Saturday, November 22, 2008

LES to double size of National Enrichment Facility

Urenco is seeking 50% U.S. market share

Uranium enrichmentLouisiana Energy Services (LES) surprised just about everyone with an announcement Friday Nov 21 that it plans to double to the size of the National Enrichment Facility now under construction in Eunice, NM, which is in the far southeast corner of the state.

LES said it will pursue expansion of the National Enrichment Facility from its current planned size of 3 million separative work units (SWU) to 5.9 million SWU. As currently configured, the National Enrichment Facility will provide the equivalent of 25% of the total US nuclear reactor fuel demand. By doubling its capacity, the facility could reach as much as 50% of the U.S. market for enriched uranium for civilian nuclear power plants by 2015.

LES President and CEO Reinhard Hinterreither said in a press release . . .

"LES began examining the business case to pursue an expansion of its plant in Lea County several months ago. That business case depends on several factors: commitments from utility customers, availability of investment capital, long term stability of the US enrichment market, community support, and rests on the approval of state and federal regulatory agencies and the Urenco Board."

Expansion requires a new round of permits

Local media coverage in New Mexico indicates that construction expenditures to date total $471 million with another $100 million to be spent by the end of December.

nrc logoExpansion of the facility will require an application to the NRC for a change to its license and a new round of public hearings. NRC spokesman Scott Burnell told the Hobbs, NM, Daily Sun the agency has not yet received the application though they are expecting it.

New Mexico Environmental Department Secretary Ron Curry told the newspaper the expansion will require the plant to update its water quality permit. Environmental groups in New Mexico are challenging the current permit in court after exhausting administrative appeals. It is likely they will continue their protests with the new one once it is filed with state regulators.

LES move changes the competitive landscape

The expansion of the plant comes at a time when three other uranium enrichment plants are being planned to serve North American nuclear energy markets. These plants include USEC in Ohio, Areva in Idaho, and General Electric in North Carolina.

Unlike USEC and Areva, LES did not apply for federal loan guarantees to boost its ability to attract capital. Urenco is reportedly funding much of the construction with its own funds. Areva is an investor in Europe in Urenco.

The move may be seen as a pre-emptive action to force one or more of the other planned projects to be put on the shelf due to the difficulty of getting financing in the current economic downturn.

USEC has been having trouble raising capital, but announced earlier this month it would proceed with the first $1 billion in capital spending to build the $3.5 billion plant in southern Ohio.

However, Areva is a state-owned corporation funded by the French goverment and is likely to proceed with its $2.4 billion Eagle Rock uranium enrichment plant in Idaho regardless of the condition of capital markets.

General Electric is further behind the other three firms with near-term plans to build a test loop for its new laser enrichment process in Wilmington, NC. The firm claims it will build a full-scale plant and have it operational by 2012.

# # #

Friday, November 21, 2008

Russia inks huge Indian nuclear deal

Four new reactors for 4,400 MW will be built at Kudankulam

Sergey Kiriyenko, (right) kiriyenkoDirector General of RosAtom State Nuclear Energy Corp., visited the construction site of India's Kudankulam Nuclear Power Plant (Tamilnadu, Southern India), on Nov 20 and inked a deal on the spot which will be ratified next month. In December Russian President Dimitry Medvedev visits New Delhi. Indian Foreign Minister Shiv Shankar Menon told Indian wire services, "all the formalities are done."

The deal calls for four new reactors to be built in addition to the two VVER 1,000 MW units already under construction at that site. According to Russian Ambassador to India Vyacheslav Trubnikov, two of the reactors will be 1,000 MW and two additional units will be 1,200 MW.

The deal is the first major nuclear reactor trade deal with India since the NSG cleared the country to receive nuclear fuel from member countries. French nuclear giant Areva, Canada's AECL, and U.S. firms including Westinghouse and General Electric all have representatives working on similar deals with India.

From pint size to super size

Until the action by the NSG last September, India had lived for more than three decades outside the Nuclear Non-proliferation Treaty. This status severely limited its ability to get nuclear fuel for its installed base of less than 4 GW of nuclear power. None of its operating plants are larger than 500 MW, all are older and less efficient than current designs, and some have operated at half capacity, or even closed down, due to fuel shortages.

In a visit to India Nov 14, Hugh MacDiarmid, CEO of AECL, told the Globe & Mail India's history of isolation meant it has not kept pace with western nuclear technology. India has also paid a price with rapid increases in fossil fueled plants and accompanying air pollution as well as greenhouse gases.

