Saturday, October 11, 2008

China launches Pebble Bed at Shandong

High temperature gas cooled reactor design is being developed at Tsinghua University

China CCTV image - PBMR launchChina's Huaneng Group has launched a demonstration of its PBMR nuclear power project at a plant in Shandong Province according to an English language report on CCTV.

Parties involved in the project signed agreements in Beijing on Oct 7. The HTR-PM project, which stands for ""High Temperature Gas-cooled Reactor Pebble-bed Module"" is the most advanced nuclear reactor in China. It is being developed by Tsinghua University and is expected to have an installed capacity of 200 MW.

Zhang Yanke, Deputy President of China Huaneng Group said "This nuclear power plant can save 550 thousand tons of coal a year, and cut carbon dioxide emission by one million tons, compared to thermal plants with the same capacity."

According to the CCTV report under the nuclear power development plan, China will have nuclear power generating units with a capacity of over 40 GW by 2020. If the country achieves that level, nuclear power will account for 4% of the country's total power generating capacity.

On the net

Unistar awards design contract for Calvert Cliffs

Areva and Bechtel will develop detailed design of the USEPR

Agriculture-drafting_tools_3A consortium composed of Areva and Bechtel has won a contract from UniStar to complete detailed design engineering for a proposed Areva Evolutionary Power Reactor (EPR) to be built adjacent to Constellation Energy's (NYSE:CEG) existing Calvert Cliffs nuclear plant in Maryland.

The scope of work includes full plant specifications and design of plant facilities and buildings. This will provide UniStar Nuclear Energy the information needed to make decisions about plant-equipment purchases and construction-site preparations. products.

World Nuclear News reports the detailed design engineering is a major milestone towards deploying a new nuclear power plant. It generates the tangible construction drawings and detailed specifications that are necessary to buy equipment and construct the plant. The master equipment list will be developed from these design

Tom Christopher, CEO of Areva's US subsidiary Areva Inc, said: "This new multi-year agreement now involves nearly 500 Areva and Bechtel engineers."

The design work will be done by Areva at its Lynchburg, VA, site. The value of the design contract was not announced.

PPL files with NRC referencing Areva's EPR

PPL Power CerterPPL Corp. (NYSE:PPL)has filed an application with the Nuclear Regulatory Commission for a license to build and operate a new nuclear plant at Berwick, Pa. It is expected to use an Areva EPR and will benefit from the design work deal inked by Unistar this week. The Bell Bend nuclear plant would be built near the company's existing two-unit Susquehanna nuclear power plant.

Victor N. Lopiano, president, PPL Nuclear Development, said, a final decision by PPL on whether to move forward with the Bell Bend plant won't be made for several years, and will depend on NRC approval, on receiving a federal loan guarantee for the project, on attracting additional investors and on the company's view of the power market fundamentals at that time,

In additional to the COL, PPL submitted the first part of the federal loan guarantee application to the Department of Energy on Sept. 29. The company will submit a second part of the application as required before the Dec 19 deadline.

The Bell Bend license application includes the U.S. Evolutionary Power Reactor from AREVA of France, which is under design certification review by the NRC. The EPR is also referenced in COL applications to the NRC by Ameren in St. Louis and Constellation's Nine Mile plant in New York.

What about common design elements?

pennies add upNRC's review of the Bull Bell COL, which is more than 10,000 pages, is expected to take three to four years. The application is submitted in electronic form. What NRC gets is a a single set of paper binders and lots of CDs for its engineers to review. It's the same with the other two plants as well.

With all three plants based on the same detailed design, for which the work just got underway, the question has to be asked whether the NRC will combine some of its review efforts? Nuclear plant applicants reimburse the NRC at a rate of $250/hour for design reviews. With 10,000 pages of plant information, those hours will add up. Somebody must have asked NRC this question already. What's the answer?

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Friday, October 10, 2008

Western lands uranium gopher for October 11, 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 expanded version of an article published in Fuel Cycle Week V7 N298 on 10/08/08 by International Nuclear Associates Inc., Washington, DC. ~ Portions of this blog post did not appear in FCW. ~

And so it begins - Blue Rock comes up short

blurorck_logoThe global financial crash crunch will have an impact on uranium mining and here's one of the first signals of what may be coming down the pike. Bluerock Resources Ltd. (CVE:BRD) is shutting down development work for two weeks as it struggles to find adequate working capital in the midst of the current credit crisis.

The company said it continues to hold discussions with several public and private companies to get capital for its operations and to advance it's strategic plan to become a uranium producer in the U.S. Southwest. It currently produces uranium at its mine in Montrose County, Colo.

