Saturday, March 24, 2007

Bodman curries favor on India trip

Carrot & Sticks Abound During Three Day Journey

As expected Samuel Bodman, the US Energy Secretary, has carried some heavy water while visiting India this week. He lodged formal objections to a proposed gas pipeline between India and Iran. He also told critics of U.S. policies regarding nuclear fuel reprocessing he was offering that country an opportunity they should not dismiss.

Reuters reports that Bodman objected to cooperation between India, Iran and other nations on developing Tehran's gas and oil assets would help the Islamic nation's nuclear weapons.

"There have been conversations ... and if that is allowed to go forward, in our judgment, this will contribute to development of nuclear weapons," he told reporters in Mumbai at the end of a three-day visit to India.

Relations between the U.S. and India were boosted by a civilian nuclear cooperation agreement in 2005. Bodman's objections to the gas pipeline got lots of press in India, but there has been little notice of it in the U.S. news media.

Bodman also told his hosts in India the pipeline issue would not materially affect US relations with that country or prospects for US firms to build energy projects there. He said, "We are focusing on developing civil nuclear cooperation. That is my primary focus (of visiting India). That is why I came here."

Bodman visited the two nuclear reactors at the Tarapur plant, some 100 km south of Mumbai, and held round table discussions on Indo-US civilian nuclear cooperation with the members of the Federation of Indian Chambers of Commerce and Industry.

On the nonproliferation issue the United States and India agreed a year ago that the U.S. would supply the Indians with civilian nuclear technology, but the deal still faces significant obstacles.

The agreement would clear the way for U.S. sales of nuclear reactors and fuel to India for the first time in more than three decades, and India needs the technology. The country is faced with a critical shortage of electricity at a time when its economy is growing by about nine percent a year.

U.S. diplomatic sources say an influential group of Indian nuclear scientists and leftist politicians does not like some of the terms the U.S. insists on. These include no reprocessing of spent fuel by India, and no diversion of materials supplied by the United States to military use. The critics say the U.S. terms infringe on Indian sovereignty.

Those objections did not cut any ice with the Energy Secretary who stuck to his rhetorical guns.
U.S. Energy Secretary Samuel Bodman told Indian business leaders Tuesday that the critics are wrong.

"This should not be viewed as a threat in any way to India's sovereignty or its national [nuclear] program," said Samuel Bodman. "The opposite is true. It is a major opportunity."

Translation - this is an carrot. Any mention of a "stick" is left unspoken. Clearly Bodman want's the nuclear deal with India to work.


Nuclear gets new look from environmentalists

Global warming drives new ideas against old positions

USA Today reports some environmental groups are rethinking their historical hard line opposition to nuclear energy. With global warming a rising concern, some environmentalists are rethinking nuclear power because it emits zero greenhouse gases.

"You can't just write nuclear off," says Judi Greenwald, director of innovative solutions with the Pew Center on Global Climate Change, an environmental research and advocacy group. "I think everybody feels you have to at least look again" at nuclear power."

Not everyone is convinced this is a good idea. USA Today reports some environmentalists aren't buying it. "We remain steadfastly opposed to nuclear power," Sierra Club spokesman Josh Dorner said. "We're not willing to believe they are as safe as the industry is willing to portray them." Greenpeace USA also says it finds nuclear power unacceptable.

Besides Pew, at least three leading environmental organizations — Union of Concerned Scientists, Natural Resources Defense Council, and Environmental Defense — say they are willing to consider nuclear power as part of a long-term solution to global warming.

These groups are key thought and opinion leaders in shaping public perceptions of energy policy. Let's hope the government and industry are talking with them.

DOE Finally Gets Its FY2007 Money

The federal government twiddled its thumbs for six months waiting for cash from Congress

The Department of Energy finally was able to release its spending plan for FY2007 only six months after the start of the federal fiscal year. The $23.5 billion appropriation was signed off by President Bush on February 15th. DOE had 30 days to submit a detailed spending plan to Congress and it was released last week. The delay was caused by Congress which was unable to pass any spending bills and put the entire government on a continuing resolution that effectively strangled any new energy R&D. Here are a few nuclear energy highlights.

  • Nuclear Power 2010 program gets $80 million up about $16M from the prior year. The increase will support DOE's work with industry on combined construction and operating licenses for Generation III plants.

  • The Advanced Fuel Cycle Initiative will get $167.5M a major increase from $120M the prior year. The money supports DOE's work on GNEP and drives towards major siting and technology decisions scheduled for June 2008. DOE says it will "aggressively" seek to engage industry in the program.

