Friday, November 2, 2007

NRC gets first ISL uranium mining application

Uranium recovery activity noted in Wyoming

The dramatic rise in the price of uranium has stimulated new mining activities throughout the West and nowhere is this trend more visible than in Wyoming. The NRC received an application from Energy Metals to construct and operate a in-situ uranium recovery facility at Moore Ranch in Campbell County, Wyoming.

The NRC said it is the first application for a new uranium recovery facility (submitted 10/3) to the agency since 1988. NRC is reviewing the application to determine if it contains enough information to conduct environmental and safety reviews. The review is expected to take 90 days. The complete approval process, which will also include EPA and the State of Wyoming, could take two-to-three years.

Neal Froneman, president and chief operating officer of Toronto-based Uranium One Inc., Energy Metals' parent company, said the application "is a landmark event. We look forward to becoming a leading uranium producer in the world's largest nuclear power generating market."

In 2006 Energy Resources reported resources at the site of 5.8 million pounds of uranium (U308) that are contained in 2,950,000 tons of ore at an average grade of 0.10%, and an additional 89,000 pounds of uranium (U3O8), contained in 43,600 tons, also at an average grade of 0.10%.

Energy Metals was acquired by Uranium One in August 2007 and is now a wholly owned subsidiary of the firm. Uranium One recently announced an agreement for the ion exchange resins containing uranium recovered from Moore Ranch to be shipped to Power Resources’ Smith Ranch-Highland facility for final extraction.

Dale Klein, NRC chairman, said in a prepared statement, "In addition to the first applications for new reactors in decades, this application for a new uranium recovery facility is a further indicator that the nuclear renaissance is real." He added the NRC is expecting 15 additional new applications for in-situ and conventional uranium mills over the next three years..

NRC "generic" EIS

The NRC is also seeking public comment for a “generic environmental impact statement” (GEIS) the agency intends to develop for uranium recovery operations, including in-situ leach recovery facilities and conventional mills. “This GEIS is intended to address the common issues associated with environmental reviews of in-situ leach and conventional milling facilities located in the western United States,” the NRC said. On September 27th the NRC announced it would extend the comment period to November 30th and that this would be the last extension of the comment period.

In-situ leach (ISL) milling facilities are one means of extracting uranium from underground. ISL facilities recover uranium from low grade ores that may not be economically recoverable by other methods. In this process, a leaching agent, such as oxygen with sodium carbonate, is injected through wells into the ore body to dissolve the uranium. The leach solution is pumped from there to the processing plant and ion exchange separates the uranium from the solution. After additional purification and drying, the yellowcake is placed in 55-gallon drums. About 12 such ISL facilities exist in the United States.

Wednesday, October 31, 2007

EnergySolutions IPO seeks $213M

Firm will be listed on NYSE

EnergySolutions Inc., a Salt Lake City firm that manages and cleans up nuclear waste in the US and the UK, is said this week (Reuters) to plan an initial public offering of 30 million shares of common stock, according to a filing with the Securities and Exchange Commission. EnergySolutions' shares have been approved for listing on the New York Stock Exchange under the symbol "ES."

According to the Reuters report, EnergySolutions said it expects the offering to price between $19 and $21 per share. The firm is selling 11.85 million shares, and a shareholder (ENV Holdings LLC) is selling 18.15 million shares.

Assuming an offering price of $20 per share, EnergySolutions expects to realize proceeds for the firm of about $213.1 million. The company plans to use the IPO proceeds to pay members of its current and former management related to employment agreements and to repay outstanding debt.

The firm was formed in 2006 by the merger of BNG America, Durtek, Envirocare of Utah, and the D&D division of Scientech. EnergySolutions provides specialized nuclear services, including engineering, decontamination, logistics, transportation, processing and disposal, to government and commercial customers.

Customers include the U.S. Departments of Energy and Defense, the U.K. Decommissioning Authority, Duke Energy Corp., Constellation Energy Group and Exelon Corp. EnergySolutions has long-term arrangements with 82 of the 104 operating nuclear reactors in the United States, according to the Reuters report.

EnergySolutions is owned by a private equity consortium of Lindsay Goldberg & Bessemer, Peterson Partners, and Creamer Investments. For the six months ended June 30, 2007 EnergySolutions recorded income of $23.5 million on revenue of $987.9 million. The firm has approximately 5,000 employees worldwide. The Salt Lake City Tribune reported 11/01 that the firm has $925 million in debt.

Federal Court rules no EIS needed for ATR

Keeping the reactor running safely doesn't trigger NEPA

A U.S. federal district court judge in Boise ruled against a request by Keep Yellowstone Nuclear Free (KYNF), an anti-nuclear group, to suspend operation of INL's Advanced Test Reactor (ATR) pending preparation of an Environmental Impact Statement in connection with implementation of a Life Extension Program for the facility.

The court said that routine upgrades and maintenance of the reactor to achieve its full life expectancy do not trigger a NEPA review.

The judge ruled a National Environmental Policy Act (NEPA) analysis was not required. KYNF has 60 days in which to file an appeal.