In a separate development, Bluerock Resources said that it had pulled out of the joint venture to build a new uranium mill at the Mancos site in a industrial park in Green River, Utah, and that Mancos had refunded $200,000 in expenses to Bluebird. (More news on the proposed Mancos uranium mill below)

International Isotopes scouts for $55M

laflinSteve Laflin, (right) CEO of International Isotopes, is tenacious and he has to be looking for $55 million to build a plant to extract fluorine from depleted uranium for use in high tech electronics and pharmaceutical manufacturing.

His work a as the CEO of a small eastern Idaho company aiming to build a $55 million plant to extract industrial gases from depleted uranium has narrowed its search to four sites, including two in Idaho.

International Isotopes Inc. (OTC:INIS) Laflin said last Tuesday in Idaho Falls that one of the Idaho sites is near Idaho Falls, where France's Areva plans a $2 billion uranium enrichment plant. The other Idaho site hasn't been disclosed.

The company also is considering sites in Lea County, NM, where Louisiana Energy Services / Urenco is building a separate uranium enrichment facility, and in nearby Andrews County, TX, which has a low-level waste dump.

Laflin told the AP his proposed facility could be anywhere on transportation routes between uranium enrichment plants that produce depleted uranium and the facilities where uranium waste is disposed.

"We're meeting with all the elected officials and all the economic development officials" in areas where the plant could be built, Laflin said.

International Isotopes aims to take depleted uranium from the enrichment process and extract the fluoride gas into a very pure form for use in high tech industrial applications such as micro chip etching and pharmaceuticals. The 13-year-old Idaho company has 35 employees and sales of $4.5 million in 2007. It and produces isotopes such as cobalt-60 used in medical treatments.

The company is evaluating several ways to raise cash for its plant, a process Laflin said hasn't been easy in the current economy.

"There can be no guarantee the capital will be available, or available under acceptable terms," he said.

-- Prior coverage on this blog of INIS.

Uranium economics debated in New Mexico

Thomas_Powers logoStrong arguments against a new uranium boom in New Mexico were presented in Gallup the last week by Thomas Powers, an economist and research professor at the University of Montana. He told the Gallup Independent newspaper he has a “hard-nosed view” of the revival of the uranium mining and milling industries.

At a meeting sponsored by the New Mexico Environmental Law Center of Santa Fe, Powers, who consults widely across the West on resource issues, said that unrealistic expectations for a free lunch from uranium mining are based on “folk economic analysis.” Powers is the author of the book “Post Cowboy Economics” in which he argues that fearful, crisis driven environmental and economic development policies are unnecessary and inappropriate, and often counterproductive.

Powers said people who believe there will be a new economic boom from uranium mining are are missing three important factors that will limit the economic benefits from new uranium mines.

The first, and most important, is that new mines and mills are highly automated. A new mine opening today will employ far fewer people than an operation of similar size in the 1950s. This means there will be a lot fewer new jobs than people expect, and the requirements for them will require a lot more skill and education.

Second, the costs of extracting and processing uranium have gone up. Even though the price of uranium is at a historic high, so are the costs of outfitting a new mine or building a new mill.

Finally, Powers said that miners now have to factor in the cost of cleanup and local governments have to provide services such as law enforcement, fire protection, and basic infrastructure. This means that property tax revenues will have claims on them even before they are collected once development starts up. “It’s not the wild west anymore,” Powers said.

The boom and bust cycle of uranium mining is inevitable Power said. More significantly, Powers said that New Mexicans are overrating the role uranium that could be mined in their state will have on world markets. Powers cautioned his audience against believing predictions that a return of the uranium mining industry “will provide an economic bonanza” for the state in terms of employment, payroll, and tax revenues. He added, “Caution is called for before people sacrifice permanent, unique, and irreplaceable” characteristics” of their communities.

According to Powers’ economic estimates, “New Mexico doesn’t have a corner on the uranium market.” He said that according to current estimates the U.S. has about 7% of the world reserves and New Mexico has only 2%. There may look like there is a lot of uranium to be mined, but in terms of global markets, New Mexico is just another player.

The beat goes on over new uranium mines

NewMexicoUncPowers wasn’t the only expert speaking about uranium mining to diverse audiences. In Grants the New Mexico State Legislature Indian Affairs Committee held a joint hearing with the legislature’s Radioactive and Hazardous Waste Committee to assess the potential for expanded uranium mining in New Mexico.

Public comment came fast and furious from both sides of the issue. Opponents of new mines told the Gallup Independent Newspaper their primary issues is that once the uranium was gone, abandoned mining works left a toxic legacy that polluted drinking water supplies.

Candace Head-Dylla, representing the Bluewater Downstream Alliance, told the joint committee hearing wells on private property were made unusable from abandoned mines. Like many others at the hearing, she called for a ban on all new uranium mining in New Mexico until the pollution from abandoned sites is cleaned up. Her views were echoed by Dr. Jana Gunnell, a member of Physicians for Social Responsibility.

