Saturday, July 7, 2007

Toshiba sells stake in Westinghouse to Kazakhstan

After paying a premium price for Westinghouse, Toshiba is laying off some of the action

Toshiba, Westinghouse Electric Co.'s parent company, said this week it is in negotiations to sell a 10 percent stake in the Monroeville-based firm to a state-run energy company in Kazakhstan.

Nikkei English News, a Japanese newspaper, and other Japanese wire services, report that Kazatomprom will pay Toshiba Corp. $486.4 million for the interest in Westinghouse. The deal would give Toshiba access to Kazakhstan's uranium at a time when increased demand has tripled prices of the nuclear fuel ingredient in the past year. It would give Kazatomprom access to Toshiba's uranium processing technology and its sales channels.

The deal would allow Toshiba to off-load some its financial burden from its October 2006 purchase of the nuclear reactor firm. Toshiba acquired its 77 percent stake for $4.16 billion from British Nuclear Fuels Ltd. Other partners are The Shaw Group Inc. of Baton Rouge, La., which paid $1.08 billion for 20 percent of Westinghouse, and Japanese machine maker I-H Heavy Industries Co., which purchased the remaining 3 percent for $162 million.

Toshiba and its partners reportedly paid approximately $5.4B for Westinghouse in January 2006, far more than other bidders. Other bidders for Westinghouse included rival General Electric Corp., which had submitted a joint bid with Japan's Hitachi worth about $3.5 billion. Mitsubishi Heavy Industries had offered more than $2.5 billion in summer 2005.

In December 2006 Toshiba saw the first prospects of long-term returns on the premium price it paid when China placed orders with Westinghouse for four new nuclear reactors in a deal which is estimated to be worth at least $5B and as much as $8B. China also placed orders for two more reactors with AREVA a short time later.

Julian Steyn, president of Washington-based nuclear fuel consulting firm Energy Resources International, told the Pittsburgh press the deal makes sense for Kazakhstan, which is on the path to become one of the world's top producer of uranium by 2012. It is No. 3, after Canada and Australia.

"I haven't heard of this deal, but it's not unreasonable," Steyn said. "Kazakhstan is going to be reeling in an awful lot of money from uranium, and they have to think about investments."

The spot price for uranium is soaring with a posted amount in late June of $135/lb. Long-term contracts have much lower prices, but when they come up for renewal the price will likely increase.

Will a uranium cartel follow in OPEC's footsteps?

The Uranium Information Center notes Kazakhstan has 15% of the world's uranium resources and an expanding mining sector, aiming for 15,000 tU annual production by 2010. According to the CIA Fact Book, the country has a land-locked territory in central Asia about four times the size of Texas and a sparse population estimated to be about 15M people.

The US Embassy in Kazakhstan reports the country's human rights record remains poor and said the strongman government of President Nursultan Nazarbayev severely limited citizens’ right to change their government and democratic institutions remained weak. The Embassy says the government continued to restrict freedom of the press, and there were instances of government harassment of independent media. It adds the government continued to use arbitrary arrest and detention and selectively prosecute political opponents using prolonged detention as a coercive measure.

Countries like Kazakhstan with vast uranium reserves may become world players in the energy markets of the 21st century much like OPEC nations did in the second half of the 20th century. "Petropolitics" appears to have done little to advance democratic values or human rights. It is worth asking whether uranium politics may, in some cases, follow a similar course? A case in point is Thomas Friedman, a New York Times columnist, reports that the price of oil and the pace of freedom always move in opposite directions. He wrote in Foreign Policy Magazine in June 2006, "It’s the First Law of Petropolitics, and it may be the axiom to explain our age." Perhaps Mr. Friedman should cast his reporter's eye on uranium politics and tell us what he sees?

Think tank reports proliferate like lily pads

Europe mulls the risks, benefits of nuclear energy

At the current rate, if the proliferation of think tank studies on the future of nuclear energy is to be compared to the pace of lily pads marching across the surface of a pond, then by day 16 or 17, the earth will be covered with the title sheets of these studies, same as the pond with plants.

Here are two of the latest. The first is a sober minded review of criteria for go/no go decisions to build a nuclear plant. It's probably a good read for utility executives, state regulatory bodies, surely the folks at the NRC know this stuff, but an update about thinking in other countries never hurts.

