deeply in the financial ditch as the first six.

The NRC said it was concerned about the shortfalls in the funds. Nobody is going to get a free ride in terms of the agency’s regulatory requirements for maintaining the funds no matter how bad the market gets over time.

“We’ll discuss this with the plants over the next few weeks so they can explain to us how they’ll get the funds back on track to account for their decommissioning cost estimates,” said Tim McGinty, director of Policy and Rulemaking in the NRC’s Office of Nuclear Reactor Regulation.

“This is not a current safety issue, but the plants do have to prove to us they’re setting aside money appropriately.”

If you think your 401K is shot to pieces, wait until you see the numbers associated with the mess Wall Street made out of the investments utilities held to pay for closing their sites.

Like everyone else, the long term investment portfolio has shrunk thanks to unchecked greed by the so-called wizards of Wall Street. Under the Bush Administration, the Securities & Exchange Commission (SEC) took a long nap and now everyone is paying for it including nuclear utility decommissioning funds.

The most visible example is Entergy’s (NYSE:ETR) Vermont Yankee plant with a shortfall in the range of $600 million. The five firms other firms, all of whom are planning to build new nuclear plants, are Exelon, Constellation, FPL Group, and TVA.

In Vermont anti-nuclear legislators, who tried and failed in the last session to require Entergy to come up with the money right away, fulminated over the NRC’s notice. Governor Douglas has twice vetoed bills that would have mandated that Entergy come up wit the money and shut down by 2012.

Entergy, who owns and operated the utility, has applied to the NRC for a 20-year extension to its operating license. Anti-nuclear groups want the plant to close at the end of the current license which expires in 2012.

They’ve raised the issue of insufficient decommissioning funds as a reason why the plant should close. This is counter intuitive since such an action would deny the utility the opportunity to restore the decommissioning fund through contributions from earnings.

The WSJ reported that the Nuclear Energy Institute, which represents the nation’s largest nuclear utilities, noted that companies have up to 60 years to tear down plants once they are closed.

"We do have some time to recover that shortfall," said Adrian Heymer, senior director of strategic programs for the Nuclear Energy Institute (NEI).

Entergy says financing won’t hinder spinoff

Bloomberg wire service reports that while legislators in the super green state of Vermont are raising a stink over the shortfalls in Entergy’s Vermont Yankee decommissioning fund, the utility is bullish on plans to spin off six nuclear plants. They include Vermont Yankee and Indian Point. Other reactors are in Massachusetts and Michigan.

Entergy, which is the nation’s second largest nuclear utility behind Exelon, wants to bundle the six plants into a new company to be called Enexus Energy Corp. It would own and operate 5 GWe. The new firm would have to borrow $4.5 billion to finance the spinoff.

Given the cost of new nuclear power plants, at upwards of $4,000 Kw, the deal looks like a bargain. For its part, Entergy says the deal will deliver “full value of the plants” to investors.

Entergy CEO Wayne Leonard told Bloomberg the financial markets are improving. He reportedly said, “I don’t think you’d have any trouble raising $4.5 billion for these kinds of assets.”

However, not everyone is convinced it is a good deal for consumers. The New York Public Service Commission has worried out loud that the deal will produce a company with a junk bond credit rating, or as they say “below investment grade.”

Leonard told Bloomberg he and his board are getting impatient with regulatory delays. He also said that Entergy may wind up retaining some interest in the new company, but did not provide details.

Meanwhile, New York State Attorney General Andrew Cuomo continues to call for Indian Point, which has applied for a 20 year license extension from the NRC, to be closed when the current licenses for the two reactors expire in 2013 and 2015.

This is the same position taken by now former Governor Elliot Spitzer who resigned before he could benefit politically from this policy stance. Neither official ever told rate payers what the cost of replacement power for the 2.0 GWe of electricity provided by Indian Point would cost or that it would undoubtedly come from fossil fuel plants at spot prices.

Moody’s continues negative outlook for nuclear energy

Dow Jones reports that Moody’s Investor Service said June 25 that it may take a more negative view of utilities planning to build new nuclear power plants. The rating service discounted the value of federal loan guarantees as a moderating influence on the high capital costs of new plants.

Although federal loan guarantees will provide low-cost financing, Moody’s said they only "modestly" reduce the risk plant developers face.

"It has become increasingly likely that the pursuit of new nuclear power projects will lead to some near-term rating actions or outlook changes.”

Moody’s also discounted the favorable regulatory atmosphere in some states especially Florida, Georgia, and South Carolina. It said that the new plants can take upwards toward a decade to complete, from the time they apply for an NRC license, and can cost from $6-12 billion each. As a result Moody’s said, public utility commissions and rate payers may lose patience with the projects.

This is another counter intuitive judgment call by people who have an outlook on financial returns that can best be described, in family friendly terms, as “add water and microwave.” Translating that to the vernacular, it appears the rating service that has aligned its thinking investors who have no interest in understanding the nature of regulated rates of return in specific electricity markets.

To be fair, Moody’s also said utilities can preserve their ratings by spreading the risks of new plants through partnerships and cutting dividends to preserve cash to cover unanticipated construction costs.

Exelon to cut costs and 500 jobs

Nuclear engineering students who thought going to work for a large utility would be a guarantee against unemployment got a rude shock on June 18. The Wall Street Journal reported that Exelon (NYSE:EXC), the nation’s largest nuclear utility, is cutting costs by $350 million and eliminating 500 jobs to meet that target. The firm also froze some white collar salaries. About 100 managers will be among those who will be let go.

The firm employs 20,000 employees so the total numbers are a literal drop in the bucket or just 2.5% of the headcount. However, the layoffs will reportedly reduce 2Q 2009 earnings by $40 million or nearly $80,000 per warm body out the door. While Exelon, like other firms, isn’t going to disclose information on who was laid off, these kinds of costs suggest severance payments for senior employees.

The view that the firm is trimming its apparent top heavy management profile was reinforced by a statement from Exelon CEO John Rowe who told the WSJ . . .

"By rethinking our executive team structure and streamlining corporate support functions, we will increase both our efficiency and our focus on operational excellence."

In another sign of streamlining, the WSJ reported that President and Chief Operating Officer Christopher Crane, who manages Exelon's generation business, will also take over running the company's wholesale-power operations.

Maybe Exelon will be hiring new nuclear engineers after all since it still has to run 17 nuclear power plants and plans to build two new ABWR reactors in Victoria, TX. At the ANS national conference held in Atlanta June 14-18, a senior engineer with the firm told me that Exelon is serious about building the Victoria project. He should know because he and a lot of his colleagues are spending a lot of time on it.

Key investor says Exelon’s hostile bid for NRG is too low

While Exelon was tuning up its balance sheet to save $350 million, by laying off 500 people, and spending $40 million to do it, a key investor in NRG (NYSE:NRG), which is the subject of a hostile takeover attempt by Exelon, says the deal isn’t worth it at current stock prices.

Bloomberg wire service reports June 26 that MFS Investment Management (MMUFX), one of NRG’s largest shareholders, said NRG’s stock has gone up since Exelon made its hostile bid for the firm last Fall. Maura Shaughnessy, manager of the MFS utility fund, told Bloomberg . . .

“Exelon will have to pay much more or the deal won’t go through. I think Exelon is in a bind.”

MFS owns 4.6% of NRG’s stock. NRG’s market capitalization is $6.31 billion making the MFS position worth $281 million. NRG’s stock has been rising since its 52-week low May 1st of $14.39 a share and closed at $23.80/share on June 26.

When Exelon made its all stock offer last October, it said it would provide 0.485 shares of its stock for each of NRG’s outstanding shares or at $26.43/share.

Exelon’s stock price has since declined to $50.70/share which reduces its offer for NRG stock to $24.58/share as of market close on June 26. NRG’s stock closed at $23.80 on June 26 which hardly makes for much of a premium in terms of Exelon’s offer. The difference in Exelon’s offer made last October produced a premium of 37%.

Bloomberg reported that Exelon has no plans to sweeten its offer. Paul Elsberg, a spokesman for Exelon, said the company had nothing to add to the “value proposition” in its bid.

Shaughnessy thinks the situation will continue to improve for NRG. She told Bloomberg NRG is the “best run U.S. power producer” and that its prospects and stock price will improve as the economy rebounds and demand for electricity increases with that growth.

# # #

Sphere: Related Content

Change NRC cost recovery rule for small reactors

A modest proposal to avoid killing off innovative reactor designs due to the expense of design certification reviews

In a widely read OP ED published in the Wall Street Journal on June 25, Bob Metcalfe, a well-known entrepreneur and venture capitalist, complained about the “high costs and astronomical risks” of the design certification process at the U.S. Nuclear Regulatory Commission (NRC).

He points out there are at least five start-ups, some funded with venture capital, that are facing design certification costs of as much as $50-100 million each. Most of these costs, which the NRC must recover by law, will be driven by the fact that the new designs are not light water reactors. Hence,the NRC will have to spend considerable time moving up a steep learning curve at the applicant’s expense. For investors, that’s a lot of money and a lot of risk and all the while the product is not moving towards a market.

Metcalfe is right, and his complaint needs a solution

Mr. Metcalfe is absolutely right that the NRC's reactor design certification step is likely to be the place where the development of small reactors meets its fate. In an interview I conducted with NRC former chairman Dale Klein (left) June 16 in Atlanta, GA, at the annual meeting of the American Nuclear Society, he said that developers of small reactors will have to meet the same tests for safety as the big baseload plants.

“To be successful the firms promoting small reactors must do more than make sketches. There are the same serious issues with safety systems and reliability that the vendors of large system have to address. These issues apply with equal vigor under our regulations to small reactors.”

This is consistent with a speech he gave in 2008 when he said that small reactors had the NRC's attention and he called on the nuclear industry to work with the NRC to identify the key issues that would need to be addressed in the design certification process for them

The start-up firms that are developing new nuclear reactors in the range of 100-300 MW simply do not have $50-100 million to pay for NRC's review. Even billionaire Bill Gates, who's foundation is paying for development of a "Traveling Wave" reactor, may find he has limits when it comes to paying for government oversight.

The NRC has an important role in making sure nuclear reactors are safe. Congress needs to look at the cost reimbursement issue and make changes so that innovation in the nuclear industry isn't killed off by the way the NRC gets its funds.

A modest proposal in five easy pieces

There are lots of ideas floating around about what to do about Metcalfe's complaint. Here are five easy pieces for immediate action.

First, change the formula by which the NRC recovers costs from small reactors for design certification reviews. Instead of requiring the start-ups to pay for all of the costs, require them to pay for a complete application. In other words, hold them accountable for getting their design docketed by the NRC. This requirement will insure the NRC’s limited time, and stretched to the limit workforce, will not be wasted by stock speculators with kitchen table top sketches. Once the docketed application was in hand, the NRC would turn to a new line item appropriation to pay for most of the design certification costs.

Second, establish a line item appropriation to fund the NRC to conduct the design certification reviews of new reactors that are docketed and which meet certain technical criteria. Examples include power (less than 500 MW), the benefits of simplified design and below grade installation, in terms of reduced risk of coolant and core damage accidents, less fuel handling due to longer period of burn up of initial fuel load, and so on.

Third, the message to large reactor vendors, who will complain that this is a subsidy to their competition, is that they are well positioned to help sell and service these reactor designs once they are certified by the NRC.

While this proposal would significantly cut regulatory costs for start-up investors, they still face daunting challenges getting their products to market and that includes building or leasing manufacturing capacity. The large reactor vendors are in a position to form joint ventures with small reactor firms to supply manufacturing capacity and sales/distribution support in return for a combination of equity and profits.

Fourth, the small reactors should consider forming a trade group to promote their interests which includes legislative proposals like this one. The cost of a lawyer and an engineer in Washington, DC, for a year probably could be had for less than $500,000. These firms should also form technical and regulatory working groups to provide input to the NRC on how it could streamline the current reactor design certification process for their innovative reactors without compromising safety.

Fifth, take the show on the road to the large reactor vendors. Convince them that there are potential profits to be had through joint ventures for manufacturing, sales, and services. Investors in small reactors want the fastest path possible to a return on investment. That means they don’t want to pay for or wait for small reactor vendors to build their own infrastructure or global marketing organizations. For instance, Mr. Metcalfe, the venture capitalist, if he did invest in one of these firms, would want to cash out from his position in five years.

What NRC and Congress can do now

There is also something for the NRC to do. It should start talks now with the small reactor firms and with its congressional appropriations committee to explore an alternative form of funding so that American innovation and export earnings don’t die on the vine because of the current cost recovery law.

The Congressional Budget Office (CBO) should be asked to calculate the cost of the change in NRC’s funding formula and also the benefits in terms of tax revenues from new businesses that would become profitable, along with their payrolls and high economic multiplier effects, once the reactor designs were certified for sale.

Energy Sec. Steven Chu could weigh in with a real commitment to the Next Generation Nuclear Plant (NGNP) making it a test bed for applications for small reactors, e.g., process heat, hydrogen production, as well as electricity. There is also work which is needed on fuel types, materials, and balance of plant, e.g., new types of turbines, that would benefit from government funded R&D. Small reactor vendors could work with the Idaho National Laboratory (INL) through Cooperative Research and Development Agreements (CRADAs) to move their R&D agendas ahead.

This isn’t a complete package, but there ought to be enough ideas for the small reactor start-ups to stop publishing OP EDs and start doing something to advance their interests. Their investors will likely thank them if they do.

# # #

Sphere: Related Content

Duke and Areva team up in Ohio

Proposed 1,600 MW reactor will build on Piketon’s nuclear legacy and help define its future – gaining public acceptance will be a key to success

It is a deal between giants. In the global world of multi-billion dollar agreements between mega-utilities and the continent spanning reach of reactor manufacturers, the announcement in Piketon, OH, this week got a lot of attention worldwide and in southern Ohio.

In addition to being a deal of a lifetime, it is also a potential tar pit of anti-nuclear sentiment created by years of distrust of government and industry actions and inaction over legacy hazardous and radioactive contamination. Anti-nuclear groups immediately focused on the still unfunded project and may seek to leverage negative community sentiment on cleanup issues to impact acceptance of the new reactor project.

If anyone doubted the importance of the contract for the parties involved, Duke Energy and Areva, they needed only to look at the video of the press announcement to see Jim Rogers, CEO of Duke Energy, and Anne Lauvergeon, CEO of Areva, talking into the lens of the television cameras.

Launched on the site of a former uranium enrichment plant in Piketon, OH, about 85 miles east of Cincinnati, the plant will be built by a group calling itself the Southern Ohio Energy Park Alliance. It consists of the site owner, U.S. Enrichment Corp. (USEC)(NYSE:USU), the utility Duke Energy (NYSE:DUK), Areva, the French state-owned nuclear reactor vendor, and Unistar Energy which is a reactor building consortium of Areva, Constellation Energy, and Bechtel.

The way the agreements are expected to work among the various parties are that Duke Energy would be the owner and operator of one or more 1,600 MW U.S. EPR design nuclear reactors supplied by Areva. Unistar would develop the COL license application for the project to the NRC. It could be filed as early as 2010. Bechtel, a Unistar partner, will build the plant and related infrastructure. USEC would lease the site for the life of the reactors and provide all site infrastructure.

Why here why now?

There has been plenty of straight news about the deal, but some questions remain open. For instance, what brought this combination of companies together and why? To answer it start with a look at the site. It’s legacy goes back to the Manhattan Project in World War II when it was used to produce enriched uranium in a gaseous diffusion process.

That process involves massive amounts of electricity which was supplied by TVA. The transmission and distribution infrastructure that brought electricity to the site is still in place. The wires that brought power in can now be used to send power out to an energy hungry Midwest that knows the days of coal-power are drawing to an end.

Duke Energy is right in the middle of that change. While it is one of the nation’s largest nuclear energy utilities, it is also one of the nation’s largest coal fired utilities. In his press statement, Duke CEO Jim Rogers said, “We face the indisputable fact that our nation and our world are transitioning to a low-carbon future.”

He told the New York Times in a telephone interview, “Most of our fleet in Ohio, which is coal-fired, will be retired over the next 15-20 years. We’re going to need to replace it, and this plant will replace that capacity.”

1st in line for a fleet change out

This is the first time Duke and Areva have teamed up on a reactor project. If the project is successful, Areva will be first in line for future orders to replace other Duke coal fired plants. Overall, it is a vision that spans decades and even generations, but it fits the worldview of some who have said that thinking seriously about nuclear energy requires a perspective that spans 100s of years.

The Piketon site is also home to USEC’s new American Centrifuge facility which if completed will produce over 3.5 million SWU of enrichment services a year for the nation’s commercial nuclear power plants. USEC has been on a continuing hunt for investors. Last Fall it let a $1 billion contract with Fluor Corp. to ramp up construction, but by late winter 2009 it had stopped work and laid off almost all of the workers due to cash flow problems.

If USEC can convince investors the reactor project is real, it will be a confidence building measure. After all, a huge, 1,600 MW reactor next door to the enrichment plant is an obvious customer for its services. That may not be enough.

Areva and USEC are currently locked in a competitive battle over $2 billion in federal loan guarantees for uranium enrichment plants. For its part, USEC has said it cannot attract investors without the loan guarantee. Areva is the reactor vendor in Ohio selling reactors so its participation in the project will not affect its capital requirements for other U.S. activities like the enrichment plant in Idaho. That gives it a competitive advantage and a reason to be in Ohio.

Areva’s Eagle Rock Enrichment Facility, to be built in Idaho, will have an initial capacity of 2.4 million SWU, but the company has filed an amendment to its license application with the NRC to double the size of the plant if market demand supports it following start-up in 2014. If USEC's investment strategy fails to materialize, Areva and Louisiana Energy Service, which has also planned to double the size of its plant, will be positioned to pick up the market share left on the table. For its part, USEC is determinined to succeed and has said it will aggressively pursue its business goals.

