Saturday, September 13, 2008

Texas nuclear new build roundup

Exelon files with NRC, Luminant coming up soon

roundupTexas is the heart of the nation's oil industry, but the amazing fact is in the Lone Star state new nuclear reactors are being planned at a pace which only a few years ago would have seemed like science fiction. There is an enormous amount of activity in Texas, and it continues to rival China in terms of planned commitments to nuclear energy. This work is taking place in addition to the work by NRG to add two new reactors at the South Texas Project.

  • Exelon this week (Sept 3) submitted a Combined Construction and Operating License (COL) application to the Nuclear Regulatory Commission (NRC) to build and operate a dual-unit GE-Hitachi nuclear power station in Victoria County, Texas.
  • On September 19 Luminant will file a similar application to add two giant Mitsubishi reactors to its Comanche Peak site.
  • However, Amarillo Power apparently has hit a pothole or two in the road to a COL and announced this week that it will delay its filing for two Areva EPRs with the NRC to 2009. It could be looking for some wind to fill its sails.
All three filings involve reactors that are still in designs certification with the NRC. It appears that the firms filing their applications with the NRC have an expectation they'll be able to build the reactors by the time the agency finishes reviewing their license applications. These are big bets all around. Here are the details of the cards the firms are holding in their hands.

Exelon files for a greenfield plant

Exelon has chosen two GE-Hitachi new generation reactors, the "Economic Simplified Boiling Water Reactor" ESBWR. The two units are expected to produce about 3,000 MWe. The ESBWR (vendor fact sheet), a GE-designed Gen III+ reactor, is currently in NRC's design certification process. The Design Control Document was docketed by the NRC in 2005. The agency has not published a date for completing the review.

greenfieldThe power station will be located on a greenfield site of 11,500 acres a dozen miles south of Victoria, Texas. It is about equally distant, as the transmission line runs, from San Antonio and Houston. Plant structures in the proposed design will occupy about 300 acres and a man-made lake for cooling water will take up 4,900 acres or nearly eight square miles.

The application for the COL, which was submitted in electronic form, is over 6,000 pages. According to Exelon, it took a year for a large team of engineers to complete. The NRC will complete its review in about four years or sometime in 2012.

Construction would start once the NRC license was in hand. Assuming it takes four-to-five years to bring the first unit into revenue service, and another one-to-two years to complete the second one, both units could be online in a time frame of 2017-2019. During construction peak employment will hit about 6,300 according to Exelon and the two plants will employ 800 permanent workers with average salaries of $65,000-80,000/year as measured in today's dollars. Actual wages will be higher because another decade will pass before the operations staff reports for work.

Effect of "Prudent Investor" laws

Money futuresUnder the Texas version of the uniform "prudent investor" law, Exelon won't make a statement committing to actually building the reactors until all the technical and financial issues line up in the right direction. It drives a lot of people crazy when they read what they think is corporate legalese for hedging one's bets, but in Texas, and in most other states, the decision to proceed with an investment of this size is governed by similar legislation.

The prudence standard for trust investing traces back to Harvard College v. Amory, (1830). Trustees should "observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested."

So here is how Exelon states its "prudent investor" principles.

The application does not imply that Exelon has decided to build the plant. Among conditions that must be resolved before a final decision is made are public acceptance of the plant, NRC approval of the license application, assurances that a new nuclear plant can be financially successful based on market conditions, and that the government has made significant progress toward resolving questions around storage or recycling used nuclear fuel.

For more information see Exelon's new web site devoted specifically to the Victoria, Texas, nuclear plant.

Luminant plans two reactors at Comanche Peak

comanche peakWhile Exelon is filing to build two new reactors at a greenfield site, Luminant Generation plans to apply Sept. 19 to build two reactors at its Comanche Peak nuclear power plant in Somervelle County, Texas. This action will will set in motion a nearly four-year review by the NRC. Luminant would be the third company to apply to build a nuclear reactor in Texas in the past year.

