Saturday, January 9, 2010

AEHI leaves pink sheets for OTC

It is a move to raise confidence in its stock

DollarAlternate Energy Holdings, Inc. (AEHI:OB) announced it received approval from the National Association of Securities Dealers (NASD)(FIRNA) to list and trade its common stock on the Over-The-Counter Bulletin Board effective Jan 8, 2010.

Don Gillispie, AEHI Chairman and CEO stated, "We hope the move up from Pink Sheets will increase investment community awareness of the many things that our company is doing.”

AEHI submitted the necessary securities registration statement to attain OTC:BB status in Oct. 2008.

This is the second move in as many years the firm has taken to improve the credibility of its business objective to build a nuclear power plant in Idaho. In February 2009, the firm filed its stock with the Securities & Exchange Commission (SEC).

AEHI meeting gets low key response in South Korea

SKoreaNuclearCEO Gillispie is reportedly in South Korea to hold exploratory discussions with KEPCO executives about importing their APR 1400 reactor for his project.

A South Korean energy official issued a statement Jan 6 about the meeting. He said, "AEHI asked to meet with us to exchange views on nuclear reactors, but the meeting must not be seen as a concrete step that could lead to another export deal for South Korean nuclear reactors," the official stressed, without going into details.

"The businessman and the company wanted to know some of the details about the Korean reactor," he added, toning down media reports that Gillispie may try to finalize a deal to buy the APR-1400 reactors for use in the United States.

He pointed out that there has been no prior discussion between the ministry and AEHI, although some preliminary talks have been carried out with KEPCO, which is in overall charge of the country's nuclear energy field.

Others in the ministry said there is no proof that AEHI has the resources to build nuclear reactors, since the aggregate value of its stocks currently stand at around US$10 million.

At market close AEHI’s stock stood at $0.10/share against a 52-week range of $0.01-0.25 and volume of 137,000 shares with 116 million shares outstanding.

AEHI recently pushed back the date it plans to file a license application with the NRC from 2010 to 2011. It has permit requests pending for rezoning actions in Elmore and Payette Counties in Idaho.

APR1400 Schematic

Source: Korea Times

APR1400

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Nuclear Energy Twitter Feed & Group

Join, read, post, put it on your blog or web site

Twibes.logoA new expression in the use of the social media tool Twitter is now available for people who support the use of nuclear energy as a carbon emission free source of energy.

It is called a ‘Twibe’ which is a made up word that means a ‘tribe’ of twitter users. It involves people who post ‘Tweets’ about nuclear energy. You can see the nuclear energy Twibe feed on the left panel of this blog. You can also subscribe to read the feed via an RSS service such as Google Reader.

Anyone can participate by signing up with your twitter account. Don’t have one? They’re free at Twitter. Posting is simple, but limited to 140 text characters. It is like the old Western Union telegram that gave you so many words for 25 cents. Except, Twitter is free to use.

How to use Twibe

BlackBerry-BOLD You can use Twibe from your favorite desktop or mobile Twitter client including Tweetdeck, Seesmic, Hootsuite, and many others. See this list for links to dozens of choices. You can post directly to Twitter from the Twibe web page and it includes an automatic web link URL service.

Subscribe to it and build a pro-nuclear community of twitter feeds. http://www.twibes.com/group/nuclear

Also, the Twibe nuclear energy twitter widget on nuclear energy news is up and running. You can put it on your blog, website, or Facebook page.

Privacy notes

The Twibe service is not affiliated with Twitter. Your name and Twitter ID will not be shared by Twibe with third parties. However, when you Tweet, your Twitter ID is visible to everyone who uses the service. It is not visible if you just subscribe to follow up others to read their Tweets either directly or via RSS.

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Thursday, January 7, 2010

Facts ~ What Me Worry?

An Eastern Idaho State Legislator and a Pocatello TV station create a tempest in a teapot

teapot-tempestThe Idaho State Legislature is back in session this week and headline seeking in Boise is already taking its toll. Not that KPVI (NBC) in Pocatello is blameless. Its reporter seems to have been out of the room when the part about getting all the facts was taught in college.

15 seconds of fame summary

Pocatello, ID, KPVI-TV quotes Idaho State Rep. Tom Loertscher (R-Iona) saying that Areva will ditch the Eagle Rock Enrichment Plant. Wrong, and worse, Loertscher makes his claim after a drive by of empty high desert pasture 18 miles west of Idaho Falls, ID, not realizing that Areva can't break ground until it gets the NRC license in mid-2011. Tempest in a teapot and media frenzy result. Do you know where your state legislator is tonight?

And now for the rest of the story

It all started this morning (Jan 7) when State Rep. Tom Loertscher (R-Iona) told Aaron Kunz, a KPVI TV reporter, that he thinks Areva will pull out of its plans to build a $2 billion uranium enrichment plant 18 miles west of Idaho Falls.

