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.

Wamp says no to GNEP at Oak Ridge

Like the State's civil war volunteers, Wamp doesn't mind drawing a line in the sand

Rep. Zack Wamp, (R-Tn) said March 3rd he's opposed to any proposals that would bring the nation's spent nuclear fuel to Oak Ridge for processing. "I want waste leaving here, not coming here," Wamp said during a brief meeting with the news media at the Y-12 National Security Complex.

"Once we modernized our facilities (in Oak Ridge) and moved away from the Manhattan Project era, we do not want waste. We do not want to process waste. We do not want waste coming in. We want waste leaving Oak Ridge,"

Wamp's opposition to GNEP took some Oak Ridge residents by surprise. According to the Knoxville News Sentinel, Wamp is known as a strong nuclear advocate, and some Oak Ridge officials have suggested that he's taking the anti-GNEP stance because he doesn't want the waste issue "around his neck" if he decides to run for governor. If so he wouldn't be the first candidate for governor to run for cover when it comes to dealing with nuclear waste issues.

Wamp is the ranking Republican on the House Appropriations Committee and might have something to say about funding for GNEP in addition to opposing the placement of its nuclear plants in Tennessee. Why he might leave Congress and run for a state office is another question.

Wamp might not need GNEP to generate high paying nuclear industry jobs. Last January the Washington Post reported the Tennessee Valley Authority will submit applications to build two new nuclear reactors under the government's streamlined licensing process and restart its oldest reactor after a 22-year shutdown at Browns Ferry, TVA officials told the Chattanooga Times Free Press. The public utility also plans to decide by August whether to spend up to $2 billion to complete the unfinished Unit 2 reactor at Watts Bar Nuclear Plant.

The Post noted that Wamp has strong support on the Senate side of the Congress. "Nuclear power is almost the only answer for clean electricity to meet our growing needs," said Sen. Lamar Alexander (R-Tn), who is co-chairman of the TVA Congressional Caucus and a member of the Senate Environment and Public Works Committee. "When I look at all of the options, I think nuclear (energy) is the leading technology." Even better for Wamp, Alexander agrees with him that bringing GNEP nuclear reprocessing plants to Oak Ridge isn't a hot idea with the voters in Tennessee.

According to Business Week, Alexander said the amount of waste coming to Oak Ridge for reprocessing could be limited "as part of the arrangement that is made with the government" if the city is selected. "Oak Ridge or any other site doesn't have to be the site for waste from all over the country," he said. The former Tennessee governor emphasizes he has strong reasons for opposition to GNEP.

"Oak Ridge was burned during the Cold War and before the Cold War by assurances that it was safe to handle dangerous materials, and many people got sick from it. So I think before Oak Ridge takes this step, the community will want to assure itself of exactly what it is getting into."

It should be noted that Alexander supports GNEP, He just doesn't want the program's reprocessing plants in his home state.

What it boils down to is that Wamp and Alexander are OK with new nuclear energy plants being built in Tennessee but they don't want their state to shoulder the burden of the occupational and environmental risks of new nuclear waste processing plants.

Wamp has been an advocate for sick nuclear workers seeking compensation from the government for illnesses connected to their work. He's been a critic of government bureaucracy that has slowed the process of paying these claims. In May 2006 Wamp took the unusual step of testifying before another House Committee to make his point.

None of this means Wamp has a knee jerk opposition to nuclear programs at Oak Ridge. On March 5th he told the news media he is bullish on the Y-12 plant at Oak Ridge. The plant makes uranium fuel for US Navy nuclear powered ships. More colorfully, it describes itself as the “Fort Knox” for highly enriched uranium. It oversees the management and storage of special nuclear materials as weapons are retired from the national stockpile or returned for dismantlement under strategic arms reduction treaties.

It appears that new nuclear energy plants and the safe, long term storage of highly enriched uranium sound a lot more like a sure thing to Zack Wamp than GNEP. With the state's US Senator in the shotgun seat at Wamp's side, it could be the pursuit of GNEP in Tennessee is in for a rough ride.

If nuclear plants orders come, who will build them?

This isn't a baseball diamond in an Iowa cornfield

Areva, the French nuclear energy industry giant, is recovering from several setbacks building a $4 billion reactor in Olkiluto, Finland, which is the first of its kind in Europe in the past 15 years. A series of technical and regulatory problems have cost the firm $700 million euro the Wall Street Journal reports (subscription required). The problems have generated lots of bad press for the nuclear industry.

A Finnish nuclear regulatory group issued a long report on the difficulties Areva has encountered and lays the blame on a lack of know-how and lack of safety discipline. Jukka Laaksonen, director of the agency, said, "you can't play with specifications in the nuclear sector." Behind this is the stark fact that the lack of orders for new nuclear plants has stripped the industry of people who know how to build them.

This is borne out by a statement by Areva's project manager, Philippe Knoche, who said the firm had troubles managing the work of subcontractors many of who have no experience building a nuclear plant. Area's problems are being closely watched in the US and in China where orders for new plants are coming in after decades of no activity. China has just given Areva an order for two new reactors to be built in that country. Knoche's concern is how fast his company can create the expertise it needs to build the 1,600 Mw plant in Finland and others like it in China.

The US Nuclear Regualtory Commission has also taken note of the issue. In an informational notice published February 5th this year, the agency worried aloud about quality assurance in the construction of new nuclear plants. The agency wrote there are several conditions under which major quality problems might recur. These include the following:

A first-time utility with staffs or an architect/engineer, construction manager, or constructors (vendors and fabricators) that have inadequate nuclear design or construction experience;

A very large growth in the number of nuclear power plants being constructed that can overwhelm the industry’s and NRC’s capabilities;

A long delay before nuclear plant construction activities start again,resulting in a dearth of experience in the industry;

Regulatory actions at federal and state levels that undercut quality. The NRC and the nuclear industry need to be aware of the implications for quality that these possibilities hold.