When completed, the complex at Kudankulam will be the single largest nuclear power station in India with a combined generation capacity of 6,400 MW. The first 1,000 MW reactor is reportedly nearing completion. Russia has shipped the first fuel loading containing enriched uranium for the unit to India.

VVER1000

Even engineers on foreign shores must be diplomats

For his part, Kiriyenko, went beyond the normal Soviet style of self-congratulatory rhetoric. In an oblique acknowledgment that not all has gone smoothly with the first two units, he thanked Indian and Russian engineers for “working hard for the sake of the general cause and not pointing at one another in case of problems.”

“This approach must be preserved,” Kiriyenko said.

A 17-member delegation from Rosatom came with Kiriyenko on the ground breaking visit. Over 100 Russian engineers and other specialists are working on the construction site according to a press release from RosAtom. Construction is being managed by Atomstroyexport company.

Every deal deserves a song

The mutual congratulations between India and Russia are completely over the top. Rather than quoting any of it, I'm providing a musical comment. Here's a song for the deal.



Idaho still likes GNEP

Even if there isn't much left of it

gnep logoThe Department of Energy is soldiering on with the Global Nuclear Energy Partnership (GNEP) even though Congress has repeatedly shredded its budget. The nuclear industry has ignored it except when it handed out money. Critics have attacked it as a giant nuclear boondoggle and even pro-nuclear analysts have worried that the government moved too quickly with huge and unrealized plans to build massive spent fuel reprocessing plants and fast reactors.

What started out as a supernova of a program has been reduced to a white dwarf. It began as a plan to build nuclear recycling centers, fast reactors, and advanced fuel R&D facilities at several of 13 potential sites in 11 states. In April 2007 EnergySolutions estimated that a combined site in Idaho with fuel reprocessing and a fast reactor would cost $20 billion.

Now, what's left is a programmatic environmental impact statement with no site-specific analyses and some obvious policy choices that the incoming Obama administration isn't likely to put on its short list for action in 2009.

White dwarf shines in Idaho Falls

tubaOn Nov 20 the GNEP traveling road show came to Idaho Falls for another in a series of hearings on the draft programmatic environmental impact statement (PEIS). A document like this is a difficult exercise for just about everyone involved because it doesn't drive site-specific decisions and nearly everything in it is subject to further analysis in the future.

That didn't stop about 200 people from showing up at the brand spanking new Hilton Garden Hotel on Lindsay Blvd producing a standing room only crowd for the first hour. Last March 700 people showed up to support GNEP when it was believed that one or more of the program's planned nuclear plants might actually be built in Idaho.

Department of Energy officials still rate Idaho Falls as the most nuclear friendly city in the nation. It is a reputation earned by a combination of the stewardship of the nearby nuclear R&D lab and more than decade of steady progress with the nuclear waste cleanup program. The combined payroll of these facilities and the Naval Reactors program has been a mainstay of the economic engine for the 10 county region in eastern Idaho since the early 1950s.

For its part the government, and the Idaho congressional delegation, have supported funding for these projects over the long-term even if various advocates haven't gotten everything on their wish list. Two secretaries of energy have visited the site over the past decade, but funding is still acquired one line item at a time. The signature facility of the current contract, a $2 billion 'Next Generation Nuclear Plant' (NGNP), likely a HTGR, is 8-10 years away in terms of start-up of construction.

Hearing moves faster than expected

The hearing was an exercise in cordial banter and enthusiastic support for the program's objectives even if no practical decisions are likely to flow from it. However, there were a few critics who's comments were received respectfully by the audience. Lane Allgood, director of the pro-nuclear Partnership for Science & Technology (PST), continued his practice of reaching out to engage critics of nuclear energy programs in public dialog.

The DOE hearing official started the meeting with a fairly crisp briefing on the program. Like many in the audience, my first impression of a 21-slide handout with lots of long sentences was that we'd spend all night on it and never get to the hearing. Thankfully, that turned out not to be the case. Here are a few highlights.

GNEP reconsidered and how

No site will be selected as a result of the PEIS. Only federal sites like Idaho or Savannah River will be consider for now, but DOE is keeping its long-term options open for non-federal sites. All 13 site-specific analyses prepared in 2007 were removed from consideration, but DOE added four fuel cycle alternatives including;

  • Thermal reactor recycle
  • Fast reactor
  • Thorium reactor
  • Heavy water or high temperature gas cooled reactor

gnep-process

Interim storage of spent nuclear fuel was not analyzed, the DOE official said, because the agency has no legislative authority in that area. He added that none of the alternatives change the need for opening Yucca Mountain. The reason, he said, is that DOE expects the national inventory of spent nuclear fuel to reach 70,000 tons by 2010.

