Saturday, August 23, 2008

AEHI takes on the Snake River Alliance

Virginia nuclear energy firm files a lawsuit against the Idaho environmental group

lawsuit A company that wants to build a nuclear power plant in Elmore County is suing an Idaho environmental group over comments made to a KTVB reporter (Boise) in an interview last week. Alternate Energy Holdings (PINK:AEHI) filed a defamation lawsuit on Aug 22 against the Snake River Alliance (SRA). In the interview with the TV station, Snake River Alliance spokesperson Andrea Shipley said Alternate Energy Holdings was "scamming Idahoans."

Both groups appear to have over-reacted and put their respective feet in the political bucket. Can you get two left feet in one bucket? The answer is yes, but this configuration insures that both parties are facing in different directions.

AndreaShipleyShipley (left) has said a few other things in recent months that make it clear she's taken on an "in your face" approach to the nuclear plant project. As a relative newcomer to Idaho, she may feel it is in her interest to prove how tough SRA can be in order to raise funds and strengthen support for the organization. Her quoted statement to the TV station, and AEHI's reaction, appears to indicate this strategy has over-achieved in terms of its impact on the group's primary target. (image Boise Weekly)

AEHI alleges that due to the "world wide reach of KTVB and KTVB.COM," the comment was causing them "substantial damage." The TV stations are seen throughout southern Idaho over-the-air, on cable, and via UHF repeaters. Video reports are also available over the Internet. The term "world wide" is likely a stretch. It's not clear now much damage Shipley could do to AEHI which on its own has created a fair amount of skepticism in the state since it showed up in winter 2007. Even the Nuclear Regulatory Commission has publicly expressed doubts the firm will ever file a license application for reactor.

Lawsuit tactic may backfire

The lawsuit is unusual because most nuclear plant operators and developers simply ignore the hyper-inflated comments of anti-nuclear organizations or talk their way around them. The usual response from public relations firms tasked to deal with the problem is to roll out blue ribbon study groups on nuclear safety and economic benefits. Plus there is the always popular tactic of simply piling on more public relations.

Current examples of this non-confrontational strategy include Entergy's fight to keep Indian Point open in New York and to develop a new reactor at a greenfield site in Victoria County, Texas. In both cases Entergy appealed to reason and disregarded the bait from the more rabid anti-nuclear groups that oppose its projects.

By comparison AEHI's lawsuit in Idaho is a first-of-its-kind in recent memory. The firm's aggressive effort may create problems for dialog between anti-nuclear groups and the industry nationwide. AEHI has probably also given pro-nuclear business groups in Idaho a giant headache.

golden opportuniyThe lawsuit may backfire because it has probably handed the Snake River Alliance a golden opportunity to raise funds, increase public support for its cause, and attack the firm, not only for its ham handed handling of the issue, but also for using the lawsuit to try to silence critics of the project. It is a far cry from AEHI's approach in 2007 when it sent letters to startled green groups in Idaho asking for their support.

More public relations from AEHI

The Snake River Alliance declined to comment on the lawsuit. However, on Friday Aug 22 the Twin Falls Times News got a statement from Martin Johncox, who is the public relations spokesman for AEHI in Idaho.

He said the SRA, which self-identifies itself as a 'nuclear watchdog group,' has actively opposed the proposed nuclear plant, questioning its financial plans and the intentions of company CEO Don Gillispie. This time, however, AEHI said "the group crossed the line, and that while they may seem to be stifling public debate, they are actually encouraging it."

Johncox also said, "In a free society, healthy public debate requires giving people some leeway to speak. But accusing people of criminal acts without any evidence is defamation. If people are going to start resorting to that, any kind of intelligent public discourse is going to break down."

gillispiedonIt is clear that AEHI has none of Entergy's patience, and if anything, is demonstrating all the attributes of having a short fuse when it comes to dealing with public criticism of its business plans. According to the Twin Falls Times . . .

In the news release, AEHI CEO Don Gillispie (right) said, "These groups are allowed to make almost any claim they wish, regardless of the facts, and the media rarely question them," Gillispie is quoted as saying in the release. "Someone has to hold them accountable."

Is AEHI skating on thin ice?