Public acceptance issues put a bulls eye on the project

Finally, there is the issue of public acceptance of more nuclear facilities at Piketon. The area is controversial with the public. In 2007 citizens groups in the area came out like swarms of angry hornets for hearings held last year when a GNEP facility was proposed for Piketon which is also a nuclear waste cleanup site managed by the Department of Energy.

More than 300 people testified against the GNEP project. Citizens groups have objected to any new nuclear facilities at the site until the current one is cleaned up. The political landscape looks like an alien battlefield with hovering fleets of flying saucers zapping a rouge planet. Or put another way, the peasants revolted coming out, metaphorically speaking, with pitchforks and pruning hooks to drive off what they perceive as an evil influence.

For nuclear energy to be acceptable at Piketon, Duke and its partners will have to put a communications strategy on the ground that differentiates its project from the legacy clean up issues that have enraged the community. Even more to the point, anti-nuclear groups will see the Piketon project as a ripe opportunity to exploit existing high levels of alienation.

On a national scale, anti-nuclear activists like Harry Wasserman are already mounting a rhetorical attack on the project. If the anti-nuclear groups in Ohio, and nationally, can make enough trouble, forcing Duke and Areva to walk away, then they can count coup in a kill and cast doubt on the viability of the nuclear renaissance.

Make no mistake about it, this project is in the sights of anti- nuclear groups which are looking to make an example out of it. It is also an opportunity of a lifetime for Duke and Areva to do something different in terms of on-the-ground and national communications strategy than just roll out a web site and hand out fliers at chamber of commerce breakfasts.

The advantages of the site for the partners in the Southern Ohio Energy Park have produced compelling reasons to want success at that site. The question is whether with all that corporate throw weight whether anyone has thought through the necessary transparency and confidence building measures needed to convince the people of Piketon, OH, that they will benefit from the plant. Real jobs associated with the project, numbered in the 1000s, will not materialize for at least five years. What will Duke and Areva do in the meantime?

Watch the space in Piketon. Everyone else is.

# # #

Sphere: Related Content

NEI – Cooper study “biased”

Analyses show nuclear is 'least cost option' for generation of new baseload electricity

NucNet - analyses in several US states show that new reactor units will be the “least cost option” for new generation, the Nuclear Energy Institute (NEI) said this week in response to a study The Economics of Nuclear Power: Renaissance or Relapse? by Mark Cooper, who is identified as a senior fellow for economic analysis with the Institute for Energy and Environment at the Vermont Law School.

NEI - Vermont Law study is biased

The nuclear industry trade group couched its response in measured phrases, but the real message is, more or less, Cooper is blowing smoke.

Among claims arising from the study, published earlier this month, was that actual cost estimates for proposed reactors is some four times higher than industry projections from less than 10 years ago.

However, the NEI said the study presented a “biased view” of the overall picture in the US. In a detailed response, the NEI said:

“Based on studies by the energy companies contemplating building new reactors and independent analyses, new nuclear power plants are expected to produce electricity at competitive prices. New nuclear plants in some markets may be one of the most cost-effective ways of generating electricity in a carbon-constrained world.

“Contrary to the study’s finding that ‘nuclear power cannot stand on its own two feet in the marketplace’, nuclear energy is expected to be among the most economic sources of electricity … New nuclear reactors have been affirmed as the least cost option for new generation by the Public Service Commission (PSC) in South Carolina, Florida, and Georgia.

“The analyses supporting the PSC reviews found nuclear to be cost competitive with other forms of baseload generation in addition to helping to address climate change.”

NEI White Paper on nuclear plant costs

A paper by the NEI, which provides a survey of cost information for new nuclear and coal-based generating capacity and summarizes recent analyses of the comparative economics of new electric generating capacity is on the NEI’s website

The study by Cooper is on the web site of the Institute for Energy and the Environment at Vermont Law School. In fact Mr. Cooper’s relationship with the law school may be tenuous according to Charles Barton at NuclearGreen.

Here’s his real bio - Mark Cooper is director of research at the Consumer Federation of America (CFA) where he has responsibility for energy, telecommunications, and economic policy analysis. The rest of his bio reveals a sterling educational pedigree, but as previously noted on this blog, even smart guys can be wrong.

Where there’s smoke there’s fire

BTW, in another case where smart guys are wrong, at least about nuclear physics, Ralph Nadar, who helped organized CFA, has been outspoken in his opposition to smoke detectors which use tiny amounts of Americium 241. Encased in plastic, the alpha emitter poses no risk to anyone unless you break the thing open with a hammer and try to eat it. The World Nuclear Association has the real 411 on the safe use of this isotope.

Mr. Cooper’s study has been called “biased” by NEI, but in the case of Ralph Nader and smoke detectors, the American Nuclear Society (ANS) makes it clear why they recommend use of the Americium 241 model. Here are the facts.

The ionization smoke detector uses a tiny bit of radioactive americium-241, a source of alpha radiation. An air-filled space between two electrodes creates a chamber that permits a small, constant current to flow between the electrodes. If smoke or heat enters the chamber, the electric current between the electrodes is interrupted and the alarm is triggered.

This smoke alarm is less expensive than other designs and improves the original smoke alarm by measuring more than the heat of a fire. It can detect particles of smoke too small to be visible.

Finally, hats off to the Idaho Section of the American Nuclear Society which each year gives away hundreds of smoke detectors to families in Idaho which otherwise could not afford them.

# # #

Sphere: Related Content

Pace of NRC license reviews aired at ANS

The nuclear industry is not happy about some aspects of the process

One of the more significant misconceptions about licensing a new nuclear power plant is that if you throw more money at the Nuclear Regulatory Agency (NRC), it will speed up the approval process for new reactor projects and designs. This turns out to be wrong.

The license applicants and reactor vendors want the NRC go move faster, but their perception, as aired at a panel discussion held at the American Nuclear Society Annual meeting on 6/16, is that this is not happening. Although people were polite, it was a tense session. Off-hand sardonic remarks seemed to travel in the air. Frustration with government regulators can sometimes turn up some weird analogies and one was shared with me by an industry representative.

The metaphor is that if it takes a one woman nine months to give birth to a new baby, if you get nine women together, you ought to be able to have the baby in one month. Some things just don't work that way and throwing money at the NRC licensing process for new nuclear plants is one of them.

For the impatient, the answer, again metaphorically speaking, is that if you want to speed up the process, then take your electronic filing, put it in the microwave, add water, hit the power button and wait 42 months. Naturally, the nuclear industry doesn't see it that way. That somewhat unsympathetic comment came from another member of the audience, and not from an NRC official. What the NRC officials did say is that the agency is committed by its own regulations to lay down a record of environmental and safety reviews so 42 months is what it takes, assuming all else goes well.

These differences made for an interesting dialog held June 16 between a senior NRC official and some industry licensing managers. It aired out the views of both groups and shed light on what's taking so long.

High wire acts with billions at stake

Getting an NRC license to build a nuclear power plant, or certify a new reactor design, is a high wire act that can cost $50 million, more or less, and that just gets the paperwork done. There is a saying in the industry that when the weight of the paper equals that of the reactor vessel, you've done your job. It isn't true, but for some it feels that way.

Dave Matthews, Director, New Reactor Licensing, at the NRC started the meeting by describing the scope of work facing the agency. There are 18 COL applications that have been filed and three new reactor designs that are undergoing design certification (Areva's EPR, Mitsubishi's APWR, and GE's ESBWR).

The outlook to 2020, which at this point is just a decade away, is that 4-8 reactors will be in revenue services and another 15-18 new plants will be in some stage of formal development having received their license from the NRC. Matthews made it clear that just about everyone in the government and the industry regards the success of the '1st wave' as setting the stage for the next dozen or so projects.

Schedules are commitments

By 2011 the NRC is committed to completing a schedule for some of the COL applications on file and all of the design certifications. The schedules published by the NRC are regulatory instruments. Matthews said the license applicants and the reactor vendors need to meet the deadlines for the NRC's requests for information which come with a 30-day turn around.

Generally, the industry members of the panel expressed annoyance with what they considered to be "nit pick" questions submitted by the virtual (electronic) truckload and all with 30-day clocks on them. The applicants aren't exactly thrilled with some of the questions or the huge volume. Taken together the burden is sometimes overwhelming.

Greg Gibson from Unistar, working on the Calvert Cliffs III project, said some of the requests appear to be trivial such as one that asked for the screen mesh size of a net used to capture and count aquatic wildlife in a survey of the local environment.

There are deficiencies in some of the applications which holds things up Matthews said. Also, some firms that submitted COL applications have put them on hold hoping to concentrate the NRC's regulatory review on higher priority projects. Matthews noted that Unistar has taken this approach with the Nine Mile plant in upstate New York in an effort to make progress with the Calvert Cliffs III project.

Dollars in as fees are not always dollars for the NRC’s work

It doesn't always work that way inside the agency Matthews said. As a fee recovery agency which bills applicants for the time of NRC engineers at least $250/hr, some applications will not be reviewed as quickly as others. One of the reasons is that while the NRC is required by law to collect the fees, Congress doesn't always appropriate the money back to the agency to cover the full cost of requested services.

Congress deals with the NRC fees the same way it does for entrance fees to national parks. The money goes into the U.S. Treasury, but that does not mean it gets allocated to the agency on a dollar-for-dollar basis. In fact, the NRC has two separate accounts. The first is funding to respond to regulatory requirements, such as license applications, about 90%, which comes from fees, and the second is for some agency initiatives such as international standards development, which comes from general tax revenues.

With a budget in 2009 of just over $1 billion, Matthews said it isn't enough to make the industry happy all the time. Some in-and-outside the agency see the diversion of fees into other government accounts as a problem.

Their logic is that the fees for regulatory review are fees-for-service. Pre-emptive allocation of the money elsewhere by Congress raises hackles with the nuclear utilities and reactor vendors who have applications pending with the agency.

Design references implement the 80-20 rule

In another effort to speed things up, the industry has been trying to cut down on the number of unique reviews the NRC has to make by taking a "fleet" approach to standard references. For instance, Unistar is using Calvert Cliffs as a design reference for Nine Mile, Bell Bend, and any other Areva EPR the consortium will build.

Peter Hastings of Duke Energy, who is working with applications involving the Westinghouse AP1000, told the ANS panel that 80% of the standard reference design data is common to all of the projects. The 20% that is not is what is getting the NRC's attention. He said, "site specific challenges are a minefield," which can throw a license application behind schedule.

Hastings said are that Vogtle will be the standard design reference submitted to the NRC for the "fleet" of AP1000s being built in the South and not TVA's Bellefonte Units 3&4. With EPC contracts in place at Vogtle, V.C. Summer, and Levy County, the Westinghouse reviews can't afford to be held up while TVA makes up its mind whether to go forward with Bellefonte 3&4, complete units 1&2, which were stopped in the 80s, or do all four. The lack of a defined construction schedule for any unit at Bellefonte is what drove the change.

Hastings also revealed that the COL for the Florida Power & Light dual AP1000 plants at Turkey Point will be submitted by the end of June and not in 2010 as indicated earlier this year by the utility.

Lessons learned in China will bring success to the U.S.

Hastings said Westinghouse is learning from the work it is doing in China. It has poured concrete for two AP1000s at Sanmen and will build two more at Haiyang. The Sanmen unit is supposed to enter revenue service in 2013 and Haiyang will start up a year later. Westinghouse has engineers in China who will bring lessons learned home to the U.S. to help make construction go more smoothly at new nuclear power plants here.

Another factor which will make life easier for Duke and Westinghouse is that five-of-the-seven plants it is working with are located at existing reactor sites. Only two are "greenfield" Levy county and William Lee. This means the projects at existing reactor sites already have data for the environmental impact statement and other site assessment information.

What to do about those delays?

I came away from the session with a perception that the NRC does not have enough money to process all the COL license applications in 42 months. However, some are not ready for prime time, because of deficiences, and other license reviews have been suspended at the applicant's request. The situation is better with reactor design certification. There NRC expects to finish all three that it has docketed by 2011.

The industry panel wasn't all about gripes and schedules. There is a atmosphere of respect between the NRC officials, some of whom spoke from the audience, and the industry licensing engineers. But no one is shy about airing a gripe. So in that regard, the ANS panel served a useful role of reminding everyone of the realities of the NRC’s review process.

The utilities and reactor vendors know the analogy of adding eight women to one that is already pregnant get a baby in one month is illogical. However, with tens of billions riding on these projects, if the industry could, metaphorically speaking, find a way to get those eight other women to move the NRC to speed things up, they'd have display ads in the Atlanta Constitution by sundown.

On the other hand, maybe they should save their money and instead book flights to Washington to lobby Congress to not use the NRC's budget to de facto throttle the future of the nuclear renaissance.

# # #

Sphere: Related Content

Nuclear bloggers achieve critical mass at ANS Atlanta

A first-of-a-kind panel discussion explores the new media for the nuclear industry

The nuclear energy industry is not the first place you would think of when it comes to new social media like blogs. That perception was shattered this week when four of the nation's most prolific bloggers about nuclear energy met in person for the first time in Atlanta, GA, at the annual conference of the American Nuclear Society. The stars must have aligned in the skies over Georgia to bring this group together this week!

Rod Adams, Atomic Insights; John Wheeler, ThisWeekinNuclear, Kirk Sorensen, Energy from Thorium; and Dan Yurman, Idaho Samizdat; spent three hours on Wednesday June 17 talking to a group of about 100 people who wanted to know how blogs tell the nuclear energy story.

You can read all about it in an exclusvie report at the Energy Collective where it is now online.

# # #

Sphere: Related Content

Areva EPR for Duke at Piketon, OH

Official announcement is released

Reuters reports that Duke Energy Corp (NYSE:DUK) plans to build a new nuclear power plant in Piketon, Ohio, the state's Gov. Ted Strickland said an energy conference taking place in Ohio.

According to Reuters sources said Duke wwould build an Areva 1,600 MW EPR at the site. Executives from Areva were at the meeting with the governor.

Areva has a statement on its North American blog which confirms the fast breaking news.

Update 12 Noon eastern time 6/16/09

Marketwarch reports Ohio Governor Ted Strickland, Duke Energy, Areva, USEC, (NYSE:USU) and UniStar Nuclear Energy said June 18 they formed an alliance to build a nuclear power plant at a U.S. Department of Energy site in Piketon, Ohio, which is about 85 miles east of Cincinnati.

Named the Southern Ohio Clean Energy Park Alliance, the consortium will evaluate the site as a potential location for a new nuclear power plant, including preparing a plant siting study and licensing documents for the U.S. Nuclear Regulatory Commission.

UniStar is a joint alliance between France's EDF and Constellation Energy (NYSE:CEG). The energy park follows an effort by the U.S. Department of Energy to convert former weapons sites for energy production. Duke will manage the project, provide project oversight and serve as the applicant for the NRC licensing applications. No date was announced for submission of a COL. This is Duke's first reactor project with Areva.

World Nuclear news reports the proposed site is the location of the Portsmouth gaseous diffusion uranium enrichment plant, which operated from 1954 to 2001. The plant and its facilities were then kept in 'cold standby' until 2005, when they entered 'cold shutdown', and decontamination and decommissioning began to clean up the contaminated site.

In 2004, US enrichment company USEC selected the Portsmouth site as the home of its American Centrifuge enrichment plant, currently under construction and due to begin commercial operations in 2011 or later depending on how soon USEC attracts full investor funding for the project.

The site could host an Areva 1,600 MW EPR reactor and might also be a replacement for Ameren's withdrawal from Callaway II following action by the Missouri legislature's decision not to enable "construction while in progress" (CWIP) legislation.

Update 6:00 PM 6/16/09

The New York Times reports that because the old gaseous diffusion enrichment process used so much electricity, the site has strong connections via TVA to transmission and distribution grids. It is also in a region that needs the jobs from industrial development.

Jim Rogers, Duke CEO, told the NYT,

“I’m confident I can fund it. Most of our fleet in Ohio, which is coal-fired, will be retired over the next 15 to 20 years, and we’re going to need to replace it, and this plant will be a good candidate to replace that capacity.”

The NYT also reportered that the plant would be built as a regulated generator, not a merchant generator, and state approvals, once they are enactred, will allow the company to begin collecting money before it is finished.

Rogers told the NYT Duke is looking for additional partners. He would not specify a target price or a target date for breaking ground.

“This is the beginning of the beginning,” Rogers said. “It’s a very long process to build a plant in this country but if you don’t get started, you won’t get it done.”

If you want to know how serious Areva takes this project, consider the fact that Anne Lauvergeon, the CEO of Areva, was in Ohio for the announcement. She said in a telephone interview with the NYT that nuclear power was the only choice for reliable, low-carbon energy.

On the issue of financing, there have been questions asked about how the firm will raise the estimated 11 billion euros it needs for global expansion into projects like this one. Lauvergeon told the NYT that the financing was an issue for Areva’s customers, not for Areva itself. The plant would provide 4,000 to 5,000 construction jobs and 500 to 700 permanent jobs, she said.

# # #

Sphere: Related Content

Story telling and blogs

What makes a good blog?

Hat tip to Merlin Mann at 43 Folders

At the American Nuclear Society conference taking place in Atlanta this week I was part of a panel discussion with Rod Adams from Atomic Insights, John Wheeler from This Week in Nuclear and Kirk Sorensen from Energy from Thorium (speaking from the audience). This is a critical mass of nuclear energy bloggers by any definition.