She said that due to the radiation health risks, uranium should not be mined at all. She also said that uranium mining and the resulting pollution of drinking water supplies, may have contributed to cancer cases in the Grants area.

The uranium mining industry also got a chance to speak its mind. Terry Fletcher, president of Rio Algom Mining denied that the industry today leaves behind a toxic legacy. He said that today’s environmental laws require reclamation of mined sites. He said, “today companies cannot cut and run.”

Rick van Horn COO of Uranium Resources (NASDAQ:URRE), said that this firm must meet all cleanup obligations in its license to mine. He added the state regulations have specific requirements about groundwater restoration. He noted there are exceptions when a company cannot meet technical requirements, but the miner must file a request for a change to its permit with the state and a public hearing is held to get input. “It’s not something we do in secret,” van Horn said.

Goliad still vexed about uranium

lawsuitWhile the future of uranium mining was being debated in New Mexico, in Texas the Goliad County Commissioners have filed a lawsuit against Uranium Energy Corp (AMEX:UEC) for allegedly contaminating the groundwater during initial drilling operations for an ISL mine. The county has filed a case in federal district court claiming UEC failed to grout the drill holes allowing storm water to drain into the subsurface formation.

Jim Blackburn, the attorney who filed the lawsuit for the county, also claimed that the Texas Commission on Environmental Quality (TCEQ) using the contaminated groundwater as a “baseline” for UEC’s subsequent permit. He argued that if the firm is allowed to proceed that the groundwater will have elevated levels of heavy metals at the end of the mining process.

For its part UEC said in a statement that the company is committed to “meet or exceed all applicable environmental regulations in the restoration of mined sites.” The firm also pointed out the restoration process is “carefully monitored” by the state government.

Blackburn disputed the effectiveness of state monitoring of uranium mines (video below). He told the Victoria Advocate newspaper that the TCEQ routinely allows mining companies to amend the levels of minerals in restored groundwater. He pointed to statistics that showed over the past two decades 51 requests have been granted out of 80 submitted to the agency.

Lisa Wheeler, a spokesperson for TCEQ, said that requests for amendments to permits regarding groundwater restoration are subject to public hearings. However, Ted Long, a member of the Goliad County Commission, said he came away from Blackburn’s statement with a clear impression that groundwater is almost always worse off after mining.

Blackburn also pointed out that TCEQ does not independently verify baseline groundwater monitoring data supplied by mining companies when they ask for changes to their permits. In response, Goliad County Commissioner Jim Kreneck said the whole process “is like the fox watching the hen house.”

Video interview with Blackburn

Texas environmental coalition calls for statewide ban

On Oct. 8 a coalition of South Texas residents and environmentalists called for a statewide moratorium on uranium mining, saying weak state laws are allowing uranium companies to threaten Texas drinking supplies.

“We want to put a stop to uranium mining until we have better protections in place,” said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club. “For too long, we have allowed uranium miners to explore, mine and leave behind contaminants that poison our groundwater.”

The Alliance of Texans for Uranium Research and Action released a report that analyzed already mined uranium sites in Texas. The report found that in 51 of 80 sites, the TCEQ relaxed water quality standards “by failing to enforce initial requirements and/or amending restoration levels.”

U.S. public is vexed by uranium mining

geologistsWhile Uranium Energy Corp was being hauled over the coals by local government in Texas, the CEO of another Texas uranium firm said he’s not surprised by the opposition to new uranium mining in his state and elsewhere in the U.S. Paul Goranson, VP of privately-held and Texas-based Mestena Uranium, spoke at a mining conference in Las Vegas, Nev., on Sept 23. According to a report in Mineweb, he said the resurgence of the U.S. uranium mining industry is being stymied by the public’s lack of understanding of how uranium benefits the economy.

Goranson said firms starting new mines, especially in areas which haven’t been disturbed by previous exploration, face the biggest challenges. However, there is a lot of activity. He estimates 60 firms are drilling for uranium and they employ 1,200 people mostly in western states. He said that “near-term production” will be derived from historic resource areas rather than greenfield sites.

He also complained of a “lost generation of uranium workers” who left the industry in the 1980s, but he said uranium firms are now hiring geologists from the oil & gas sector.

New mills for Colorado and Utah get first hearings

An open house in Montrose County, Colo., and a preliminary hearing in Emery County, Utah, both indicated progress for two new proposed uranium mills in the West. In both cases local officials are getting their first look at requests to approve land use decisions for the mill sites.

