Friday, March 9, 2007

Will Idaho state politics go for broke over GNEP?

The Idaho Settlement Agreement could be a deal killer for GNEP in the state. What's a governor to do?

Idaho politicians are lining up to support GNEP at next week's hearing in Idaho Falls. This week the Idaho Legislature got around to the question of whether to endorse the two applications pending before the Department of Energy to build a nuclear waste reprocessing reactor, and related facilities, out on the Arco desert at the Idaho National Laboratory.

The Idaho State Senate passed a nonbinding resolution endorsing the state as the "most suitable" location for the program's plants. A similar measure is pending in the House, but not without opposition. Rep. Nicole LeFavour (D-Boise) wants to know how the GNEP program will affect the cleanup of nuclear waste that's already in Idaho.

The problem for all this nonbinding legislative glad handing is that the Idaho Settlement Agreement, signed in 1995, bars the Department of Energy from shipping any more nuclear waste to the site. A spokesman for the Idaho lab told the Associated Press the GNEP project is a "research initiative" at this stage. The Settlement Agreement's spent fuel provisions are also unique because certain types of spent fuel (such as commercial power reactor fuel) are specifically excluded from the types of waste allowed to come to the INL.

The problem is that a decision by the Department of Energy to bring major pieces of the GNEP program to Idaho, worth billions of dollars and thousands of jobs, will also involve bringing in new spent nuclear fuel not coverred by the current agreement. To do that the federal government will have to negotiate with the State of Idaho to modify the current cleanup agreement.

This is no small thing. It will take patience, trust, and time. In one form or another these qualities have been lacking in the dialog between the state and the feds. Nongovernmental organizations have also filed lawsuits over the issue and have simultaneously actively opposed the GNEP initiative.

The State of Idaho and the Federal government are trying to figure out how to address a clause in the agreement that could generate a really big cleanup bill. Under the terms of the Settlement Agreement, all of the transuranic waste buried out on the desert must be treated and shipped out of the state of Idaho by 2018. The Department of Energy has asked the Federal District court, which issued the consent decree, to modify the "all" provision. The State of Idaho won a ruling from the District court in May 2006 that says "all" means "all."

In a classic "well, duh!" statement Idaho Attorney General Wasden said, “The State of Idaho maintained that the 1995 agreement was clear and unambiguous and, specifically, that ‘all transuranic waste’ means exactly what it says, all transuranic waste. The court’s decision upheld Idaho’s position.” Despite the ruling, the feds and the state are still talking since neither wants to see the potentially ruinous outcomes of reverting to hardball politics. Idaho could get the waste cleanup but lose out on future nuclear research programs and their economic benefits to the state which are considerable. More on this below.

Perhaps mindful of these negotiations, Idaho Governor C.L. "Butch" Otter said through a spokesman that if the pro-GNEP measure passes the Senate next week that he doesn't have to sign it. That could appear as though the governor is ducking the issue. He might have another reason besides cleanup issues. Idaho voters have a habit of knee jerk reactions to anything new that is nuclear assuming it will french fry the state's famous potatoes right on the vine.

Democrats in Idaho have a tradition of raising money from well-heeled environmentalists in Sun Valley and Boise by referring to the Idaho site as a "nuclear waste dump." The Snake River Alliance, which is based in Boise, refers to GNEP as "still dirty, still dangerous." Playing on the "dump" theme, the Alliance warns that spent nuclear fuel brought to Idaho as part of the GNEP program "could be here for as long as a century."

On the other hand, Otter having looked over one shoulder might want to look over the other. He could start with a review of his campaign contributions from the 2006 election that put him in office. There are a few firms, with interest in GNEP, who could be looking for more support from the governor for a GNEP facility in Idaho. Of course they should also be prepared to be disappointed. According to the Idaho Secretary of State campaign election database, Otter got a total of $12,000 from four nuclear energy contractors via their political action committees or directly. Here is the list.

  • EnergySolutions, Salt Lake City, UT $5,000
  • Areva, Bethesda, MD, $1,000
  • General Electric, Washington, DC $1,000
  • BWXT, Lynchburg, VA, $5,000
Also, keeping those golden french fries in mind, Otter has long standing roots in the potato industry which strongly affects his political outlook. By comparison Otter's Democratic party opponent in the 2006 election, newspaper publisher Jerry Brady, got no campaign contributions from any of the four nuclear energy firms.

Another problem for Otter is that the Idaho nuclear R&D site is definitely not small potatoes when it comes to its current impact on the state's finances. A study by economists at Boise State University released in February shows some huge financial impacts.
  • INL is the third largest employer in Idaho. With 8,452 employees and an annual budget of about $1.23 billion, INL ranks behind only state government and Micron Technology, and is by far the largest employer in eastern Idaho.
  • INL operations annually account for 19,860 jobs in Idaho. The combined direct and secondary economic impacts of INL account for 15,570 jobs in the state. In addition, there are longer-term effects on the economy due to the continued presence of the lab in eastern Idaho, accounting for an additional 4,290 jobs.
  • Fiscal impacts of Idaho state tax revenues by INL and its employees approach $85 million. INL and its employees make payments to the state in the form of personal income, corporate income, sales and other taxes. In total, INL accounts for 3 percent of total Idaho tax revenues.
  • Direct tax payments to the state of Idaho by INL and its employees exceed the cost of state-provided services. The total state budget per capita is $1,442. State tax payments by INL employees for themselves and their families amount to $1,926 per capita.
What it boils down to is that the Idaho Governor has a full plate of hot potatoes dealing with the Department of Energy over cleanup and yet can't ignore the jobs and economic benefits that would be generated by GNEP in his state. Other states, such as South Carolina, have gone all out to show support for the program that could be worth tens of billions over the next several decades.

If Idaho's governor decides the cleanup agreement is more important, he could be tearing up his own checkbook. Is there a way out? Maybe Idaho's politicians will figure out how to have their cleanup agreement changed without looking like they caved in. To do that they will have to get some help from the feds. If these two can't reach an accommodation, South Carolina is waiting with open arms.

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