AEHI's charges that it is being "defamed" by SRA may put it out on thin ice if the case ever goes to court. In fact the Snake River Alliance, which is prone to over-the-top rhetoric, actually got a few things right earlier this month in its analysis of AEHI's proposed relationship with Houston-based Powered Corp. That firm has a troubled history and got itself kicked out of Yemen by the government over an alleged lack of credibility according to an English language newspaper report published in July 2007. Like two of AEHI's prior "investment partners", the firm has no experience in the nuclear energy field.

The SRA is the second of AEHI's critics to face legal troubles. Long-time Idaho anti-nuclear activist Peter Rickards, a Twin Falls podiatrist, was arrested on misdemeanor trespassing and battery charges June 16 at a public meeting held by AEHI in Glenns Ferry. The Twin Falls Times reports a pretrial hearing for his case is scheduled for Sept. 18 and trial is set for Sept. 25 in Mountain Home.

Land use next stop for AEHI

In an unrelated matter the Elmore County planning commission will set an October date for a land use hearing on AEHI's request to rezone 1,400 acres for a new nuclear power plant. The Mountain Home, Idaho, News, reports that Alternate Energy Holding Inc. formally filed its papers last week with the county planning and zoning commission.

The land, located about six miles south of Hammett near the Snake River, is currently classified as prime agriculture/grazing land. County ordinances only allow energy production facilities to operate in heavy manufacturing zones.

Bonnie Sharp, director of Elmore County Growth and Development, told the newspaper she hopes citizens understand the rezoning process is a long process and that citizens will have plenty of opportunities to voice their opinions on the matter.

"It's not going to happen tomorrow just because we're setting a hearing date," she said. "There will be a lot of chances for people to comment and have input."

*** Prior coverage here ***

# # #

India must wait for NSG decision

The 45-nation nuclear fuel cartel failed to agree on a U.S.-India nuclear technology trade pact

According to wire service reports, representatives of 45 nations meeting in Vienna this week to decide whether to lift a ban on nuclear trade with India ended their talks without making a decision.

Diplomats said members of the Nuclear Suppliers Group, planned to meet again on Sept. 4.

delayedIt leaves the future of a deal between the United States and India in diplomatic limbo and could push the possibility of congressional action into the next presidential administration.

The group must decide whether to agree to allow nuclear fuel and technology exports to India. The bilateral deal has disturbed many members of the group who signed the nuclear nonproliferation treaty because India has not done so. Further in 1974 it developed nuclear bombs and tested them with Western technology imported for civilian uses.

The Wall Street Journal reported on Aug 23 that in an emailed statement, U.S. Undersecretary of State John Rood said the U.S. is "committed to achieve an outcome that is of benefit to the nonproliferation regime and meets India's energy needs."

Earlier this month, the International Atomic Energy Agency (IAEA) approved the deal. However, approval from the Nuclear Suppliers Group is required before the deal goes to the U.S. Congress for a vote. It needs to reach Congress by early September to have a chance of being passed before the end of the term.

Direct reports from Vienna

Siddharth VaradarajanSome of the best on-scene coverage from the somewhat secretive Vienna meeting comes from Siddharth Varadarajan (right) who is the Deputy Editor, The Hindu. In his blog he is providing excellent insights into the challenges facing the U.S. and India as they attempt to make their case.

For its part India's foreign policy establishment is reportedly wrapped around the axle that the U.S. was unable to deliver the NSG's approval at this week's meeting. Because of domestic politics, India has little room to change its position on the draft agreement submitted to the NSG despite intense pressure from other nations to do so.

According to his latest report in the Hindu,

A diplomat said the NSG raised concerns on nuclear testing, adherence to NPT full-scope safeguards, the need for a review mechanism to assess Indian compliance, as well as restrictions on enrichment and reprocessing technology.

“There was a reference in the earlier U.S. draft to the desirability of India eventually accepting the NPT and its safeguards that was more positive than what we have now,” the diplomat said. “So, I think America will have to come back to us with a new draft before any decision is possible.”

In an email to me last week Varadarajan said the pressure is on the Bush administration because the U.S. Congress is waiting for the outcome of the NSG meeting before deciding whether to support the deal. A rejection by the NSG will likely weigh heavily against prospects for approval by Congress. Approval by the NSG could pave the way for fast action before the November election.

Watch this space September 4th.