  • Energy Fuels – Pinion Ridge

energy fuelsIn Montrose, Colo, a public meeting held Sept 24 brought together officials from the county planning commission and the state department of public health and about 50 citizens. At issue is an application for a special use permit requested by Energy Fuels of Nucla to build the Pinion Ridge mill in the Paradox Valley.

Montrose County Commissioner Lana Kinsey told the Grand Junction Sentinel newspaper the application is “unprecedented” because it is the first uranium mill proposed to be built in the area in over 20 years.

Steve Tarlton speaking for the state health agency, told the public meeting that new technologies and “tougher regulations” to protect the environment mean companies will “face giant liabilities” if they compromise public safety.

However, San Miguel County Commissioner Art Goodtimes was not convinced. He said his county shares a watershed with Montrose County and is worried about the impacts of the mill on future generations. Despite the promise of high paying jobs related to the mill, he said, “I don’t think it is worth the short-term benefits.”

~ Prior coverage of Pinion Mill issues on this blog

  • Mancos uranium mill

In Emery County, Utah, a public hearing held on Sept 25 by the planning and zoning commission took a look at requested changes to land to be used for the Mancos Hills Industrial Park. The 2,547 acre parcel has two proposals for development. One of them is a new uranium mill which would use 640 acres.

A more controversial aspect of the new mill is its request for 800 acre feet of water. A hearing on that issue scheduled for August 27 by the Utah State Engineer has been postponed, perhaps for as long as six months. Protests are expected to be filed against the requested use of the water according to Sarah Fields of Uranium Watch based in Moab, Utah.

At the land use hearing the commission heard that the site is attractive because of the nearby interstate highway and railroad services. The type of industrial zoning needed for the mill is still at issue. The county wants to preserve the area for heavy industry and keep hotels, truck stops, restaurants, and retail in Green River City. The commission plans to hear more public testimony on the development of the industrial park.

In a separate development, Bluerock Resources (CVE:BRD) said in a press release that it had pulled out of the joint venture to build the Mancos mill and that Mancos had refunded $200,000 in expenses to Bluebird.

  • Nuclear power for Utah?

The other proposed use at the Mancos Industrial park is a nuclear power plant. The project is being developed by EnergyPath Corp., a consultancy, based in North Carolina, and Transition Power, a privately-held Utah firm. The two firms are proposing to build a 3,000 Mw plant to replace the now canceled coal-fired Intermountain Unit #3 which would have been a 900 MW facility.

The project’s economic prospects depend on a legislative effort to follow Florida’s model which allows recovery of construction costs while the plant is being built. So far the Utah State Legislature isn’t buying it. California cities, such as Los Angeles, which could be major customers for the electricity from the nuclear plant if it is built, haven’t yet publicly indicated whether they would invest in it.

Opposition to the nuclear project at the Mancos Industrial Park site comes mostly in the form of objections to its claims on water for cooling systems. In a strident editorial published on Oct 4, the Salt Lake City Tribune wrote,

“The nuclear power plant would be a first for Utah, and for good reason. It's stupid to even contemplate building a water-intensive power plant in the desert and particularly in the upper Colorado River Basin, where allocated water rights already exceed the river's flow during dry years. We understand the county's desire to create high-paying jobs and produce carbon-free energy, but there are better, safer alternatives than nuclear power plants.”

Aaron Tilton, the public face of Transition Power, now has an angry Salt Lake City Tribune to face among his other problems.

~ Prior coverage of Transition Power on this blog

Uravan mill cleanup complete

A 20-year $120 million cleanup of the old Uravan Mill along the San Miguel River in western Montrose County was completed in September. The U.S. Environmental Protection Agency certified the job is done. The Department of Energy will be responsible for long-term monitoring of the site.

Cleanup involved moving more than 13 million cubic yards of mill tailings and treating 380 million gallons of contaminated liquids.

Umetco, a subsidiary of Dow Chemical, had operated the mill since 1984. It reportedly paid $120 million to cover the costs of cleanup. A slice of the former site, 140 acres, has been donated to public use to the Rimrock Historical Society to house a museum about the history of uranium mining in the region.

Jeff Deckler, remedial programs manager for the Colorado Department of Public Health told the Grand Junction Sentinel even though the cleanup is done, the job of monitoring is not.

“We’ll keep watching that site pretty much forever,” he said.

Powertech moves forward in Colorado

Despite intense opposition to its plans for an ISL mine near Nunn, Colo, Powertech (TSE:PWE) is reportedly making quiet progress on its planned “Centennial” mining site near Nunn in northeast Colorado.

Richard_Clements_PowetechRichard Clements, Powertech CEO, (right) told the Ft. Collins news media on Oct 1 that the firm will complete drilling tests by December and apply for an underground injection control permit. The first production wells could be drilled by the end of 2009. The current drilling is being carried out to determine where to place the mine on a 15 square mile site northeast of Ft. Collins, Colo. Powertech also has a similar project in South Dakota.

