Saturday, July 18, 2009

Sen. Lamar Alexander’s nuclear energy speed run

Is there climate change compromise coming in the Senate?

lamar_alexanderEven if you’ve been ignoring energy issues being debated in Congress, you are unlikely to have missed the repeated media reports that Sen. Lamar Alexander (R-TN) (right) is advocating the U.S. build 100 nuclear plants in the next 20 years. Just so you get the complete picture of what he is talking about, consider that 100 1,200 MW nuclear power plants equates to 120 GWe of electrical power which basically doubles and more the current size of the U.S. nuclear reactor fleet of 104 plants.

During his speech (text, video) at the National Press Club on Monday July 13, Sen. Alexander raised hopes that his call for 100 new nuclear power plants, or at least as bakers’ dozen, would open the door to compromise in the Senate with an ambitious and complicated climate bill passed by the House last month.

Counting votes in the Senate

In the final vote on the House bill, House Speaker Nancy Pelosi (D-CA) lost 44 of her Democratic colleagues who voted against the bill. This is a number that can only be described as “way too many.” In the Senate, Majority Leader Sen. Harry Reid (D-NV) cannot afford to lose a comparable block of votes on the Obama Administration’s premier environmental and energy initiative.

In a final vote on a conference committee draft, both Democratic leaders will need every Democrat they can get plus Republicans. The stakes could not be more significant. A looming global climate change conference to take place in December requires the U.S. show up with climate legislation in place. This is necessary to be taken seriously by the G8 group as well as China, India, and other developing nations.

It is for this reason that hopes were raised by Alexander’s calls for new nuclear nuclear plants echoed by Sen. Lisa Mirkowski (R-AK) and others at a hearing of the Senate Environment and Public Works Committee last week. However, these hopes were dashed by harsh, and for now, uncompromising language by Sen. Alexander. He called the House Climate bill “unfixable,” a “job killer,” and a “contraption of taxes.”

Of course Alexander is no hard liner so some of his heated rhetoric might be just that and open to change. Of course he is in a comfortable position relative to other Senate Republicans who are also are hot about the tax issues in the House passed climate bill. They’ll have time to cool off during the August recess.

SenBarbaraBoxerSen. Barbara Boxer (D-CA) (left) who is leading the climate change legislative effort in the Senate has postponed action on the bill until September. According to wire service reports, the outcome lies with 15 Democratic moderates, many of whom fear that a vote for climate-change legislation could hurt their re-election chances.

Boxer is reportedly trying to round up Republican votes to offset opposition from Democrats Sen. Mary Landrieu of Louisiana and Sen. Ben Nelson of Nebraska. She’ll need to add Alexander to the list on the Republican side.

Energy density matters

Alexander’s speech shares some interesting common themes with views expressed by former VP Al Gore. In a "moon shot” speech" on energy policy made in July 2008 in which he said . . .

"We are borrowing money from China to buy oil from the Persian gulf to burn it in ways that destroy the planet. Every bit of that has to change."

While both Gore and Alexander hail from Tennessee, that’s about the point at which further common threads come to an end. In his speech, Alexander goes after renewable energy sources with critical reviews in several fronts.

  • First, as variable energy sources, they can’t light our cities or power out factories.
  • Second, wind farms and solar arrays chew up land at an alarming rate, and third, and
  • Third, and more importantly, there is the issue of energy density.

In the world of base load demand, Alexander populates his speech with information about the remarkable energy potential of a handful of uranium fuel pellets (U235 at 5%) compared to a ton of coal, three 55-gal drums of oil, or enough natural gas to keep your backyard cooking daily chicken BBQs for the next couple of summers.

post_20th_centThe energy density issue is well known to anyone who has compared the energy of a gallon of kerosene in a diesel electric locomotive to a pound of coal in one powered by steam.

Next time you fly from Chicago to New York consider the energy density of jet fuel which gets you there in under three hours compared to the requirement for a 16-hour coal-fired train ride in the 1930s. In those days the New York Central 20th Century Limited was considered to be a top-of-the-line speed run between the two cities.

For more in-depth reading on energy density at work, without the math, see William Tucker’s book Terrestrial Energy which explains the concept quite well. See the video below.

Can the Republicans make a deal? Do Democrats care?

Alexander isn’t the only voice on nuclear energy and climate change on the Republican side of the aisle in the Senate. Sen. Lisa Murkowski has forged bipartisan legislative efforts with Senate Democrats for a Clean Energy Bank that would expand loan guarantees for nuclear power plants. She is the ranking member of the Senate Energy & Natural Resources Committee. A review of speeches by Senate Republicans shows more than a little diversity of opinion on the issue of support for nuclear energy as an element of a climate change bill.