If you are more of a generalist, or a journalist, and want something to put you to sleep on a transatlantic flight, this might be the book for you. Maybe the authors can put together a 'Dummies" version or as a glossy paperback and peddle it to politicians. Would they read it? Pro-nuclear groups might want to do some Powerpoint briefings on it for use in nuclear plant public hearings. The original report is only 88 pages so that's probably a worthwhile task for a hot Saturday afternoon if you are inside escaping from record heat as we are here in the rocky mountain west.

The OECD press release is mercifully short so I'm just going to run it in full (below).

The Oxford Research Group (ORG) makes no claims to be dispassionate. It doesn't like nuclear power as a solution to global warming plus it thinks the risks from terrorist attacks and proliferation of plutonium outweigh other benefits. One point they make is that a single terrorist attack, even if unsuccessful, against a nuclear power plant would bring all new construction to a halt. That's questionable even if the plausibility of a suicide attack against a plant is well within the realm of bona fide security threats.

Overall, the group comes down hard on security risks associated with building nuclear power plants. A link (PDF file) to a 24-page executive summary is cited below along with the text of their press release. Clearly, ORG has hit more than a few nerves judging by the responses.

The Nuclear Energy Institute, based in Washington, DC, takes exception to the Oxford study in a blog post. NEI is more-or-less fed up with reports like the ORG's, which is the second in a series. However, readers are reminded that blogs exist so that impatience can be vented in a constructive manner. NEI does quite well at this.

It writes, "No doubt we need to make sure our nuclear facilities remain safe and secure. But to dismiss a technology that already provides substantial benefits to the world would be irresponsible -- especially if that decision would do nothing to promote peace and stability in the world."

Wait. There's more. The World Nuclear Association stepped out of its usual mode of using 'diplomatic speak' to offer this comment about ORG's report from John Ritch, the group's Director.

He said: "The bald conclusion that nuclear power should be taken out of the world energy mix because Congo may be ill-suited to use it will come as a surprise to serious planners in scores of major governments."

Ritch goes on to assert that the nuclear industry could indeed produce new reactors at a rate in excess of that the ORG authors specify. He says. "Whereas the authors dismiss as a pipe dream the idea that the world's nations might somehow combine to build one reactor a week, the future expansion of nuclear power will probably be even more rapid. On a per-capita basis, if the OECD countries, plus China and India, were to build at France's 1980s start-up rate, the result would be five reactors per week rather than one." He labeled the report "a grab bag of fatuities that blends ignorance and ideology in equal measure."

Now there's a guy who says what he means to say. A we know ignorance and ideology are a dangerous combination when mixed together. There are lots of examples in history which I've leave to the reader to supply.

For the chemists among the readership, it's kind of like dropping a lump of sodium into a beaker of water. It rearranges a lot of atoms with explosive force. Translating to a political metaphor, maybe that's ORG's objective with the report?

In the famous sequence in Shakespeare's "The Tempest," one of the characters claims he can call huge creatures from the sea. The other, an obvious skeptic, responds, "Yes, but will they answer?" ORG is getting an answer, but it may not be the one they expect.

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Here's the full text and citation of the OECD press release.

New NEA study explores the risks and benefits of nuclear energy

With the publication of Risks and Benefits of Nuclear Energy, the OECD Nuclear Energy Agency (NEA) provides a useful new aid for decision makers. The study brings together authoritative information and illustrative data on how the risks and benefits of nuclear energy might be assessed in the light of sustainable development goals. Drawing on ongoing research into nuclear and non-nuclear electricity generation, the authors identify qualitative and where feasible, quantitative measures of the risks and benefits associated with this technology.

Based on an extensive number of energy system assessments and sustainable development measurements, the study identifies indicators for measuring the economic, environmental and social dimensions that constitute a sustainable development approach. The indicators were chosen for their scientific robustness, functional relevance and ease with which they could be applied. Identified in the study as meeting these criteria were such economic considerations as generation costs, the technology’s sensitivity to fuel price fluctuations and its use of energy and non-energetic resources. Greenhouse gas emissions, land use and the risk of severe accidents are some of the environmental factors highlighted. Whilst social factors are often difficult to quantify, job creation, human health impacts and proliferation risks also met the study’s criteria for inclusion.