DOE is on record as supporting the "closed cycle" for nuclear fuel which involves advanced recycling and fast reactors. DOE said its decision would impact the nuclear industry, but didn't say whether the government or private industry would build and operate the new facilities. Given the huge costs and risks of these first-of-a-kind projects, it is likely the government would have to fund them for perhaps as long as several decades or perhaps forever depending on early results. Even if the government funded and built five 1,000 ton/year reprocessing plants in the next two decades, it couldn't keep up with the growing inventory of spent nuclear fuel for the rest of this century or the next.

Pro-nuclear testimony

INL bannerPro-nuclear testimony at the hearing came mostly from managers and scientists at the Idaho National Laboratory. John Grossenbacher, the lab's director, said that planning for the future of nuclear energy needs to take into account a time line of decades and even centuries. He also commented that nuclear energy is safe and that more people died this year in the sugar industry than have died in the entire history of the U.S. nuclear industry. He may have been referring to a February 2008 explosion at a Georgia sugar plant in which 11 people died and 14 others were injured.

Steve Piet, a Ph.D. nuclear scientist, said "recycle must happen" because it is pointless to wait for natural attenuation to work itself out over 250,000 years. Brent Dixon, a nuclear engineer, said the current U.S. approach to managing spent nuclear fuel is like eating a banana except the U.S. eats the peel and throws away the fruit.

Critics testify on hazards

Critics of the GNEP program included Willie Preacher of the Shoshone Bannock Indian Tribe and Arjun Makhijani from a nonprofit anti-nuclear group in Washington, DC.

SB cardPreacher was critical of GNEP because he said, "the technology is not proven" and "will create new waste while there is no place for the old waste."

He said the tribe is concerned about transportation of spent nuclear fuel across the reservation, which is adjacent to the Idaho National Laboratory. Also, he made the claim the INL is actually ancient tribal land and that the Indian nation wants it back.

IEER Director interviewed

In an interview with this blog, Arjun Makhijani, a Ph.D. scientist who is the long standing director of IEER, an environmental think tank in the Washington, DC, area,, said the government's preference for fast reactors ignores the fact that globally various projects to build them, including one in France and another in Japan, have not worked.

Arjun MakhijaniArjun Makhijani (right) told the hearing the Draft PEIS is "seriously deficient" and that the closed cycle alternative will generate more waste, especially greater than class "C" waste, than the "no action alternative." He cited a table on Pg. S-35 of the Summary of the PEIS as the basis for his statement.

Instead, he said none of the GNEP alternatives make sense. Instead, he said the U.S. should set a goal of phasing out all nuclear power plants in 30-40 years. He's written a book which he says includes an analysis that shows it is possible using a combination of solar, wind, and energy efficiency to achieve this goal. However, he cautioned the U.S. should not move too fast despite the incoming Obama administration's preference for renewable energy supply. He warned that the reliability of the nation's electrical transmission and distribution grid is a key priority.

Asked what he thought of Al Gore's ten-year plan for renewable energy, Makhijani said that the former Vice-President had not responded to inquiries from IEER about it. However, Makhijani praised Dan Reicher, a key energy transition official in the Obama organization, and said he'd make a good Secretary of Energy.

Makijani predicted that Congress would not support expansion of the current ceiling on federal loan guarantees ($18 billion) compared to the applications for $122 billion in insurance coverage for 100% of the loans and 80% of the cost of new nuclear plants. Under this scenario, he said only a few new nuclear plants would ever be built. He pointed a statements by leading nuclear utility executives which said no new plants would be built without the loan guarantees.

Hearing record remains open

DOE officials stressed that the comment period on the draft PEIS remains open until December 16th. The pro-and-anti-nuclear sentiments for GNEP seem to be bouncing around inside the same glass jar. There is lots of transparency, but the fate of the future of nuclear energy in the U.S. is unlikely to be substantially influenced by the outcome of any decision related to GNEP.

# # #

Sunday, November 16, 2008

Nuclear news notes from all over for 11/16/08

A collection of small but significant items for your reading pleasure

Book beats expectations

Gwyneth Cravens, author of the book, "The Power to Save the World, the Truth About Nuclear Energy" (Amazon) writes to this blog in an email with an update on how things are going since her visit to Idaho Falls earlier this year.

To my surprise, my book is in its 5th printing in hardcover. The publisher, Knopf, did not expect such enthusiasm. It has responded well to the demand and done a good job of keeping the book in print. The Vintage paperback came out last month, and that makes it easier for students to purchase and for profs to assign it to their classes.