Building a business from scratchNote there is also considerable support in the House for a measure that would remove energy loan guarantees from the Department of Energy and create a separate agency for that purpose. So the question is whether nuclear energy is a part of the deal making process between the House and Senate for a climate bill?

The best place to start is a long and incisive analysis by Katherine Ling of Climatewire published in the NY Times on July 17. Ms. Ling’s take on the issue is that there will be something in the Senate’s version of a climate bill this September, but how much it will really benefit the industry remains unknown.

Even the Democrats, who sometimes dance way too enthusiastically to the tune of the green wing of their party, acknowledge this is a likely outcome. The article quotes Sen. Tom Carper, (D-DE) who told reporters if the committee draft doesn’t carry enough water, he will add to it on the floor. The rest of the article is well worth your time.

After Labor Day the question will be whether the Republicans will put party interest ahead of global climate change. Another will be whether the Democrats will give up their environmental fervor to pass a workable bill that puts wind in the sails of President Obama in December in Copenhagen?

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Here are William Tucker’s slides on Terrestrial Energy.

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Is AECL down for the count?

Can anyone really add up the numbers in the Darlington bids?

shish ka bobObservers of the political turmoil now underway in Ontario over the media reports that AECL bid $26 billion to build two new ACR1000 reactors (2,220 MW) are in good company trying to make sense of these figures.

The news media, notably the Toronto Star, had a field day with the numbers sticking provincial politicians like they were morsels on a shish-ka-bob skewer. The problem with all the fire, smoke, and spit from the grill is that the numbers are undoubtedly wrong and wrongly reported in the news media.

First, $26 billion is an aggregate number that includes two reactors, turbines, transmission and distribution infrastructure (power lines or T&D), plant infrastructure, and nuclear fuel for 60 years as well as decommissioning costs. The most important number in the whole controversy has gone largely without notice and that is the delivered cost of electricity from the plants is in the range of five cents per kilowatt hour.

Shis-ka-bob costs less in Canada than Turkey

By comparison, over in Turkey the government in Ankara is stuck with a single bid from a Russian consortium that proposes to deliver electricity from 5 GWe of nuclear plants at $0.15/KwHr. That’s three times the rate bid in the Darlington project and it represents a forced reduction from the astonishing first offer of $0.21/KwHr.

It would be the equivalent of asking rate payers to get rolls of quarters from the bank and put them one-by-one into a slot in the kitchen for each hour of heat and light. The delivered cost of electricity from natural gas plants in Turkey is in the range of six-to-eight cents per Kw/Hr. If you want to talk about heat and shish-ka-bobs from a failed nuclear tender, the place to look is Turkey not Canada.

Unbundling the cost numbers

inflatable earthSecond, the widely reported figure of about $11,000/Kw for AECL’s reactor package is also wildly inaccurate because it wraps the entire cost of the package into a single bundle and then allocates all of them to a figure designed to inflate the cost of the electricity generated by the reactor alone.

The other bidder at Darlington agrees this kind of analysis is nuts. In a conference call with nuclear energy bloggers on July 17, a spokesman for Areva declined to provide exact numbers, but did not specifically dispute a report in the Toronto Star on July 14 which pegged the cost of two 1,650 EPR reactors at $7.8 billion. Doing the math, that comes out to just under $2,400/Kw which is a very competitive price.

For comparison purposes, AECL bid two of the new ACR1000, which is an 1,100 MW reactor, which comes to 2,200 MW. At a reported bid price of approximately $6.0 billion, the price per Kw/Hr of the reactors is $2,700/Kw or very close to the price reported in the news media for the Areva reactors.

The spokesman for Areva said in the conference call the bulk of the “all in” price includes “balance of plant,” including turbines, T&D, and local and regional transportation improvements to bring plant components and the construction workforce to the site. It also includes nuclear fuel for 60 years! According to the Toronto Star for July 17, Areva’s total “all in” cost was $23.6 billion compared to AECL’s of $26 billion.

Readers should therefore be very skeptical of alarms raised by Greenpeace that the price of the reactors is in the stratosphere. It’s not true. Lumping all the costs of the entire project, and then dividing them by the reactor power output at the turbine alone is not accurate or fair.

Note also that because the Ontario provincial government put a “gag order” on the bidders, all of the numbers in this blog post are based on figures leaked to the Canadian news media by people in the Energy ministry. Provincial Premier Dalton McGuinty told the Toronto Star July 14 he did not refute the numbers for both bidders published by the newspaper.That’s also interesting since there has been little effort to hide the home town push to award the project to AECL and preserve its 4,000 jobs.