A lot of the discussion was on the mechanics and practices of blogging, and you can find this stuff on the Internet in a much more comprehensive way than I can represent the conversation here. Also, I’ll have additional coverage on the conference workshop over at the EnergyCollective later this week.

One of the things I talked about was that blogs tell stories. I've edited my prepared remarks and include a link to the slides for your reading pleasure below.

In 2008 a San Francisco, CA, blogger named Merlin Mann wrote a brief essay about story telling and blogging. However, I felt I could take the essay further in a number of areas and so adapted his essay with my extensions. Here it is.

Blogs tell stories

A good blog, indeed an extraordinary blog, must address the fundamental question of why the reader should spend time with its story. A good story, a satisfying story, must have a compelling start, a middle which lays out the struggle to resolve conflicts and contradictions, or which celebrates the triumph of hard work, dedication, innovation, or which captures the fortunate circumstances where just plain luck arrives and often when it is not expected.

Blogs tell stories, but there are dividing lines between ordinary blogs and those that tell the best stories. The best blogs are not just journalism. In some ways they hearken back to an oral tradition that is thousands of years old.

A blog has a voice

A blog must have a distinctive voice which in its highs and lows conveys the personality of the blogger and what it's publisher has to contribute to its readers' knowledge of how the world works. The voice of a blog is not a measured monotone. A good blog is exuberant and conveys its enthusiasm for its subject matter to the reader. A good blog is also serious when its needs to be, and must display determination to pursue a topic to its logical conclusions.

A blog cannot mere be a curator of links, a collection of pointers to the work of others, or a mish mash of citations of media clips. The voice of a blog must carry the reader to a new place, where there is better understanding of an issue, a topic, or an event. The blogger's voice cannot falter. The voice of a good blog tells a compelling story which carries with it elements that border on obsession about its topic.

Blogs are passionate about their subjects

A good blog takes the readers basic interest and captures their attention. Good blogs reflect commitment to an issue or cause, an industry, a person, product, or an idea. The stories told by a strong voice in a good blog overflow with a clear desire to satisfy curiosity about the subject matter. The reader must come away from reading such a blog knowing that the publisher never stops reading and learning about the blog's focus.

A good blog has tenacious attention to detail without burying its readers in a mass of disorganized facts. A good blog encourages the reader to follow the evolution of the story, including the use of links to reinforce the authenticity of the facts of the tale.

Blog success is derived from dedication to a craft

No successful blog is the product of "add water and microwave." Good blogs tells stories that reflect years of effort to refine the craft of written communication. Good blogs require dedication, hard work, and sometimes getting up at 2 AM to put an idea on the net so it will not be lost. Good blogs must be kept current with fresh, new stories.

Polite blogs do not make a difference

Good blogs must challenge their readers and take them out of their comfort zones. Good blogs are platforms for new core ideas which can create fundamental change. Blogs highlight divergent thinking that the mainstream media sometimes overlooks, and blogs may at times confound their readers with complex ideas out of the ordinary.

Even when a blog is an advocate for its subject, it cannot avoid the inevitable potholes in the road, and must write about them with equal attention to excellence. Blogs will also tell their readers when a story has no happy ending or where there is no prospect of closure.

Good blogs are persistent. They will repeatedly return to compelling subjects without taxing the patience of their readers because each new visit is a new perspective on the topic at hand. Good blogs are not boring or signals the publisher has stopped taking his medication.

Blogs put honor before elegance

Good blogs tell stories that explain the world from a unique perspective. They answer the "so what" questions. They do not waste your time, and when you finish reading the current day's offering, you are ready for more.

Good blogs explain more, analyze deeply, illuminate their subjects using high beams, and if they are really successful, inspire readers to go out and slay dragons or at least not be afraid of things that go bump in the night.

Good blogs pick you up the way the sun evaporates water from the sea. They carry you across the skies, and release you like rainfall into a new land. That's what blogs are or ought to be about.

# # #

Sphere: Related Content

Right-size reactors fuel vision of new ANS president

Thomas Sanders comes to the office this week with a commitment to help the U.S. rebuild its manufacturing capabilities for nuclear technologies

In an exclusive interview with the Energy Collective, Thomas Sanders, Ph.D., who takes office today as the President of the American Nuclear Society (ANS), shares his vision to revitalization of American manufacturing capabilities for "right-size" reactors and a companion program of reliable fuel services. This audacious agenda will be a signature of his term as the head of the nation's leading scientific and engineering professional society for nuclear energy.

Thomas Sanders, Ph.D. says he isn't just painting a picture of commercial success. What he has in mind is a combination of "right-size reactors" of 100-300 MW and cradle-to-grave reliable fuel services for developing nations. This is an early exposition of what Sanders plans to make as major priority for the nuclear science and engineering professional society during his term in office.

Read the full interview at the Energy Collective web site.

# # #

Sphere: Related Content

Elmore County punts but no field goal

County commissioners tell planning team to re-work industrial land use policy

The Elmore County, ID, county commissioners decided yet again not to decide the fate of AEHI’s (OTC:AEHI) proposed nuclear power plant for southwestern Idaho.

According to a report by Rocky Barker in the Idaho Statesman, the commissioners told the planning and zoning commission to consider amending the county's comprehensive plan. The idea is to create yet other heavy industry areas in the comprehensive land use plant besides the one along Simco Road.

The decision pleased no one. AEHI’s CEO Don Gillispie really has only one thing to show for all his several years of effort to site the plant and that is that the Idaho news media knows how to spell his name. Otherwise, he has virtually nothing on paper to bring to potential investors because he doesn’t even have the local approval he needs to build the plant much less an NRC license. With only time on his hands, Gillispie told the media he’ll wait to see what the county does next.

This is AEHI’s second site having abandoned an effort to get approval for a site in Owyhee County just south of the current candidate for the proposed 1,600 MW plant. That site had geologic problems and the distinct disadvantage of being on the wrong side of the Snake River relative to access to the interstate highway.

The Elmore county commissioners are also concerned that if they grant the zoning change, and then AEHI fails to raise the money for the project, and abandons the project, that a future developer could come along to build on it because of the zoning. In that regard they have a point because Idaho planning law goes to the allowed uses of the zoning and not specific projects. Once the heavy industry zoning is approved, anything that fits within it can be built there.

Anti-nuclear “watchdog” barks

Andrea Shipley, the outspoken director of the Snake River Alliance, a self-described “nuclear watchdog,” is based in Boise less than a hour’s drive drive from the county seat in Mountain Home, ID. It has recently been reinvigorated by making destruction of Gillispie’s nuclear dream its life mission. Shipley told the Idaho Statesman she was equally unimpressed with the commission’s further deliberations.

However, the group also sees the delay as an opportunity to perhaps trot off to Sun Valley to wave the ghost of the nuclear industry’s past at a few more trophy home owners to raise funds. Shipley called the decision a success "because we can start talking about the issue at hand, which is nuclear power."

Like many anti-nukes, Shipley can quickly tell you the names of two famous nuclear accidents, but she can’t name ten plants that run at 100% of capacity without mishap of any kind. It reflects the group’s take no prisoners philosophy when it come to advocating for their cause.

She told the media since the proposal is still alive, she and and her organization will keep working to kill it.

New banker has clean record

When AEHI first came to Idaho there was plenty of skepticism about its intentions and questions whether it was legitimate or was just another penny stock outfit with large dreams and empty pockets. Now working with its third investment banker, and having registered with the SEC, the firm appears to be making moves towards bolstering its financial credibility.

The Twin Falls Times News this week did a check on Source Capital and found a series of minor infractions and an apparently solvent operation. The newspaper reported that fines for infractions of state regulations in Connecticut and Arizona, and federal law, were few and far between and peanuts compared to the multi-billion dollar busts seen on Wall Street.

According to the Times-News, Richard Kreger, senior managing director of investment banking, said he joined Source Capital just three months ago because he was impressed by its clean history.

The firm has its work cut out for it to raise $70 million to pay for site preparation and submission of a COL application to the NRC. At market close on Monday June 15, AEHI’s stock traded at $0.20/share against a 52-week range of $0.40/$0.01/share. Total market capitalization is just a hair under $20 million. In its last filing with the SEC, the firm recorded less than half a million in cash on hand.

One thing is for sure, unlike the tight-lipped Steve Winn from NRG, Don Gillispie won’t have to worry, at least any time soon, about Exelon launching a hostile takeover of the firm.

# # #

Sphere: Related Content

Exclusive interview with NRC's Dale Klein

Direct from the annual meeting of the American Nuclear Society and exclusive to the Energy Collective

In a first ever sit-down one-on-one interview with a nuclear energy blogger, Dale Klein, former chairman of the U.S. Nuclear Regulatory Commission (NRC), answered questions about the key issues of his tenure at the NRC. Klein continues to serve at the NRC. His term expires in 2011.

The interview is now online at the Energy Collective

Sphere: Related Content

Tweeting #ans09

I'm at the American Nuclear Society conference in Atlanta, GA. I'll be sending tweets twice a day to #ans09

The first batch is already up. Look this evening on the Energy Collective for longer posts.

The Tweets and blog posts are brought to you as a result of support from the Energy Collective.

Update 1520 hrs 6/15

See Rod Adams blog post on nuclear bloggers attain critical mass

Sphere: Related Content

Nuclear energy news roundup for 6/14/09

B&W wows everyone with a conceptual design for a small reactor

The marketing buzz was in the 125 decibel range for the announcement by Babcock & Wilcox that the firm has plans for a new “modular” reactor that would generate 125 MW of electricity. Just so we’re clear, they haven’t built one yet.

Rod Adams at Atomic Insights blog has several reports including videos from the press conference held earlier this week. Check it out.

The firm said at the press conference it hopes to sign a contract with the first customer by 2011 and have one in revenue service by 2018. At an estimated $4,000/Kw, a number cited by the firm in press interviews, a unit would cost $500 million.

Like other small reactor designs, the B&W reactor must get a license from the NRC. The good news for B&W is that their design is based on conventional light-water-reactor principles, and uranium enriched to 5%, which may make it easier for the regulatory agency to wrap its head around a design that isn’t at least 1,000 MW. Note that Nuscale Power out in Oregon also has a design for small 45 MW LWR reactor.

Other small reactor designs include so-called nuclear batteries from Hyperion and Toshiba. Hyperion wants to sell its 25 MW unit overseas, and could license it there as well bypassing the NRC’s lengthy and costly design certification process. Hyperion says it has signed up customers in eastern Europe which puts it ahead of the pack in terms of time to market.

Another plus for the B&W unit is that customers will not have to wait for Japan Steel Works to agree to build the pressure vessel. The components can be built right here in the U.S. The concept of a reactor that can be shipped to the customer on rail cars and built rapidly and cost effectively on-site based on standardized manufactured components is a compelling one.

It won’t be a case of add water and microwave. In an industry where “is it soup yet” takes four years of paperwork and five years of construction, that’s a big deal if it can be done.

NRG raises cost estimate for STP

While B&W was downsizing the design of light water reactors, NRG was announcing that the two GE-Hitachi ABWR reactors, at 1,350 MW each, would cost $10 billion. This is a 40% increase from the price announced in September 2007 when the firm was the nation’s “first mover” in filing a license application with the NRC.

NRG executives explained the cost increase this way. According to Reuters they said the firm’s goal in developing two new reactors at the South Texas Project has been to reduce regulatory, financing and construction risks. They are doing this by partnering with Toshiba and choosing a nuclear design that has been built within budget and on schedule in Japan.Steve Winn, CEO, told Reuters,

"We know how much concrete; we know how much steel was used in the existing units. By building a unit that has been built four times before, we have a very specific cost estimate."

He pointed out that in Texas the competitive electric market also forces NRG to get a grip on its costs so it can contract to sell its output at a profit. In a regulated market, utilities are allowed to earn a guaranteed return on their investment.

"The incentive in a regulated world is to say the number is huge," Winn said. "In an unregulated world, the incentive is to say the number is accurate."

NRG is also in the running as one of four firms short-listed for Department of Energy loan guarantees if the agency can ever get the paperwork moving towards a decision. Steven Chu, the new DOE Secretary has publically castigated his own agency for its slow pace in processing the applications. NRG said they’d been told the DOE will make a decision later this year. The agency was authorized by Congress to issue the loan insurance in 2005.

NRG also is still in the hunt for investment partners, a situation which is likely to improve once it has the DOE loan guarantees in hand. Austin, TX, which is an investor in STP Units 1&2 declined to invest in the two new units, but it looks like the municipal utility in San Antonio, which also owns shares in units 1&2, will be an investor in units 3 & 4.

UAE moving towards nuclear reactor in 2015

The IAEA has told the United Arab Emirates (UAE) that its projection of having a new nuclear power plant in revenue service in 2015 was “optimistic.” Reuters reports that the UAE wants to fast track the development of a new nuclear plant and will award a contract to build as many as three units for 5 GWe of power by the end of 2009.

However, Ali Boussaha, a director at the IAEA, told Reuters on the sidelines of a conference in Dubai. "I think this is optimistic because it generally takes 10-15 years to get people trained and infrastructure in place."

A race is on by nuclear energy vendors who are competing for an estimated $40-60 billion life cycle in the new plants which includes the reactors, fuel for 60 years, as well as operations and maintenance of the plants.

Observers inside the UAE told this blog the UAE is determined to move ahead as fast as possible on the project. The UAE is expected to short-list firms to submit proposals by September 2009. An award for the massive project could be made as early as December 2009.

French oil giant Total, which is partnered with French construction giant GDF Suez, has said it expects to win the award taking a 49% stake in the project. If that happens the consortium will turn to French nuclear giant Areva to supply the reactors.

French President Nicholas Sarkozy (right) has put his personal prestige on the line for the deal visiting the UAE to ink military contracts and to press for award of the nuclear energy contracts to his country.

Meanwhile, the UAE has asked the U.S. Congress to approve an agreement to allow it to buy nuclear technologies from U.S. firms such as GE-Hitachi and Westinghouse. The agreement will likely see Congressional action before the summer adjournment. If Congress gives the agreement a green light, it could put considerable competitive pressure on the French bid.

Italy will generate nuclear power by 2018

Dow Jones News Wires reports that Italy will generate electricity from a new nuclear reactor by 2018. Energy Minister Claudio Scajola said construction could start as early as 2013. He also said the country has a goal of generating 25% of its electricity from nuclear power. He pledged that such developments would see Italian electricity bills, the highest in Europe, drop by as much as 30% once the new nuclear plants come online in the next decade.

Obama nominates a nuke for DOE post

In a surprise move the “green” Obama administration nominated a second person for a post at the Department of Energy who actually knows something about nuclear energy. The first was Steven Chu who is now the Energy Secretary.

Warren F. Miller, Jr., Ph.D, (right) a 27-year veteran of Los Alamos, is a sterling candidate to be Assistant Secretary for Nuclear Energy. Charles Barton blogging at NuclearGreen has done the heavy lifting in developing a profile of Mr. Miller. So you probably want to wander over there and read it.

Miller is also a Fellow of the American Nuclear Society. If he shows up in Atlanta next week, I’ll try to get an news interview with him for my live blogging from the ANS annual conference.

The nomination is subject to Senate confirmation. Given his excellent credentials, there should be little trouble in getting through the process.

# # #

Sphere: Related Content

Western lands uranium gopher for 6/14/09

Jaczko in the morning, miners take warning

The "green agenda" of the Obama administration is being felt almost immediately in the western states where ISR mining abounds. Newly appointed NRC Chairman Gregory B. Jaczko announced on June 4 that the agency is making a significant change in the way it approaches environmental reviews for new ISR facilities.

The agency has decided that it will require a full environmental impact statement (EIS), with all of the costs, opportunities for intervention, and inevitable delays, for new ISR permit applications. Previously, the NRC conducted an environmental assessment (EA), which under the agency's implementing regulations authorized by the National Environmental Policy Act (NEPA) is a much more compact and faster process.

The change in the scope of the agency's environmental review is expected to be felt most significantly in Wyoming which has extensive ISR operations and is not an "agreement" state with the NRC.

Martin Loomis, executive director of the Wyoming Mining Association, told the Casper Tribune June 4 the requirement to conduct a full EIS will cause costly delays. He said that the burden in terms of time an cost to mine uranium in the U.S. could cause customers to turn to foreign sources.

"I think that would be a mistake," he said, "especially when we have ample supply here."

Jaczko said in a prepared statement that the agency took seriously complaints from environmental groups and state government officials in Wyoming and New Mexico that the generic EIS the agency completed in 2008 "would overlook the unique characteristics of each site."

Agency officials attending an unrelated environmental scoping meeting in Idaho Falls for a uranium enrichment plant told me June 4 that the change is driven by Jaczko's desire to allow "maximum opportunity for the public to participate in the process."

The officials also pointed out that the NRC will continue to prepare an EA for applications to expand or renew existing ISR operations. Typically, an EA is not issued for public comment unless there is significant public interest.

NRC expects 17 license applications for ISR operations over the next 18 months. A spokesman said in Idaho Falls that the agency expects to complete most licensing reviews within 24 months.

NRC says foreign ownership is not an issue for Crowe Butte

In a significant setback for intervenors, the sitting four commissioners of the agency overruled a panel of the regulatory agency's administrative judges stating that Cameco's ownership of the mine is clearly permitted under U.S. law.

The NRC also ruled that claims the mine was contributing to instances of various diseases at the Pine Ridge Indian Reservation, some 30 miles away, was "speculative" at best. The agency said intervenors failed to prove the mine released any arsenic or that it contributed to instances of diabetes or pancreatic cancer.

Kevin Vaughn, a spokesman for Cameco (NYSE:CCJ), speaking from the firm's Casper, Wyo., office, said the firm is relieved that the NRC ruled in its favor. He added that although uranium prices have fallen this year, the firm still plans to proceed with its expansion plans at the Crowe Butte mine.