Back in Finland Areva and the nuclear oversight agency say they both are learning some lessons about how to get work done. For its part Area says it is learning to how to have better communication with the regulators. That may help. Now where are those nuclear workers who left to open donut shops 20 years ago?

Videos of Spurgeon visit to Idaho available online

Dennis Spurgeon, DOE assistant secretary for Nuclear Energy, and members of the Nuclear Energy Research Advisory Committee (NERAC) visited Idaho Falls on Tuesday, Feb. 20, and Wednesday, Feb. 21, to attend a NERAC public meeting and the groundbreaking ceremony for Idaho National Laboratory's Center for Advanced Energy Studies (CAES).

At the NERAC public meeting, Spurgeon discussed the U.S. role in the Global Nuclear Energy Partnership (GNEP), a new strategy to demonstrate nuclear fuel recycling technologies. Minutes from the meeting aren't online yet, but five videos taken at his meetings in Idaho are available here as well a transcript. If you want to know what the top guy for nuclear energy in the government is thinking this is it.

US Nuclear plants next stop India

There's a lot of people there who want electricity

The US nuclear industry wants to build plants everywhere. Consider the latest news from New Dehli where a delegation of 38 US nuclear firms met with their counterparts from India this week. The goal is to build nuclear plants there to meet that country's enormous demand for electricity.

India has a population of over one billion people and is expected to top 1.6 billion people by 2050 exceeding
population estimates for China by that time. By comparison population in the US will grow from about 300 million to about 420 million. While the US economy is one of the most energy intensive in the world, the total demand for electricity in China and India will outclass any other nation for the rest of the 21st century. If you are in the business of building 1,000 Mw or bigger nuclear power plants to make electricity, these are the countries where you want to be selling your expertise.

The Hindustan Times
reports that Tim Richards, an executive for General Electric, told a conference on Indo-US nuclear cooperation this week, "We know India's need for electric power." He added there are "huge opportunities" in civilian nuclear cooperation between India and the US. No kidding.

At the same time these meetings were occurring in India, other US nuclear energy executives cautioned their firms can't spread themselves too thin trying to build plants in the US and India. USEC CEO John Welch told an industry trade group,

"In negotiating such agreements, we must remember that the presence of a vibrant US nuclear energy manufacturing and supply infrastructure is essential if we are to successfully influence nuclear energy and non-proliferation policies in other countries."

Readers are reminded that USEC would like to sell uranium fuel for nuclear reactors to plants in the US. According to the firm's investor relations
web page,

USEC Inc. (NYSE:USU) is a leading supplier of enriched uranium fuel for commercial nuclear power plants. USEC operates the only uranium enrichment facility in the United States and supplies more than half of the U.S. market and more than a quarter of the world market. Annual revenues are about $1.6 billion.

It is no surprise that USEC apparently isn't interested in waiting for the rest of the 21st century to sell nuclear fuel to reactor companies. However, others are chasing this market. Companies represented at the meeting in New Dehli included ATK, ConverDyn, EnergySolutions, General Atomics, Lockheed Martin, Northrop Grumman and Westinghouse. Later this month Energy Secretary Samuel Bodman is
scheduled to speak at a March 20-21 conference in New Delhi sponsored by the U.S. Energy Association about investment opportunities in the South Asian power markets.

While the US delegation was exploring new business opportunities abroad, at the same time an industry trade group meeting in Washington, DC,
told the Department of Energy the federal government must implement loan guarantees with favorable terms for construction of new nuclear plants. Up to $9 billion in loan guarantees are on the table.

However, at a House Appropriations Committee hearing this week, Energy secretary Samuel Bodman got a skeptical reception to his request for the $9 billion in loan guarantees. Rep. Tim Ryan (D-Oh) wanted to know why the government was putting all its loan eggs in one energy basket. He said, "My concern is that loan guarantees are too focused on the nuclear industry and not on some of these emerging technologies." This is a common refrain from House Democrats who are now in charge there. They want more money poured into alternative energy sources like solar, wind, and, of course, ethanol, which generates more votes than energy in farm states.

While the fate of the loan guarantees was hung up in Congress, the US Nuclear Regulatory Commission (
NRC) issued a permit for a new nuclear plant to Exelon Corp in terms of location, but did not approve construction of a specific reactor. The permit does not mean Exelon can build a new reactor at the site of its existing 1,043-megawatt Clinton Power Station, about 160 miles southwest of Chicago. What NRC approved is an "early site permit" for a new reactor at the Clinton site, an environmental review that clears the site for use as a nuclear reactor for 20 years. Exelon still has to go through the lengthy and expensive process of applying for a construction and operating license for a new reactor if it decides to build one.

The NRC is expected to make a similar decision in the next few weeks on an
Entergy Corp request for an additional reactor at its Grand Gulf site in Mississippi.

All this activity has finally captured some interest in California which has a law on the books that bans new construction of nuclear plants. Assemblyman Chuck DeVore
introduced legislation that would repeal the ban citing the need to cut greenhouse gas emissions. However, the big electricity producers in California said they aren't ready to go to the public with a request to build nuclear plants.

"One of them asked me not to do it," DeVore said. "They said 'We're not ready for that fight yet.' I think the time is right. I don't see how we make our numbers (reducing greenhouse gases) without nuclear being a sizeable component."

California's big three investor-owned utilities are Pacific Gas & Electric Co., a subsidiary of PG&E Corp., Southern California Edison, a subsidiary of Edison International, and San Diego Gas & Electric Co., a subsidiary of Sempra Energy.

PG&E CEO Peter Darbee said his company would welcome a partner to invest in nuclear generation outside of California. Maybe he should try India?