So what’s a risk factor?

high wire actAreva’s bid was judged “noncompliant” in its bid as a result of a lopsided evaluation by Ontario Energy Minister George Smitherman. The reason is that the French nuclear giant did not price out “risk factors” which the provincial government demanded in is RFP. AECL, which was betting on subsidies from the central government in Ottawa, added them in hence its reported higher price and the resulting political uproar over it.

The evaluation is lopsided because no commercial reactor vendor worth its shareholders’ skin is going to assume in a bid that a fairy godmother will show up to pay for avoidable cost overruns. That’s exactly what AECL, as a crown corporation, sees in the central government in Ottawa, and it is why PM Stephen Harper is so hard over about not fulfilling that role.

A real “risk” is a what former U.S. Defense Secretary Donald Rumsfeld would have called a “known unknown.” It is a contingency for cost escalation often brought on by rapid changes in the cost of key materials such as concrete and steel, or changes in specifications by regulatory agencies.

A compelling example of risk and cost is the impact of including directives from regulatory agencies into the design of nuclear waste cleanup facilities at the Hanford site in eastern Washington. A ruling by the Defense Nuclear Safety Board on seismic tolerances sent the Department of Energy and its contractors back to the drawing boards adding several billions to the cost of the cleanup plant.

What’s AECL’s real risk?

AECL SymbolAECL’s risk is that it’s reactor design is still in certification review with the Canadian Nuclear Safety Commission. No one knows how that process will turn out, not even the regulator, which is still pouring over the engineering documents provided to it by AECL.

The cost of building the ACR1000 will depend in part on changes to the design, specified for safety purposes, by the regulator. The prescriptive changes could inflate the cost of the reactor as built. Because no one yet knows the outcome of the review process, AECL is carrying a very large risk about the delivered cost of a first-of-a-kind reactor and included cost contingencies in its Ontario bid hence the higher price.

Are we there yet?

GreenpeaceSouthPark1In a case of the triumph of rhetoric over reason, Shawn Patrick Stensil, a spokesman for Greenpeace Canada, condemned what he called a “media blackout” on the real cost of the reactors. This is nonsensical because the Toronto Star and other news media in Ontario have had one headline after another all week with the purported bid numbers. How can there be a “media blackout” when the Energy Ministry has blanketed the press with numbers. In fact, there have been so many numbers released into the wilds, it looks a lot more like the Cartoon Network than a “media blackout.”

On July 17 some reason did emerge like sunlight after a summer thunderstorm. The Ontario Energy Ministry started talking about the project in terms of costs to the rate payers for electricity. It said the bids were being evaluated based on the “Levelized Unit Electricity Cost” or LUEC. The Energy Ministry told the Toronto Star . . .

“This measure is more sophisticated than just considering the capital cost of a facility as it projects the facility's lifetime electricity output, costs during construction, cost of nuclear fuel, operating expenses over its lifespan.”

Remember the ratepayer doesn’t care about most of these things. What customers do care about is whether they are paying for electricity with nickels, dimes, or quarters. That’s the customer perspective on LUEC.

Even so the stakes in Ontario are not chump change, but anyone who believes the current numbers in the Canadian news media needs to get out a calculator and start from scratch.

* * *

For your added edification, here is comedian Raechel Donahue in a 2007 performance on "unknown unknowns." Advice for the unwary . . .

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Clinton’s passage to India

U.S. nuclear deals are still some way off

ElephantU.S. Secretary of State Hillary Clinton is now engaged in an official visit to India where she hopes to strengthen bilateral ties with that nation on behalf of President Obama. As part of the agenda for this visit, Sec. Clinton hopes to sign formal agreements for sales of U.S. defense weapons from Lockheed and Boeing and nuclear reactor deals from Westinghouse and General Electric. For its part India has obligingly designated two sites for American reactors in Andhra Pradesh and Gukarat.

The nuclear deals, which will likely be limited to memorandums of understanding, might eventually be worth $10 billion, but only if India’s parliament changes several key domestic laws related to indemnification and protection of intellectual property.

While the U.S. waits for Indian politicians to take up the issue, which is unlikely before 2010, Russia and France are selling nuclear reactors to India like hot cakes because they enjoy sovereign immunity and don’t have to answer to shareholders worried about next quarterly earnings. The reactors are sold on a turnkey basis to Indian utilities which then have to operate them.

India’s total nuclear energy capacity is less than 5 GWe, but hopes to bring it up to 20 or 30 GWe within the next two decades. At the rate things are going, the country could get everything it needs from Russia and France before U.S. firms ever submit a bid. What’s ironic is that India’s waiver from the Nuclear Suppliers Group last September to buy nuclear technologies and fuel was driven by U.S. pressure under then President George Bush.