She reports she is on the road most of the time to spread the word about her book. Looks like it's working.

* * *

Tucker interviewed by NEI

While we're on the subject of authors of books about nuclear energy, William Tucker, who wrote "Terrestrial Energy" is interviewed this week at NEI's blog in a two-part video.

* * *

Podesta publishes energy plan

The Wall Street Journal Environmental Capital Blog reports that the Center for American Progress, a "progressive" think tank has a new and very significant energy strategy out.

Building a Vibrant Low-Carbon Economy” makes no mention of nuclear power, but it is important because it is an energy blueprint written by Obama transition leader John Podesta. You can read about it here.

If you want to know what the key energy policy advisors for the Obama transition team think about "green energy," this is it.

* * *

Hyperion overcomes hype

Brian Wang, who publishes the blog Next Big Future, writes that Hyperion's small nuclear reactor "is not a scam."

Hyperion Power Generation is venture capital funded company that is trying to factory mass produce a uranium hydride nuclear reactor. $25-30 million per unit which would be 15-20 tons and generate 27 MW of electricity and 70 MW thermal. It would burn up to 50% of the uranium nuclear fuel for 5-10 years. It would then be dug up out of the ground and processed by the company and remove about a football or softball of unburned fuel.

Wang also provides readers with a projected schedule for NRC licensing of the Hyperion technology.

* * *

Flamanville to enter revenue service in 2012

EDF confirms the start up, in 2012, of the EPR reactor currently under construction at Flamanville in Normandy. In a formal statement EDF said it and its partner Bouygues "have taken the necessary steps to manage the unforeseen events inherent to a project of this scope." That's French for "we've got the bases covered."

Lastly, EDF said it has taken steps both internally and with its suppliers to improve the quality of supervision and control throughout the site.

* * *

Bowman resigns at NEI

Platts reports Nuclear Energy Institute CEO Frank "Skip" Bowman has resigned. Trade group now seeks new leader in Obama era.

NEI released portions of a letter Bowman wrote to NEI Chairman John Rowe. Bowman said that his decision to leave allows NEI "to take stock of how best to meet the challenging energy and environmental issues that confront us."

That's kind of cryptic, but maybe that's life with major lobby groups. There's nothing wrong with Bowman's view of reality regardless of the political winds of change. In comments published online by the National Journal last week, Bowman said energy policies of the incoming Obama administration need to address the facts.

"There must be synergy between meeting a 25-percent increase in electric demand by 2030 and regional and national goals to reduce carbon and other greenhouse gases."

Other major challenges facing the nuclear energy trade group are how to present the industry's case for expanded loan guarantees for new nuclear reactors and dealing with the future of the Yucca Mountain project.

* * *

Japan greenhouses up as giant nuclear plant stays closed

Japanese greenhouse gas emissions rose 2.3 percent to hit a record high in 2007. The reasons are the extended shutdown of some nuclear power plants, while emissions from manufacturers continued to rise

According to a Bloomberg Wire Service report, emissions of heat-trapping gases including carbon dioxide rose to 1.37 billion tons from 1.34 billion tons a year earlier, according to data compiled by the Environment Ministry. That is an increase of 8.7 percent since 1990.

Tokyo Electric Power's Kashiwazaki-Kariwa nuclear power plant was damaged by an earthquake July 16 last year and remains closed. As of November 2008, the entire plant is still shut down for exhaustive inspections and seismic upgrades. There are seven reactor units for a total of 8.2 GW.

Bloomberg reports the loss of emission free nuclear energy has thwarted the country's efforts achieve its emission-reduction target under the Kyoto Protocol.

* * *

Good night Chet . . .

Idaho Samizdat teletype at work
~ We never sleep ~

Exelon launches hostile bid for NRG

All stock offer for $6.2 billion is rejected in a heated exchange of letters

hostile-takeoverAfter making an unsolicited $6.2 billion all stock offer for NRG (NYSE:NRG), Chicago-based Exelon (NYSE:EXC) got a strong and unequivocal "no" from Princeton-based NRG. The Wall Street Journal reports NRG replied that Exelon was trying to get the company for a "low ball" price.

According to the WSJ, Exelon President Chris Crane told a utility conference the firm will not raise its price for NRG. Exelon has now made the offer directly to NRG's stockholders.

The hostile bid is seen by financial analysts as an outcome of industry consolidation as a way to fund growth because new investment funds can't be obtained at competitive rates in the current financial climate.