The current mine reportedly produces 800,000 lbs a year of uranium using ISR methods and had applied to expand the operation to a new site about eight miles away. This set off a round of protests by native American groups and the Western Nebraska Resource Council. The NRC let stand a contention that there is a potential for contamination of the White River in Nebraska.

Mt. Taylor in New Mexico gets "cultural" designation

Private property owners in a 540 square mile area in New Mexico, which is about half the size of Rhode Island, with Mt. Taylor in the middle, are predicting years of litigation over the designation of the site as an endangered historic place. A committee of state agencies have placed Mt. Taylor on the State Register of Cultural Properties. In doing so they also may have signed off on the end of uranium mining there.

The mountain has been mined numerous times since the 1950s, but now a coalition of 30 native American groups have prevailed to protect the mountain including its 11,300 ft summit and surrounding mesas.

Landowners were quick to point out that the so-called exclusion of certain private holdings would likely be challenged by the same groups. Marron Lee Nelson of Grants, NM, one of the largest private property owners on the mountain, told the Associated Press June 5 the decision is a huge blow to his economic future. "I do think lawsuits will be coming," he said.

State officials said the justification for the decision is the cataloging of over 300,000 trails, archeological resources such as petrogylphs, and burial sites. A spokesman for the leading five tribes involved in the assessment told the AP they were "ecstatic" over the decision.

Other uranium news

On June 2 Strategic Resource Inc (CVE:UVR) announced that it has entered into an Option Agreement with Uranium Energy Corp. (AMEX:UEC) Under which Strategic Resources can earn up to a 60% interest in 20 lode mining claims (~413 acres) located in Catron County, NM.

Uranium Resources, Inc. (NASDAQ: URRE) announced that it plans to file a petition with the U.S. 10th Circuit Court of Appeals for an en banc review regarding its ruling on April 17, 2009 that determined URI’s Section 8 in Churchrock, NM, is Indian Country and, therefore, comes under the jurisdiction of the U.S. Environmental Protection Agency (USEPA) for the issuance of an Underground Injection Control Permit (UIC). The New Mexico Environmental Department has previously issued a UIC permit to the Company.

Dave Clark, President and CEO of URI, said, "Our objective remains to resolve issues with the Navajo Nation regarding uranium mining in New Mexico, so we can be well positioned to begin production as quickly and as safely as possible.”

URI has an NRC license to mine 15 million pounds of uranium at Churchrock using in situ recovery methods. A UIC permit from the appropriate governmental agency is the final permit needed before development can begin.

White Canyon Uranium (ASX:WCU), an Australian company, has received a permit to begin operations at the Daneros Mine in Utah. The firm said it would ship its first ore to Denison's White Mesa mill in Blanding, UT, about 60 miles away, in September 2009.

Monaro Mining (ASX:MRO), an Australian company, has raised over $1 million in a private placement to develop the Apex-Lowboy and Rio Puerco mines in New Mexico. The firm reports JORC inferred exploration results of 950,000 tons U3O8 The firm said drillings results also showed other unaudited results of U3O8 concentrations ranging from 0.09% to 0.24%.

According to the company, Apex-Lowboy was an underground mine between 1954 and 1966 and a reported 105,926 pounds of U3O8 were produced during that period. This production averaged a grade of 0.25% U3O8.

# # #

Sphere: Related Content

Blogsphere meet up at ANS Atlanta

Live blogging from ANS Atlanta June 15-18

Thanks to support from the EnergyCollective, I will be live blogging at their website about the American Nuclear Society (ANS) annual meeting and what's happening there, twice a day, Monday June 15 through Thursday June 18.

ANS Twitter feed

The ANS hash mark for the annual conference is #ans09 ~ if you plan to tweet at the conference please consider using it in your posts so others can share in the conversation.

Session on bloggers and nuclear energy June 17

I'll be speaking at the annual meeting of the American Nuclear Society (ANS) on the subject of pro-nuclear advocacy using social media such as blogs, instant messaging, and emerging online tools.

• Focus on Communications: The Nuclear Story and Other Tales – Panel Discussion;
  June 17th, Wed. afternoon, sponsored by the Education & Training Div. 1:00-4:00 PM;
  Room: Hanover A

The session will explore how Internet based media can be used to enrich public discussion of nuclear science and technology. The majority of the session will be open Q&A following a 10 minute presentation by each of the three panelists. A second part of the discussion will be on how to get started with new media, but this part is focused on how you organize the effort and not on techical widgets.

My co-panelists are Rod Adams of Atomic Insights blog and John Wheeler of This Week in Nuclear blog. We will also be joined in the discussion by: Carrie Phillips, Southern Co., Laura Scheele, American Nuclear Society, and a reporter from the Atlanta Constitution.

I've also heard from Kirk Sorensen, blogging at Energy from Thorium, that he will attend the session though he is not on the panel.

This session is a first for ANS and for the U.S. nuclear blogging community. The stars must be aligned in the skies because this is the first time that all of us will be in the same place at the same time. It is an opportunity you should not miss if you have any interest in how blogging and the new social media can advance public outreach for the nuclear energy industry.

Hat tip: to Laura Hermann, VP Potomac Communications Group (PCGPR), Washington, DC, for asking, and to David Pointer, Ph.D, Nuclear Engineering Div., Argonne National Laboratory (ANL), for organizing the session.

Nuclear blogger meet-up ~ Wednesday 6/17 4:30 PM

I'm calling on other nuclear energy bloggers and those who publish nuclear energy content online (text, podcasts, video, etc.) to consider holding an informal networking event at the ANS conference immediately following the Wednesday afternoon panel.

All types of organizations are welcome so whether you work in a corporate environment, university, engineering or consulting firm, or government, etc., please plan to get in touch.

The objective is to form a more coherent network following the conference for information sharing, cross-posting of links to excellent content, and so forth. Bring your ideas.

I call also be reached at djysrv@gmail.com or mobile 208-521-5726

# # #

Sphere: Related Content

Areva U.S. CEO talks with nuclear bloggers

Jacques Besnainou sets up an open mike for questions

Readers of this blog are invited to take a virtual trip to the EnergyCollective where they will find an exclusive interview with Areva U.S. CEO Jacques Besnainou (right).

In the telephone discussion which took place June 5, he talks about Areva’s lessons learned from building new nuclear reactors in Finland and France and how these “first-of-a-kind” projects will make for better nuclear reactors when they are built in the U.S. Areva has plans to build four so far with the first one, Calvert Cliffs III, scheduled to break ground in Maryland in 2012.

You’ll also learn some surprising news about Areva’s work with biomass and wind energy technologies.

The exclusive interview is online or you can download a PDF version of the online web page.

The interview is also available as a podcast from Areva's U.S. blog.

# # #

Sphere: Related Content

AEHI gets another banker

Will the third try be the charm that works?
[Update 06/08/09]

Alternative Energy Holdings Inc. (OTC:AEHI) issued a press release Friday June 5 that it had a new investment banker.

The banker is Source Capital Group with offices in Westport, CT. The firm describes itself a full-service financial institution, specializing in middle-market investment banking transactions, distressed and high yield debt securities, investment management, mortgages, and business lending.

Source states that it has provided equity, debt, and structured finance solutions to both public and private companies in a variety of industries, including energy, oil and gas, telecommunications, technology, biotech, and consumer goods.

The announcement comes just a few days ahead of a planned decision by the Elmore, ID, county commissioners whether to grant AEHI’s request for re-zoning a large parcel of land to build a 1,600 MW Areva EPR reactor near Mountain Home, ID.

After a contentious planning commission meeting last November, which resulted in a 4-2 decision against the rezoning request, AEHI took its case to the county. A decision could come as early as Monday, June 8.

What’s different this time?

In the past two instances, where AEHI has announced it has an investment banker to raise the $6 billion or so need to build a greenfield nuclear power plant, the firms involved have had little or no qualifications to work in the nuclear energy industry. Both subsequently disappeared from AEHI’s radar screen without ever raising a dime for the project. It isn’t clear whether Source Capital has ever worked on a nuclear plant.

On its website, Source Capital Group lists generically that it has experience in the oil industry with exploration and development of energy projects. It does not list any experience in the nuclear industry nor projects of the financial size and scope of a new nuclear power plant.

Also, AEHI’s press release includes a statement from an executive with Source Capital Group. Richard Kreger, Senior Managing Director of Investment Banking for Source Capital, made the usual corporate statement about being excited to be working on AEHI’s project.

Still, that’s a change from prior instances where little if anything about the qualifications or experience of the principals in the investment firm could be found on the public record. At least Mr. Kreger has complete LinkedIN profile to tell us he has experience in the investment banking industry. That fact alone makes the AEHI press release newsworthy. According to SEC filings, Mr. Kreger previously worked on stock issues for an aerospace parts company and, based on the LInkedIN profile, for his father’s trucking firm.

FoxNews 12 of Boise reported that Source Capital Group out of Connecticut to fund $70 million for the project. The money will be used to buy the land, water rights, and pay for the license application with the Nuclear Regulatory Commission.

Don Gillispie, president of AEHI says the only thing left is to wait for Elmore County commissioners to make a decision on whether or not to approve a rezone of the property in question.

He added that if the land is rezoned its value should increase if nothing else. If things do not go AEHI’s way in Idaho, the firm has previously said that it will seek to develop a nuclear power plant in Pueblo, CO, or in Mexico, rather than continue to seek to build a reactor in Idaho.

Passing the baloney test

The $70 million that AEHI says it has secured is enough to pay for filing an application with the NRC for a COL license for the plant. That’s high on the firm’s list of things to do to build credibility with the industry and investors.

In its first ever SEC filing last winter the firm listed cash on hand of $400,000. AEHI’s stock closed June 5 at $0.22/share against a 52-week range of $0.01 to $0.40/share.

The firm has not been taken seriously by some in the nuclear industry because of its inability to raise funds or emerge from its penny stock status. Two years ago then NRC Chairman Dale Klein made an indirect reference to the firm in a now famous “no bozos” speech. Klein said in June 2007 . . .

My subject is something that each of the five Commissioners believe in, and have said before—which is this: owning a commercial nuclear reactor is not a business for amateurs. If the nuclear power business is treated with less than the seriousness it deserves—and people begin to think that anyone can just jump on the nuclear bandwagon . . “

In September 2007 Klein, speaking at a nuclear fuel conference in Boise, ID, told the Idaho Statesman that "AEHI is not on the agency's radar screen."

To refresh readers on the pass/fail criteria of the baloney test, I am listing the short version below. A nuclear energy firm must have the following qualities to pass.

• Public identification of investors, markets, and suppliers
• Reactor design is already approved by the NRC
• Filed a complete COL application with the NRC
• Co-located with existing reactors to take advantage of existing infrastructure
• Construction firms and suppliers have track records building nuclear power plants
• Arrangements with manufacturers of large forgings to get them on time and within budget
• Deals to sell electricity on an existing grid to committed customers
• Experience in the nuclear energy industry running nuclear reactors

Getting $70 million to file a license application with the NRC is a start toward passing the test. The firm still has a long way to go to convince skeptics that it is serious about its plans to really build a new nuclear power plant in Idaho.

Updates

June 8, 2009

The Mountain Home News reports The Elmore County commissioners Monday tabled until next Monday, June 15, any decision on the rezone for the AEHI nuclear power plant. The commissioners were advised by legal counsel to limit their discussion to the rezoning action and not to the proposed use, e.g., a nuclear power plant. This could be a difficult task for these elected officials who have the unhappy task of deciding whether to over rule their own county planning commission which voted 4-2 against the land use change. No decision was made at today's meeting other than to meet again next week.

June 9th - Idaho Business Review has a complete update online

# # #

Sphere: Related Content

Barking up the wrong tree

Snake River Alliance testimony at NRC hearing targets issues from its own agenda

Idaho’s self-appointed nuclear watchdog, the Snake River Alliance (SRA), proved what everyone knows, and that is having one around sometimes results in a lot of barking at the wrong things.

For instance, dogs in our neighborhood here in Idaho Falls will bark at all kinds of harmless birds including morning doves, magpies, and even the occasional ducks that migrate from nearby irrigation canals to backyards to see what’s there to eat.

Mostly, the dogs bark because they are bored or lonely while kids are away at school and parents at work, and so they extend their territorial barking to address anything that moves out of the shear novelty of being heard.

The dog’s own voice tells the astute human the barking isn’t the real “warning bark” that responds to the unknown intruder in the dead of night. It is more of a case, from the dog’s point of view, of “I know I’m supposed to bark at stuff that moves, and since the ducks and morning doves are all I’ve got, that’s what I’ll bark at.”

This is pretty much how things went at the NRC environmental scoping meeting on Areva’s license application for the Eagle Rock Uranium Enrichment Plant. The SRA, which barks at all things nuclear, whether they move or not, also demonstrated the morning doves plus magpies, and ducks, equation works equally well for self-appointed human watchdogs.

Meanwhile, the 30-month long licensing process for the $2.4 billion plant moves at a stately pace guided by regulatory milestones that must be met. A lot of people urged the NRC to move faster, but the agency is required to lay down a complete record of its review and it will take the usual amount of time. The good news the NRC has already licensed a facility just like the planned Areva plant so this isn’t a first-of-kind exercise for the agency.

Key steps in the licensing proces

The hearing did not go to the dogs. Far from it, the NRC kept things moving with an effective facilitator and a three-to-five minute time limit for oral presentations. The NRC also demonstrated how seriously it takes the licensing process and the environmental scoping step by turning out an “A-list” team of nearly a dozen people including Patricia Bubar of the NRC Environmental Office who has long experience with radioactive materials.

Two key documents which the NRC must write are a Safety Evaluation Report and a Final Environmental Impact Statement. The environmental report requires a public scoping meeting in which the NRC takes testimony on what issues the public thinks the agency ought to consider in its evaluation. To see what a completed process looks like, visit the NRC web page on the license for the LES plant in New Mexico which already has a license and is now under construction.

The public is free to submit any issue it wants, but the NRC is bound by its own regulations and federal law in terms of what it actually can consider as part of the review. In its slide presentation given at the public meeting held June 4 at the Shilo Inn in Idaho Falls, the NRC said that it will identify the significant issues and eliminate those that are unimportant.

In this blog post I’ll focus on just two of the issues that the SRA raised because the errors in their statements are serious and need to be corrected before anyone gets any funny ideas. The SRA also said the Areva plant was a proliferation risk, but this statement ignores the fact that only the federal government makes HEU and that work is done at Oak Ridge in Tennessee.

Barking at the wrong issues - numbers

The Snake River Alliance (SRA) turned out about a half dozen of its folks including Andrea Shipley, (right) the group’s young executive director, and Beatrice Brailsford, based in Pocatello, who is well-known in eastern Idaho for her long standing and outspoken opposition to all things nuclear, a record she is proud of.

Where things went wrong was in their assertions that there is no “need” for the enrichment facility relative to market demand and that the depleted uranium from the gas centrifuge process would be a threat to Idaho for decades if not centuries.

Need for enrichment services

On the issue of need, current demand for enriched uranium in the U.S. is met by a combination of domestic sources and imports. Less than 50% of U.S. requirements are met by imports of blended down HEU from Russia under the “Megatons-to-Megawatts” program that ends in 2013.

The Snake River Alliance’s representatives submitting testimony repeatedly got this number wrong pegging it at 90%. The U.S. Department of Energy, Energy Information Administration, reported in May 2009, that total U.S. demand for the previous 12 months was 13 million SWU. Russian origin fuel was 38% of the U.S. total.

Future demand for enriched uranium through the middle of the next decade is pegged at 12-15 million SWU where “SWU’ is a uranium industry measure of the U-235 isotope at 3-5% enrichment from natural background of 0.7%. To meet growing demand not one, but three uranium enrichment plants are being built in the U.S.

Louisiana Energy Services, a U.S. domestic subsidiary of Europe’s Urenco, will complete construction and spool up a 3.0 million SWU. The Areva plant as originally proposed is designed to produce 3.3 million SWU, and a third plant that is also licensed and under construction by USEC in Ohio will produce 3.8 million SWU when it, like the other two, is in full production by 2014. This brings projected U.S. production to a total of 10.1 million SWU against demand of 12-15 SWU. There is so much need that money is being left on the table.

The Russians will continue to sell enriched uranium to U.S. utilities, and with recent changes in the international agreements that govern the sales, will be able to achieve about a 25% market share. This accounts for about 2.5-3.0 million SWU. Recently, Russia’s Rosatom inked deals with four U.S. utilities including PG&E, Ameren, Progress, and Exelon.

What this means is that as the U.S. market demand grows, driven in part by new plants coming on line in the next decade, and first loads for reactors, both LES and Areva has asked the NRC, as marketing contingencies, to authorize them to double the size of their plants. These changes would bring LES to 6.0 SWU and the Eagle Rock plant to 6.6 million SWU. USEC is also expected to expand their plant.

That’s not the end of the demand curve. In a telephone interview on Friday, June 5, Areva North American President Jacques Besnainou (right) told me he sees U.S. demand rising to 20 million SWU by the end of the next decade. Readers should know that Areva executives are cautious about releasing numbers like this. So it follows that this estimate is already well-understood in the industry and is not proprietary information.

In the end the Snake River Alliance’s statement there is no need for the plant is incorrect. There is no other way to put it.

Barking at the wrong issues – waste

The Snake River Alliance also raised the issue of how Areva will deal with the uranium left over from the gas centrifuge enrichment process. This waste stream is really nothing more than the original uranium with the U-235 isotopes spun out of it for use as nuclear fuel. The remainder is stored in gas form as uranium hexafluoride (UF6). It is called “depleted uranium” because the U-235 isotopes that naturally occurs in it has been removed via the centrifuge arrays the plant uses to make fuel for commercial nuclear reactors.