It is one thing to build a reactor for an Indian nuclear company and supply fuel for it. It is quite another to build and operate the reactor yourself with all of the risks that go with that business model.

powerlinesEven if the legal issues were resolved, it isn’t clear building and operating U.S, reactors would reap profits for American shareholders. India’s transmission and distribution infrastructure is a patchwork and theft of electrical service is a national pastime. Another challenge is getting state-owned utilities to charge rates-of-return that will insure profits over the lifetime of the reactors.

Still some companies want to get in on the action, but realism prevails. Ted Jones, the executive director of the U.S. India Business Council, told the Wall Street Journal July 16, “We’re a long way from being on a level playing field with our international competitors.”

Areva inks deal for two EPRs

The Hindu reports on July 12 that India and France are likely to sign a contract within the next 60 days to build two 1,650 MW EPR reactors from Areva at Maharashtra on behalf of the Nuclear Power Corporation of India Ltd (NPCIL). France will also provide fuel for the reactors for their 60-year life cycle. Discussion about reprocessing of spent nuclear fuel is still in progress according to the Hindu’s report.

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Friday, July 17, 2009

Western lands uranium gopher for 07/17/09

Mining the press releases of the uranium industry in western states for useful news

gopherPortions of this blog post were originally published in Fuel Cycle Week, V8N335 on 7/15/09 by International Nuclear Associates, Washington, DC.

Energy Fuels gets planners' nod

Energy Fuels (TSE:EFR) got a leg up on the next milestone towards full regulatory approval from local and state authorities July 2 with a unanimous vote by the Montrose County, Colo., planning commission for a special use permit for its 880 acre site where the firm wants to build a new 1,000 ton/day uranium mill. The action is a recommendation for a special use permit. The measure now goes to the Montrose County Commissioners for approval. The unanimous vote makes it a near certainty that the county will accept the planning commission's recommendation. The county will likely act within the next four-to-eight weeks.

The process wasn't easy. The planners held three hearings at which hundreds of people turned out to state their views, pro-or-con, to the commission. Getting approval to use the land for the purpose of building a mill is just the start of a long journey.

The real challenges ahead are with the State of Colorado which will issue the permits for the mill which is planned to be located on a site 12 miles west of the tiny town of Naturita, Colo. The licensing process for the mill is administered by the Colorado Department of Health and Environment (CDPHE). Energy Fuels said in a statement it plans to submit its request for a mine permit this October.

Once the permits are in hand, the firm can begin the hunt for major investors. A new 1,000 ton/day mill could cost as much as $100 million to build and take four-to-five years from the time it breaks ground to achieve full capacity. That assumes that there is enough ore to feed it. Mines in the Uravan mining region have been shut down due to low prices for uranium. Clearly, Energy Fuels is betting that by the time it opens for business the market will be up.

Powertech adds property at Centennial, updates Dewey-Burdock

Powertech Uranium (TSE:PWE) has entered into two option agreements to purchase 3,500 acres of land in Weld County, Colo. The deal includes water and mineral rights. The parcels are adjacent to Powertech's Centennial Project near Nunn, Colo. The actions will consolidate holdings and add uranium resources to the mine which is currently undergoing permitting with local and state regulatory agencies.

The firm said in a press release that the new properties would, if acquired, increase the inferred uranium resources within the project from 9.7 million pounds U3O8 to 11.5 million pounds.

At Powertech's Dewy-Burdock property in South Dakota, the firm said in a press release it had increased its estimate of inferred resources from 7.6 million pounds U3O8 to 10.8 million pounds. Mark Hollenbeck, the project manager, told the Rapid City Journal in May the recent steep drop in spot prices for uranium would not affect the company's plans for the mine. He said long term contracts for uranium could bring as much as $70-90/pound compared to the spot price which is lower. According to Trade-Tech the spot price for uranium on July 2 was $52/pound.

The firm has a long way to go with permits for the project. South Dakota is not an "agreement state" with the U.S. Nuclear Regulatory Commission (NRC) so in addition to a federal permit, the company must also meet a blizzard of regulatory requirements from a half dozen state agencies. Anyone who thinks uranium miners are impatient hasn't tried to permit a mine.

NRC EIS process delays Wyoming mines

The NRC's new requirements for supplemental environmental impact statements for new ISR mines will delay several ISR mines in Wyoming. Donna Wichers, VP for Uranium One, told the Casper Tribune on June 27 the firm's Moore Ranch ISR mine at Pumpkin Buttes will be pushed back a year in terms of getting a permit from 2010 to 2011. Wichers said that every time they nail down the regulatory requirements the NRC moves the goal posts.