  • DOE gets operating funds to support $4B in loan guarantees. Now they just have to hire people who know how to operate a program.
You have to wonder how industry will react to the prospect of one part of the government "aggressively" pursuing streamlined regulatory processes while another part, Congress, forces the agency to sit on it hands for half a year?

Friday, March 23, 2007

Nuclear fuel shortages loom soon

Limited Supplies Could Thwart New Nuclear Plants

Limited supplies of fuel for nuclear power plants may thwart the renewed and growing interest in nuclear energy in the United States and other nations, says an MIT expert on the industry.

According to the MIT study, over the past 20 years, safety concerns dampened all aspects of development of nuclear energy: No new reactors were ordered and there was investment neither in new uranium mines nor in building facilities to produce fuel for existing reactors. Instead, the industry lived off commercial and government inventories, which are now nearly gone. Worldwide, uranium production meets only about 65 percent of current reactor requirements.

That shortage of uranium and of processing facilities worldwide leaves a gap between the potential increase in demand for nuclear energy and the ability to supply fuel for it, said Thomas Neff, a research affiliate at MIT's Center for International Studies.

Further, China, India and even Russia have plans for massive deployments of nuclear power and are trying to lock up supplies from countries on which the United States has traditionally relied. As a result, the United States could be the "last one to buy, and it could pay the highest prices, if it can get uranium at all," Neff said. "The take-home message is that if we're going to increase use of nuclear power, we need massive new investments in capacity to mine uranium and facilities to process it."

Sunday, March 18, 2007

Sec. Bodman to India for nuclear energy talks

A California Congressman has extra baggage for the trip

US Energy Secretary Samuel Bodman is off to India this week to follow-up on a recent trade mission of several dozen US energy companies who want to build nuclear and coal power plants in that country. His boat could be rocked by some waves Congress is making over a proposed gas pipeline deal India is working on with Iran.

Tom Lantos (D-CA) introduced the Iran Counter-proliferation Act (HR 1400) in the Congress last week which could make things a lot more difficult for Bodman. The bill will automatically sanction countries which have oil or gas deals with Iran.

According to a fact sheet released by the House Foreign Relations Committee, the bill would prohibit nuclear cooperation between the United States and any country that provides nuclear assistance to Iran. It would increase economic pressure on Iran by expanding the types of investment subject to sanctions, severely limiting the export of U.S. items to Iran, ending all imports from Iran, and preventing U.S. subsidiaries of foreign oil companies that invest in Iran’s oil sector from receiving U.S. tax benefits for oil and gas exploration.

Last year the Congressional Research Service (CRS) wrote that "India’s growing energy needs and its relatively benign view of Iran’s intentions will likely cause policy differences between New Delhi and Washington." They were right. The Indian political establishment is not happy about the proposed legislation. However, this isn't likely to be the Secretary's number one headache as the gas pipeline might never be built.

The really big problem Bodman will have to face is that India has asserted its right to reprocessing of spent nuclear fuel from any reactors in that country regardless of who builds them. The US position is that nuclear cooperation with India does not involve helping that country with its nuclear weapons programs. U.S. has agreed to help India advance nuclear technology as long as the country commits to certain nonproliferation principles that limit the spread of dangerous nuclear materials.

Once he's tackled those issues, according to Reuters, Sec. Bodman will meet Prime Minister Manmohan Singh and his counterparts from the Ministry of Power, Ministry of Petroleum and Natural Gas before addressing an energy conference on March 21.

On March 22, he talks with venture capitalists on clean energy technology, and will meet with the head of India's Atomic Energy Commission to discuss a deal that would allow New Delhi to buy U.S. nuclear reactors and fuel for the first time in 30 years.

Reuters also reports U.S. companies looking to build any type of power plant in India are cautious because of the experience with the Dabhol power plant, a $3 billion project that was supposed to attract foreign investors in the 1990s.

The 2,000-megawatt fossil plant near Mumbai, pursued by Enron Corp., Bechtel Corp. and General Electric Co., was shutdown in 2001 after its sole customer, the state-run Maharashtra State Electricity Board, renegotiated the output deal at levels too low for the developers to make a profit. The Secretary will likely be asking for assurances the Indian government won't pull the rug out from under US companies in new deals.

Have a nice trip Mr. Secretary. Take some aspirin. You're going to need it.