Tom Kleckner, a Luminant spokesman, told the Star-Telegram the NRC held a public hearing in June on Luminant’s expected filing. Dallas-based Luminant said at the time that it expected to add two reactors to Comanche Peak with combined output of 3,700 megawatts.

Comanche Peak currently produces about 2,300 megawatts of electricity from two reactors. The two new reactors are expected to be referenced in the application as Mitsubishi PWRs. This reactor is also in design certification. NRC has published a 2011 date for completing its review.

See prior coverage on this blog . . .

  • Luminant advances Mitsubishi APWR
  • Mitsubishi files reactor design with NRC

There will be more coverage on this blog once Luminant files with the NRC.

Amarillo pushes its game plan back a year

Things appear to not be going nearly so well in the Texas panhandle. There Amarillo developer George Chapman, and his partner Unistar Nuclear Energy, have notified the NRC they won't file a COL this year, but may do so next year. UniStar - a joint venture between Baltimore-based Constellation Energy and French nuclear power plant operator EDF - plans a fleet of 1,600 MWe Areva EPRs. Like the other two reactors, the Arevas EPR is also in NRC's design certification process. The agency has published a date of 2011 for completing its review.

Right now Chapman's chief worry is whether there is enough water to cool two 1,600 MWe plants. He told the Amarillo Globe News this week he has an engineering firm doing a study to find out.

According to the newspaper, water isn't the only issue that is affecting the plant's licensing schedule, but a spokesman for Unistar punted when asked for specifics. UniStar Senior Vice President Joe Turnage said no "big negative surprise" has caused the delay.

"I think it has just taken us a lot longer than we'd anticipated in structuring the project company (for the Amarillo plant) and moving forward. We just need to go forward with assuring ourselves as investors that we have adequate access to water, as well as ensure we have (transmission) access to those we want to sell the power to. In terms of greenfield development, we (UniStar) remain very interested."

The key issue appears to be how to get the electricity to market. Over at Atomic Insights blog, Rod Adams has an intriguing theory that Chapman is going to ride piggy back on the new transmission lines to Dallas-Ft.Worth connected to a series of giant wind farms to be built in West Texas by T. Boone Pickens, who also lives in Amarillo. Readers who have not unplugged their TVs in recent weeks will have seen Pickens' commercials about his $2 billion plan for wind energy. Here's where the connection between the two comes into sight.

powerlinesAccording to Adams, Mr. Chapman has people asking several key questions about his nuclear reactor project including:

  • Who will buy the power? (The sparsely populated Texas Panhandle does not need 3,200 MW of electricity.)
  • Where will you get the cooling water needed for large pressurized water reactors?

When Pickens completes an electric transmission corridor from his planned wind farms to population centers like Dallas-Ft. Worth, the lines will be able to provide a higher return on the investment by carrying reliable nuclear generated power as well as the intermittent power provided by the wind turbines.

It follows that Chapman and Pickens may be in a partnership with each other in terms of energy development. If so Chapman is surely waiting for the wind to blow in his direction in order to start the real work on his new nuclear power stations.

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Friday, September 12, 2008

Western Lands Uranium Gopher for September 14, 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 N294 on 09/10/08 by International Nuclear Associates Inc., Washington, DC. Portions of this blog post did not appear in FCW. ~

NRC Chairman tours Wyoming uranium mine

Dale Klein, Chairman of the Nuclear Regulatory Commission (NRC), spent a busy day in Colorado and Wyoming in mid-August talking about the agency’s generic environmental impact statement process for ISR mines. While in Denver, Klein met with a nonprofit group promoting dialog about the uranium industry. The International Forum on Sustainable Options for Uranium Production (IFSOUP) asked Klein whether the NRC would consider pulling back its scope of uranium regulation for ISR operations to the plant boundary and leave groundwater monitoring to the states.