Debt challenges the deal

NRG is facing several challenges including signing up investors for its two new nuclear power plants at the South Texas Project. The City of Austin, TX, which is an investor in STP units 1 & 2, said no to investing in the two new nuclear plants NRG has planned for the region. The company said it would continue on this path of seeking new investors for STP units 3 & 4 rather than allow the company "to be bought at a fire sale price."

Money futuresExelon's bid comes at at time when its investment grade rating from Moody's is under review. If the rating is downgraded again, it could hamper the deal since NRG's $8 billion in debt would have to be refinanced at a higher price.

Exelon told the WSJ it has a plan to avoid refinancing the debt. Most likely it involves selling off NRG's fossil plants and keeping the current and planned nuclear plants. Exelon owns the largest fleet of nuclear reactors in the U.S.

Still a premium by the numbers

On Oct 20 Exelon offered 0.485 shares of stock for each share of NRG stock. Exelon's stock was $54.59 on Oct 20 the day it made the offer. That would have made its offer worth $26.48/share against NRG's closing price that day of $25.00 a share.

Things have changed. On Nov 14 Exelon's stock closed at $50.57 on 11/14, a 7.4% decrease. That would make its offer of 0.485 shares of stock for each share of NRG worth $24.53.

Exelon's point of view likely is that its premium offer went up from $1.48/share to $1.88/share even though the price of both stocks went down. What they are probably saying in Chicago is "what fire sale?" However, at NRG they could be thinking if Exelon offered cash at an attractive fixed price per share, with none of this market price at close stuff, they deal could be done by now

NRG's stock was at $25.00 on Oct 20. It closed at $22.65 on 11/14, a 9.4% decrease. However, Exelon has not changed its offer since making it Oct 20 since it believes based on the numbers alone it is still offering a premium for NRG's stock.

Firm

11/14/08 Close

52 Wk High

52 Wk Low

NRG

$22.65

$45.78

$14.39

Exelon

$50.57

$92.13

$41.23

In the current volatile financial climate, by the time a deal closed, both parties would probably be back at the negotiation table because of significant swings in the price of their respective stocks.

Previous coverage on this blog

# # #

South Africa, Turkey, struggle with their new nuclear contracts

Money and management get everyone's attention

Eskom logoEskom, the much troubled South African electric utility, told Bloomberg Wire Service Nov 13 it will select the winner of a tender for construction of a $11.7 billion nuclear power plant by January 2009. However, Eskom also said the current economic climate means it will have to back off its aggressive plans to build 20 GW of new nuclear power plants in the next two decades.

Fani Zulu, a spokesperson for Eskom, told the wire service the utility will choose between building two Areva 1,650 EPRs or three Westinghouse 1,140 AP1000 reactors.

Eskom supplies 95% of South Africa's electricity, but has been unable to keep up with demand forcing power reduction agreements with major industries and negatively impacting the nation's GDP.

Zulu said the utility is painfully aware of its shortcomings, but has to "review energy investments" because of the global slowdown of the economy.

Eskom signed a $500 million, 20-year loan on Nov 10 with the African Development Bank. It is the largest private sector loan ever inked by the multi-lateral institution. However, South Africa's incoming President Kgalema Motlanthe has not been briefed on the loan or Eskom's prospects according to South African Energy Minister Buyelwa Sonjica. Eskom is also reportedly seeking a major loan from the World Bank.

Turkey may cancel nuclear tender after only one bid

gulerTurkey will make changes to a nuclear energy tender law nearly two months after it received just one bid in a tender to build the country's first nuclear power plant according to a report by Reuters. Until now Turkey's Energy Minister Hilmi Guler (right) had pushed hard to award the first tender and to get the second one advertised for bid by December.

According to Reuters a consortium comprised of Russian Atomstroyexport along with Turkey's Park Teknik Group was the sole bidder in a tender to build and operate Turkey's first nuclear power plant in Mersin on the Mediterranean coast. Turkey plans to build three nuclear power plants with a total capacity of 4,000-5,000 MW.

Analysts expected Turkey to cancel the 1st tender after it received only one bid from an initial group of 13 companies that had bought tender documents for the plant.

'There have to be some changes in the nuclear tender law for the second tender. The changes will also be valid for the Mersin tender if that tender is canceled,' the Energy Ministry source told Reuters.

Many companies had requested changes to the law before the tender. Analysts say it doesn't provide enough guarantees to investors. When the bidders asked for a six-month extension the energy ministry turned them down. Since then the program has been in turmoil.

The bidders want several things . . .