"We've been told various firm dates by NRC, yet every time we get close to ending the process, something changes."

Uranium One has more than 100 million pounds of uranium to mine in Wyoming at 61 sites.

Wayne Helli, president of Ur Energy told the newspaper he also is disappointed with the delays his projects in Wyoming are facing as a result of the NRC's action.

Other miners in Wyoming, who were not quoted by the newspaper by name, took a much sharper line. They say the NRC overreacted to public ignorance about ISR mining. They worry that the new requirements and subsequent delays will cause their investors to lose patience and pull out of mine projects before they can start production.

Environmental groups are frank that they are punishing current uranium miners for sins of past projects that have contaminated the land. Shannon Anderson, a spokesman for the Powder River Resource Council, said her organization has major concerns about legacy pollution from uranium mines and is concerned about cumulative impacts from new projects.

Her "bad boy" for the NRC, in terms of advocating to ramp up the environment assessments to full impact statements, is Cameco's Smith-Highland ISR mine which had dozens of environmental violations according to a review by the Wyoming Department of Environmental Quality (DEQ). The state agency fined Cameco $1 million in 2008 for the violations.

Wyoming mining officials counter that ISR mines typically operate safely without damage to human health or the environment. For its part Cameco told the Casper Tribune that no one was injured as a result of its violations nor was there any long lasting harm to the environment.

Black Range moves on Colorado Hansen uranium site

The business of who has what share of a uranium deposit in the Tallahassee mining district in the Front Range of Colorado got a bit more complicated this past week. The ball got rolling when Uranium One defaulted on an option to buy a 39% share of the Hansen uranium works located there. This default also ended a joint effort by Uranium One and Black Range Minerals (ASX:BLR), an Australian company, to acquire a total of 51% of the property. For its part Black Range says it will now pursue all 51% of the deal with NZ Minerals LLC, a privately-held firm.

The Hansen uranium deposit is located on the south side of the property being worked by Black Range minerals Taylor Ranch uranium project. Both sites are located in Fremont County, Colo., due west of Canon City, which is the site of the old Cotter Corp uranium mill. According to Black Range the Taylor Ranch property contains 80-100 million pounds U3O8.

As part of the deal, Black Range will pay NZ Minerals $1 million in cash and $2 million in stock. Black Range also said it may bring in another partner to help finance the deal. The firm's stock closed at $0.08/share on July 10.

Uranerz posts drilling update

Uranerz Energy Corp. (NYSE:URZ) released an update of its 2009 drilling program on its projects in the Powder River Basin. On the 81%-owned Arkose property (with United Nuclear, 19%), the exploration team completed 199 trend and delineation holes through July 3, 2009 at South Doughstick, Cedar Canyon, and at North Jane, a new area. Although little mineralization came to light at Ceder Canyon, 31 holes drilled in the North Jane project turned up good results. Preparation of a 43-101- compliant technical report on the South Doughstick property is in progress.

The 2009 drilling program at Arkose found uranium mineralization ranging from <0.01-0.51% eU3O8 at a cutoff grade of 0.03%. Approximately 45.2 % of the 199 holes drilled to date in 2009 met or exceeded the minimum cut-off grade. In addition, 51 delineation holes were drilled on Uranerz 100%- owned Nichols Ranch and other nearby properties to prepare for the installation of baseline monitor wells for the planned Nichols Ranch ISR uranium mining facility Well Field Unit #1.

BLM saves bats

The Grand Junction Sentinel reports that the Bureau of Land Management has taken action with three abandoned uranium mines in southwest Colorado to save bats. The mines have been withdrawn for future use to preserve sensitive bat populations that live there, according to a new measure signed by Interior Secretary Ken Salazar.

The measure preserves 23 acres of habitat for the Townsend Big-eared bat. The mines are in the Dolores Public Land Center and the Uncompahgre and the Grand Junction Bureau of Land Management field offices, according to a release from the BLM. The bats love to live in abandoned mines and caves.

According to the newspaper report, in the past 15 years, more than 4,250 mines have been surveyed for suitable bat habitat through government programs.

Bats are one of the slowest-reproducing mammals and only give birth to one offspring a year, making it critical to protect their habitat, the BLM said.

Very cool BLM.

Uranium Resources acquires minerals rights in New Mexico

Uranium Resources (NASDAQ:URRE) announced it has entered into an agreement to purchase from NZ Uranium, LLC (NZU) 113,000 acres of mineral rights in the Crownpoint area of New Mexico. Closing of the transaction is expected to occur by mid August.