Clements is bullish on the company’s future. He said once production gets underway the firm’s stock will rise to reflect the value of the operation. Powertech estimates the mine will produce 9.7 million pounds of uranium over its useful life. At $60/lb the resource is worth nearly $600 million.

Earlier this year Synatom, a subsidiary of Electrabel, purchased 20% of the Powertech’s stock for $9 million. The firm operates nuclear power plants in Belgium. Powertech’s stock closed on Oct 3 at $0.47/share near the bottom of a 52-week range of $0.40-$2.78.

Powertech is also facing some competition for uranium in northeast Colorado. Australia-based Geovic (TSE:GMC) is also developing an ISL mine in Weld County. Unlike Powertech, which has acted almost like a magnet for opposition to uranium mining. Geovic, which actually has a potentially much larger operation, has mostly flown below the radar in terms of public attention. The firm also announced it is moving its offices from Grand Junction to Denver to be closer to other uranium services and investors.

Statewide the Colorado Geological Survey reports that since 2005 more than 20,000 uranium claims have been filed with the state.

~ Quick Notes ~

Whirlwind mine moves closer to production – Six people are now working at the Whirlwind uranium mine located six miles from Gateway, Colo, in Mesa County. BLM approved the mine’s permit in September. Gary Steele, VP at Energy Fuels (TSE:EFR), said the firm will begin shipping ore to the Denison Mill in Blanding, Utah in “a few weeks.” In the meantime, the crew is getting ready to produce up to 200 tons a day of ore once the mine reaches full production. A second mine owned by Energy Fuels, the Energy Queen mine, located in LaSal, Utah, is also getting ready to produce ore and has a similar production target.

White Canyon Uranium (ASX:WCU) has acquired two additional uranium deposits in Utah comprised of 58 claims on 1,079 acres. The Blue Jay and Marcy & Look sites were located via exploration in the 1970s. White Canyon has started the exploration permitting process. Drilling operations will start as soon as practicable, initially on the Blue Jay Project.

The new projects were acquired from local Blanding prospectors Kevin Shumway and David Lacy for cash and shares of stock: Blue Jay $200,000 and 3.2 million shares, while Marcy & Look was bought for $100,000 and 1.6 million shares. The stock closed at $0.15/share on Sept 23. The combined value of the shares exchanged at this price is $720,000.

Fischer-Watt Gold acquires U.S. uranium assets – In its first foray into the uranium market Fischer-Watt Gold (OTC:FWGO) will acquire mineral claims and leases in Wyoming, South Dakota, and Arizona from Tournigan Energy (CVE:TVC) for $310,000. Tournigan will retain a potential 30% interest in the sites. So far the firm has drilled 80 holes in its Cyclone Rim claims in the Great Divide Basin in Wyoming. Previously, Fischer-Watt was focused on gold properties in Arizona and Nevada.

Uranium City Resources (CVE:UCR) has entered into an agreement with Running Fox Resources to earn up to a 60% interest in 178 lode mining claims (over 3,160 acres) located in an area of mineralization south and west of Albuquerque, New Mexico. This is the firm's first acquisition outside of Saskatchewan.

In the late 1970s, this area was the subject of exploration efforts by Gulf Mineral Resources, Pioneer Nuclear, Occidental Petroleum and Energy Reserves Group. The project was abandoned when the price of uranium collapsed in the early 1980s.

Uranium sought in Missouri

A Colorado firm plans to invest $5 million in Mississippi County, Missouri to validate the extent of uranium deposits first discovered in 1978. John Gustavson, of Water Research & Development from Boulder, Colo., is planning to drill 30 100-ft deep wells to map out a possible ISL mining operation. However, he told the Missourian newspaper on Sept 23 local farmers are strongly opposed to his drilling plans despite the fact that he has permits in hand from the local government in the area. Getting easements for some of the drilling is still a problem. He noted that ISL mining will not disturb surface water supplies and will remove about 60% of the uranium from subsurface groundwater.

Gustavson told the Sikeston Standard Democrat on Sept 21 his investors have put up $1 million for exploratory work this year and pledged an additional $4 million if testing shows good results. The firm is not publicly traded so all of the investments are private placements.

Once the resource is mapped production could start-up within two years. If the mine in Missouri is developed, Gustavson says he will ship the uranium from it to a plant in Paducah, KY, for further processing. He said there is enough uranium in the ground in the area to support ISL mining operations for the next 30-40 years. He added his firm is also engaged exploration for uranium in South Carolina and Kansas. Prior to the current uranium project, Gustavson worked all over the world on oil and gas exploration.