The fluorine is valuable and International Isotopes (otc:inis), an Idaho Falls firm, is building a $55 million plant in New Mexico to recover it from the UF6. As Areva’s plant comes online, either International Isotopes or Areva itself will recover the fluorine gas. Areva has been conducting what is called “uranium deconversion” at its enrichment plants in France for over two decades.

Once the fluorine is removed from the depleted uranium, it can be safely disposed of in a licensed landfill. The reason is the uranium is now in powder form and is entirely composed of the native form as U-238. There are three such disposal facilities in the west including one near Mountain Home, ID, one about 90 miles west of Salt Lake City, and one in Andrews, TX, just over the border from Eunice, NM, which is where the LES plant is being built and will come online this December.

The Snake River Alliance charged that Areva would abandon the UF6 as an waste that could pollute the aquifer. This is a patently false statement since the commercial value of the fluorine insures that uranium deconversion will process the UF6 to make high purity fluorine and safely dispose of the remaining U-238 uranium at a licensed landfill.

In summary, and in the fullest meaning of the idiomatic phrase, Idaho’s self-appointed nuclear watchdog is barking up the wrong tree in its public testimony submitted to the NRC about Areva’s license application.

Wrong tree right tree

About 150 people turned out for the meeting and most testified in favor of it including Idaho’ entire congressional delegation and the governor all of whom sent statements of support. State Rep. Eric Simpson (R-Idaho Falls) (right) took aim at the SRA’s contentions.

He said, “I am all for open debate but let’s make sure it is honest debate.”

Testifying in support of the license application, Bob Skinner, Vice President of the Partnership for Science & Technology, said,

We believe any issues raised during the scoping period that are not directly related to the assessment of potential impacts of the project or to the decision- making process should be dismissed from the draft EIS and discussed in other venues.

We have had the opportunity to study AREVA’s environmental report that was submitted along with the application and we found the report to be extremely thorough.

We feel, after application of the best management practices and mitigation measures outlined in the report, the unavoidable environmental and safety impacts from the facility will be small and acceptable.

Ann Rydalch, of Idaho Falls, who has been elected to multiple terms in both the Idaho Senate and the House, pointed out that no Idaho taxes will be used to build or support the facility.

Linda Martin, the CEO of Grow Idaho Falls, an economic development group that played an important role in convincing Areva to come to Idaho, testified that the plant will bring millions in tax revenues to Idaho along with its payrolls from the construction and permanent workforces.

Want to know more?

The NRC has two web pages with information on the licensing process for Areva’s Eagle Rock Enrichment Facility.

• Arveva license application
• NRC Electronic Reading Room – Adams Docket #70-7015 ML091210558 –
• The NRC has an agreement with the Idaho Falls Public Library to make documents available to the public.

How to contact the NRC

If you have questions or comments on Arveva’s license application, you can send email to: EagleRock.EIS@nrc.gov

The NRC also named two of its key employees on the project as public points of contact. They are;

• Breeda Reilly, Licensing Project Manager, Tel: 301-492-3110 or email: Breeda.Reilly@nrc.gov
• Gloria Kulesa, Environmental Project Manger, Tel: 301-415-5308 or email: Gloria.Kulesa@nrc.gov

Areva Information

• Areva’s Eagle Rock Enrichment Facility has its own web page
• Areva also provides updates on its work via its own US blog

International Isotopes, and its work on uranium deconversion, has been the subject of three comprehensive reports on this blog.

• April 2007 – New plant in Idaho Falls
• June 2008 – Major expansion of deconversion plans
• March 2009 – Chooses Hobbs, NM, for LES related plant

# # #

Sphere: Related Content

REMINDER ~ NRC hearing on Eagle Rock plant June 4th

The hearing seeks public comments on its environmental review process for the plant’s license

The U.S. Nuclear Regulatory Commission (NRC) will hold a public meeting June 4 in Idaho Falls, Idaho, to seek comments about specific issues that should be addressed in its environmental review of a proposed uranium enrichment facility.

The meeting will be held at the Shilo Inn, 780 Lindsay Blvd. in Idaho Falls, (map) from 6:30 to 9:30 p.m. NRC staff members will be available for an hour prior to the meeting to speak informally to members of the public. Both the NRC and Areva will have informational handouts available, but get there early because they go fast.

There is a web site where you can get the same information from Areva online. The NRC website has a more technical approach about the gas centrifuge process if you desire this type of information.

Areva must get a license for the facility in order to break ground at a site 18 miles west of town. The NRC license review process is expected to take just under three years which targets the first shovel of dirt being moved in summer 2011. The plant is expected to generate 800 construction jobs and 300 permanent jobs when it is fully operational in 2014.

Basis for the hearing

AREVA Enrichment Services LLC submitted an application Dec. 30, 2008, for a license to construct and operate a gas centrifuge uranium enrichment facility near Idaho Falls. AREVA resubmitted its application April 24 to double the facility’s proposed production capacity. [See 4/22/09 report on this blog – Areva doubles its bet.]

The proposed facility would enrich uranium for use in the production of fuel for commercial nuclear power reactors. Typically, uranium is enriched to 3-5% for this purpose. The fuel cannot be used for nuclear weapons and the resulting spent nuclear fuel, once it has completed its burn-up in the reactor, is a very poor product for this purpose as well. However, it is a very good candidate for reprocessing.

In April, the NRC staff determined that the license application was sufficiently complete to allow the agency to begin its formal environmental review. A notice of intent to prepare an environmental impact statement was published May 4 in the Federal Register.

What happens at the hearing?

At the June 4 meeting, NRC staff will explain the licensing review process and provide an opportunity for the public to speak about specific environmental issues that should be addressed in the report.

Members of the public wishing to make statements are encouraged to pre-register by May 28 by contacting Tarsha Moon at (800) 368-5642, ext. 7843, or email at Tarsha.Moon@nrc.gov

Interested persons may also register to speak at the meeting, and written comments will also be accepted. Written comments may also be submitted by e-mail to EagleRock.EIS@nrc.gov

Note that at the last meeting with the NRC here in Idaho Falls, over 400 people turned out to show support for the project . See 12/12/08 report on this blog – Idaho Falls stands up for Areva.]

Don’t miss this opportunity to listen and learn about the project and to ask questions. NRC officials will be available for informal Q&A with the public for an hour prior to the hearing. You can read the summary of the December meeting to get up to speed. Also, Areva now has a web page devoted just to the Eagle Rock facility.

See you there.

# # #

Sphere: Related Content

Murkowski steps up for nuclear energy

The senator from one of the biggest oil states in the nation has become a leading advocate for nuclear energy

Alaskan Sen. Lisa Murkowski is taking a leadership role advocating in Congress for nuclear energy to be supported in energy legislation now working its way through the Energy & Natural Resources Committee.

On June 2 Senator Murkowski urged the Obama administration to expand the role of nuclear power in its energy strategy. Murkowski made remarks from the Senate floor as energy committee members in the Senate and the House of Representatives seek to craft new energy legislation.

As the ranking Republican on the Senate Energy and Natural Resources Committee, Senator Murkowski has urged the Obama administration to expand the role of nuclear power in its energy strategy. The administration has resisted supporting increased nuclear power plant construction to help meet the nations energy needs. In fact, it appears to have a deliberately crafted blind spot on the subject.

BTW: There are no commercial nuclear reactors in Alaska.

Here's a video (20 min) of her remarks.

Category: News & Politics Tags: AK Alaska Lisa Murkowski Nuclear Energy

Murkowski speaks for support for nuclear energy to the Senate.

Sphere: Related Content

If this is Tuesday it must be Belgium

Brussels TV network & newspaper blog about nuclear energy

The European news channel, euronews and the Brussels-based newspaper, European Voice, published by the Economist group, have formed a unique partnership, in association with Shell Oil, in order to seek informed opinions on the key issues facing our society.

The project entitled Comment:Visions explores the personal views of thinkers, innovators and scientists about possible solutions to global warming, overpopulation, and dwindling resources. Green technology advocates take note – there are multiple opportunities to interact with this site.

The Comment:Visions website, includes: footage of the on-air programs and interviews, video clips from sponsored events, and a forum where invited guests can share their opinions and vision for the future.

This month’s discussion is on the question: What role should nuclear technology play in our future energy mix?

The site features more than a dozen European and North American expert thinkers on the subject of nuclear energy. There are three web pages of comments pro-and-con about nuclear energy.

Idaho Samizdat, a blog about nuclear energy, is pleased to have been invited to be featured on euronews as part of this project.

I look forward to reading your comments there.

# # #

Sphere: Related Content

Advocates for nuclear power near and far

Sen. Lamar Alexander has some common sense goals for the loan guarantee program

Tennessee Republican Sen. Lamar Alexander has emerged as an outspoken proponent of nuclear energy. The Wall Street Journal Environmental Capital Blog reported May 29 that he is "ratcheting up" the rhetoric.

Alexander and his counterparts in the House are doing more than just talking about nuclear energy. They are sending a signal to the Obama administration that there is a price for support of climate change legislation now being considered in the House. It will be realistic committments to support more than just a token three or four new nuclear power plants as a response to the challenge of climate change.

In a statement at Oak Ridge National Laboratory (ORNL), which is located in Tennessee, he repeated his call for the U.S. to build 100 new nuclear power plants by 2030. Alexander certainly knows the U.S. isn't going to meet his goal, and it shows in his more calibrated call for the federal loan guarantee program to be expanded from four to 12 plants. This makes a lot of sense because it would cover about two-thirds of the applicants now pending before the Department of Energy which are not on the agency's short list for the first four awards.

At about $6-7 billion per 1,200-1,600 MW plant, Alexander's plan would represent private investment of $72-84 billion over a two decade period. The loan guarantees would cost the taxpayers nothing unless one of the projects defaults. Assuming all of the first round of 12 plants are built with reasonable costs and schedules, financing the next dozen or more reactors should be a lot easier and cheaper because investors will have confidence in the industry. This suggests an outcome over the next 30 years of 24 new reactors or 36-40 GWe of new carbon-free baseload electricity supply. Presdent Obama's plan for a nationwide smart grid would fit in nicely with this plan.

The rest of the world is way ahead of the U.S.

The WSJ blog also notes that according to the most current numbers, China has firm plans for 60 GWe of new nuclear power, and is now talking unofficially about building as many as 100 new plants, at least 100 GWe, in the next two decades. Some of the plans of other nations may not be realized such as India's claim it will also achieve 60 GWe. More likely, India will build 20 GWe by 2030. So far it has inked deals for 5 GWe from Russia and 3 GWe from France.

The U.K., Russia, France, Brazil, and other nations also have plans to build news nuclear plants. The U.K. build is spread over 11 potential sites and could involve up to 18 new reactors for at least 20 GWe. The benefit is that, like other nations, it will not build coal-fired plants to generate that amount of electricity.

All of these plans will drive huge investments in manufacturing capabilities for reactor components such as pressure vessels, pumps, turbines, and the transmission and distribution networks to get the electricity to customers. In the U.S. this kind of manufacturing capacity is already under construction by Areva and Northrop Grumman in Virginia and Westinghouse and Shaw Group in Louisiana. Each plant represents investments of at least $300 million and brings hundreds of high paying jobs to their respective cities.

Goodbye Yucca ~ Hello Savannah River

Now that Nevada Sen. Harry Reid is gloating over having killed off Yucca Mountain, he may have done the industry a favor. He's opened the door for the U.S. to consider spent fuel reprocessing which will recover 95% of the energy value of the spent fuel for new product. A $4.5 billion MOX fuel plant is already being built in South Caroline and it could be a potential site for the U.S. nuclear industry's first spent fuel reprocessing plant. It would need a lot of political and economic support from the government to get off the ground. Other nations hungry for the energy value in spent nuclear fuel are already planning to spend billions to get it.

Meanwhile, the scholars at MIT think Alexander and advocates of spent fuel reprocessing are whistling in the wind.. In an update to their 2003 report on the future of the nuclear industry, they write that safety, environmental, security issues, and economic costs of spent fuel reprocessing still outweigh the potential benefits of recycling.

What MIT doesn't get is that there are going to be costs that cannot be allocated to the market when it comes to solving the problem of global warming. Investing in new nuclear power plants is in the mix. There are some things government must do and one of them is to provide the means for the nuclear industry to lower the cost to ratepayers of new nuclear power plants by increasing the scope of the federal loan guarantee program. Another is to build the first-of-a-kind 500-1,000 ton/year spent fuel reprocessing plant.

Seeking bipartisan support for nuclear energy?

All this means it is time for Energy Sec. Steven Chu to get over to the White House and explain the physics of spent fuel reprocessing to Carol Browner and company. The President is looking for leadership from his cabinet officials. The President’s science advisor John Holdren is already on record in favor of building more nuclear power plants. Maybe the two of them should make the visit together? What else does Chu need? If it is support from Congress, read on.

Advocacy for new nuclear power plants is a perfect opportunity for something the President really wants and that is bipartisan support for his energy policies. Alexander’s statements are not just wishful thinking. They are a clear signal that if the President expects to make progress in the Senate with his cap-and-trade program he is going to have to step up to the plate on the issue of nuclear energy.

Idaho advocates hit the OP ED pages

While Alexander making his points in the Wall Street Journal, advocates for nuclear energy in Idaho were also busy. Rep. Mike Simpson (R-Idaho) (right) published an OP Ed in the Idaho Statesman on May 31 in which he called on the Democrats to embrace nuclear energy as part of climate legislation now being considered in the House.

Say, that’s a really interesting idea – bipartisan support for energy policies requires compromise between greens and nukes. The leading Democratic greens (Rep. Henry Waxman D-Calif, Rep. Ed. Markey, D-Mass.) in the House are driving the legislative process, but they eventually will need republican votes. Maybe there is something brewing here after all? There is no need to tap dance around it. Just ask Simpson.

One his best qualities, whether speaking in public or writing for publication, is his direct straight from the shoulder style that gets right to the point. In his column he tells Democrats they need to give up their belief in the magic of “renewable technologies” and deal with the necessity of nuclear energy as a solution to meeting baseload demand while reducing greenhouse gases.

“As I write this column, congressional Democrats are engaged in yet another round of discussions aimed at producing an energy cap-and-trade bill . . .

The most recent version of their bill would require 20% of our nation's baseload energy sources to come from renewable fuels and energy efficiencies by 2020. Further, the bill would require a 17% reduction in greenhouse gas emissions from 2005 levels by 2020 and would establish some sort of auction whereby emitters would purchase credits.

Conspicuously absent from the list of Democrat-approved greenhouse gas reducing technologies is the one baseload source that actually has the potential to address this problem on a large scale - nuclear energy.

The failure to include nuclear energy as an approved technology for meeting greenhouse gas reduction goals isn't just a politically motivated mistake; it is an indication that congressional Democrats aren't really serious about protecting our economy while instituting their climate-change agenda.

It is time for congressional Democrats to get serious about combating greenhouse gas emissions. It is time they finally commit themselves to supporting nuclear energy.”

Simpson points out that since 2006, U.S. nuclear energy plants have been responsible for avoiding emissions of almost 50 million tons of SO2, nearly 20 million tons of NOx, and over 9,400 million metric tons of CO2.

We could learn a thing or two from the French Simpson writes pointing out they get over 80% of their electricity from nuclear energy.

Raising awareness one OP ED at a time

And in another example of how the pro-nuclear atmosphere of eastern Idaho is making its influence felt, Lane Allgood, (right) Director of the Partnership for Science & Technology, is publishing an OP ED in newspapers throughout the rocky mountain west responding to critics of nuclear energy. His latest was printed in the Casper Tribune this week.

His premise is that most of the nation simply isn’t aware that 20% of all of its electricity comes from nuclear power plants. He points out that there are nearly 30 new reactors proposed for construction with license applications now pending before the NRC.

“Study after study has shown that nuclear energy ranks as one of the best technologies for producing large amounts of electricity without emitting significant amounts of air pollution or greenhouse gases. In fact, on a life-cycle basis, nuclear energy is responsible for less carbon emissions per kilowatt-hour than solar or wind power.

That is why groups like the Progressive Policy Institute, Third Way, and the Pew Center for Climate Change are urging our leaders to embrace nuclear energy as a way to meet growing energy demands while reducing greenhouse gas emissions.”

You can be an advocate for nuclear energy

Time is short for the climate change legislation moving through Congress and the House Democrats show no signs of giving up their irrational, almost religious beliefs, in “renewable technologies” as a source of baseload electricity.

The Kansas City Star reports that before leaving for Memorial Day, the House Energy and Commerce Committee approved a bill that would set the country's first mandatory limits on greenhouse gases, promote renewable energy and increase the efficiency of buildings, appliances and vehicles.

The bill now will be considered by other committees and should reach the floor of the House of Representatives for a vote this summer.

Politics can paper over a lot of things, but one thing it cannot fool are the laws of physics and chemistry. If you want carbon free baseload power, there is just one way to go and that is with nuclear energy. Right now nuclear isn’t part of the bill as a method for reducing green house gases. You can change that situation.

It will take more than just the voices from eastern Idaho or Tennessee to make a difference. You can help these voices to voice be heard if you will write to your elected officials. You could even send them a copy of this blog post. Most importantly, just tell them nuclear power will keep the lights on and pollution out of the atmosphere. That’s a good story and a true one.

# # #

Sphere: Related Content

Canada offers CANDU for sale

This time they really mean it

In the latest round of what passes for a soap opera plot in the heavy industry world of nuclear energy, the government of Canada has announced yet again it will offer a crown corporation, or at least parts of it, for sale. The part it wants to sell off is the CANDU heavy water reactor technology developed by Atomic Energy Limited of Canada (AECL) and its workforce.