The properties include Section 24 at Crownpoint, in which URI already owns a 40% fee interest. According to URI’s existing reserve studies, the acquisition of the remaining interest in Section 24 will add six million pounds of uranium mineralized material to URI’s current holdings.

The properties also include Sections 19 and 29 at Crownpoint that had been leased previously by URI from NZU. URI engineering studies and publicly available National Instrument (NI) 43-101 reports of other parties assign approximately 14 million pounds of uranium mineralized material to those two properties. These combined 20 million pounds are included under the Company’s Nuclear Regulatory Commission (NRC) Crownpoint license.

URI will also acquire Hosta Butte, southeast of Crownpoint, which URI had evaluated as an in situ recovery (ISR) project for NZU in the past. Publicly available NI 43-101 reports of other parties assign approximately 15 million pounds of uranium mineralized material to that property. URI plans to commission a third-party engineering study to update the estimates.

URI will pay $1 million in cash and issue four million shares of common stock along with a 7.5% royalty on future production from these properties to NZU in consideration of the purchase.

Dave Clark, President and CEO of URI, noted “We believe this acquisition marks an important next step in building our uranium assets from 100 million pounds to our goal of approximately 200 to 300 million pounds. These are properties with which we are very familiar and that fit well into our plans to develop low cost ISR production under our Crownpoint NRC operating license, the only such license in the state.

Although these properties are considered to be Indian country, we will continue our efforts to demonstrate the safety of uranium mining for the Navajo Nation and citizens of New Mexico."

At market close Friday 7/17 the firm's stock closed up $0.08/share at $1.14 against a 52-week range of $0.36-$3.69.

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Sunday, July 12, 2009

Nuclear news roundup for July 12, 2009

It ain’t "game over" over until the fat lady sings

A lot of people think Exelon at Victoria, TX, has taken its bat, ball, and glove, and hit the showers over its plans for twin GE-Hitachi 1,350MW ABWR reactors there. This has been a hard luck site for the giant Chicago based utility. First, it spent tens of millions on a license application to the NRC referencing the GE-Hitachi ESBWR, but later bid that design goodbye when it turned out the Department of Energy ranked Exelon’s application lower for loan guarantees because the ESBWR isn’t ready for prime time. It is still deep in the design certification process at the NRC. Switching to the ABWR didn’t help. Exelon still found itself out of the running.

More recently, Exelon told the NRC to stop reviewing its licensing application. Instead, Exelon said it will develop an Early Site Permit which will preserve its place at the table for as long as 20 years, but not require it to spend lots more money updating the license application with a new reactor.

Most observers felt Exelon was basically mothballing the site until either Congress expanded the loan guarantee program or Wall Street came to its senses over new nuclear power plants or both.

It came as a big surprise when the Victoria Advocate reported that Exelon may not be so deep into mothball territory after all. The utility has renewed its options for 75,000 acre feet of water from the Guadalupe River for another year or possibly longer. What’s more, Exelon has a grip on what are called “senior water rights” which means in dry years, if they choose to exercise them, they would get water first from the river before other people.

This revelation has got farmers and environmental groups pretty stirred up. The utility isn’t moved by the fervor over its position. Craig Nesbit, a spokesman for the firm, told a San Antonio newspaper, “These water rights exist whether we build a plant or not. The only question is how you plan to use them.”

Exelon has paid the San Antonio River Authority $1.1 million for the rights for another year with a reported understanding it will negotiate a longer term deal. The utility also points out nuclear reactor cooling systems aren't a "consumptive use" since the water goes through one time and is returned to the source. About 5% is lost of evaporation through the cooling towers.

So hang on to your hats in Victoria, TX, because if you think Exelon’s story there is over, think again. No one pays a million bucks for water rights they don’t intend to use. We’ll watch this space.

Vermont Yankee passes latest relicensing test

The NRC’s Atomic Safety & Licensing Board has denied an intervenor’s request not to renew the 20-year license for Entergy’s Vermont Yankee nuclear power plant. Reuters reports that the NRC will likely make a decision on the license renewal application later this year.

Several green groups said that various components of the reactor no longer worked properly and demanded additional tests. Entergy went ahead and conducted the tests and the parts passed, but that was not the result the green groups hoped for so they filed another round of protests. This latest group of contentions are what were thrown out by the licensing board.

The NRC now has clear running room to make a decision on the merits of the license renewal application since all pending contentions, at least for the moment, have been denied.

Indian Point tagged for fish kills

Environmental groups in New York have found a new way to raise the price of electricity for customers of Energy’s Indian Point plant. They want the utility to spend at least $700 million on new cooling systems that won’t kill so many fish.

