Depleted uranium and a castle in the sky are in the news
The Salt Lake City Tribune reported Oct 6 that Utah politicians are up to their usual tricks of thumping the stump about disposal of depleted uranium (DU) at the Energy Solutions site 80 miles west of town. This is a great tactic for raising campaign funds because it qualifies as a fringe issue that distracts voters from more substantive topics like the recession, health care, and climate change. There is nothing like a "showgirl" issue to distract the voters from thinking for themselves.
The latest round of stump thumping about depleted uranium disposal in Utah, as reported by the SLC Tribune, comes from the opportunistic Rep. Jim Matheson (D-UT). He sees a two-month delay in shipments of DU from the Department of Energy’s Savannah River Plant as an opportunity to rile the voters, and raise campaign funds, over the waste issue. The shipment, which is 15,000 drums of U238 (depleted uranium) is part of a multi-billion dollar cleanup effort to dispose of the stuff in a licensed facility.
Joining Matheson in thumping the DU stump is Utah Governor Gary Herbert who did not issue a blockade to the shipments, but is holding high tea with HEAL, Utah’s leading anti-nuclear group.
So far Energy solutions has accepted over 700,000 tons of depleted uranium from various DOE sites. The two-month delay in the next shipment very likely has little to do with Utah politics. The waste will come because Energy Solutions has a license and the Utah Radiation Board does not have the legal authority to reclassify the waste from the NRC designation.
New cork for the nuclear genie?
Also, let’s be clear about what this issue is really about. Anti-nuclear groups think they have found a new cork to plug the nuclear genie back on the bottle by making it too difficult to dispose of depleted uranium from fuel enrichment processes. The logic goes that if you can’t dispose of the DU, then you can’t make fuel for reactors hence you stop nuclear energy.
What’s wrong with this logic, and what the NRC knows, is that DU is just plain old U238 same as it came from Utah mines since the middle of the 20th century. The only reason it is “waste” is because the U235, the “fissionable” isotope, has been removed to make nuclear fuel for reactors. In the natural state, U235 is less than 1% of the mass in U238.
The current rhetoric from Utah politicians makes about as much sense as the long ago opponents of a young Florida congressional candidate George Smathers, who was defeated in his first bid for office by a vile canard. Posters appeared throughout the rural district that said Smather’s had a sister in New York who “was a practicing thespian.” Absolutely true – she was an accomplished actress on Broadway. Smathers lost that election. He later won a seat in Congress and served for many years.
BTW: This day in history October 7 in 1974 Washington, DC, police in the early dawn hours stopped the car of a very drunk Rep. Wilbur Mills, then chairman, some say tyrant, of the powerful House Rules Committee. In the car with Mills was an equally inebriated Fanne Fox, a stripper, who escape from police custody at the scene. Ms. Fox, also known by her stage name as the "Argentine Firecracker," ran off to jump into the nearby Reflecting Pool on the Washington Mall. Now that's a "showgirl" distraction.
Blue Castle claims it has a customer
Aaron Tilton’s (right) Blue Castle Holdings, formerly Transition Power, issued a press release Oct 5 that Page Electric Utility will participate as an “equity owner” of the multi-billion project.
Blue Castle Holdings is a private equity firm. This the first time it has gone public with the name of one of its investors.
The utility, which is a municipal service of the City of Page, AZ, is an unlikely candidate to lead the financing of such a large project. The town has a population of less than 10,000 people.
It is near the Utah border which is defined by Kane County, the home of Rep. Mike Noel, Aaron Tilton’s former legislative partner in development of nuclear energy and director of the Kane County Water District which has a deal with Blue Castle to supply water to the plant should it be built.
That said, the press release quotes Bryan Hill, General Manager of the Page utility, as mentioning he doesn’t see new electricity generation capacity coming from coal so he welcomes the opportunity to buy juice from a nuclear plant.