According to the Toronto Star for May 29, Canadian Natural Resources Minister Lisa Raitt told the news media AECL “faces stiff competition from much larger rivals.” The Star citied an internal government assessment of AECL’s prospects and says, “Atomic Energy's commercial CANDU reactor division "can be best served by a strategic alliance with one or more partners with global scale that can leverage the technology, skills and experience of AECL in Canada and internationally."

The review said a strategic alliance could take the form of a joint venture or merger with another nuclear reactor supplier or the sale of a minority or majority equity interest in AECL.

According to a May 28 report by World Nuclear News, the report came with a conclusion that was no surprise to anyone citing AECL’s inability to access capital markets to grow its operation.

Ms. Raitt also came to some considerable political grief after losing confidential government papers about the future of AECL. They were found but not beffore a tearful Raitt offered to resign. Her offer was turned down by PM Harper. A 20-something aide took the fall for the gaffe.

What price for AECL and what for?

Nobody has put a price on the private equity offering, and it has not yet been released for bids. If Raitt (left) or the Harper government has any idea of what they will accept from investors, they aren’t saying anything. What is likely is that any private equity firm will not also take with the sale accountability for covering cost overruns at Darlington, Ontario, should that $22 billion project be awarded to AECL.

This is the sharp stick that has been poked in the ribs of the central government in Ottawa by the provincial government in Ontario. For nearly a year the Ontario government has delayed making a decision on who to award the new $22 billion nuclear build at Darlington. The primary reason, according to media reports, is “sticker shock” at the costs submitted by bidders and the realization of what cost over runs could do to the success of the project and electricity rates for customers.

Since AECL is a creature of the federal government in Canada, what Ontario has been doing is holding the bids hostage until it can get a guarantee from Ottawa that if the award goes to AECL, with its 30,000 employees in Canada, that cost over runs for the Darlington project will be made good through federal reimbursement. That’s a tough negotiation ploy and has insured there is no love lost between the provincial and central governments over this issue.

Betting dollars for donuts

As the folks in Ontario see it, if AECL is a crown corporation, then unexpected costs, and schedule delays, should be paid by Ottawa assuming AECL is the builder. If another firm is chosen, you can bet dollars to donuts Ontario will issue a fixed price contract with draconian penalties for schedule delays and excessive costs. Of course the question then becomes whether anyone besides AECL would take such a contact. More likely, a risk sharing framework for costs would have to be worked out to achieve success.

All this pressure from the provincial government has added momentum to a process that has been underway for some time. AECL has required increasing subsidies from Ottawa especially for its Chalk River nuclear isotope reactor and for design and development of its next generation commercial nuclear reactor – the ACR1000.

Drawing a line at Chalk River

Chalk River, which is more than 50 years old, is yet again shut down due to a heavy water leak causing chaos in the medical world because it supplies more than half the isotopes used in the U.S. and Canada. The Harper administration has shown some common sense and is separating Chalk River from its sale of AECL.

Further, the federal government will commit to replace the reactor with a new one and take on the over $7 billion in cleanup liabilities associated with the site. An effort to replace Chalk River with two smaller reactors was scrapped last year due to multi-million dollar cost-over runs and repeated failures to get the units to work. In addition to building a new conventional reactor to make medical isotopes, Raitt said the government would seek to privatize that operation while setting aside legacy liabilities to be resolved by the government. Presumably, that would include the $7 billion in cleanup and the eventual decommissioning of the Chalk River reactor complex.

Who will offer new lamps for old?

AECL has not made a profit in the last five years. Last year alone the cost of R&D subsidies for AECL amounted to $350 million. The ACR1000 has just entered design review with the Canadian Nuclear Safety Commission, but despite getting that far, it has not booked any sales nor even firm prospects of one. There are questions of how well it would fare as an export product. It looks like the future of the ACR1000 depends almost entirely on whether AECL gets the Darlington bid award.

Other bidders for Darlington, and likely equity investors in AECL itself, include Areva, SNC Lavalin, a Canadian construction company, Ontario’s Bruce Power, which is also thinking about building an twin-unit ACR1000 power station in Alberta, and General Electric. Westinghouse has stated it wants to supply nuclear reactor components to Darlington, but is not publically on record as being interested in AECL itself.

Ontario’s energy minister George Smitherman (left) has been expected to make a statement on who will take the Darlington Project by June 21. However, the Toronto Star reported he may postpone that announcement until he can see how AECL will be chopped up for sale to be sold off in pieces and to whom.

What he is probably worrying about is that the federal government is going to sell AECL off and, with it, deep six to any obligation to subsidize new reactor R&D and, more importantly, backstop cost over runs if the Darlington project is awarded to AECL.

The worst possible outcome for Ontario is that AECL is left without enough resources, in a private eqity deal, to actually execute a contract at Darlington. Then Ontario has 30,000 jobs to worry about and still needs a builder for its reactor complex. Someone other than AECL might hire its engineers, but cherry picking the best of them might also involve their assignment to the equity firm's projects that are already underway at other nuclear reactor projects in other countries.

Nuclear engineers – pack a bag

In terms of who would bid on the commercial division, that depends on what they think they are buying. Globally, AECL’s current and projected market shares are not significant. The installed base of heavy water reactors is aging and the technology never caught on globally. See World Nuclear’s profile of Canada’s power reactors for more details. Scroll down past the profile of its uranium industry.

The newest offering, the ACR1000, is still on the drawing boards. It is not a product with a defined time-to-market. It could need several hundred million more in R&D and design work before it is ready for sale domestically or for export. This leaves just one factor of immediate value and that is AECL’s workforce.

In a global industry where dozens of new nuclear reactor projects are scrambling for qualified, experienced nuclear engineers, the 30,000 workers on AECL’s payroll looks like a gold-plated body shop.

While there will be continuing work to maintain AECL’s reactors in Canada, and build Darlington if AECL gets the award, the fact is a private equity bidder for AECL most likely would have immediate work for its top nuclear engineers on projects worldwide. Note to ACEL engineers – pack a bag because you are going to need it.

Prior coverage on this blog

• March 8, 2009 – AECL’s destiny to be decided at Darlington
• November 28, 2008 – Is Westinghouse in or out at Darlington?
• November 9, 2008 – Ontario delays reactor new build decision
• May 16, 2008 – AECL gives up on Maple reactors
• April 9, 2008 – GE-Hitachi pulls out of Ontario bidding
• April 4, 2008 – AECL leaves the ice in the U.K.
• March 1, 2008 – Canada posts ‘For Sale” sign at AECL
• December 16, 2007 – Isotope maker restarts after controversy

# # #

Sphere: Related Content

NY Times claims “renaissance” is over

Newspaper tries to make the case the “nuclear renaissance” of the future has collided with its past – it is wrong.

In a wrenching review of problems accumulating at Olliluoto, Finland, and Flamanville, France, the New York Times reports that the so-called “nuclear renaissance,” a vision of the future of nuclear energy as an answer to the challenge of global warming, has suffered from a head-on collision with the industry’s past.

In a three way pile up – cost over runs, technical issues, and regulatory mazes – the newspaper says these events are red flags for the Obama administration which has been notably quiet on how it feels about nuclear energy. However, this is the point where the newspaper gets its signals crossed and winds up with a collision of its own between news and opinion.

Plus, where's the hard news peg? The story of the delays at these two project, and what the company has been doing to correct them, has been around since 2007. See the four links to prior coverage on this blog below.

The most significant issues is that the NYT article takes two data points and applies assumptions drawn from them to the global nuclear industry. This would be roughly the same as taking the total consumption of orange juice in Brooklyn and applying it to a projection of what's on everyone's breakfast table for the U.S, England, and France.

I can see the headline now - Obama warned not to send economic stimulous money to Florida due to sharp drop in sales of concentrated juice in Brooklyn grocery stores.

There are problems with Areva’s projects

The NYT article is a litany of serious problems taking place at two enormous reactor projects both being built by Areva, the French state-owned nuclear giant. Both plants are 1,600 MW EPRs which are state-of-the art designs. The key problems are subcontractors which the Finnish regulatory authorities say poured bad concrete and ignored quality assurance procedures and standards for welding and related steel work. The article reports similar problems at Flammanville again with the concrete and steel foundations of the reactor.

This sounds suspiciously like the lowest bidder phenomenon. It has two parts well known to construction project managers. The first is if you want it bad, you’ll get it bad, and the second is, there is never time to do it right, but always time to do it over. The cost increases to double the original estimate and at least three years of delays in an estimated completion time are ample evidence that both factors are present at both sites.

For Areva’s part, the company has repeatedly pointed to delays in Finland caused by an understaffed and overwhelmed regulatory agency. However, as similar problems with pouring concrete and fabricating the steel have turned up on France, it is clear that control of subcontractors, getting them to work to nuclear industry standards, is at the heart of the problem.

The company says on its U.S. blog that it knows it has problems, expected some of them, and is applying lessons learned in Finland to Flamanville and to its planned U.S. projects.

We recognize that as with any first-of-a-kind project, there is bound to be a learning curve. We have learned much from the EPR reactor under construction in Finland and will apply this experience to future projects around the world. At our second EPR project in France, we’ve already implemented many of the improvements we’ve learned from the Finland project.

Areva isn’t the entire nuclear industry

What’s wrong with the NYT article is that it uses issues that are clearly within Areva’ control to fix as deal breakers for the nuclear industry as a whole. This is where the newspaper’s article derails itself and attempts to spike the nuclear renaissance like a bad story of cops and robbers from the police blotter.

The newspaper then takes on what can only be called a “kitchen sink” approach tossing every anti-nuclear argument it can muster into the pile.

It adds in specious claims about airliner impacts on containment building. Note to NYT editors – in such cases the airline loses, the concrete containment structure gets some scratches and scorch marks, but the reactor itself is untouched by the impact. Also, the NRC hasn’t bought the airliner issue.

The newspaper also turns to Caren Byrd, a wall street banker, who lately has wailed that the “warning lights are now flashing more brightly” for potential investors in the nuclear industry. Well, there is a reason for that – the wall street bankers, like Ms. Byrd’s employer, tanked the entire western economy, ours and Europe’s, with a Las Vegas gambling mentality. I don’t see how the newspaper can turn to them for authoritative comments on other industries when they’ve done so badly with their own.

As the the issue of the Missouri legislature rejecting Ameren’s request to overturn a 1976 anti-nuclear law, that clearly was a mix of ineptitude by both the utility and the legislature. Ameren came in the a proposal which undercut ratepayer rights. It gave opponents all the opening they needed to kill the measure despite compromises later in the session by the utility. A surprise in the mix was the opposition of one of Ameren’s biggest customers, an aluminum plant, which actually needs the electricity from a second reactor in order to grow.

In short, just about everyone involved in the “show me” state shot themselves in the foot. Ameren and the legislature have two more tries before the NRC issues a license to the utility sometime in late 2011. Maybe hanging together rather than separately would be a good way to go during next year’s legislative session.

So what we have with the NY Times is two articles. The first is a reasonably accurate account of old news about Areva’s problems which the utility has stated it is working to correct. The other half of the article is a collection of unrelated anecdotes which use Areva’s problems as a spring board for an anti-nuclear tirade against the entire industry that belongs on the op ed pages and not in the news section.

Prior coverage on this blog

News of problems with Areva's EPR projects in Finland and France, and what the firm is doing to correct them, are not news. Why the NY Times pursues the story now remains a puzzle since the original, cited above, has no hard news peg.

• August 28, 2008 -Areva's double trouble with EPRs
• August 8, 2008 - New trouble at Olkiluoto
• December 27, 2007 - Areva's EPR for Finland will be late
• December 4, 2007 Areva's Flamanville project is underway

# # #

Sphere: Related Content

Rethinking nuclear power hits the road

Robert Hargraves takes his Dartmouth class to Vermont Yankee on a field trip and then lights up Google with a talk on thorium power

by: Robert Hargraves
Guest Contributor to Idaho Samizdat

Students enrolled in the Dartmouth ILEAD course, Energy Policy and Environmental Choices: Rethinking Nuclear Power toured Entergy's Vermont Yankee nuclear power plant May 21. Weeks before we had submitted personal identification information for screening by homeland security. After a brief talk by our hosts we passed through several security checkpoints, where we were given ID badges, X-rayed and puffed at metal and radiation detectors, issued two dosimeters each, and escorted into the heart of the plant.

Inside Vermont Yankee

We visited the turbine generator room. I'm impressed that 640 megawatts of electric power is produced by a single generator on a single shaft spun by high and low pressure steam turbines. The water that cools the reactor passes directly through the turbines, so this area is mildly radioactive.

My own Russian radiation counter showed rates about 10 times normal background; the Entergy-loaned dosimeter showed I was exposed to a total of 0.6 mrem during the tour. (Background radiation is about 350 mrem/day here.)

We also walked around the reactor vessel containment structure and looked at the hydraulic actuators for the control rods. After another security check we visited the control room. On the way out we passed through security checkpoints, surrendered the dosimeters, and were measured for any radioactive contamination. Everyone enjoyed the interesting visit and many asked for an opportunity to ask further questions.

Course motivation

I started teaching this course in 2008. I had previously written a tutorial blog about the pebble bed reactor, a Gen IV technology that promises high temperature and efficiency, passive safety, and continuous refueling. After many talks I was too often confronted with "but what about the waste?".

Consequently I decided to address the energy issue more broadly, writing an eight-week course with about 700 PowerPoint slides entitled Energy Policy and Environmental Choices: Rethinking Nuclear Power, offering it to members of Dartmouth College's Institute for Lifelong Education at Dartmouth (ILEAD).

ILEAD ILEAD has about 1500 members -- mostly business, educational, and professional people who have retired in the area surrounding Dartmouth College in Hanover NH. It offers over 200 courses a year led by former writers, bankers, CIA-spooks, submariners, musicians, ecologists, doctors, farmers, publishers, and teachers.

Rethinking Nuclear Power course topics

• 1. Introduction: energy, power, units, efficiencies, uses, demand growth, doing the math.
• 2. Fear: Chernobyl, TMI, weapons, biological effects, medical radiation.
• 3. Environmental choices: impacts of oil, natural gas, depletion, global warming, coal, oil shale, tar sands, wind, hydro, solar, corn, ethanol.
• 4. Current technology: submarines, PWR, LWR, Candu, NRC, Westinghouse AP-1000, GE ESBWR, Areva.
• 5. New technologies: high temperature gas reactors, hydrogen electrolysis, fuel synthesis, waste reprocessing, integral fast reactor, Gen IV, GNEP, molten salt reactor, and my Aim High! talk.
• 6. Site visit: Vermont Yankee (Seabrook last year). The students heard guest speakers: Howard Shafer, a submariner; Neal Boucher, DHMC radiation safety officer; Richard Bower, NY PUC member during Shoreham; Graham Wallis, NRC Advisory Committee on Reactor Safeguards.

Results

Twenty-nine students enrolled in the course, nearly twice as many students as last year. They told me that previously they had no knowledge of the costs and benefits of nuclear power compared to other energy sources. They are urging me to teach it again, so others can also learn. One student told me "Taking your course is one of the best things I have ever done."

Aim High! Teachers also learn

After giving the course last year I learned about the molten salt thorium reactor. I was so impressed with its potential that I put together the Aim High! presentation and have spent many days in trying to make people aware of the need for R&D in this area.

Course presentation materials availability

The course presentations are based on about 700 graphic, tutorial PowerPoint slides, with web references for further discovery. They are all posted on the course website, in .ppt and .pdf form.

There are also audio recordings to accompany the slides. I encourage anyone to use these materials to educate interested people in other communities.

Hargraves at Google

Mankind's fossil fuel burning releases CO2 into the atmosphere, contributing to global warming and deadly air pollution. Natural resources are rapidly being depleted by world population growth. Safe, inexpensive energy from the liquid fluoride thorium reactor can stop much global warming and raise prosperity of humanity to adopt US and OECD lifestyles, which include lower, sustainable birth rates.

Category: Science & Technology Tags: google tech talk liquid flouride thorium nuclear energy

Video of Hargraves at Google May 26, 2009

# # #

Sphere: Related Content

G8 Energy ministers endorse nuclear option

New nuclear reactors are a “common low-carbon technology platform”

In the arcane world of international diplomacy, it is unusual to see an absence of the usual contorted language in a joint statement from a group of western nations with wildly divergent interests.

The Wall Street Journal reports that energy ministers from the world's eight richest nations said on May 24 they would work to create a common low-carbon technology platform as solutions to climate change and a lack of secure energy supplies.

In short, they are talking about two things. First, nuclear energy can meet Europe’s energy needs, and second, as a result the G8 nations will not be held hostage to Russia’s political manipulation of natural gas supplies to Europe.

The NY Times reports that U.S. Energy Secretary Steven Chu (right) said the participants had agreed on the need for diversifying energy sources to help keep prices stable and help the economic recovery.

''There's a continued, renewed interest in trying to stabilize energy prices, so that the world economy, both the oil exporting and the oil importing countries, can have a stable future,'' Chu said at a joint news conference.

The statement comes as a number of countries, including the oil-rich United Arab Emirates (UAE), are planning to build nuclear reactors to produce electricity. Not only are they worried about energy security, the oil-producing nations are also concerned that a future run up of the price of oil could tank global demand and with it their own national investment strategies.

The WSJ reported that in a closing statement at their two-day meeting, held in Rome, the energy ministers from the Group of Eight leading nations, plus the European Commission, said,

"In the opinion of a growing number of countries, the use of nuclear energy can contribute to energy security while reducing greenhouse emissions."

"We encourage all countries interested in the civil use of nuclear energy to engage in constructive international collaboration," the statement said, while reiterating "the fundamental prerequisite for the peaceful use of nuclear energy."