Tuesday, October 30, 2007

TVA files for two new reactors at Bellefonte

And now for a really big show

Anyone watching the nuclear energy industry this month must think it is on something of a roll. The Tennessee Valley Authority filed an application for a license to build and operate two new nuclear power reactors. The site is in Bellefonte, Alabama where it mothballed two reactor projects nearly two decades ago after investing billions of dollars. The TVA application is the first to the NRC for construction of a Westinghouse AP1000 reactor.

The Associated Press reports that the filing with the NRC, made in conjunction with an industrial consortium called NuStart, was the second application for a new commercial reactor in just over a month. NRG in Texas submitted a complete application to the NRC for two new GE-Hitachi reactors earlier this month. Constellation Energy has a partial application with the NRC for expansion of its Calvert Cliffs, MD, nuclear plant using an AREVA EPR. The TVA application also means all three of the major reactor manufacturers are now represented in license applications to the NRC.

The TVA application is the first made under the umbrella of the NuStart consortium, a group of electric power utilities that will test the NRC's new streamlined reactor licensing program. AP also noted that the TVA restarted its Browns Ferry Unit 1 reactor in Alabama last summer after a lengthy shutdown. In 1996 it began operating Unit 1 at Watts Bar in Tennessee.

NRC concerned funding delays will slow reactor license reviews

Congress has not acted on funding for federal agencies for fiscal year 2008 which began Oct 1. The NRC is still working on fiunding levels from 2007 which don't cover the new costs of recent license applications. NRC Chairman Dale Klein also said "it would be devastating" if Congress didn't approve funding for the NRC. "It would curtail hiring and slow down review of licenses and design certification," he warned.

There are questions about how fast the "nuclear renaissance" will come, however, given a qualified labor shortage at both the NRC and in the industry. The NRC has had to hire more than 400 employees to replace a retiring workforce to handle the influx of applications. Klein told Dow Jones newswire, "Certainly there are risks to delay, but I do not believe the NRC will be a risk of bottlenecks to the process."

"What's different now, is that the sites are brownfield sites - at existing facilities - and the communities are comfortable with the facilities operating in that area." Also, he said the licensing process now uses a one-step, combined construction and operation license.

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What's ironic about TVA's actions at Browns Ferry and Bellefonte is that in September former TVA chairman S. David Freeman scared the socks off legislators in Utah with testimony about the financial and technical failures of his agency in the 1970s. It seems that TVA has risen like the mythical phoenix bird to live again as a nuclear utility.

Baloney detection for nuclear new builds

You can't tell the players without a scorecard!

In 2001 Michael Shermer, a columnist for Scientific American, introduced the practice of baloney detection which is the fine art of detecting fraud in the scientific and engineering realms. Schermer asks five questions which are appropriate for assessing the legitimacy of a claim. In the case of nuclear energy, baloney detection is needed for news about new builds.

Here are Schermer's questions applied to nuclear new build announcements.

* How reliable is the source of the claim? When a company says they are going to build a new nuclear power plant, are they new at the game or does the firm have an industry track record?
Does this source often make similar claims? Is the firm issuing multiple press releases to pump up its stock? Are there other indications the firm is all hat and no cattle?

* Have the claims been verified by another source? Has the firm filed a permit application to build the plant with regulatory authorities? What happened next?

* How does the claim fit with what we know about the way the world works? Is the firm a "first mover" plants in the U.S. which will build at an existing reactor sites to gain competitive cost advantages using infrastructure already in place. "Greenfield" sites are exciting prospects but unlikely.

* Has anyone disproved the claim or only sought supporting evidence? Is anyone with industry credibility saying the emperor has no clothes? While you can't realistically expect suppliers and trade groups to do this, if someone, besides a knee-jerk anti-nuclear group, sounds off, it is time to pay attention.

Box Score - 1 home run, 3 strike outs

So lets look at four recent announcements of new builds for nuclear reactions.

* NRG in Texas
* AEHI in Idaho
* Energy Alberta in Canada
* Transition Power in Utah

NRG is a home run and clearly passes the baloney detection test. Here's why.

* Public identification of investors, markets, and suppliers
* Reactor design is already approved by the NRC
* Filed a complete COL application with the NRC
* Co-located with existing reactors to take advantage of existing infrastructure
* Construction firms and suppliers have track records building nuclear power plants
* Arrangements with manufacturers of large forgings to get them on time and within budget
* Deals to sell electricity on an existing grid to committed customers
* Experience in the nuclear energy industry running nuclear reactors

The other three new build announcements are strike outs although the pitch count is high.

Alternative Energy Holdings, Idaho -- AEHI has not identified its investors, not filed an application with the NRC, and is proposing a remote, rural, greenfield location in southwestern Idaho with no transportation infrastructure nor capacity in the regional power grid to get the electricity to market.

AEHI identified a firm to raise $3.5 billion, but said nothing else about its financing other than to buy back its penny stock at $0.30/share down from an earlier high of $0.95. The firm hired to raise the money has no experience with investors for nuclear or fossil fuel plants. Prior deals are for self-storage units, convenience stores, gas stations, bars, and motels.