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Thursday, October 9, 2008

Shel Holtz workshop in Idaho Falls

An introduction to Social Media Oct 22nd at the Shilo Inn

shel_holzShel Holtz, the instructor for this workshop (right), is one of the world's recognized leading authorities on intranets.

He is a leading advocate for the value and power of communication from your organization's leaders.

He has led internal communications at two Fortune 500 companies and counseled scores of others, including Intel, The Arkema Group, Symantec, Applied Materials and PepsiCo.

Full-day workshop

A full-day, immersive workshop on social media, covering strategy and tactics and delving into the specific tools, including blogs, wikis, podcasts, social networks, social bookmarking sites, social ranking services, microformats, tags and widgets.

Participants emerge prepared to integrate social media into broad communication plans and to implement specific strategies that meet measurable objectives. The session covers both internal and external communication.

The workshop is Wednesday, Oct. 22. Registration/check-in is from 8 am to 9 am and the workshop starts promptly at 9 am and runs until 4 pm at the Shilo Inn Convention Center in Idaho Falls.

Lunch is included in the cost --$59 for those registered by Oct. 17 and $79 after Oct. 17. Checks should be payable to IANS (Idaho Section of the American Nuclear Society)

RSVP to IANS attn: Nikki Iwert-Bays
(208-526-8587 or Nikki.Iwert-Bays@inl.gov)

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Sunday, October 5, 2008

Ten tons of chickens, five tons of truck

The Department of Energy's loan guarantee program is overloaded

Overlaoded ChickenTruckIn an old joke told to me by a man who made a living clearing farmers' fields of tree stumps with dynamite, a truck is driving down the street of a small town and something unusual happens every time it comes to a stop light. The driver hops out, runs around to the back, pulls a 2x4 out of spare tire rack, and whacks the daylights out of the vehicle. As soon as the light turns green, he hops back in and drives off. Needless to say, he is eventually stopped by the local sheriff and asked to provide an explanation.

Here it is. The truck, which has a five ton load limit, is carrying ten tons of chickens which have to get to market for the man to make a living. While he is driving along the wind through the cages keeps most of the chickens aloft lightening his load. It is only when he stops that he has to hit the truck to keep the hens airborne.

Ten times overloaded at Department of Energy

overloadedThis is where the Department of Energy finds itself after getting $188 billion in applications for federal loan guarantees to build new nuclear power plants. These aren't loans.

The congressional limit on the program is a mere $18.5 billion of which $2 billion is allocated to uranium enrichment plants. The agency doesn't just have twice its carrying weight. It has ten times the limit.

In a press release sent out late last week, the startled feds acknowledged there are a lot of chickens on its truck.

DOE has received 19 applications from 17 electric power companies for federal loan guarantees to support the construction of 14 nuclear power plants in response to its June 30, 2008 solicitation. The applications reflect the intentions of those companies to build 21 new reactors, with some applications covering two reactors at the same site. All five reactor designs that have been certified, or are currently under review for possible certification, by the NRC are represented in the applications.

The 'guarantees' are federal insurance, like crop insurance for farmers, that provide confidence for commercial loans. In the case of nuclear plants, the program covers 80% of the cost of the new reactor and 100% of the loan. Utilities signing up for the program pay hefty fees to participate in it. The government has no liability unless a project defaults. In the era of the "prudent investor" as a uniform law among states, no one is going to start down the road to build a new reactor unless they are very sure of their finances.

Everyone into the pool!

Bloomberg wire service reported that Richard Myers, VP at the Nuclear Energy Institute (NEI) stated the obvious and what everyone expected. He said the federal loan guarantee program "appears to be over-subscribed."

"Clearly, $18.5 billion is not adequate to provide the financing support necessary."

The Bloomberg piece provides a quick snapshot of three of the applicants.

  • Southern applied for help with its planned expansion of the Vogtle plant in Georgia
  • PPL is planning a third reactor at the Susquehanna plant in Pennsylvania
  • Duke is planning a new plant in South Carolina

World Nuclear News offers additional insights into the applicants. They include;

  • Unistar for Calvert Cliffs, MD
  • Dominion for North Anna, VA
  • Exelon for Victoria, TX
  • Luminant for Comanche Peak, TX

In addition to the nuclear plants, both USEC and Areva have submitted loan guarantee applications for their planned uranium enrichment facilities.

What's a mother to do?

unhappyClearly, the Department of Energy is going to make a lot of people unhappy since it has to award only $1 in coverage for every $10 applied for under the program. One thing in its favor is that by the time DOE gets done evaluating the applications, a new Congress will be in session. It will have to decide in 2009 if a loan guarantee program that is too small by a factor of ten needs some adjustment.