According to Michelle Rehmann, a spokesperson for the uranium nonprofit group, Klein indicated that NRC would “entertain requests to reconsider this position, as well as reviewing the assumptions and other factors which may have impacted the development of the position.”

Rehmann also said a group of uranium mining firms met with Klein and expressed concern that the generic EIS process might actually delay licensing and production of new ISR mines. They asked the NRC chairman for a “plan B” if the generic process is tied up in litigation.

Klein said during a tour of the Smith-Highland ranch north of Douglas, Wyo., that the uranium mining industry needs to do more to educate the public about the permit process and groundwater monitoring needed to ensure safety.

While Klein was in Wyoming, its governor Dave Freudenthal urged the NRC to get a move on with its generic EIS study. He told the NRC it needs to finish up by the original deadline of January 2009 and not push the completion date back six months to June 2009. Freudenthal said the additional time would slow down the development of uranium projects in the state.

Hearings held throughout the West on the GEIS have been contentious especially in New Mexico where native Americans objected to new uranium mining projects until old, abandoned mines from the 50s and 60s are cleaned up.

Labor shortages hound uranium miners in Wyoming

Regulatory studies aren’t the only thing slowing down uranium mining in Wyoming. A labor crunch is making it hard to make progress on projects. Glenn Catchpole, president of Uranerz Energy (AMEX:URZ) in Casper said at an energy conference held there on Sept 5 that, “labor is an issue, skilled labor, top to bottom.”

Uranium mining is competing for skilled labor in Wyoming with oil, gas, coal mining, and with wind energy projects. Catchpole wasn’t the only person raising the issue. Chuck Foldenauer of Cameco Resources (NYSE:CCJ), said, “as coal mines expand, and they are, and as more uranium mines come into production, and they will, it’s just going to be a very difficult problem.”

He added that shortages of geologists has “definitely slowed down some projects.”

When you get two high profile uranium companies traded on major U.S. exchanges complaining about the same problem, you know there is a problem. Students in engineering and mining programs take note. Jobs are waiting for you in Wyoming.

Whirlwind Mine gets final environmental assessment from BLM

The Bureau of Land Management (BLM), Grand Junction, Colo., Field Office, released the final environmental assessment for the Whirlwind uranium mine located near Gateway, Colo. BLM issued a "finding of no significant impact. The mine is owned by Energy Fuels (TSE:EFR).

The firm said in a press release it plans to start production operations later this Fall. The mine designed to produce up to 200 tons of ore per day. Initial operations will be 50-100 tons per day.

Mine production at this level would result in 250,000 lbs. of U3O8 annual production. Additionally, this mine tonnage will provide about 1,000,000 lbs. of V2O5 annual production, which will be sold primarily to steel makers as an alloying agent.

With this approval, the Whirlwind Mine joins the Energy Queen Mine near La Sal, Utah as Energy Fuels' second fully permitted uranium/vanadium mine. At today's published prices, these two mines, when fully developed could generate revenue of US$75 million per year for Energy Fuels.

The Whirlwind mine will operate one shift five days a week and employ 24 people. Frank Filas, a manager for the firm, said it is in negotiations with Denison Mines to ship the ore to the White Mesa Mill in Balnding, Utah.

Denison wants more ore for Blanding mill

Getting product to Denison’s Mill (AMEX:DNN) in Blanding, Utah, is an issue for the firm. Ron Hochstein, Denison’s COO, told a Colorado newspaper, the Norwood Post, in August the mill is only operating at 75% of capacity or about 1,500 tons per day. There is not enough ore being mined he said to keep the mill as busy as the firm would like.

So far the company has spent $28 million to upgrade the mill which was built in 1980. Hochstein said that in 2006 the mill produced 242,000 pounds of uranium and in 2007 it produced 254,000 pounds.