  1. 15 year guarantee by government to buy the electricity at a rate which makes it profitable to build the plant,
  2. Protection of proprietary business information including bid info, technology, etc.
  3. Indemnification for accidents, and
  4. Permission to employ foreign workers to operate the plants.

None of these terms and conditions were tied down in the first bid which is why everyone except the Russians walked away. Westinghouse never even ordered a copy of the bid documents.

A nuclear energy industry analyst in Washington, DC, said "the only reason the Russians bid for the project is that they are desperate to be a "real player" in nuclear world-wide. Unlike natural gas and oil, where they can have their way, they simply do not have the same leverage in nuclear energy."

Turkish energy analysts also pointed out the government may be having second thoughts about letting the Russians build, fuel, and operate their nuclear power plants after watching the Kremlin use natural gas supplies as a means of gaining political leverage with its European customers.

# # #

Western lands uranium gopher for 11/16/08

Mining media reports and press releases for useful stuff.

gopherThis is an edited version of an article originally published in Fuel Cycle Week, V7N303 on 11/12/08 by International Nuclear Associates, Washington, DC

Bluerock Resources Ltd. (TSX:BRD) announces it has received payments totaling $78,000 for shipments of ore from the J-Bird Uranium Mine. The firm's previously announced suspension of U.S. operations will continue while it works to raise capital for operations to allow for continued development and production.

The company has also renegotiated the terms of the final purchase of the J-Bird Uranium Mine with the vendors. In order for Bluerock to complete the acquisition of 100% of the J-Bird Uranium Mine the company paid $57,000 on Oct 31 to be followed by a payment for the balance of $100,000 on January 30, 2009. In addition, the company will be required to utilize the vendor's drilling company to fulfill a $200,000 drilling contract by August 31, 2009 or alternatively pay $100,000 to the vendors by August 31, 2009.

Ur-Energy (TSE:URE) Adopts a poison pill – The firm’s board of directors said it has adopted a “stockholders’ rights” plan in the event of a takeover bid, but denied that that any takeover bid was pending or expected in the near future. The plan would be set in motion if any investor acquired 20% or more of the firm's common shares without prior approval of the board of directors. If a hostile takeover event took place, the plan would allow current shareholders to buy the stock at a 50% discount from the market price. The plan applies to the firm's stock listed on the Toronto Exchange. It isn't clear whether the plan also applies to the firm's stock listed in the U.S. (AMEX:URG). The stock was approved for listing on AMEX in June 2008.

Currently, the firm has 93.24 million shares outstanding on the Toronto Exchange with a stock price at market close on Nov 7 of $0.69 yielding market capitalization of $64.3 million. A 20% share would be equal to $12.9 million. A 50% discount of the current stock price would deliver shares to a buyer at $0.35 share or at a cost of $350,000 per one million shares. Acquisition of 20% of the company would cost a buyer $6.5 million for 18.7 million shares.

It is also conceivable the firm could be taken over by one of its current stock holders which would defeat the purpose of the plan. Something stimulated this action by the company, but what it is will remain a mystery unless a buyer emerges sometime in the future.

Bayswater (TSE:BAY) packs it in for the night for U.S. properties. Given current market conditions, the company is significantly reducing overhead and project expenditures. The firm expects to reduce U.S. expenditures to zero during the current downturn.

The firm said these measures will enable it to stay operational for several years and to retain its management team. The company's working capital is approximately $7.5 million of which approximately $1.2 million consists of flow-through funds that will be spent by the end of December 2008.

Bayswater's annual cash burn rate, including property maintenance costs, which is currently about $3.8 million, is being reduced to approximately $1.5 million. The focus will be on the firm's uranium projects in Canada.

In the U.S. the firm has what it calls "advanced stage projects" in Montana, Wyoming, California, and Nevada, but none have produced NI 43-101 compliant reports for these properties.

The stock closed on Nov 7 at $0.07 against a 52-week high of $1.30.

Strathmore (CVE:STM) dumps Nu-Mex. The company has terminated its joint venture agreements with Uranium International Corp. (formerly Nu-Mex Uranium) (OTC:URNI) on the Nose Rock and Dalton Pass uranium projects in New Mexico as a result of it not being able to comply with the terms of the agreements. Strathmore retains its 100% interest in both properties.

Uranium International Corp. had agreements with Strathmore Minerals Corp. to earn a 65% interest in each of the two projects based on their joint-venture development. For the six-month period ending Aug 31, according to URNI's SEC filing, current assets were $23K and current liabilities were $530K. The firm's CEO and CFO resigned during the past six months but retained their seats on the board due to their stock holdings.