# # #

Friday, August 22, 2008

Western Lands Uranium Gopher for August 23, 2008

(An occasional column on money and mining news items)

gopherThe rise of nuclear energy, a second act if ever there was one, has given uranium a shot in the arm in western states in the U.S. Interest in uranium mining is growing and with it comes another growth industry - the production of press releases about the uranium mining industry. The purpose of this occasional column is to separate the really interesting stuff from promotional fluff.

The choices of the subjects is based on what looks interesting mostly in states that are "west" of the 100th meridian, but this isn't hard and fast. The states of interest are WY, CO, UT, TX, NM, AZ, & NV. For this reason the series is titled the "western lands uranium gopher." These are news notes and the content is not to be considered investment advice.

This column is an edited version of an article published in Fuel Cycle Week V7 N291 on 08/20/08 by International Nuclear Associates Inc., Washington, DC.

Colorado uranium mining expands despite lawsuits

Despite a blizzard of lawsuits by environmental groups and back country home owners, uranium mining made progress in Colorado this month. The Bureau of Land Management (BLM) is accepting public comments on several uranium mining sites along the western slope of the state. In Durango BLM posted a notice that Denison mines (AMEX:DNN) plans to expand its existing Topaz Mine and conduct exploratory drilling in the Gypsum Valley southwest of Naturita.

Both sites are regarded as being part of the Sunday Mine complex which Denison wants to manage as a single project. New activities associated with the mines will include expansion of waste piles, addition of vent holes along access roads, and the drilling activities. The current mine occupies 77 acres and the new work would add another 13 acres to the complex. All of it is on public lands.

Because the activity is on public lands, San Miguel County officials have little to say about the project other than they are unhappy about the impacts of mine hauling on county roads. However, the county does not have veto authority over actions on public lands.

One local official, Joan May, a San Miguel County Commissioner, told the Telluride News on August 7, “We’ll submit comments and look at the impacts. Because we’ve had so many problems with the whole mining industry, primarily the waste issue, as a board we’re not in favor of it.”

Denison has five mines are operating on the Colorado Plateau with production from the Sunday, Pandora, Topaz, West Sunday and Rim mines running at about 400 tons per day. The company said ore grades have been slightly lower than planned averaging 0.18% U3O8 and 1.05% V2O5 compared to plan of 0.2% U3O8 and 1.2% V2O5.

Denison U.S. earnings & production reports

In its second quarter earnings report released Aug 13, Dension said sold 100,000 pounds U3O8 during the quarter from U.S. production at an average price of $83.13 per pound and 271,950 pounds U3O8 from its Canadian production under the existing long-term contracts at an average price of $50.96 per pound.

Production at Denison's White Mesa mill in Utah was 62,000 pounds U3O8 for the three months ended June 30, 2008 and 114,000 pounds U3O8 for the six months ended June 30, 2008 compared to 56,000 pounds and 137,000 pounds U3O8 for the same periods in 2007. Processing of conventional ore commenced on April 28, 2008 and to June 30, 2008 production from conventional ore was 20,000 pounds U3O8. Production at the White Mesa mill has been increasing since the commencement of conventional ore processing with approximately 89,500 pounds U3O8 produced in July 2008.

At the Tony M mine within the Henry Mountains Complex, located in Utah, production is currently approximately 300 tons per day and will ramp up to 450 tons per day by year end. Production from these mines is being hauled to Denison's White Mesa mill. As of June 30, a total of 191,000 tons had been shipped to the mill of which 49,000 tons have been fed to the mill. The firm reported little progress with its Arizona 1 uranium mine due to problems with the air quality permit.

Powertech seeks expanded drilling at Centennial project

Powertech Uranium Corp. (TSE:PWE) submitted a request to the Colorado Division of Reclamation, Mining, and Safety to drill an additional 10 holes at its 5,700 acres Centennial project site near Nunn, Colo. The project has attracted intense public opposition. The firm said in its Notice of Intent that the new drill holes will insure the ISR plant is not located over the ore formation and will be used to set up two new monitoring wells. Information derived from the drilling will be used in the firm’s permit application for the mine. The firm said it is on schedule to submit the permit to state regulators later this year.

Powertech said it estimates there are 10 million tons of uranium ore in the Centennial project area. At a yield of four pounds per ton that would work out to be 40 million pounds of uranium. However, Powertech qualified the estimate by noting it is based on surveys taken by Rocky Mountain Energy Co. in the 1970s.