Hill has the right vision for his utility, but he may be riding the wrong horse. So far the key “objective” that Transition Power, now Blue Castle Holdings, has its eye on is developing a license application to the NRC and then selling it to a real developer of a nuclear power station.
There is no precedent in the U.S. nuclear industry for this strategy. Blue Castle must think there is something to it because it named former NRC Commissioner Nils Diaz as its Chief Strategy Officer.
Last August Transition Power said it had hired a major engineering firm to develop an Early Site Permit for a nuclear reactor site near Green River, Utah. That’s not the same thing as a Combined Construction and Operating License, but it can be a precursor to applying for one.
Where we are is that Blue Castle Holdings is on the right track to build a nuclear power plant by starting work on an Early Site Permit. However, the firm is going to need additional equity partners, with much deeper pockets, to be successful with the project.
Aaron Tilton responds to Idaho Samizdat
Note to readers . . . the following text is the entire, unchanged content of an email sent to this blog by Aaron Tilton, on behalf of Blue Castle Holdings. Perhaps most interesting is his statement that the firm does have an objective to cash out once a license is obtained from the NRC.
I would suggest a statement like “Blue Castle’s business model is to pre arrange ownership during the licensing of the site, then transfer the ownership during or after the license is issued."
The full text follows below.
We appreciate all that you do in covering the nuclear industry and specifically our project. Today I read your blog which commented on our MOU with Page Electric Utility. I noticed some errors. I know that you try hard to be accurate and add some simplification to some of the technical aspects to make it more understandable to the average reader.
With this in mind I offer a few suggestions for some corrections or clarification on your latest blog concerning our project. Page Electric Utility (PEU) is not an investor and Blue Castle is not “claiming a customer”. I would suggest stating that they are a potential equity participant in the project by way of an MOU. Characterizing our business model by stating that “selling the project to the highest bidder“ is not accurate, though I know you are trying to simplify the description of the development process to make it more understandable to the average reader.
Also the statement that “There is no precedent in the U.S. nuclear industry for this strategy” is in error. The business model is very similar to the South Texas Project which has MOU participants that do not have definitive agreements in place with municipal utilities. The model has also been followed many times in other large non-nuclear power plant developments that pre arrange multiple equity owners by an MOU. Some time before the licenses are secured a closing on the equity ownership takes place.
Most multi owner/participant facilities that do not have regulated rate recovery requirements follow that type of process. This allows the MOU participants to proceed with a flexible ownership structure as you reported on the STP project. CPS looks like they are changing their ownership percentage via MOU while NRG is in the process of licensing the site. This is a common practice with non-nuclear facilities especially in the West.
I would suggest a statement like “Blue Castle’s business model is to pre arrange ownership during the licensing of the site, then transfer the ownership during or after the license is issued”. We are not conducting an auction.
In the West where the market size in terms of retail customers tend to be smaller but the geographic service area size tends to be spread out over longer distances it is very common for small utilities (PEU) to be part of projects that have more than 10 participants.
Intermountain Power Project in Utah has 36 participants that range in ownership from 74.9% - .04%. IPP has a capacity of 1950 MW.
Another example is Palo Verde Nuclear Generation Station
• Arizona Public Service: 29.1 percent
• Salt River Project: 17.5 percent
• Southern California Edison: 15.8 percent
• El Paso Electric: 15.8 percent
• PNM: 10.2 percent
• Southern California Public Power Authority: 5.9 percent
• Los Angeles Department of Water and Power: 5.7 percent
The press release was needed to make the public aware of our process. We currently have ongoing discussions with multiple potential participants in and out of Utah. Because PEU has disclosure requirements they are the first to be public about their due diligence and MOU.
Please feel free to call or email me with any questions you may have. Our company appreciates everything you are doing for the common sense approach to public awareness for nuclear power development.
Blue Castle Holdings Inc.
299 South Main St. Suite 1300
Salt Lake City, UT 84111
Aaron Tilton [firstname.lastname@example.org]
Prior coverage on this blog
# # #