The New York Daily News reports that the new York State Department of Conservation (DEC) agrees with Riverkeeper, an arch foe of the Indian Point plant, that its cooling intakes kill lots of fish eggs and hence lots of fish.

The reactor uses 2.5 billion gallons of Hudson River water daily, 2 million gallons per minute, in a system that pulls in and kills fish eggs, bug larvae, and plant life. Note that the water goes in, but also comes out, albiet a lot warmer.

Entergy has gone to court over the price tag for the new cooling system. A company spokesman said the plant already has spent more than $100 million to protect fish by installing special screens to reduce the number of fish pulled inside the system.

The DEC estimates a new cooling system would cost $740 million, and $145 million a year to run. That comes out to 6% of Entergy's annual gross revenue. The costs would be passed on to Entergy's customers. In the meantime, Entergy expects to be back in the State Supreme court with appeals of the ruling by the environmental agency.

Stop Yucca, Stop sign, stop fees?

Bloomberg wire service reports that the nation's nuclear utilities have asked the federal government to be accountable for its actions by suspending payments required to cover the cost of opening Yucca Mountain. Since Senate Majority Leader Nevada Sen. Harry Reid has installed his personal stop sign for the project at the NRC in the form of now chairman Gregory Jazcko, the utilities say they shouldn’t have to pay an estimated $769 million this year. Their claim is that they no longer owe the money because the U.S. is abandoning the Yucca Mountain site and hasn’t settled on another disposal plan.

The Nuclear Energy Institute (NEI), the trade association that represents owners of all 104 operating U.S. reactors, sent a letter to Energy Secretary Steven Chu asking for the payments to be suspended. So far as of this year about $30 billion in fees and interest has gone into the nuclear fund. That's enough money to finance at least five new nuclear power plants at $6 billion each. The utilities want that money back.

Bloomberg also reported that another influential group has also asked that the fees be suspended.

“There is no clearly defined program for disposal of spent nuclear fuel and high-level radioactive waste,” Frederick Butler, president of the National Association of Regulatory Utility Commissioners, said in a separate letter to Energy Sec. Steven Chu. “Therefore, there is no basis to assess the adequacy of fees that continue to be paid into the Nuclear Waste Fund.”

Bloomberg points out that President Barack Obama announced earlier this year in budget documents that the U.S. would no longer seek to build a nuclear waste repository at Yucca Mountain.

Spent fuel and wetlands get NRC attention in Florida

The Tampa Tribune reports that plans by Progress Energy to build a new nuclear power plant in Levy County, Florida, have run into trouble. The NRC gave standing to the Green Party of Florida and two other groups to challenge the plant's federal license application to build two new reactors.

The Tribune reports that in a 112-page ruling, the NRC's Atomic Licensing Board found that the Green Party had successfully raised "certain major issues" about the plant's environmental impact that “deserve a full-fledged legal hearing with oral arguments.”

The first issue is obvious, but also ominous for other license applications pending with the NRC. The board agreed that Progress Energy did not have a long-term plan for disposal of spent nuclear fuel. This means the utility might wind up storing it in dry casks at the reactor for decades while the U.S. either builds and operates a recycling center or some other solution.

It seems to be a circular argument by the board since the federal government is the entity that has cancelled Yucca Mountain without providing an alternative. Holding the utility responsible looks like blaming the victim.

The board also found that the utility may have a problem with impacts on a floodplain. It may have to fill and pave hundreds of acres of wetlands, which may hurt both the underground aquifer and the Withlacoochee River. it would also have impacts on wildlife species that depend on them. The utility's plans call for filling 765 acres of wetlands, according to the Army Corps of Engineers.

The Green Party also challenged the design of the plant's cooling towers and water transfers locally to cool the reactor.

The utility hasn't decided how to respond to the ruling. "Progress Energy Florida has received and will review the ruling. We'll soon make a decision on whether to file an appeal," spokesman Tim Leljedal wrote in an e-mail to the Tampa Bay Tribune

The Green Party of Florida, the Nuclear Information and Resource Service and the Ecology Party of Florida have joined to try to stop the plant from being built. However, it doesn't look like these contentions are fatal.

"If it rules in their favor after those arguments, NRC spokesman Joey Ledford said, the utility "would have to amend their application to satisfy the shortcomings that had been found."

Progress plans to complete the plant, which involves two Westinghouse AP1000s, and have them in revenue service by 2016.