Decision-aiding tools such as external cost valuation and multi-criteria decision analysis (MCDA) are detailed in the study, along with illustrative examples of their application. The external costs of energy are those that are imposed on society and the environment, but which are not included in the cost to producers and consumers. The MCDA approach can be used to facilitate a more holistic representation of social criteria and improve the quality and transparency of the debate between policy makers and other stakeholders. Used in tandem or separately, these tools can help decision makers to interpret the often complex results of comparative assessment studies.

The concept of sustainable development is well-established and its relevance to policy making in the energy sector is broadly recognised. However, its practical application in implementing sustainable energy mixes has been limited to date. The challenge for policy makers is to balance the interactions between the three dimensions of sustainable development and when necessary, make trade-offs between them. Risks and Benefits of Nuclear Energy is a tool to help policy makers meet that challenge.

Risks and Benefits of Nuclear Energy
OECD, Paris, 2007
ISBN 978-92-64-03551-5. Price: €24, £17, US$29, ¥3 300. 88 pages.

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Here's the full text of the ORG press release

Too Hot to Handle? The Future of Civil Nuclear Power Frank Barnaby and James Kemp, with a foreword by David Howarth MP, July 2007

Supporters of nuclear power claim that the security risks can be managed. However, this briefing paper clearly shows that a worldwide nuclear renaissance is beyond the capacity of the nuclear industry to deliver and would stretch to breaking point the capacity of the International Atomic Energy Agency (IAEA) to monitor and safeguard civil nuclear power.

Even a failed terrorist attack on one of the first new builds would most probably cause subsequent new build to halt in many countries. If this happened, the authors argue that governments would need to again review energy policy - minus civil nuclear power - further delaying progress towards a sustainable and secure energy policy and possibly causing the UK and other countries to miss the window of opportunity to tackle climate change.

This briefing paper is one of a series of reports and fact sheets published as part of ORG's Secure energy project.

Friday, July 6, 2007

Texas plans to keep the lights on with new nuclear plants

The nuclear industry eyes six new reactors

According to a comprehensive article in the Dallas Morning News by reporter Elizabeth Souder, the future of the nuclear industry may get a jump start in Texas. The state has four nuclear reactors in operation today and six more are planned to be operational by 2015.

According to the Dallas Morning News article, here's a quick checklist of what's on the drawing boards.

  • NRG Energy wants to build two reactors at the existing South Texas Project (STP). The new reactors could be generating electricity by 2015. This is the only planned plant in Texas that has signed up to use a reactor design already certified by the NRC.

  • TXU has two reactors at its Commanche Peak site. The firm would like to double its capacity by building two new reactors using designs from Mitsubishi which have not yet been certified by the NRC.

  • Amarillo Power and Excelon Energy want to build new nuclear plants at brand new locations. These "greenfield" sites are a break from other plans nationally which put new reactors along side existing plants.

Planning for new nuclear plants includes an aggressive hunt for investors. They in turn are looking for insurance that the plants will be built on time and within budget. The prospect of loan guarantees from the US federal government remain uncertain with both regulatory and legislative decisions still in the future about how much of investors' risks the guarantees will cover and whether the federal government will offer them at all. A House Appropriations Committee bill for 2008 funding zeros out money for the guarantees.

With these issues in mind, Texas nuclear plant operators are turning to Japan as a source of investment. In a potentially risky move they may ask the Japan Bank for International Cooperation for loans. The bank may refuse because its charter targets loans for Japanese exports to developing nations. For their part the Japanese are ready to build as soon as they get the financial green light. Their construction experts have developed a modular method of putting up nuclear plants that cuts years off the time it takes to complete the facility.

On June 27th Reuters and other wire services reported that Toshiba claimed to have won the contract to build two advanced boiling water reactors for NRG in Houston, TX. Official confirmation is reportedly in progress.

A key milestone in the development of nuclear energy is a landmark agreement between a national environmental group and the Wall Street Investors who bought TXU in winter 2007. Environmental Defense and Kohlberg Kravis Roberts (KKR) agreed that TXU would permanently withdraw the permit applications for eight of TXU's 11 coal plants. The states still needs energy and this agreement opened the door to the nuclear option which does not emit greenhouse gases.