Powertech submits permit application for Dewey-Burdock mine in South Dakota

Powertech Uranium Corp. announced it has submitted a new uranium exploration permit application to the South Dakota Department of Environment and Natural Resources for Dewey-Burdock Project located in Fall River and Custer Counties. The application requests permission to drill 30 additional holes to support design of the ISR mine and surface facilities. Additional permit applications for various environmental regulatory requirements from EPA and NRC are in progress and reportedly will be submitted this Fall.

Uranerz Energy announces NI 43101 report for Nichols Ranch ISR project

Uranerz Energy Corporation (AMEX:URZ) announced a preliminary assessment on the economics and technical viability of the company's Nichols Ranch Uranium ISR project in the Powder River Basin, Wyo. It filed a related NI 43-101 technical report.

The firm said the mine plan for the Nichols Ranch project includes a central processing facility and a satellite ion exchange facility at its Hank property. The central processing facility is planned for a licensed capacity of 2 million pounds per year of uranium (U3O8)and will process uranium-bearing well field solutions from Nichols Ranch, as well as uranium-loaded resin transported from the Hank satellite facility.

ISRMining_schematic

"The results of t"The Preliminary Assessment demonstrate the economic and technical viability of our Nichols Ranch Uranium ISR Project," stated Uranerz President and Chief Executive Officer, Glenn Catchpole. "The completion of the Nichols Ranch central processing facility will solidify the Company's strategic position in the global uranium market and should improve the project economics of our other properties in the Powder River Basin."

Highlights of the economic analysis (based only on Nichols Ranch and Hank NI 43-101 current "measured" and/or "indicated" estimated resources) include:

  • Production start-up in late 2010 (subject to federal and state regulatory approval)
  • 3.27 million recoverable pounds of U3O8 based on a 73% recovery rate
  • Production Life - 5.25 years
  • Capital Cost - US $34.2 million

In a separate development, Denison Mines announced it has purchased 5,465,000 common equity units in Uranerz Energy Corp., each unit consisting of one common share and one-half warrant for $2.40 per unit or $13,116,000.

Uranium Resources announces 2nd quarter results

Uranium Resources, Inc. (NADAQ:URRE) announced revenue for the second quarter of $6.6 million, a decrease of $1.4 million compared to the same quarter in 2007. The firm said 113,500 pounds of uranium were produced in second quarter. Production costs were $40.03 per pound. The average selling price was $66.41 per pound on 99,400 pounds sold. The higher cost of sales compared with last year's second quarter was attributed to higher material and energy costs, production from new wellfields with lower percentages of recovery and approximately $111,000 in pre-production costs associated with the start-up of new wellfields at Vasquez and Rosita, Tex.

The net loss for the second quarter of 2008 was $3.1 million compared with net income of $1.2 million in the same period last year, primarily due to lower revenue, increased per pound cost of uranium sold, and the write off of $1.4 million in costs associated with the termination of the agreement to acquire Rio Algom Mining. See details in the WLUG for July 12, 2008.

The losses will change some of the company's plans and operations. Dave Clark, president and CEO of URI, said,

"We are implementing aggressive measures to reduce our costs through reductions in personnel, the consolidation of South Texas operations to Kingsville Dome which resulted in the closure of the Corpus Christi office, the reduction of legal, professional services and consulting fees and increased cost discipline to bring spending in line with the current uranium pricing environment and our lower levels of production."

Uranium Energy Corp. (AMEX:UEC) said it has completed plans for 30 new exploration holes in a 900-acre field in Karnes County, Tex. The company has received a permit for the drilling from the Texas Railroad Commission, Division of Surface Mining.

Karnes County is immediately adjacent to Goliad County, the site of the company's Goliad ISR Project. The project was originally explored by Texaco Uranium (now ChevronTexaco), and reportedly contains an historic resource of 1.2 million pounds of U3O8. The company plans to have an independent Technical Report prepared under NI 43-101 guidelines.

Anglo Canadian Uranium Corp (CVE:URA) reports 26 holes have been completed at its Eula Belle uranium project in Montrose County, Colorado. Preliminary results show grades of 0.193% to 0.258% using gamma ray probe. The current drill program is taking place adjacent to the firm’s 100% owned King Uranium Project.