Competition is coming to Denison. Two other uranium mills are developing plans to open in western Colorado and eastern Utah. In the Paradox Valley Energy Fuels is planning a new 1,000 ton per day operation. In Green River, Utah, Mancos Resources of Cortez, Colo., now owned by Bluerock Resources, submitted a request last May to the Utah Division of Water Rights for 800 acre feet of water to support a new mill. However, a hearing on the request scheduled for late August has been postponed. Bluerock currently has an agreement with Denison to provide ore to the White Mesa mill.

Denison mines is currently getting uranium ore from several mines in western Colorado including one in San Miguel County. There officials are complaining that the mill is pulling more tonnage over county roads than they agreed to in a permit. Mike Rozycki, a county employee, said Denision is pulling more than 12 truckloads per day. However, Denison said that the matter is open to interpretation as the company believed 12 truckloads was an “average,” and not the maximum number. Rozycki was not convinced, and said the county has put the firm on notice it thinks there is a violation. The firm may face a public hearing if the county decides to review its permit.

UR-Energy loses ground in NRC generic licensing delay

Ur-Energy Inc. (TSX:URE) saw its shares take a brief dive after the company updated the permitting and production timeline on its Lost Creek Project based on recently released licensing guidance from the U.S. Nuclear Regulatory Commission.

UR-Energy says the NRC revised the expected publication date of a final Generic Environmental Impact Statement (GEIS) for In-Situ Leach Uranium Milling Facilities from January 2009 to June 2009 in a July 28 Federal Register notice.

As a result of meetings with the NRC earlier this month to confirm how the revised completion date would impact timing for the issuance of licenses, Ur-Energy says it is revising its expectation for the issuance of the Lost Creek Project's NRC license from the second quarter of 2009 to the fourth quarter of 2009. First production from the Lost Creek Project is now anticipated to occur in the second half of 2010.

Ur-Energy President and CEO Bill Boberg stated, "Changes in the licensing program are beyond our control. It is important to understand that this will impact all early applicants equally and is not a reflection on Ur-Energy's Lost Creek application."

Uranerz Energy gains ground in Wyoming licensing push

Uranerz Energy Corp. (AMEX:URZ) announced that the Wyoming Department of Environmental Quality (WDEQ) said the company's application to build and operate an in-situ recovery (ISR) uranium mine was "complete" and the WDEQ review process can now move to the next stage.

The action by WDEQ marks a significant advancement of the company's application for a state permit to mine covering its Nichols Ranch ISR Uranium Project located in the central Powder River Basin of Wyoming. The company’s application for a Source Material License from the U.S. Nuclear Regulatory Commission requests an authorized yellowcake production capacity at the Nichols Ranch central processing facility of up to two million pounds per year. Like other firms in Wyoming, Uranerz is faced with delays from federal regulators.

In December 2007, the Company submitted its application for a permit to mine to the WDEQ for the Nichols Ranch ISR Uranium Project consisting of the Nichols Ranch property and the Hank property. When licensed and constructed, the Nichols Ranch ISR Uranium Project will consist of a central processing plant facility at the Nichols Ranch property and a satellite plant at the Hank property along with the associated well fields.

The expected production level from these two properties will be in the range from 600,000 to 750,000 pounds of U3O8/year. It is planned that the central processing plant at Nichols Ranch will be complete with a drying and packaging circuit capable of producing a finished yellowcake product acceptable to the conversion facility, the next step in manufacturing fuel for nuclear power plants. Start-up of operations at the Nichols Ranch ISR Uranium Project is projected for late 2010 or early 2011.

Ucore Uranium opens exploration on Alaska property

Landmark Alaska, a U.S. subsidiary of Ucore Uranium (CVE:UCU), a Canadian firm, will spend $4 million on an exploration program at Bokan Mountain on the Prince of Wales island site. It was Alaska’s only producing uranium mine from 1957-1971. During this time it produced 1.3 million pounds of uranium.