Not everyone in Texas is happy about the prospects for new nuclear plants. In a particularly memorable sound bite, a local environmental organization said this. Tom Smith, of Public Citizen in Austin, TX, told the Dallas Morning News in June, "When you are looking at coal plants vs. nukes, it's sort of like quitting cigarettes and taking up crack."

Organized opposition by environmental groups in Texas hasn't stopped investors from taking note of the state's new nuclear energy construction plans. Forbes puts Texas at the top of its list of the states most likely to build new nuclear plants. Political leaders in Texas are lining up to support the new nuclear plants. Houston Mayor Bill White and Dallas Mayor Laura Miller were opposed to TXU's coal plants, but support the utility's nuclear plans because they will help lower greenhouse gases. Plus, if the coal plants aren't going to be built, something has to be put in its place to keep the lights on in the two biggest cities in Texas. The electricity isn't going to come from someplace else because Texas, as in many other matters, is an independent player in the national grid.

And finally, thinking ahead NRG is considering a partnership with Texas University to train nuclear plant operators. College students in engineering programs take note. If you want a job in the nuclear industry, head for Texas because that's where the industry is lighting up.

Monday, July 2, 2007

Nonproliferation, MOX plant win in Senate

GNEP slashed in Senate Appropriations Subcommittee vote

The Senate subcommittee on energy and water voted out a bill on June 28th. Here's a few quick nuke notes.

Global Nuclear Energy Partnership

Last week, the Senate Appropriations Committee's FY2008 Energy and Water Development bill called for $242 million for GNEP $153 million below the budget request. The Senate's bill directs DOE to focus less on commercial deployment of the advanced reactors and spent fuel reprocessing facilities, and to put more effort toward demonstrating the technical feasibility as well as a proven safety record.

The bill also directs the Department to stop work on a new Advanced Fuel Cycle Facility and use the funding to invest it into the existing laboratory capabilities. Within the available funds, $23 million has been directed to upgrade the hot cells at Los Alamos.

Nonproliferation & MOX

The continuing effort to control nuclear weapons is a big winner in the Senate subcommittee vote. That's good news. As these programs meet their milestones we will all sleep more soundly.

The Committee continues to make global nuclear nonproliferation a top priority. The Committee mark provides $1.8 billion toward this effort, an increase of $200 million over the request and $54 million over current year levels.

The bill provides $390.8 million to support construction of the U.S. MOX facility at the Savannah River Site (SRS).

The committee bill expressed its continued frustration that the Russian government has failed to fulfill the terms of the bilateral Plutonium Management and Disposition Agreement. The bill rescinds $57 million in previously appropriated funding for the Russian disposal effort. These funds will be used to accelerate the construction of the U.S. MOX facility. The Committee said that $151 million remains available to support the bilateral initiative.

The bill also provides $50 million to initiate creation of an international uranium fuel bank within the International Atomic Energy Agency (IAEA). This funding will be used to create a fuel reserve that the IAEA can use to encourage countries to forego a domestic uranium enrichment capability. This reserve would give countries the confidence that there is a secure and available supply of uranium that can be used if other uranium supplies are disrupted in the future. This fuel bank will be useful for countries that don't already have uranium enrichment plants of their own. It's too late for India and Iran, but not for a lot of other places.

Under the nonproliferation account, the bill redirects $29 million proposed for the Elimination of Weapons Grade Plutonium Production (EWGPP). The funding reduction is enabled as a result of foreign contributions to the program from six other nations. It's nice to see multi-lateral cooperation especially in the form of other countries writing checks.

New Mexico's big dog weighs in

New Mexican Republican Sen. Pete Domenici, a supporter of GNEP and Los Alamos, was unhappy about the outcome of the subcommittee vote on GNEP

"Although I share the president's desire to address our spent fuel inventories by recycling and reducing this material, I recognize that the new congressional leadership is seeking a more modest program that can more fully demonstrate the technical and commercial feasibility of closing the nuclear fuel cycle as other countries have done," he said in a prepared statement.

Translation - the Democrats in the Senate aren't buying President Bush's plan for GNEP anymore than their colleages did in the House. The only difference is they hold far less of a margin in votes in the full Senate than they do in the House.