Arizona lawmaker supports uranium mining
but has problems with U238 decay

Arizona State Sen. Sylvia Allen isn't what you would ordinarily think of as an Internet video star. That assumption was overturned this week when she became a hit on You Tube for her extemporaneous remarks that the earth is 6,000 years old. [See video below]

She also supports uranium mining in the state, but discounts scientific evidence based on U238 decay that the earth is actually billions of years older than her estimate.

Allen's confusion of geological time scales occurred during a June 25 hearing of a legislative panel working on rural development issues. The legislators were drafting a nonbinding resolution asking Congress to insure access to public lands for traditional uses including cattle grazing and mining.

Allen spoke up on behalf of uranium miners in her district which includes her tiny community of Snowflake, Ariz. She said more economic development would occur if uranium mining were given more support by the federal government. Then she unloaded this bombshell.

"The Earth has been here for 6,000 years, long before anybody had any environmental laws, and somehow it hasn't been done away with."

The Arizona Republic posted a 43-second video clip on its web site and the images also made their way to MSNBC where liberal pundit Keith Oberman gave it a prime time roasting.

Arizona State Senator Sylvia Allen on the age of the earth

Allen is not upset by the attention. She says she is shrugging off the comments noting that her district has one of the world's largest copper deposits and all she cares about is whether anyone will be able to work there despite growing pressure from green groups.

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Italy’s nuclear renaissance becomes real

Next steps – select sites and build

Under a new law now approved by its parliament this week, Italy will in the next six months identify candidate sites for new nuclear reactors. The law also requires the government to set up a regulatory authority to manage the process of building the plants and administering the safe storage of spent nuclear fuel.

ScajolaEnergy Minister Claudio Scajola (left) told the Italian wire service ANSA that the country will break ground for its first new nuclear reactor in 2013 and that the plant is expected to enter revenue service five years later.

These changes, which have taken place in less than two years, are a stunning turn around for a country that abandoned its nuclear power stations in the late 1980s following the Chernobyl accident. What has driven the country to take this unprecedented step is that it has the highest costs for electricity in Europe. Italy relies on oil and gas imports for 80% of its energy use. Last year when oil prices spiked, the country went into economic shock.

Can you build it if they come?

bulldozer The biggest difficulty is no longer authority to do the work, but actually doing it. Political observers point out the country’s local government system is dysfunctional and beset by a ferocious case of “not in my backyard” or NIMBY. Some provincial authorities are deeply suspicious of nuclear energy and have already stated they will not host the plants. The government says it will pay people to allow the plants to be built in their communities.

Another problem is to find investors who will take the risk of building the plants. Italy’s biggest utility Enel SpA wants in on the action, but is heavily in debt and cannot pay for the new project out of current cash holdings. Government loan guarantees, which are not yet in the picture, could make it possible for the utility to put together financing for new plants.

There’s plenty of opportunity for investors if the sites can be found in the densely populated country. Energy Minister Scajola isn’t kidding when he says Italy needs to build at least eight-to-ten new nuclear power plants (10-12 GWe) to significantly reduce its dependence on imported oil and natural gas. However, the country also needs to avoid building more coal-fired power plants. One of the earliest options may be to buy a 12% share in a new Areva 1,600 MW EPR being built in France.

What is the real green case against nuclear energy?

Like other countries, the battle between greens and nukes isn’t always about ideas. More often it is about who gets capital for investment. Environmental organizations have been howling over the government’s full fledged commitment to the nuclear renaissance. However, in this case the debates over “green values” are about money.

Roberto Della SetaAccording to ANSA, Roberto Della Seta (left), a spokesman for one of Italy’s greener political parties, claimed the country would spend as much as 25 billion euros ($34.8 billion) on new plants but that they would only account for 5% of the country’s energy use. He claimed that renewable energy sources such as wind and solar could be built much faster and with energy efficiency measures have a far greater impact.

Legambiente, another leading Italian environmental group. used as a springboard U.S. President Obama’s reluctance to fully embrace nuclear energy as being part of the solution to the challenge of global warming. In a gross distortion of what the White House has said, the Italian group asserted that Obama’s opposition is based on the fact that nuclear energy is “polluting and unsafe.”

The government of Premier Silvio Berlusconi isn’t taking abuse or political distortions from Legambiente or any other green group. Italian Senate leader Maurizio Gasparri told ANSA the decision to move forward with nuclear energy “is a turning point, a courageous choice.”

In Brussels Foratom, an association of Europe’s nuclear industry, said new nuclear power plants in Italy would help that nation meet its climate change obligations. Foratrom’s director-general said the decisions taking place today in Italy “will inspire other countries considering a similar political path to press ahead.”

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People are pretty excited about the changes taking place in Italy. Here’s some renaissance music if you want to get up and dance.

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