Cliff Hanson, general manager of Landmark, said the firm is targeting permits and the start of construction in the 2011-2013 timeframe. According to Hanson, the U.S. Geological Survey estimates total uranium deposits are 11 million pounds plus various rare earth elements. Hanson said his firm has filed 500 claims in the area. All of the claims are on federal land in the Tongass National Forest.

Hanson said the significance of the public lands is that no private individuals are permitted to live within the district of the Tongass National Forest, in which the Bokan project is located. There are no indigenous populations located within this area, and no jurisdictional land rights other than those permitted and supervised by the National Forest Service.

Uranium International gets NI 43-101 report for Dalton Pass, NM, property

Uranium International Corp.(OTC:URNI) has received a Canadian securities compliant National Instrument 43-101 technical report outlining the uranium mineral resource estimate for its Nose Rock Uranium Property.

The Nose Rock Uranium Property, McKinley County New Mexico, totals approximately 5,060 acres and consists of 102 lode mining claims and six State of New Mexico mineral Leases. The property is located on the northern edge of the Grants Mineral Belt of northwestern New Mexico. This property is optioned to Uranium International Corporation, formerly known as Nu-Mex Corp., where UIC has the right to earn up to 65% interest.

The Nose Rock Uranium Property was extensively explored by drilling over 1,000 holes by Phillips Uranium, a subsidiary of Phillips Petroleum, during the 1970s and was being brought to underground mining production in the late 1970s and 1980s. The plans were scrubbed due to collapse of uranium prices.

Using Phillips Petroleum data provided to the company by Strathmore Minerals, and based on additional drilling, the firm estimates a combined indicated and measured mineral resource of 1,286,231 tons of mineralized material containing 3,001,162 lbs of U3O8 at an average grade of 0.12%, consisting of a measured resource estimate of 797,726 tons of mineralized material containing 1,869,971 lbs of U3O8 and an indicated mineral resource estimate of 488,505.34 tons of mineralized material containing 1,131,190 lbs of U3O8.

In addition to the above measured and indicated mineral resource estimates, the firm reports an inferred mineral resource estimate of 800,638 tons of mineralized material at a grade of 0.12% U3O8, containing a total of 1,624,709 lbs U3O8.

American Uranium Corp. expands into Arizona

American Uranium Corp. (OTC:AUUM) announced it has signed a letter of intent with Nu Star Exploration LLC of Arizona lease that firm’s claims with an option to purchase a 100% interest in them. The deal involves 449 federal mining claims in Mohave and Coconino counties in northwest Arizona. The claims produced 19 million tons of uranium in the last two decades of the 20th century.

Bob Rich, American CEO, said he was involved with the claims while working for Energy Fuels in the 1980s along the Arizona strip. This is the firm’s first independent project in this area.

American Uranium is a Nevada firm and also has active properties in Wyoming. Rich said his firm is committed to spending $12.4 million to earn a 23% interest in the Wyoming Pine Tree-Reno Creek project. Over the next six years the firm will spend an additional $33 million to earn a 60% interest in the project.

Vane Minerals announces JV with Uranium One

VANE Minerals (LON:VML), a London, UK, based firm, announce that VANE Minerals (US) LLC, its wholly-owned uranium subsidiary, has signed a Joint Venture Agreement ("JV") on 5th September 2008 with Uranium One Exploration USA Inc. (TSX:UUU)

The JV is a 50-50 interest to both companies. Expenditures will be shared according to the on-going interest in the project and targets, commencing at 50% each. VANE will be operator of the projects at the exploration stage and U1 will be operator of the projects at the development, mining and milling stages.

The contributions of both companies result in a combined land package of 9,500 acres consisting of some 58 separate properties having 68 pipe targets identified to date, of which 10 are confirmed mineralized pipes.

Vane's exploratory work along the south rim of the Grand Canyon has generated intense controversy with environmental groups who see it as a threat to natural resource values in the region.