The last sentence was a reference to North Korea’s underground nuclear test on May 23 said to be in the range of 4 MT. However, the G8 ministers made a strong distinction in their statement between nuclear weapons and nuclear energy for peaceful purposes.

German greens say not so fast

Critics have condemned the new thinking in Europe on civilian commercial nuclear power, claiming that the G8 ministers are letting themselves be fooled by the nuclear lobby's "climate" arguments. German greens want to shut down all 17 of the country’s nuclear power plants and have a deal to do so with the current ruling coalition which would result in seven being shut as soon as September 2009. They have railed against the claim that nuclear energy is part of the solution to the challenges of global warming.

"If you wanted to be really cynical you could say that the nuclear industry had to invent the whole climate discussion in order to see a chance for themselves," said Rebecca Harms, (left) an MP from Germany's Green party.

"I know of no other case in which a huge industry tries so hard to benefit from a huge global problem as the nuclear industry does in the case of climate change."

Next September German Chancellor Andrea Merkel will swing for the fences and seek to overturn the nuclear deal with the Social Democrats. She will bet the election on this issue and her handling of the current financial crisis.

UAE deal leading the Middle East drive for nuclear energy

That argument did not cut any ice with Arab nations. The WSJ also reported the G8 statement was endorsed in a subsequent statement signed by Saudi Arabia, the world's largest oil exporter, as well as India and China, which are fastest growing developers of nuclear energy.

The UAE has a deal pending with the US to allow it to engage in trade for nuclear reactors and related technologies. The new build is said to be in the range of 5 GWe to be built in three stages near the UAE border with Saudi Arabia. This would aid wheeling electricity to that country.

Competition for the deal is reported to be intense with French President Nickolas Sarkozy traveling to the UAE last week to try to sell them on buying Areva EPRs for the project. According to press reports from the UAE, a short list of potential bidders will be released in September 2009.

Italy and Japan cut nuclear deal

While the G8 ministers were making global pronouncements, two members cut a side deal. According to wire service reports, Japan and Italy signed a memorandum to cooperate in nuclear power development. It is the third such deal the Italians have inked in as many months. It previously agreed to “cooperate” with Russia and with France on new nuclear reactor projects.

Japan's METI minister Toshihiro Nikai and Italy's Industry Minister Claudio Scajola (right) met Sunday on the sidelines of the G8 countries' Energy Ministers meeting held in Rome, and signed the memorandum. The Japanese government agency METI issued a statement in Tokyo announcing the deal.

This is the sixth country METI has a nuclear cooperation memorandum with, the others being Jordan, Kazakhstan, Indonesia, Vietnam and the UAE. A common factor for these deals in their relation to very large consumers of electricity including current or planned aluminum smelting plants.

The memorandum with Italy calls for a three-year project in which Japan will cooperate with Italy in the education of experts and government regulatory policy. Last year Italy decided to resume nuclear power generation to combat global warming and increase its energy security.

Japan Steel Works (JSW) currently is the leading source globally of long lead time reactor vessel components, but other countries, including the U.K. and France, plan to build competing facilities. While JSW has a comfortable backlog in its order book, that situation might not last if these other facilities come online. Clearly, Japanese export earnings would take a hit hence the multiple deals for “nuclear cooperation” to keep JSW’s hand in at the deal table.

Kashiwazaki-Kariwa – 7th chevron is locked

As Japan was signing a deal with Italy, which could lead the way to exports from Japan for heavy nuclear components for new reactors, there was good news back in Tokyo that raised the credibility of the Japanese nuclear establishment.

Retuers reports that Tokyo Electric Power Co (TEPCO) said on May 24 it had boosted output from the 1,356 megawatt, No.7 nuclear reactor at the Kashiwazaki-Kariwa plant in northern Japan to 50% capacity.

TEPCO, Asia's biggest utility, restarted the No.7 unit for the first time in nearly two years ago following a magnitude 6.8 quake. It resumed power generation from the unit at 20% of capacity on May 19.

A company statement said the output at the No.7 unit was raised to 50% on May 23. The company's website showed that the reactor was generating 719 MW of power. Under a test run, output will be raised to 75% and then full production.

Reuters reported that the restart of the No. 7 unit could cut TEPCO's annual fuel purchases by more than 70 billion yen ($740.2 million) and cut carbon dioxide emissions by more than 5 million tonnes, according to company and Reuters calculations.

TEPCIO said it was proceeding with plans to restart the other six reactors which were closed two years ago due to a severe earthquake. While there was no damage to the plants, provincial government authorities, which have veto power over plant operations, forced them to remain closed while an assessment was made by the IAEA. A series of fires at non-nuclear parts of the plants also alarmed officials and contributed to the delay in restarting the facility.

Japan’s international nuclear energy reputation has taken a beating as a combination of factors increased the delay in restarting the world’s largest nuclear power station. It must come as a relief to TEPCO officials and the government to see the power back on.

# # #

Sphere: Related Content

Vermont Yankee bill vetoed

Funding for the decommissioning fund will not be set by legislative fiat

Vermont Gov. Jim Douglas vetoed a bill that would require Entergy (NYSE:ETR), the owner of the Vermont Yankee nuclear power plant, to pay hundreds of millions of dollars toward decommissioning the nuclear power plant. This is the second time in two years Douglas has vetoed such a bill.

Earlier this month, the Vermont Legislature passed the bill as part of an effort to get Entergy Nuclear to put the money into the fund, for use cleaning up the Vernon property if the plant closes in 2012. That assumes the NRC does not extend its license for another 20 years.

Anti-nuclear forces in the state legislature are trying to create an atmosphere of inevitability over closure by raising the issue of the adequate funding for immediate closure.

The Burlington Free Press reports Gov. Douglas (right) said the bill threatens the state's economic recovery by increasing electric rates for consumers and businesses.

"Many Vermonters are struggling as a result of the current recession and all are facing pressure from rising costs. While I do believe there are opportunities for operational improvements at Vermont Yankee, this legislation does nothing to increase protections for Vermonters, ratepayers or our state's economy.”

"This legislation's approach is to extract money in any way possible, creating a hostile business environment," Douglas said in a four-page veto message.

He said the bill threatened to drive up electric rates for Vermonters, renege on a 2002 agreement with Vermont Yankee owner Entergy Corp., and circumvent the Public Service Board process.

The plant's decommissioning fund totaled $346 million this winter after suffering extensive losses in the recession hobbled economy. The legislature wants the parent company to fund the $600 million short-fall out of corporate earnings, but as a practical matter is will come out of the rate base with massively higher electricity bills for the people and businesses of Vermont.

Under an agreement with the state when it bought the plant in 2002, Entergy was allowed to consider on-site storage of spent nuclear fuel for up to 60 years. The state legislature disagrees and wants to overturn that arrangement.

Rep. Tony Klein, D-East Montpelier, chairman of the House Natural Resources and Energy Committee, (right) said that the agreement is not binding forever. "There's nothing about a Public Service Board order that can't be changed," he said.

Lawmakers are expected to attempt to call an override vote on the decommissioning fund when they meet in a special session on June 2. Last year, when Douglas vetoed similar legislation, lawmakers did not try to override the veto.

Political analysts told the news media this year's Legislature does not have the votes to do so either, as businesses that rely on large quantities of electricity have been effective in persuading some legislators to vote against it. This includes IBM which reportedly employs 6,000 people in Vermont.

# # #

Sphere: Related Content

Ed Kee's slides on status & future of nuclear energy

The slides from a May 19, 2009 presentation by Ed Kee to the Goldman Sachs Power & Utility Conference are available below. Ed posted the slides at 'SlideShare' via Linkedin and they are reproduced here under the terms and conditions of the SlideShare service. This is an excellent overview of where the nuclear industry is today and where it is headed globally for new builds of nuclear reactors.

For questions about the content, see Ed Kee's contact information in the slides

# # #

Sphere: Related Content

Ghostlight

Taking a break for the Memorial Day holiday

The blog will be dark for the Memorial Day holiday. Blogging on nuclear energy news will resume the following week.

For those of you who may have missed some of the top blog posts of the past five months, here are a few links.

• Exelon bids goodbye to ESBWR – the Chicago based nuclear utility wants a better horse to ride to win the loan guarantee race.
• Areva seeks financing solutions – the French state owned nuclear giant needs 11 billion euros over the next three years to meet its global financial needs for capital projects that span the entire nuclear fuel cycle. 
• Microsoft veteran boots up nuclear – Bill Gates thinks a radical nuclear reactor design could be the answer to the energy needs of the developing world.
• Blue castle reactor for Green River – a private equity firm wants to build a 3,000 MW nuclear reactor power station and wheel most of the electricity to Los Angeles
• Is AECL’s destiny to be decided at Darlington – a $22 billion reactor new build in Ontario is the prize sought by three bidders.

 Don’t forget why we have Memorial Day

Please remember to honor current and former service men and  women.  Typically, in Washington, DC, the President lays a wreath at Arlington Memorial Cemetery to honor the dead from all wars in which Americans gave their lives for freedom.  It is the site of the Tomb of the Unknown Soldier and other war memorials.  Also on Memorial Day some people visit the Vietnam Veterans Memorial and find the names of the dead on the wall.  It is a holiday with a somber tone, but it is also worth remembering that the spirit of American freedom is an inspiration to people all over the world.

And just to break you out of the mood, here is a video of the U.S. Marine Band playing 'Amazing Grace" with bagpipes at Estes Park, Colorado. Somehow the sound of thunder in the background fits these times.

# # #

Sphere: Related Content

Nuclear energy news roundup for 05/17/09

Possible bid award for Ontario reactor project – or not?

The Toronto Globle & Mail reported on May 15 that the Ontario government has selected AECL to negotiate a multi-year, multi-reactor $22 billion deal with the provincial government. Since AECL is still a crown corporation, the government in Ontario finds itself in the unusual position of arm wrestling over price with the Canadian federal government.

However, the news of the award was disputed by “Infrastructure Ontario” which is offering the tender and which purportedly makes the final decision. Diane Flanagan, a spokesperson for the agency, told the Globe & Mail a winner bidder has not been chosen and that evaluation of the bids is still underway.

There may be a reason for the delay. According to the newspaper, George Smitherman, the Ontario Deputy Premier in charge of the tender, reportedly has “sticker shock” for all three bids – from AECL, Areva, and Westinghouse.

The Globe & Mail says he apparently didn’t get the memo from Ontario Premier Dalton McGuinty who reportedly told the ‘Infrastructure’ agency on May 15 to begin negotiations with AECL.

This is where the newspaper and the agency go off the rails in their respective stories about whether the contract was awarded or not. The paper says AECL has the award, but the everyone else except the top guy says they don’t.

Uncertainties will plague the award to AECL

A key issue in the negotiations is how to control cost overruns. The last time AECL built reactors for the Ontario government, the costs soared into the stratosphere like so much volcanic ash to the tune of $12 billion. That debt is still being paid off.

This time the Ontario government wants a firm, fixed price contract with the winning bidder. A nod to AECL will require cost control guarantees from the Harper government that will stand up to potential changes that will be sought by future administrations if costs get out of control again.

While provincial officials tried to sort out who was saying what, Areva Canada, one of the bidders, told the Globe & Mail AECL’s reactor, the ACR1000, hasn’t completed design reviews at the Canadian Nuclear Safety Commission and no one can predict what building one will cost.

Another factor adding uncertainty to AECL’s ability to complete the job is that the Harper government in Ottawa has been sitting on a banking industry review of the feasibility of spinning off AECL to private investors to rid the government of both liability and future costs associated with the nuclear reactor organization. So far the evaluation of AECL’s assets and prospects has been kept secret. One exception is that the Harper government did say it would exclude the Chalk River isotope reactor from any spin off due to cleanup liabilities at that site.

Italy moves closer to new nuclear build

Reuters reports that Italy’s senate, the upper house of the parliament, approved restart of the government’s commitment to nuclear energy.

Under the legislation, the Italian government now has to develop a nuclear safety commission, select sites for reactors, develop rules for management of spent fuel, and develop compensation measures for communities which, in the densely populated country, do not want the plants.

Italy closed down its nuclear plants two decades ago following the Chernobyl accident. It has since come to regret that action as it now depends on coal and imported natural gas and has some of the highest electricity prices in Europe in a country has has a lagging economy.

The earliest new deal for a reactor will likely be a 12.5% stake that one of Italy’s major utilities will take in a new Areva EPA being built in France. Italian authorities have said that if all goes well with the new government agencies, a new reactor site in Italy could break ground as early as 2013, but some have disputed that speedy result saying given Italy’s fractious politics, it could be 2020 before construction starts on a domestic plant. It could take some real political magic to meet the earlier date.

In the meantime, Italy is talking with Russia about importing more natural gas to meet its energy needs. Critics of that move have pointed out Russia is not a reliable fuel supplier given the experience of the Ukraine last winter when it displeased the Kremlin as part of a dispute over gas prices and the Russians turned off the pipeline.

Germany’s nukes position for post-election decisions

Reuters reports the nuclear power industry in Germany, facing the possibility that a “green” slate could win the September 2009 election, is positioning itself to respond to that contingency.

If it happens, the left-leaning greens will shut down all 17 of Germany’s nuclear power plants by 2021 and seek to substitute a combination of energy conservation, wind, solar, and natural gas energy sources in their place. Seven of the nuclear plants would be shut down immediately.

The four nuclear utilities are trying to figure out what political price they would have to pay to extend the life of the plants beyond 2021. They are also trying to educate the German public what the shutdown of the reactors would mean to the economy and the environment.

The utility group, called the ‘Atomic Forum’ told Reuters through its spokesman Walter Hohlefelder, that the change sought by the Social Democrats (SDP) would result in a lost of 20% of baseload power for the nation as a whole impacting industry, business, and household use of electricity.

China’s new nuclear build has growing pains

An analysis of China’s nuclear energy sector by Dow Jones Newswires on March 17 paints a picture of an aggressive drive for nuclear power challenged by a lack of expertise both technically and in terms of management as well as future issues associated with reliable supplies of uranium.

According to the report, China also has an artificially low rate structure for electricity that makes it difficult for new nuclear plants to recover their costs even in a “state-owned” environment. It appears you can only cook the books in some many different directions before it catches up with you.

Another “disincentive” is the lack of a carbon emissions control program, or carbon cap-and-trade, which would shift new investments in power plants from coal to nuclear. China’s coal interests are just as opposed to the new nuclear build there as the the U.S. coal industry is opposed to new reactors being built by TVA.

There are four nuclear plants in operation in China that generate about 9 GW of electricity. This is about the same amount of baseload power from nuclear as is installed in Sweden which has a much smaller population and economy. China has plans to build at least 11 more nuclear reactor stations, some multi-unit, to generate 50 GW which would raise the market share to about 5% of total energy requirements.

The nuclear industry in China is remarkably fragmented for an economy run by centralized state planning. It has three state owned utilities and two independent power producers. In addition to an indigenous 1,100 MW reactor design, China’s utilities are buying reactors from Russia, France, and the U.S. at a breathtaking pace. However, actual construction progress is said to be hampered by delays in deliveries of large reactors components and labor shortages of nuclear engineers and skilled crafts.

China’s uranium supply challenges

China has five active uranium mines which meet less than a third of the country’s needs. It has inked major deals with Kazakhstan, Russia, Nambia, and Australia to import supplies. The imports come at much higher prices than domestic supplies which will affect the price of electricity. While some supplies from African nations may be unreliable, China has also sought deals in Canada.

The current price of uranium on the spot market is in the mid-$40 range. Dow Jones predicted it could reach $55/lb which would cause some shuttered mines, including a few in South Africa, to reopen due to the high price. This might temporarily stabilize world supplies, but Dow Jones also predicted that the price would continue to rise in response to worldwide construction of new nuclear reactors.

The impact on China of increasing costs for uranium imports will likely be an increased cost to generate electricity from nuclear power. Even with the government balancing act between costs and rates, the government will likely have to increase its subsidy to consumers or pass along the extra costs.

# # #

Sphere: Related Content

Areva enters the nuclear medicine market

Current R&D focuses on Lead-212 to treat aggressive cancers

A “cowboy” country-and-western song performed by Chad Brock that includes the dramatic lyrics “Thunder is only noise, lightning does the work” finds new metaphorical meaning in the application of ionizing radiation to aggressive cancer tumors. This metaphor is brought to down to earth in the world of nuclear medicine by the new work of Areva NC, the French state-owned global nuclear giant, which is developing innovative uses for one of the world’s most unique isotopes.

For the past year, Areva has been working with the U.S. National Cancer Institute (NCI) in Bethesda, MD. The objective is to develop Lead-212 as a medical-quality radioactive isotope for use in new treatments for several types of aggressive cancers. The firm formed a new business unit in 2009 to fund the R&D clinical trials and develop a radiopharmaceutical drug based on the very short-lived isotope.

According to the NCI survival rates for Pancreatic cancer, which is one of the aggressive cancer types, are among the lowest of all cancers. The American Cancer Society estimates that in 2009 there will be approximately 43,000 cases and 35,000 deaths from the disease. The five-year survival rate is less than 5% of those diagnosed with the disease. The primary risks factors for pancreatic cancer include age, tobacco smoke, diabetes, and inherited predisposition to DNA mutations that cause the disease. Almost all patients are over age 45 and the average age at the time of diagnosis is 72.

Interview with Areva’s nuclear medicine CEO

In an exclusive interview with this blog, Patrick Bourdet, (right) CEO of Areva's new business unit, said the R&D work with the NCI is taking place under the auspices of a Cooperative Research & Development Agreement (CRADA). He said that Lead-212 has a very short half-life, as little as 8-10 hours, but it can used to target cancer cells to kill them directly.