Domenici also express his dour views on the Russian efforts toward nonproliferation.

“I am deeply disappointed in the lack of progress on the part of the Russian government to advance the MOX agreement. I still have hope that this worthwhile nonproliferation project will eventually get back on track. But until that happens, I believe we should put our resources toward meeting our end of the bargain,” Domenici said. “MOX is fully funded to encourage DOE to proceed with our own U.S. plant without waiting for Russia.”

Idaho National Lab - local interest coverage

The Next Generation Nuclear Plant (NGNP) got $45M and infrastructure for the Advanced Test Reactor got $16M.

The much lower Senate mark on GNEP and the catastrophic cuts in the House could confine this program to finishing its EIS at DOE HQ with little new funding for GNEP work in Idaho.

That could change depending on the vote by the full Senate Appropriations Committee and the outcome of a House/Senate conference committee which, according to tradition, typically splits the difference between the two marks. If the House and Senate numbers don't change, you are looking at a GNEP funding level of between $180-200M for 2008.

Idaho Senator Larry Craig also noted in a press release that the INL cleanup program recevied $533M in the Senate subcommittee vote. The House number was just over $600M.

Fish beat nukes

If you fish in the Pacific Northwest, you will love the work by the Senate to provide a total of $99M for fish recovery along the Columbia and Snake Rivers of which $15M is for Salmon and the rest is for all the other fish. Comparisons to funding levels for nuclear R&D can be made by the reader.

Sunday, July 1, 2007

New life for nukes in space

Saving money on space payloads to be sent to the moon is the key to success

A vision of nuclear propulsion to send humans to the planets is taking shape on the high desert of the Snake River plain in eastern Idaho even though there is no spaceport here. A design from the 1960s to send space payloads to the Moon, Mars, and beyond using a nuclear reactor is being updated with new ideas and technologies. Stephen Howe, Director of the Center for Space Nuclear Research (CNSR), in Idaho Falls, ID, says his updated design ideas could, if implemented, carry an additional eight tons of payload on a mission to send astronauts to the Moon.

If you are thinking in terms of moving coal or grain along the Mississippi in a river barge, eight tons is a sneeze in the scheme of things. However, in the rocket ship business, where payloads are measured by the pound, and with costs at liftoff measured in the tens of thousands of dollars per pound of payload, eight tons is a very big number. Howe and his team are getting some attention for his Center's R&D program which is located at the Idaho National Laboratory (INL).

Speaking at the Space Nuclear Conference held in Boston in June, Howe described the new technology as old ideas with updated designs. The NERVA program, which ended in 1972, used a fission reactor to heat up hydrogen and blast it out the thrust end of the rocket. The benefit is lots more propulsion with the nuclear rocket for the same amount of fuel used by a chemical rocket. NERVA was not successful for technical and political reasons. This history doesn't deter Howe who says new R&D will overcome the technical issues and, he adds, the rocket would only be fired outside of earth's atmosphere thus perhaps tempering some of the political reactions to using nukes in space.

Howe points out the higher propulsion power of a nuclear rocket for a mission to the Moon would reduce the number of launches needed to support it and save billions of dollars. According to Howe's calculations, the 250 tons of payloads needed to support a sustained presence on the Moon could be delivered with nine nuclear rockets compared to 12 chemical rockets. At $1.5B per launch three fewer launches would save $4.5B. To paraphrase the famous words of Everett Dirkson, that's real money. Put another way, if Howe's research pans out, a nuclear rocket will be a bargain compared to chemical rockets.

One of the barriers to nuclear rockets is that there is still significant opposition to the use of nukes in space despite the successful track record of NASA's Cassini probe to Saturn and the New Horizons mission to Pluto. Both of these missions used radioisotope thermal generators (RTGs) to make electricity for the deep space probes which cannot use solar power past the orbit of Mars. NASA experts points out Howe's rockets would only work outside the Earth's atmosphere. Astronauts on-board would face higher risks from cosmic radiation than they would from the nuclear rocket.

The prospect of saving billions in costs to set up and supply a moon base has got to be attractive to NASA. So while it is true there is no space port in Idaho, Howe has an idea for a new, nuclear rocket that just might fly.