Saturday, March 3, 2007

China nuclear deal spurs demand for engineers

Nuclear programs ramp up at Pittsburgh area colleges

Nuclear engineering education is in the limelight and poised for rapid growth fueled by the $5.3 billion deal between China and Westinghouse inked in December. Universities in the Pittsburgh, PA, area are ramping up their class offerings. Jobs for new nuclear engineers with undergradaute degrees can pay $70-90,000 year.

At the same time Dale Klein, Chairman of the Nuclear Regulatory Commission said in a speech last September that the total supply of nuclear workers is unlikely to keep up with demand. The NRC expects nearly a third of all nuclear engineers to be eligible to retire by 2009. Despite these projected changes, the NRC reports 15 companies or consortia will apply to the agency for combined operating licenses for a total of 24 reactors.

Which raises the question why the Department of Energy has zeroed out its grants to universities for nuclear engineering programs from about $27 million in 2006 to nothing in 2008. In its budget request to Congress released last month DOE said,

Enrollment target levels of the University Reactor Infrastructure and Education Assistance program have been met and the program is no longer considered essential to encourage students to enter into nuclear related disciplines.

It seems strange that DOE, which itself is a major employer of nuclear engineers at its national laboratories, would pull the pin on funding for university programs for nuclear engineers and scientists. This may mean the funding for the new workforce is up to industry.

Universities are not standing around waiting for a government handout. Pennsylvania University says it has double digit growth in nuclear education program enrollment in the past few years. The University of Pittsburgh has started a new program for nuclear engineers. Carnegie Mellon University, which shut down its nuclear engineering program in 1983, now says it will offer classes in robotics, software, and materials which would lead to degrees valuable to the nuclear field. Like all the other universities in the Pittsburgh region, CM is talking to Westinghouse about its need for engineers to build the four reactors to China.

Westinghouse says the China deal will produce 5,000 new jobs. The firm, which is located in Monroeville, PA, just east of downtown Pittsburgh, has all the area's universities in discussions about its needs for training new nuclear workers.

About 30 universities offer nuclear engineering education degrees. Some are moving more quickly to get their students into the field. The University of Pittsburgh now offers a certificate program. Academic officials there were stunned when 70 undergraduate students signed up the first time the program was offered. Prospective engineers take five required classes on nuclear engineering topics inside a traditional degree program.

Idaho State University (ISU) in Pocatello, ID, offers a post undergradaute certificate in nuclear engineering as well as a masters degree in nuclear engineering. The ISU Certificate in Applied Nuclear Energy is granted upon completion of 14 credit hours of class work, consisting of nine credit hours of required courses, a 3-credit elective course and participation in two semesters of a one-credit hour weekly graduate seminar. Thesis research is not required for the certificate.

One professor there said last week in Idaho Falls at a meeting of the Idaho Section of the American Nuclear Society that none of the students in the ISU program will have any trouble finding a job.

Sunday, February 25, 2007

AEHI says Idaho nuclear plant will make ethanol

What about a toaster oven that turns lead into gold?

It is hard to know which way to go with a series of press announcements by a Virginia company with stock that trades for under a dollar, has no investors, that we know of, capable of coming up with a couple of billion dollars, and wants to build a nuclear power plant along the banks of the Snake River south of Mountain Home, Idaho.

Without the usual technical and business measures of credibility that come with a company in the business of building a nuclear power plant, it remains to review AEHI's recent press releases to see what's up.

AEHI (AEHI) says it is plans to construct the United States' first multi-generation energy facility. The facility, a proposed Idaho nuclear power plant, will be designed to use the plant's excess heat to produce ethanol and methane in addition to electricity. AEHI is listed on NEI's scorecard of nuclear power plants being planned, but that's all. It has not identified its investors nor announced plans to obtain a license for the plant from the Nuclear Regulator Commission.

Alternate Energy Holdings says it has been in discussion with AREVA, regarding its EPR reactor design. The EPR is a 1,600 Megawatt class Pressurized Water Reactor (PWR) The first EPR is currently under construction in Finland for the Finnish electricity utility Teollisuuden Voima Oy (TVO) and is scheduled to begin commercial operation in 2009.

This is a significant announcement. It identifies the nuclear technology AEHI will seek to license for the Idaho plant. It should also be noted AREVA's design is huge by comparison to the two NRC approved US nuclear plants designs. Both US designs weigh in at about two-thirds of the generating capacity of the AREVA plant.