The Eula Belle Uranium Project contains the Eula Belle uranium/vanadium mine which was operated by Union Carbide from 1901 to 1974 and produced 1,485,550 pounds of U3O8 and 5,234,387 pounds of vanadium (V2O5) and the King Uranium Project, covering two hundred and fifty claims. Both projects are located near a Department of Energy mineral reserve and the King Solomon uranium/vanadium mine that produced 3,172,420 pounds of U3O8 and 16,223,095 pounds of vanadium (V205) from 1974 to 1983.

Bayswater Uranium Corp. (CVE:BAY) announced preliminary results from drilling 152 holes during its Phase 3 drilling program at its Elkhorn Project in the Powder River mining region in Wyoming near the historic Busfield mine. That property produced 69,000 pounds of uranium from near surface sandstone deposits in the mid-1950s.

Preliminary results from phase 3 drilling earlier in 2008 identified widespread mineralization including 28 meters at 0.129% U3O8. A phase 4 drill program is underway with a focus on defining and further expanding uranium mineralization and preparing an updated NI 43-101 resource estimate.

Target Exploration and Mining Corp.(CVE:TEM) said it continues its exploratory drilling on the Bootheel, Wyo. property. The firm is in a joint venture agreement with Ur-Energy Inc. (TSE:URE) on two uranium properties (map), Bootheel & Buckpoint, in the Shirley basin, Wyo., in which it is earning a 75% interest. If drilling results support it, the firm will develop an ISR mine on the site.

Cotter Corp. uranium mill cited for contamination of golf course

The State of Colorado has cited the Cotter Corp. for radioactive contamination of the Shadow Hills Golf Course south of Canon City, Colo. The levels of contamination are below measurements that would create a public health issue according to Steve Tarlton, head of the Radiation Management Unit at the Colorado Department of Public Health and Environment.

The significance of the citation, which is for violation of state standards for groundwater, is that this is the first time off-site contamination has been traced to the mill after it was rebuilt in 1979. Other portions of the site have been under a cleanup program by EPA’s Superfund program since 1984. The contamination was found in groundwater beneath the golf course not on it. The golf course doesn’t use water from the contaminated resource, and relies on municipal supplies which are not affected.

State officials said they think the contamination is coming from 10 leaking wooden tanks, built in 1979, holding between 100,000 and 600,000 gallons each of water containing dissolved uranium and other metals. John Hamrick, VP of Milling at Cotter Corp. said the contamination might be coming from improperly stored tailings or the former mill facility.

The citation comes as Cotter company executives are planning a new mill and resumption of uranium ore processing operations at the site. Hamrick said the decision to proceed with development of a new mill would be made later this year.

Construction starts on new LLW facility in Andrews County, Texas

Waste Control Specialists (WCS) has awarded a three-year, $80 million contract to URS for the design and construction of a new low-level radioactive waste facility in Andrews County, Tex. The project includes construction of two landfills for different categories of radioactive waste. Both will be served by a new rail spur and trucking facilities.

In May the Texas Commission on Environmental Quality (TCEQ) granted a license for the disposal of radioactive residuals left over from uranium mining, milling as well as equipment, pipes, and other byproducts of uranium milling operations. That landfill is expected to open in early 2009. A second license is being pursued by the firm for disposal of low level radioactive and mixed LLW waste from the federal government. That facility is expected to open in 2010. Both landfills will be 1,300 acres.

# # #

Sunday, August 17, 2008

New Fermi reactor is a focus for energy politics

John McCain's visit to DTE Energy generates some heat and light

McCainRepublican presidential candidate John McCain (right) toured the Fermi II reactor in Michigan August 5th to promote his plan to build 45 new nuclear plants by 2030. In doing so he forced Democratic presidential candidate Barack Obama to issue a statement that moves him closer to support for new nuclear builds. For its part DTE Energy, which owns and operates the plant, said it will file an application with the NRC for a combined construction and operating license (COL) next month for Fermi III. It will be a GE-Hitachi ESBWR.

McCain and Obama have sparred with each other over energy politics with dueling press statements, but in the end both recognize that nuclear energy will be part of the nation's response to global warming. Even so the two candidates ran in circles around the issue of whether to open Yucca mountain making this aspect of the nuclear equation just one more imponderable conflict generated for media attention to gain votes in November.