AEHI said it will file a COL application with the NRC in partnership with Constellation Energy and AREVA. In September NRC Chairman Dale Klein, speaking at a nuclear fuel conference in Boise, ID, told the Idaho Statesman that "AEHI is not on the agency's radar screen."

Update: In December AEHI said it had a second investment banker which would raise $150 million in startup funds. Like the first "banker," it has no experience with energy projects.

Energy Alberta -- The firm proposes to develop two reactors in partnership with AECL in the Tar Sands region, and said it had a "secret customer" who would use 70% of the nuclear plant's electricity on tar sands oil plants. However, the oil firm said to be the customer promptly denied it had any intentions of buying a nuclear power plant. Other tar sands oil companies say the time needed to build the reactors and get them running in northern Alberta far exceeds their planning horizons.

For its part Energy Alberta has filed two applications with the Canadian nuclear regulatory agency. This bureaucracy set a new land speed record rejecting the first one in July calling it "a draft," and that's government talk for "baloney."

Update: In late November Bruce Power bought out Energy Alberta's long shot proposal for a new nuclear power plant in the tar sands regions and hitched its horse to AECL's new reactor design. Some of the power that would be generated in Alberta by a new reactor is expected to be wheeled to Montana.

Transition Power, Utah -- The firm announced a giant reactor project in October, but so far has refused to identify its investors, the proposed site for the plant, its potential customers, and except for consultants, including a former NRC commissioner, has no operational experience in the nuclear industry.

The private equity firm is not registered with the SEC nor listed on any stock exchange. Even more interesting, the firm says it plans to apply for an NRC COL license and then sell it to the highest bidder. The firm seems to be trying to establish a market in which there could not possibly be any buyers.

Public reaction has been mixed. Two state legislators have been raked over the coals on conflict of interest charges for promoting the reactor and also trying to shift the financial risk of building the plant from investors, whomever they are, to rate payers.

Environmental groups shifted gears from defending Bambi to creating alliances with consumer groups. Utah's governor said he supports nuclear power as long as no one tries to build a reactor in his state while he is in office. Transition Power's director told the governor spent fuel storage is "no problem" and will be taken care of with "on site reprocessing."

Despite these shortcomings, the firm is paying cash for access to water rights and says the plant won't be located in the district where the water rights are found. Instead, it plans a three bank pool shot involving a pipeline, using water from the already over allocated Colorado river, and a land swap. Did we mention these people are in business to make money? Why don't they just sell nutritional supplements on the Internet? It's a lot less trouble and much more likely to generate a profit. No matter how you slice it, Transition Power is right smack in the middle of the baloney bullseye.

Update: There hasn't been a public peep out of Transition Power for months, but the news media in Utah hasn't forgotten the conflict of interest controversy associated with the project. The jury is still out whether there is any there "there" for this reactor.

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So the next time someone announces plans for a nuclear power plant remember Schermer's baloney detection questions and this brief review. It will help you sleep better knowing how to separate fact from fiction.

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Monday, October 29, 2007

NAS - GNEP should be scaled back

Ambitious program is said to be sidelining important reactor R&D

The Associated Press reports that the National Academy of Sciences wants President Bush to abandon an ambitious plan to resume nuclear waste reprocessing. A panel of scientists said GNEP, has not been adequately peer reviewed and is betting on reprocessing technology that isn't proven. The report also said GNEP research is taking money and focus away from other nuclear research programs.

In response Dennis Spurgeon, the DOE official in charge of the program, said committee conclusions represented "a misconception of the (GNEP) program" and that the department "fully recognizes the complexity and time needed. We are talking about something that will, in fact, take decades to develop."

GNEP has been criticized by nuclear nonproliferation activists and has received a hostile reception in Congress, especially in the House,which has refused to provide the short-term funding the Energy Department has requested. The administration asked for $395 million for the program this year, but will likely get $167 million.

* * *

The GNEP program is expected to cost billions of dollars over several decades and includes construction of reprocessing plants and next-generation "fast-burn" reactors to burn some of the processed waste.

* * *

The National Research Council scientists, who were asked by Congress to examine the Energy Department's nuclear research priorities, said that the GNEP program is taking away funding for a program, called "Nuclear Power 2010" to help promote the construction of new commercial nuclear power plants.

The panel said DOE should put greater emphasis on that program to promote design and engineering work for a new generation of light water reactors and help the NRC move promptly to license new power reactors, said the science panel.

The panel seems to have missed the point that the NRC's reviews of new reactors is mostly funded by industry fees. However, the committee's reports also mentions that GNEP funding requests have put a lower priority on the "Next Generation Nuclear Plant" or NGNP. However, in FY2008, if Congress ever passes an Energy Appropriation bill, that program is slated to get increased funding.

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Full text of the report and a briefing for download as a PDF file are here. The brief is worth reading as it has some interesting insights into the realities of nuclear R&D as well as the challenges faced by various parts of the government involved in current projects.