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Sunday, September 7, 2008

GE-Hitachi to miss Turkey bid deadline

It is the second firm to go public with concerns about Turkey's nuclear plans [Update 09/13/08]

overloadedGE-Hitachi is the second firm which will not meet the Sept 24 deadline for bids for a new nuclear power plant in Turkey. Bloomberg wire service reported Sept 4 that Jack Fuller, GE-Hitachi CEO, said, "We're preparing the proposal. I just don't think it can be completed before Sept 24th."

Fuller told Bloomberg it still plans to submit a bid. He said, "The government also wants competition. They want multiple providers of nuclear technology. So, if they only get one on the 24th, then that probably won't satisfy their needs."

GE_logoFuller said it is possible the lack of bidders may change the Turkish government's mind about the process. GE-Hitachi is working on the bid with partners including Turkey's Haci Omer Sabanci Holding AS and Spain's Iberdrola SA.

On Aug 25 Turkey's energy minister Hilmi Guler said he rejected requests from four potential bidders to extend the deadline by six months to resolve licensing and insurance issues.

GE-Hitachi is not the only firm with doubts about the bid process. According to Bloomberg, Westinghouse won't bid on the new plant in Turkey. Dan Lipman, an executive with the firm in London, said it will not propose an AP1000 for the first of three planned nuclear power plants at different sites.

"It's not clear to us that the authorities in Turkey know exactly what they want and that means to me it could be a long and expensive journey,'' he said in an interview with the wire service.

On Aug 26 Guler Sabanci, the chair of Sabanci Holdings, a major energy firm in Turkey, said her firm, which is partnered with GE-Hitachi, was reconsidering plans to submit its part of the bid on Sept 24. The firm holds out the chance the government may change its mind about the deadline which is why it is still preparing proposal documents.

However, Salahattin Hakman, the head of Sabanci Holdings energy unit, told Bloomberg if the government doesn't change the deadline,the bid partners may split up. Hakman also said another six months is needed to sort out insurance and licensing issues before a credible bid can be submitted for the 4,000-5,000 MWe plant to be built at Akkuyu.

GE-Hitachi reportedly plans to offer its Advanced Boiling Water Reactor (ABWR) in Turkey which comes in a range of 1,350-to-1,460 MWe per unit. A 4,000 MWe power station would need three of the reactors.

Fuller also noted that GE-Hitachi is closely following developments in the U.K. The firm expects to build at least two units there. However, if EDF buys British Energy it could advance the competitive position of Areva and its EPR reactor changing the business climate for new nuclear builds. Westinghouse is also contending for new reactor business in the UK.

Update 09/13/08

South Korea added its voice to those questioning whether to submit a bid on Turkey's nuclear energy tender due Sept 24. South Korea's state-invested power supplier, Korea Electric Power, said Sept 11 it is weighing its options over its planned bid to build nuclear reactors in Turkey, the company's president said.

Kim Ssang-su, CEO, said that while he could not go into detail, the project involves risk factors requiring close examination over the next few months.

The time line of "next few months" goes way beyond the bid deadline of Sept 24 suggesting the Korean utility thinks it has flexibility to make up its mind about the bid.

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Idaho nuke kissed by elephant in South Africa

What are Hans and Mary Lou doing with their free time?

elephant2Rod Adams has the story at Atomic Insights blog.

Now you will know what two top nuclear scientists from Idaho, Hans Gouger and Mary Lou Dunzik-Gougar, are really doing on the other side of the world!

See how a large African herbivore is tamed by sudden appearance of famed nuclear scientist in its midst. Have strange atomic particles affected its behavior? See the embedded video of the kiss itself on the Atomic Insights blog.

Also, listen to a radio interview Rod did with Hans and Mary Lou about their nuclear energy research on the Pebble Bed Modular Reactor (PBMR).

Best wishes for two of Idaho's own on continued success with large animals and with their research!

If the embedded video on Rod's site does not work click here.

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