While this policy issue is working itself out, the industry is going ahead, filing COL applications with the NRC and making investments in the capacity to build the plants. US News & World Report reported on Sept 30 that Areva has announced plans to build a nuclear parts plant for its EPR reactor in the U.S. In September Shaw Group and Westinghouse teamed up at Port Charles, LA, to build a plant to make similar large "modules" for AP1000 reactors.

In Ohio USEC let a contract in September for $1 billion as part of its construction of a new uranium enrichment plant. Areva is planning to build a $2.4 billion uranium enrichment plant in Idaho. In terms of the loan guarantees, given the costs of the plants, under the current program, DOE can choose to support only one of them.

chickensIn short, loan guarantee program or not the nuclear industry in the U.S. is forging ahead. That's a lot of chickens in a lot of pots. It is difficult to predict what the next president and congress will do about the issue. We'll all have to see about those chickens next year.

# # #

TVA - there are some jobs the government must do

Providing for the common good is one of them

FDR TVA signingIn the arguments against nuclear energy, critics have taken aim at the debt ceiling of the Tennessee Valley Authority (TVA) and the federal loan guarantee program for support investments in new nuclear power plants. These critics seem to have forgotten something very important. There are some jobs the government must do, and one of the most important is to take on the very large tasks that cannot and do not belong in the realm of the so-called "free market."

The promise of Franklin Roosevelt's New Deal included a commitment to raise a region out of poverty. It was premised on the belief that it is the role of the federal government to provide for the common good by bringing the benefits of affordable electricity to every household, business, and community without regard to fear or favor. The role of government is to preserve the quilt of bonds that tie a society together.

"Freedom from want--which, translated into universal terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants" Franklin Roosevelt, message to Congress, January 6, 1941.

In this case the issue is to prevent the economic consequences of global warming from undoing our civilization. Building more coal fired power plants, instead of nuclear, is not an answer. It does not provide for the common good.

Bumping up against TVA's debt ceiling

david_freemanSome people don't get it, and have their own agendas. Two former TVA chairmen, S. David Freeman (right) and Craven Crowell are on a press tour of TVA's service area wringing their hands about the utility's debt ceiling. Both men are critics of TVA's plans to trade out older coal-fired power plants, and their greenhouse gases, for new nuclear plants including Watts Bar and Bellefonte.

In fact, what both men want to do is to throttle the nuclear renaissance as it is being born by using a string of promises they made about TVA's debt nearly three decades ago. These two see the debt ceiling issue as a way to drive a zero sum wedge between the utility and the congressional delegations in the multi-state region served by the utility. In fact they are apologists for investors who say they support wind and solar energy projects. However, what you get when you stop new nuclear power plants is more coal plants.

Solar and wind cannot provide 15,000 MW of electric power 24 x 7 365 days a year. Renewable sources are peak power only. It is coal which can provide baseload power that has a vested interest in its existing infrastructure including current mines. TVA's nuclear plans are up against more than an argument about its debt ceiling. The battle is on over the future path of investment in energy generation and fuels sources in a multi-state region brimming with coal mines. An argument against an increase in debt ceiling is an argument for displacing TVA's new nuclear power plants with private sector coal-fired plants. What you get are Freeman and Crowell wearing hats for coal even if they don't intend it.

Nukes are expensive to build

Bellefonte 3 & 4 sketchThe costs of new nuclear power plants are high. Watts Bar will cost $2.5 billion. TVA is evaluating several options for Bellefonte including building two new Westinghouse AP1000 units at $4.5 billion each and / or finishing two partially complete units for a price tag of about $3.6 billion. In May 2007 TVA reopened Browns Ferry for a price tag of $1.8 billion.

TVA receives no federal funding and hasn't for more than a decade. TVA's current debt is about $25 billion and is bumping up against a $30 billion ceiling. The debt is guaranteed by the revenue from the sale of electricity from its power plants. In its strategic plan the giant utility says it is retiring debt and setting a limit to how much it will carry relative to the value of existing assets.

The current TVA chairman is Bill Sansom, and he told the Tennessean newspaper on Sept 18, "if you are running a company that is continuing to grow, that changes the way you look at that $30 billion cap. If you are growing, it doesn't mean your debt shouldn't grow relative to your worth."

TVA President Tom Kilgore told the Chattanooga Free Press on Sept 16 that, "as we grow the debt cap will be a problem."

Sansom points out that while nuclear power plants are indeed expensive to build, they operate at lower costs compared to fossil plants.