An NI 43-101 reports was published for the Nose Rock property last August. The report estimated a combined indicated and measured mineral resource of just over three million lbs of U3O8. The Nose Rock Uranium Property, located in McKinley County, 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.

Uranerz Energy Corp (AMEX:URZ) announced exploration drilling status for 2008 on its 100% held properties and for the Arkose Mining Venture, a joint venture between the company (81%) and United Nuclear, LLC (19%). The two project areas are adjacent to each other in the Powder River Basin, Wyoming.

A total of 498 uranium trend and delineation holes were drilled utilizing five drill rigs and two electric log probing units during the period of July to October 2008.

The purpose of the 2008 Uranerz / Arkose drilling project is to find previously unknown or little-known uranium mineralization trends and to delineate known trends, which will provide data for permitting and eventual production operations in favorably identified areas. During this update period, approximately 7.0 miles of uranium roll front trends were investigated.

Approximately 3.5 miles of the 7.0 miles of trends had favorable uranium mineralization. Uranium mineralization ranged from less than 0.01% eU3O8 to 2.65% eU3O8. A cut-off grade of 0.03% eU3O8 has been established for Uranerz and Arkose projects. Approximately 39% of the 498 holes drilled during this update period met or exceeded the minimum cut-off grade.

Lawsuit over LES water permit – An environmental group based in Albuquerque, NM has filed a complaint with the state Court of Appeals over a discharge permit for the $1.5 billion uranium enrichment plant under construction in Eunice by Louisiana Energy Services.

Citizens Against Radioactive Dumping is objecting to a decision by the state Water Quality Commission last April. The state Water Quality Commission in April upheld the New Mexico Environment Department's decision in favor of the permit for the Louisiana Energy Services facility. The group claims the commission disregarded comments that the permit application was incomplete.

# # #

Energy Secretary guessing game

Everyone's got a favorite. What does it mean for Idaho?

Over at the Idaho Statesman reporter Rocky Barker (right) has some keen insights and ideas about who would be the next Secretary of Energy and what it would mean for the Idaho National Laboratory (INL). This is always a subject fraught with tension because so much of the lab's funding comes directly from the Department of Energy (DOE).

Previous energy secretaries have come and gone designating the Idaho lab as a "lead lab" for environment, energy, and now nuclear energy. Sometimes funding has followed promises, but other energy officials have tried for a "clean & close" strategy that left more than a few people in eastern Idaho gasping for breath. The appointment matters greatly to the future of the lab which is why the guessing game has so many players.

Barker's short list of candidates includes Rep. Ed Markey of Massachusetts or former Energy assistant secretary Dan Reicher, now Google's energy czar. Barker also reports that California governor Arnold Schwartzenegger "has openly lobbied for the job."

Markey and Reicher are both well known anti-nuclear activists with a long history of political action against development of nuclear power plants and nuclear R&D. Reicher is a key member of Obama's transition team for energy, but that doesn't equate to a cabinet rank appointment. The "energy issues" web page for the transition operation is silent on nuclear energy.

Barker also mentions three other governors - Gov. Janet Napolitano of Arizona, Gov. Kathleen Sebelius of Kansas, Gov. Ed Rendell of Pennsylvania. Sebelius has turned down development of coal fired power plants in her state, but has not opted to pursue nuclear energy in its place.

It is doubtful a sitting governor would seek the job. Most governors want to become senators not cabinet officials. Arnold Schwartzenegger would be way too big a republican rock in the democratic pond who would make waves far beyond the scope of the office.

So what can this mean for Idaho?

advise and consentWhile there are plenty of candidates for the job, one thing to keep in mind about them is that the President does not have a free hand in choosing one. The predisposition of the Senate confirmation committee also counts. The "advice & consent" of the Senate is a crucial factor in selecting candidates for cabinet posts. Because we don't know yet the precise make up of the Senate, nor committee memberships for the next Senate, speculation can be a crap shoot.

Worse, the Secretary of Energy is not a plum job compared to some other cabinet positions. Previous presidents have sometimes used the post as dumping ground for office seekers who gave the campaign more money than common sense. An executive from a major soft drink manufacturer once headed the agency. There have been bright spots, and the intelligence of the Obama administration will be tested and reflected by the person selected for the job.

World class science?

Barker also suggests the Idaho lab seek to become a part of the DOE Office of Science with its deep funding pockets compared to DOE's nuclear energy program office? He thinks this strategy will promote a more secure future for the facility.

zero sumThe INL could face an uphill battle getting into the Office of Science. There are other labs which would see its entry as a zero-sum trade off for their funding. Complaints to influential members of the House and Senate appropriations committees might make short work of this idea unless current funding from the nuclear energy office came with the lab.