Why would AEHI go with a design for a nuclear plant in Idaho the NRC has not licensed when there are two NRC approved designs available which are being considered by just about every other utility in the US? The cost differential is staggering perhaps on the order of $50-100 million.

One reason could be, and it is a long shot, AREVA needs someone to champion their design to the NRC and to the US nuclear utilities. Is AEHI a stalking horse for AREVA? Is that possible? Why would AREVA get involved with a penny stock outfit? Why wouldn't AREVA go with a consortium of established utilities like NuStart to spread the costs and risks of NRC licensing for their new design and achieve credibility for its design with customer buy-in as a benefit? What would AREVA gain by a go-it-alone strategy with a single plant?

AEHI company also announced its new membership in the Nuclear Energy Institute, Inc (NEI). NEI is the policy organization of the nuclear energy industry. AEHI believes that membership in NEI will prove to be an asset to the company. Maybe there will be a two-way dialog during which time the industry folks at NEI will ask AEHI to answer some tough questions about their plans for nuclear energy in Idaho.

Note that in the Star Trek movie "First Contact" (1996) fictional scientist Zefram Cochrane builds a space warp drive way out in the woods of Montana and teaches the Vulcans, an alien space faring species, about Tequila and rock 'n roll. Why can't reality follow art? If people can make movies about building spaceships with warp drives in Montana, who is to say that others cannot pursue visions of nuclear plants in Idaho?

Now about that toaster oven?

Diplomatic spin up on Iran nuclear crisis

Iran says its nuclear program is a runaway train

The Associated Press reports that the noise level is getting a lot louder over Iran's nuclear ambitions. In one of his more alarming rhetorical flourishes, Iran's president Mahmoud Ahmadinejad said his nation would press ahead with uranium enrichment despite the prospect of tougher UN Security Council economic sanctions.

"The train of the Iranian nation is without brakes or a rear gear . . . we threw them away sometime ago."

It appears to be lost on the Iranian president that using that kind of analogy can have mixed results. Pop star Britney Spears is a runaway train. It's a good analogy for tabloid trash. Nuclear programs that get tagged with this label attract sustained attention from very serious people like nobody's business.

US, European, Russian, and Chinese diplomats will meet in London starting Monday 2/26 to find a way to stop Iran's self-described runaway nuclear train. The cost to Iran could be as much as $20 billion in export credits. These are credits the country needs to expand its oil exports. Without them, and with rising domestic consumption, the country could find itself caught between falling export revenues and rising prices at home for fuel, gasoline, and gas. Domestic unrest that might follow such a development might destabilize the government. Iran's bacon, or its gasoline, might be saved in the near-term since additional tougher measures may be resisted by Russia and China which use the prospect of cooperation on sanctions against Iran crisis to gain ground on other issues with the US and European countries.

This move may backfire. The Iranians may now be taking their friends on Moscow for granted. According to the Associated Press, Iran is turning into a deabeat when it comes to paying the Russians for nuclear technologies, know how, and plant components. Russia's Federal Nuclear Power Agency said that Iran has made no payments in February, and paid only a small share of what was due in January.

The Associated Press reports that Iran was supposed to pay Russia US$25 million a month for construction works at the Bushehr nuclear power plant in southern Iran. According to these reports Iran paid only $5 million. Vladimir Pavlov, a top official at Russia's state Atomstroiexport company in charge of the Bushehr contract, said Iran needs to pay up, and fast, or the Russians might freeze work on the plant. Iran's response is to call the Russian bluff saying it's all a plot by the western powers to force the Soviets to buckle under and support UN sanctions.

None of this has stoppped the US from continuing its sable rattling over Iran's defiant nuclear politics. US Vice President Dick Cheney, traveling in Australia, warned that "all options" are on the table if Iran continues to defy UN-led efforts to end Tehran's nuclear ambitions, leaving the door open to military action. In Jerusalem, Ephraim Sneh, Israel's deputy defense minister, denied a news report that Israel was talking with the United States about possibly using Iraqi airspace if Israel decides to attack Iranian nuclear sites. Britain's Daily Telegraph, said Israel had sought use of an air corridor through Iraq from the Pentagon.