Congress must address the debt ceiling

The Tennessee congressional delegation wants to see a long-term plan for the utility. Sen. Lamar Alexander told the Free Press he thinks the TVA board is doing a good job, but right now he is cautious about raising the debt ceiling. Rep. Jim Cooper pointed out that TVA's legacy of debt from the 1980s is higher relative to revenues than commercial utilities. His comment ignores the fact that TVA isn't a commercial operation and, as a quasi-government agency, is intended to provide for the common good apart from the profit motive.

Only Rep. Zack Wamp (R-TN) points out that TVA is working with a consortium of utilities called NuStart and will share costs and ownership of generating facilities with other utilities. He added,

“The nuclear construction program is basically new partnerships with other utilities to build more nuclear capacity in the southeast United States, and TVA is basically the home base for some of these plants. This debt is going to be shared and is going to be paid for in the most efficient and effective return of any of the power generating assets in the country. That’s a good business model.”

What happens at TVA with its debt ceiling is a bellwether for the nuclear industry in the U.S. It will be a signal how Congress will deal with the loan guarantee program for new nuclear power plants. Note that TVA does not participate in that program.

global-warming-mapTVA will have to show Congress, which just completed a $700 billion bail out of Wall Street, that it can support an increase to TVA's debt ceiling because it makes sense for the region and for the country. This isn't a "bail out" because TVA makes money every day.

The government has a mission to provide for the common good, and that includes retiring old, fossil fuel power plants by building new nuclear plants to address the very real threat of global warming. That's a "good business model" as Rep. Wamp would say.

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Clamping down on loose nukes

Nuclear terrorism is a threat to everyone

loose_nukesA new organization started operations in Vienna this week with a mission of blocking theft of nuclear materials to use them for terrorist attacks. The New York Times reports that the immense task of the new nongovernmental agency will be to increase security to "eliminate weak links in the global security chain." The NYT said the chief sponsor of the agency is the Nuclear Threat Initiative (NTI) based in Washington, DC.

Former US Senator Sam Nunn is one of the leaders of NTI. He told the NYT,

“The stakes are very high. There’s no doubt that terrorist groups are trying to get this material.” Nunn said the attraction is that an atomic weapon the size of a grapefruit could level an entire city the size of New York.

The new organization is called the World Institute for Nuclear Security (WINS) (press release). It is starting out with a budget of $6-8 million and will initially hire a staff of about a dozen nuclear materials and security specialists. The agency is being set up in Vienna to be close to the IAEA. Mohamed ElBaradei, Director of IAEA, strongly endorsed the new agency. The first director is Roger Howsley, who previous held an executive post for security at British Nuclear Fuels.

Initial work by WINS will be to help bolster security at sites that handle nuclear materials that can be made into a bomb. As funding and expertise expands, the agency plans to work on control of radioactive materials that could be used in a 'dirty bomb."

According to the IAEA in 2007 there were 200 reports of radioactive materials that were unaccounted for. The high profile event last year was the break-in at the Pelindaba site in South Africa. While no nuclear materials are said to have been taken in that incident. the South African government told the IAEA the two teams of intruders had prior knowledge of security systems. Indeed, the alleged mission of one of the teams was to disable the security systems while the other was to acquire HEU stored at the plant.

Howsley said in a prepared statement that his organization can't carry out it mission alone. Last May he told World Nuclear News, "security professionals around the world have a strong common interest not to wait until a security event" before they begin to cooperate." In this week's announcement he reaffirmed that focus.

“We believe that a key element of global nuclear security must be the facility operators who have ‘first-line’ responsibility for the security of their materials. WINS will fill dangerous gaps in existing government and international regulatory efforts.”

Funding for WINS comes from the Peter G. Peterson foundation, the U.S. Department of Energy, and the Government of Norway.

On the net

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Hutton out of UK nuclear new build

Government shuffle creates a new agency responsible for energy and climate change

Ed-Milibank_UKJohn Hutton, the UK's tireless advocate for new nuclear power plants, is out of the business. He's been shifted to the Defense ministry and replaced by Ed Miliband (right) who heads up a new department which will deal with both energy and climate change issues. These moves increase the government's emphasis on global warming issues.

Paradoxically, it was Hutton's advocacy for a coal-fired power plant that may have sparked the change. The UK Independent newspaper reported on Oct 5 that controversial plans to build the nation's first new coal-fired power plant in the last three decades in Kent is what caused PM Gordon Brown to move Hutton to another post. Hutton reportedly came under fire from Miliband and also Hilary Benn for failing to require the plant to include as yet untried equipment to remove CO2 from its emissions.

Brown also reappointed to his cabinet Margaret Beckett who served under former PM Tony Blair in environmental and foreign policy posts.

Miliband must now set to work on reducing the UK's greenhouse gas emissions by 20% and developing new nuclear power plants. He will be aided by Peter Mandelson, who has been recalled from the European Commission.

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