According to Bourdet, the way the therapy would work is that the Lead-212 a Beta emitter, and its daughter decay product Bismuth-212, an Alpha emitter, binds to a specific peptide of the cancer cells.

Bourdet also noted that pancreatic cancer was not the only disease that has the potential to be treated by Lead-212 therapy should clinical trials prove to be successful. Other examples targeted by the R&D work at NCI include melanoma, ovarian, and colon cancer.

However, Bourdet said the R&D work has not yet entered clinical trials and that it will be several years before a therapeutic drug is available to physicians. He said that clinical trials could begin later this year or in early 2010.

How it works - target acquisition of cancer cells

Alpha emitters such as Bismuth-212, which is a decay product of Lead-212, are very effective at destroying single cancer cells. The Lead-212 is produced from a Radium-224 generator system which in turn is produced by the decay of natural Thorium-232 to Thorium-228 and to subsequent daughter products.

Chart source: PNNL

Two scientists at Argonne National Laboratory (ANL), John Hines and Bob Alcher, first develop a device for production of Bismuth 212 in 1989.

According to the Health Physics Society, Lead-212 and Bismuth-212 are currently used for experimental treatment of metastatic cancer in laboratory animals.

Antibodies or peptides labeled with Lead-212, or its daughter Bismuth-212, target cell-surface antigens on cancer cells.

The alpha particles from Bismuth-212 are particularly effective in destroying cancer cells. The high level of ionization breaks cancer cell DNA chains so completely they cannot repair themselves.

In short, the alpha-emitting Bismuth-212 that decays “in vivo” from the very short-lived Lead-212 destroys the fast-spreading metastases of cancer that are difficult to treat with other combinations of surgery, chemotherapy, and external-beam radiation therapy.

The institutions using the Lead-212 and Bismuth-212 daughters of Radium-224 in cell-directed immunotherapy against cancer are the University of Missouri at Columbia, MO (melanoma treatment) and the National Cancer Institute in Bethesda, MD (ovarian cancer treatment).

Building the business unit from scratch

Areva is doing something unusual for a global nuclear energy company. It is building the business unit from scratch. The firm has core competencies in things like uranium mines, nuclear reactors, and management of spent nuclear fuel, but none in nuclear medicine and radiopharmaceutical drugs. When a new product opportunity in the nuclear medicine field is not a core competency, the easy answer is to spin it to someone who knows the business. The plan is to let them take risks with the high costs of years of clinical trials, and reap licensing revenues if there is a success.

Bourdet says in this case the firm sought strategic business advice from AEC Partners, which is a strategic business consulting firm in the life sciences field, with offices in Paris and New York. After working with AEC, Areva decided to enter the nuclear medicine market with a new business unit which Bourdet now leads.

The business unit will be a supplier of Radium-224 which in turn produces Lead-212. If clinical trials are successful, the production facility and treatment center will have to be co-located because of the extremely short half-life of Lead-212.

Shortening the journey for clinical trials

Medical trials with humans require an enormous amount of groundwork. Bourdet says the three phases of clinical trials could take up to six years to complete. The three phases address safety, medical utility, and the development of a product (industrialization). However, Bourdet also said the U.S. Food & Drug Administration (FDA) offers a "shorter option for fast trials for treatments that hold the potential for very high-benefit therapeutic results." Accelerated approval of such treatments by the federal government depends on expected improved survival rates from the disease.

Areva has no investment or licensing partners at this time to share the cost of the clinical trials. However, Areva is confident enough of the outcome to have selected Goodwin Biotechnology (GBI) of Plantation, FL, to begin process development of a new radiopharmaceutical drug using Lead-212. GBI is a contract manufacturing organization that specializes in making therapeutic drugs used in all phases of clinical trials for new medicines.

From nuclear submarines to nuclear medicine

Asked why he chose to get into this business, with its long-term risks and rewards, Bourdet said the company is backing him "because we have an unprecedented opportunity to boost the survival rates from some of the most deadly cancers known to medical science."

Bourdet comes to the job with more than 20 years’ experience in the nuclear industry He started his career in 1986 in nuclear submarines with Technicatome (now AREVA TA) and the French Atomic Energy Commission-Nuclear Propulsion Dept (CEA-DPN). He joined COGEMA (now AREVA NC) in 1998 at the La Hague site in Normandy, France, working in production facilities, and joined the AREVA NC headquarters in the sales and marketing Department in 2005.

The following year, he was appointed to lead the AREVA TAO (Thorium of AREVA for Oncology) project focused on cancer research. He negotiated the Cooperative Research and Development Agreement (CRADA) signed in 2008 with the NCI. In April 2009, Bourdet was appointed President and CEO of AREVA Med, a new company focused on the development of powerful drugs to combat cancer.

There is no drug right now and the clinical trials are still in the future, but Bourdet is hopeful that the outcome will be consistent with expectations. The goal is that patients with aggressive cancers will no longer be facing a death sentence, but rather will have an avenue of hope offered to them by a most unusual source - radioactive lead. That's a pretty good future for a new business.

# # #

Sphere: Related Content

Western lands uranium gopher for May 16, 2008

Portions of this blog post were published in Fuel Cycle Week, May 13, 2008, V8,No.327 by International Nuclear Associates, Washington, DC.

Grand Canyon uranium mining controversy re-ignites

The Bureau of Land Management (BLM) has given the green light to  uranium exploration at eight new sites at five separate projects within a 1 million acre area near the Grand Canyon tagged by the House Natural Resources Committee in June 2008. The committee tried to withdraw the lands under a little used provision of the 1976 Federal Land Management Policy Act, but then Secretary of Interior Dirk Kempthorne refused to accept the action. He pointed out the committee's republicans had walked out of the session leaving the committee without a quorum.  Kempthorne left office with the end of the Bush Administration and is said to be considering throwing his hat in the ring for President in 2012.

The BLM Arizona state office said the new mining authorization does not immediately allow on-site drilling, but does set the stage for future work due to the transfer of bonds to the new sites. Quaterra Alaska, which holds the bonds, is a U.S.-based subsidiary of Quaterra Resources (CVE:QTA) of Vancouver, a Canadian mining firm. It has a reported 2,400 mining claims near the Grand Canyon. The firm estimates the total resource along the Arizona Strip is 35 million pounds U3O8 based on historical estimates developed when the sites were mined for seven million pounds by Western Nuclear in 1979.

Environmental groups have waged a high profile campaign against new uranium mining near the Grand Canyon despite the fact there are thousands of claims within 100 miles of the boundary of the national park based on historical mining activities. The Center for Biological Diversity and the Sierra Club have filed suit against BLM, but the case has not yet been heard in Federal District Court.

U.S. Rep. Raul Grijalva (D-Ariz.) reintroduced legislation this winter to ban uranium mining within the same 1 million acre area. He was beaten back in the previous Congress by the Bush Administration and Republicans who said the ban would cost the area jobs. So far Secretary of Interior Ken Salazar has not made any statements about the issue.

Cotter seeks to re-open Canon City uranium mill

Cotter Corp. may have been reading too many Superman comic books where the man of steel leaps over tall buildings in a single bound. The firm has set itself up to leap over a couple of very tall barriers to re-open its mill in Canon City, Colo. Cotter wants to process 12.5 million tons of ore from Mt. Taylor in New Mexico producing an estimated 500,000 pounds of U3O8. The project has a 25-year timeline according to Cotter.

The two most significant problems facing the firm is that the mill is a Superfund site and Mt. Taylor in New Mexico is listed as an "endangered site" by the National Trust for Historic Preservation and is said to be sacred to over two dozen Indian tribes.

More than two decades ago federal and state environmental officials discovered that contamination from uranium mill tailings were seeping into the groundwater that flows underneath Canon City (Pop 16,000). EPA built a new water supply system for the town to protect residents. Steve Tarlton, radiation manager for the Colorado Department of Health, told the Denver Post on May 3 that cleanup of the mill is required regardless of whether it gets a license to go back into production.

Cotter officials told the Post they want to resume operations in 2014. John Hamrick, VP for Milling, told the Canon City Daily Record reopening the mill would provide jobs for 80 workers and that the ore would come to the mill from New Mexico by train. He said it is unlikely the new mill will re-use any of the existing facility. "It's going to be to everyone's advantage to use new stuff," he said.

In New Mexico Mt. Taylor, a 12,000 ft high peak in the San Meteo Mountains, has been the center of uranium mining since the 1950s. Mt. Taylor is located in the Grants Uranium Belt which is one of the richest producing areas for uranium in the U.S. It went through major mining booms in the 1950s and again in the 1970s. New uranium prospecting has been taking place since 2006. Cotter believes that no new uranium mills will be built in New Mexico and that cost-effective hauling of ore by rail from new mines in the region to Canon City will make its Colorado mill profitable.

The National Trust for Historic Preservation in April took the action of listing the mountain as the 11^th most endangered cultural resource site in the U.S. due to its historic use by American Indians as a "sacred place." The list has no regulatory or legal standing, but could form the basis for further action by the Trust or Native American tribes.

Energy Fuels pursues permits for Montrose Mill

George Glasier is confident his firm Energy Fuels (TSE:EFR) can raise the $150 million he needs to build a new 1,000 ton/day uranium mill at the Pinion Ridge site in the Paradox Valley in Montrose County, Colo. He's going to need confidence, and luck, because right now the firm has just $13 million in the bank and the spot price of uranium is stuck below $45/lb. Glasier thinks he'll need a sustained, long-term contract price with utilities of $70/lb to make money.

So far he says he's spent $8 million on permitting, but his stock price is in the tank at $0.54/share against a 52-week range of $0.11-$1.29/share. He claims he has commitments of $35 million so far from early investors. The firm acquired Magnum Energy, with properties in Emery County, Utah, late last year, but that was mostly a stock for cash deal to raise capital. It gained him just over $4 million.

Another question is where is the uranium going to come from? The firm has two mines both of which are shut down due to the low price of uranium. The Whirlwind and Energy Queen mines, both located in the highly productive Uravan belt between Colorado and Utah, are not operating. Efforts to develop toll milling agreements with Denison at its mill in Blanding, Utah, did not work out.

Glasier's next step is to complete a special use application process with the Montrose County Commissioners in June. He also has to get a grab bag of permits from state agencies in Colorado. The state regulates uranium mills so he does not need a license from the NRC.

If this all goes according to plan, the firm can break ground in early 2011 assuming investors show up. Right now public support for the new mill is good. Glasier point out the mill will produce 85 jobs with a payroll of $4.3 million/year. He adds that when the mines reopen jobs there could pay as much as $90,000/year for experienced miners and about half that amount for truck drivers and helpers to move the ore to the mill.

Merger Mania Continues in Western U.S.

Industry consolidation continues to drive mergers based on record low stock prices for uranium juniors operating in the western U.S. Anglo Canadian Uranium Corp. (TSX:URA) plans to combined with Mancos Resources LLC and two other firms to engage in uranium exploration and assess the feasibility of building a uranium mill in the four corners region of southwestern Colorado and southeastern Utah where is has several hundred uranium claims.

Mancos Mill attacked as "speculative"

Mancos has been trying to develop a mill at Green River, Utah. Uranium Watch, an environmental group, is making a case under Utah law that the claim for water to run the mill is "speculative." A companion claim by Transition Power LLC for water in the region for a proposed nuclear power plant, also to be located at Green River, involves a swap with water from Kane County in the southern-most part of the state. Where Mancos wanted under 900 acre feet for the mill, the reactor project has filed a request for 30,000 acre feet of water per day. Water is the key to success for either project.

Titan Uranium to acquire Uranium Power Corp.

Titan Uranium (CVE:TUE) will acquire the outstanding stock of Uranium Power Corp. (CVE:UPC) to achieve 100% ownership of the firm. The deal offers Uranium Power shareholders a slight premium (3.4%) over market close on May 7. The stock closed at $0.27/share against a 52-week range of $0.07-$0.55/share. With 98.24 million shares, the all stock deal is worth just over $27 million.

UPC has been focused on developing uranium properties in the western USA. Its major asset is a 50% interest in the Sheep Mountain uranium mine in the Crooks Gap Mining District of Fremont County, Wyoming, in a joint venture with Uranium One Inc.

The Sheep Mountain mine has an NI 43-101 compliant Inferred Resource of 4,560,000 tons at an average grade of 0.17% eU3O8, (15.6 million pounds U3O8). That report was prepared in 2006. At the current spot price the resource would be worth about $670 million. That makes it a bargain in the all stock deal.

UPC also has significant interests in uranium exploration projects in Utah, Wyoming, Arizona and Saskatchewan.

# # #

Sphere: Related Content

Exelon back on track at Victoria, TX or not?

Hitachi inks contract with URS but for what?

May 20, 2009 (Victoria Advocate - McClatchy-Tribune Information Services via COMTEX) -- Exelon Nuclear has denied reports that a company was selected to build the proposed Victoria County plant. Reuters reported May 14 that Hitachi signed an engineering, procurement and construction contract (EPC) with URS Corp. to build the proposed plant.

"It's not true," said Craig Nesbit, an Exelon spokesman. "We haven't signed anything with anybody."

Exelon has an agreement with Hitachi to perform preplanning services such as licensing and cost estimating, Nesbit said.
"That's a huge difference than engineering, procurement and construction," he said.

URS will perform preplanning work under a contract Exelon has with Hitachi. URS is basically an Hitachi subcontractor, Nesbit said.

See updates below 05/15/09, 05/16/09, 05/18/09 for breaking news

And here is the original blog post

Just when you thought Exelon’s new nuclear reactor build at Victoria, TX, was coming off the rails, we spot news that the project is back on track. This week Hitachi hired construction giant URS (NYSE:URS) to build two 1,350 MW ABWR reactors. While none of the parties released information on the value of the contract, if the reactors are priced at $4,000/Kw, the 2,700 MW of electrical generation capacity weighs in at $10.8 billion.

The news this week is giving a lift to URS which is making its first entry into the market of building the new generation of nuclear power plants. URS Chief Martin Koffel announced the deal, but declined to provide any other details about it. It is known that once the reactors enter revenue service they will supply electricity to San Antonio, Houston and other cities in Texas.

This is also good news for the small Texas community which last November saw Exelon, the utility that wants the reactors, bid goodbye to the GE-Hitachi ESBWR, an untested 1,560 MW reactor.

A combination of problems between GE and the NRC in completing the design certification review of the new ESBWR reactor caused Exelon’s DOE loan guarantee application to be ranked near the bottom of the pile. The Department of Energy, reckoning that the ESBWR was not ready for prime time, or for market, told Exelon it was no longer in the running for the loan coverage.

Subsequently, Exelon chose the older, but certified ABWR design. Exelon must modify its NRC license application to reflect the change in reactors. Even so Exelon is proceeding without the loan guarantee coverage. DOE has in the meantime selected four other projects for its short list.

While Victoria, TX, Exelon, and Hitachi are all celebrating their giant leap forward, an industry analyst told Reuters the bad news is the Obama administration has a “nebulous” policy toward nuclear energy. The analyst said nuclear energy “offers a clear path to reducing carbon emissions.” Deep in the heart of the Texas gulf coast, everyone concerned knows the second part to be true.

Update 05/15/09

In the department of one hand not knowing what the other is doing comes this report via Platts. Exelon will "delay or cancel" plans to build two reactors in Texas because that project was not among final four selected by DOE for the first round of loan guarantees.

Exelon Chairman/CEO John Rowe said in a speech at the National Press Club in Washington May 15 . . .

Getting sustained support for new nuclear power in Congress "will remain avery difficult challenge until large majorities of both parties conclude thatit's needed," he said. However, "more and more people will come to realize"that any low-carbon generation strategy that is "competitive and effective"must "include a large component of nuclear energy."

File this under the general heading of WTF given the Reuters report of 05/15/09 that said the reactor vendor has inked an EPC contract for two reactors. I'll post additional updates as I get them.

Update 05/16/09

If you think some folks aren't talking to each other, you might be right, or someone isn't reading Platts or the Houston Chronicle, which had the same news. The latest news is that Martin M. Koffel, Chairman and CEO of URS, said on May 15 at the URS Corporation Q1 2009 Earnings Call transcript his firm has a deal with Hitachi at the Victoria, TX site. Here it is.

"We’re currently supporting three major generation III nuclear technologies; the advanced boiling water reactor, the economic simplified boiling water reactor, and Mitsubishi Heavy Industries advanced pressurized water reactor.

In fact, we’re pleased to announce that URS has signed an agreement with Hitachi to provide licensing, cost estimating, and scheduling services for Exelon’s proposed two unit nuclear power plant in Victoria, Texas. Hitachi has been selected by Exelon to participate in this new plant using the advanced boiling water reactor technology.

Preliminary work will be conducted over the next several months, and then as the project proceeds, URS has an exclusive agreement with Hitachi to provide engineering procurement and construction services for the two nuclear units."

Whatever is going on doesn't make sense. On one hand Exelon is saying it plans to cancel the project, and on the other URS, says they are going to build it. Stay tuned.

Update 05/18/09

In response to the previous updates, an expert observer of the nuclear industry wrote in an email to this blog,

"Now from a regulatory standpoint, it's likely Exelon will go ahead with the COL application, and needs Hitachi and its subs (including URS) to develop the safety and engineering design for the application, a required exercise under Part 52. It's likely Exelon will go forward with the application, given that the COL doesn't require any actual construction to occur. The license lasts for 20 years and can be renewed, so they can hold onto the paper and wait out the financial situation."

"Rowe seems to have his nuclear ambitions in South Texas trained on NRG and the South Texas Project. He can have Victoria when STP 3 & 4 are built. "

Comments anyone?

# # #

Sphere: Related Content