Just to make things even more complicated, the International Atomic Energy Agency dismissed some of the "intelligence" it had received from the US on Iran's nuclear program. The IAEA officials said the CIA and other Western spy services have provided information to the agency since 2002, when Iran's secret nuclear program was exposed. IAEA said none of the tips about supposed secret weapons sites provided clear evidence that the Islamic republic is developing nuclear weapons at this time.

"Since 2002, pretty much all the intelligence that's come to us has proved to be wrong," said a senior diplomat at the atomic energy agency.

That's strong stuff, but US intelligence on Iran's nuclear program is complicated by a lack of reliable sources. The situation is wide open for false leads and cases of disinformation. What the US is looking for are two things. The first is evidence Iran is building a nuclear bomb. The second is evidence Iran has the capability to put a nuclear payload on a missile and shoot it accurately at a target. Just to make the point they might be headed in that direction, Iran launched a missile on Feb 25th which has a range of 1,250 miles. If you want to know who is in Iran's sights, get out a copy of Google Earth and draw a circle with that range around Tehran. As the crow flies that's just enough range to hit Tel Aviv. No wonder the Israelis and the US are nervous.

Postscript 2/27/07 According to several sources Iran's missile was a suborbital rocket with a range of 300 miles.

It's not a horse race without a starting bell

Are new nuclear plants stuck at post time?

In the hit movie Seabiscuit, a trainer figures out how to get the the horse to run faster from the starting post. He works the horse before the race with a borrowed fire house alarm bell so the horse will go like blazes when the real race begins. The nuclear industry is waiting for the starting bell to ring from Congress and the Department of Energy in the form of billions in loan guarantees. The race is to get new plants licensed to qualify for the government's financial good graces.

Investors, who are the bettors in this horse race, will not line up without them. In the meantime the Nuclear Energy Institute counts 15 companies with plans to submit license applications for 19 plants between now and 2009. The entrance fee for a license from the Nuclear Regulatory Commission is $50 million. Of the 19 plants on the list, just eight are likely to get started with their paperwork in 2007. The prize at the finish line is a purse of $8 billion in federal government loan guarantees if the terms and conditions are right. For now it's a muddy track with risks everywhere.

Getting into the race is no simple matter. A decision by a utility to file for a construction and operating license is a commitment of three-to-four years. Long lead time procurement of major components and construction, which can start in the middle of the licensing process, eats up another three-to-four years. The cost is billions of dollars with no cash flow over at least seven years, These decisions are unlikely to occur unless a utility can start charging its rate payers for these costs when the process begins and all the loans, not just construction costs, are guaranteed by the federal government. Once the plant starts generating electricity everyone breathes a lot easier.

Investors have plenty to worry about in terms of the risks of runaway costs. Like a horse that loses its jockey in a race the price a new plant can get out of control and there is almost no way to stop the process short of drastic action. New plants are expected to cost $3-4 billion each over a period of about seven years. However, the Texas Comanche Peak power plant took 20 years to build. The original cost estimate was just under $1 bilion, but the final tab was $11 billion. Environmental and alternative energy groups, continue to have a field day with these numbers. They also point to the financial meltdown that occured with the Washington State Public Power Supply (WHPPS).

Despite this history Dallas-based TXU Corp. says it plans to build as many as six new reactors at three sites. Complicating matters is the fact the company is the subject of a buyout proposal which if completed would cancel the firm's plans for 11 new coal-fired power plants. The only bet its new owners may have left are TXU's planned nuclear plants.

Despite the risks plenty of people have horses in the stables and are checking on post time. A consortium called NuStart Energy Development is working on two plant applications that are likely to be submitted by Fall 2007. NuStart's members control nearly half of the current nuclear electric capacity today.

Most of the new nuclear power plant construction will likely take place in the South. California state law prohibits new plants until there is a permanent solution to spent nuclear fuel disposal. Almost all applications will be for locations adjacent to existing nuclear plants. Two exceptions to the emphasis on new plants in the South are Constellation Energy's plans for two sites at its Calvert Cliffs plant and for one at the Nine Mile plant in upstate New York.

All this activity is based on an assumption by the industry that the Department of Energy will develop a workable loan guarantee program. Right now the industry isn't happy with the government's plans. There's plenty of hay to be made once that's worked out, but until then, all the horse owners, jockeys, and trainers can do is shovel money into the licensing process and hope they aren't going through all those oats for nothing.