This outcome would make the nuclear energy office a tenant at the Idaho lab rather than the lab manager. However, it would still represent a claim on Office of Science funds because of the science infrastructure needs of the Idaho site. The one advantage is that construction of a $2 billion "Next Generation Nuclear Plant" (NGNP) would be the kind of anchor facility that the Office of Science thrives on because it would generate an operations claim on R&D funding for decades to come.

Any help from the Idaho delegation?

While we're at it, let's look at the influence of the Idaho congressional delegation and its ability to be an advocate for funding for the lab. Right now the political calculus looks daunting to say the least. First of all, except for Walt Minnick, everyone else is on the wrong side of the aisle in the next Congress. Second, the ability to influence funding measures is less than in the past with the departure of Idaho Senator Larry Craig who had been the main voice for the lab on the Senate appropriations committee.

US_Capitol_domeJim Risch, Idaho's new junior senator, despite a nominally pro- nuclear profile, will not sit on the appropriations committee and, as a result, will not have much influence over the funding process. Mike Crapo, Idaho's senior senator, is on the Senate finance committee and has indicated he will not seek a seat on appropriations.

Crapo's support for the Idaho lab was highlighted earlier this year when he brought Utah Senator Bob Bennett to visit the INL. Bennett does sit on the appropriations committee, but like Crapo, will be among the minority in the new Congress.

Idaho's new democratic congressman, Walt Minnick, pursued nuclear waste cleanup as a single issue in his campaign against Larry Craig in 1996. However, his 2008 campaign web site makes no mention of nuclear energy so maybe now he's less ferocious about it?

It turns out he is. John Foster, Minnick's campaign manager, writes to this blog . . .

Short version: All options on the table, including nuclear. His position throughout the campaign was that this country needs a new, comprehensive approach to energy, and nuclear will be part of that plan.

This leaves Rep. Mike Simpson as the one pro-nuclear representative from Idaho to carry water for the lab as a minority member of the House appropriations committee. That's not inconsequential since Simpson is well-respected on both sides of the aisle in the House. He has also been a strong advocate for nuclear waste cleanup funds for the site.

What about the nuclear renaissance?

While quite an astonishing number of new nuclear power plants have been proposed through submission of COL applications to the NRC, the Idaho lab, as a nuclear R&D center, has not historically participated in EPC contracts to build them.

DOE logoHowever, a brand new report from a DOE nuclear energy R&D advisory body lays out an agenda for the INL that arrives just in time to be included in the briefing book for whomever is designated by the Obama administration as the Secretary of Energy.

Nuclear Energy: Policies and Technology for the 21st Century is a new, breathtakingly brief (40 pgs) report prepared and adopted by the Department of Energy Nuclear Energy Advisory Committee. The report calls attention to the role of nuclear power and its impact on energy security, the environment and non-proliferation. The committee writes,

A strategy for nuclear energy policy and technology should be considered not in years but decades. This report identifies important benchmarks in both the policy and technology areas.

That's a good start, but wait. There's more. Insofar as the "nuclear renaissance" is concerned, it offers three realistic "scenarios" for the future of nuclear energy.

  • Case A - Low Scenario: All reactors extend operating life to 60 years, but no new nuclear reactors are built.
  • Case B - Middle Scenario: All reactors extend operating life to 60 years, and over a dozen new reactors are built, contributing 17GWe of installed base-load power generation.
  • Case C - High Scenario: Reactors contributing 45 GWe of additional base-load power generation are built, on the assumption that future power generation investment decisions will be based on a carbon-constrained legal and regulatory regime.

As far as an R&D agenda is concerned, for any of the scenarios, the committee makes the following recommendations.

  • Further improvement of operations and extension of the lifetime of the fleet of current and future light water reactors.
  • Assurance of a well-qualified and trained workforce.
    Development and demonstration of Generation IV reactors, such as the Next Generation Nuclear Plant (NGNP), to extend the applications of nuclear energy.
  • The upgrade of domestic facilities and expansion of the collaborative use of international facilities for activities required to create a sustainable fuel cycle.
  • Recognition of fast-reactor core competencies in critical areas, combined with a robust program of international collaboration.
  • Development of a modeling and simulation capability.

If there was just one document that should be required reading for the new Secretary of Energy, insofar as the Idaho lab is concerned, this would be it. The report provides a framework around which funding priorities for nuclear R&D could be organized, advocated, and committed over the long term.

Worth your time.

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