Nukes v. Cars

check_your_tiresIf there is anything that distinguishes the two candidates from each other in the energy arena, it is that Obama has emphasized energy for transportation, especially cars and trucks, and McCain has focused on electricity for industrial and consumer use. After a brief, and somewhat ridiculous, dust up over tire gauges, the two got back to the serious business of bashing the daylights out of each other's ideas about energy issues.

McCain told the New York Times, “If we really want to enable new technologies tomorrow like plug-in electric cars, we need electricity to plug into."

This is the third time McCain has made a major push for nuclear energy, and with the image of massive cooling towers of Fermi II in the background of his latest pitch, his pro-nuclear message finally hit a nerve with the Democrats. The visit to Fermi II produced a marked change in the campaign rhetoric. Obama’s campaign put out a statement in response to McCain pushing back on what it called "McCain’s misrepresentation" of Obama’s position on nuclear power. The NY Times also reported that the Democrat's campaign spokesman told the newspaper . . .

“Barack Obama supports safe and secure nuclear energy. Nuclear power represents more than 70 percent of our noncarbon generated electricity. It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option."

The Associated Press reports that in previous speeches on the campaign trail, Obama has described nuclear power as "not optimal" and he has labeled himself "not a nuclear energy proponent." However, he has said he would not rule out more nuclear power "only so far as it is clean and safe." McCain's speech at Fermi II has moved Obama's marker closer to a consensus position on nuclear energy. That doesn't mean, at least during the election season, that this represents progress.

Clinton's anti-nuclear appeal alive and well

Hilary Clinton's anti-nuke appeals to campaign contributions from green groups is alive and well. The statement from Obama's campaign went on to list a litany of anti-nuclear arguments as qualifiers to his support for nuclear energy, which is entirely within the normal range of political behavior during a presidential campaign.

whopper Like a famous fast food slogan, presidential candidates always want to have it their way or both ways. The Obama campaign spokesman also said, "before an expansion of nuclear power is considered, Obama thinks key issues must be addressed including: security of nuclear fuel and waste, waste storage, and proliferation.” It's the usual whopper of deal breaker issues Democrats throw into the media mix anytime they say anything positive about nuclear energy.

Some of Obama's supporters in Michigan have no nuances about his public anti-nuclear position. According to the Toledo Blade, (photo link) about 50 protesters greeted Republican presidential candidate John McCain with chants of "Obama" as his motorcade sped through the entrance of the Fermi II nuclear power plant. According to the newspaper, Denise Brooks, chairman of the Monroe County Democratic Party, characterized Mr. McCain's stop as a photo opportunity from a candidate who is out of touch with Michigan's closed factories and thousands of unemployed workers because of auto industry troubles. Labor union officials later told the Blade they would welcome new jobs that would come with construction of Fermi III.

DTE Energy moves ahead with plans for Fermi III

DTE logoWhile McCain and Obama moved on to other political issues, DTE Energy (NYSE:DTE) CEO Anthony Early told reporters the firm will submit a COL application to the NRC in September. The projected cost of the new 1,500 MWE reactor could be $8 billion.

Early said the firm would look for partners for the plant to share the costs and investment risk. He'll need them. The firm's total revenue in 2007 was $8.5 billion and current market capitalization is $6.8 billion. The stock closed August 15th at $41.70/share (52-week range $31.87-51.19) with 161 million shares outstanding.

DTE also reported progress with efforts to convince the Michigan state legislature to reign in the rate base by limiting customer choice to no more than 10% of a utility's base load demand. The bills, which passed in both chambers, are now in a conference committee. Early told reporters that if the measure is signed into law it will allow the firm to attract lenders to the project.

BU010429Earley is pitching a "build Michigan" message. He said that unless Michigan builds new power plants now, other states will do so and take jobs with them both for construction and operation of these new plants. Construction of Fermi III could involve as many as 3,000 jobs and operations will involve 800 permanent jobs. Earley also said that that Michigan, which is suffering the severe economic effects of the downturn of the auto industry, must have "reliable and affordable electricity supply" to attract new business.

& & &

Previous coverage on this blog

  • McCain & Obama square off over nuclear
  • Could McCain deliver on his nuclear plan?
  • DTE plans 1,500 MWe for Fermi III

# # #