What got the TV station excited was a brief comment Loertscher made on a radio talk show. He said that after driving past the planned site for the plant, which right now is just high desert pasture, and not seeing any construction activity, he assumed the worst. He expounded on these remarks to the Pocatello TV station. The entirely predictable uproar has everyone wondering what’s going on.

The lead story on KPVI News 6’s web site today highlights Rep Tom Loertscher’s comments about AREVA revising or possibly canceling the Eagle Rock Enrichment facility.

In the story Rep. Loertscher stated, “Everyone should be calling AREVA and ask them if they are on schedule with the 2014 building date.” He went on to say “that it's disturbing to him that no significant changes have been taking place at the place the company plans on building.”

After a day of frantic phone calls, KPVI updated its story with comments from Bob Poyser, Areva’s VP for Operations here in Idaho Falls.

Poyser said, "It's very risky to speculate on the company's future based on driving past the location."

Areva says it's still here and here to stay

Areva and local economic development officials say the problem with Loertscher’s “if-then” logic is that reality is entirely different. Areva can’t break ground for the Eagle Rock Enrichment Facility until its get a license from the NRC. The draft EIS is due in March 2010. According to the schedule published by the NRC, the license is due to be issued in mid-2011.

PST LogoLane Allgood, Executive Director of the Partnership for Science & Technology (PST), a pro-nuclear business group, issued a statement today after talking with Poyser. He, of course, has been busy talking to everyone today trying to fix the media mess.

Allgood told this blog there is very little work that AREVA can actually do on the site before the NRC issues the license. He added that the Partnership for Science and Technology has tracked the status of the license application on a weekly basis and, “it certainly appears to us that the process is on schedule.”

Allgood also issued a set of talking points based on his conversation with Poyser. (below)

AREVA officials comment to PST on status of Eagle Rock project

  • The development of the Eagle Rock Enrichment facility is going forward as planned. We are moving as fast as we can with the project. There has been no change to the project due to financial or any other factor.
  • According to the current schedule, construction of the facility would begin in 2011 with initial operations in 2014. Although work to expand the facility is expected to continue through 2017.
  • There may be no physical work under way at the site today, but rest assured that we at AREVA are working hard to move the Eagle Rock project forward and get shovels in the ground.
  • The Eagle Rock facility will create thousands of direct and indirect jobs for Idaho. its economic impact on the region’s economy is estimated at more than $5 billion.

Impacts of the non-story are far-reaching

Other state legislators will assume that Rep. Loertscher, from eastern Idaho, knows what he’s talking about. Since the state legislature provided tax incentives for Areva to come here, news that they might not finish the job would not go down well under the capitol dome.

Second, the story will get picked up by wire services handing anti-nuclear groups in Boise an additional opportunity to attack the project. Additionally, it could cast a shadow all the way back Washington, DC, and Paris, France, adding an international dimension to the fracas.

Questions about intent?

KPVI seems to have missed the principle of getting all the facts in a story. Why didn’t the reporter call Areva and ask them for a comment?

Why didn’t Loertscher call Areva first before popping off to the news media?

Maybe it is because any media attention, even negative, is better than none at all?

Headline hunting is a contact sport in politics. Rep. Loertscher has made contact. Here's the KPVI video of the interview.


Tuesday, January 5, 2010

Reality check on AEHI claims for links to S.Korea

Extraordinary claims for Idaho nuclear new build

enterprise in flightUpdate April 28, 2010 Payette County approves land use for reactor

See also October 20, 2009 AEHI picks third site for new reactor

Alternative Energy Holdings Inc. (PK:AEHI) wasted little time issuing a press release in an effort to ride the coat tails of the $20 billion award by the United Arab Emirates (UAE) to a consortium of South Korean, Japanese, and American firms. The Idaho company claims that it is on the verge of importing South Korean nuclear reactors, based on the APR 1400 design, for two sites – one in Colorado and the other here in Idaho.

What’s remarkable about this claim is that it assumes the company has found a way to get the U.S. Nuclear Regulatory Commission (NRC) to do something no other reactor vendor, or utility, has accomplished in the current era. This is to get the federal agency to power up to Warp 8, eight times faster than the speed of light, and certify a completely new LWR design, issue licenses for construction of two of them, and in less time than it takes Cmdr Spock to say “fascinating.”

AEHI CEO off to Seoul

Don Gillispie, AEHI's CEO, said Jan 4 in a prepared statement he’s gone to Seoul to complete negotiations with Korean Electric Power Company, KEPCO, to import the South Korean's APR 1400 for its Idaho and Colorado sites.

He said, "We expect the agreement to be similar to the UAE agreement announced last week, such technology should give AEHI a serious competitive advantage."

"We would like to complete our negotiations to bring the APR 1400 into the US for the first time including helping achieve NRC design certification."

NRC still in space dock

HitBrakesDecalAccording to media reports, AEHI is claiming it will submit the reactor for design certification in 2010 and applications for licenses to build two of them in 2011. This is where the AEHI starship hits the brakes.

In November 2009, officials from KEPCO, the South Korean firm building the APR 1400s for the UAE, held their first meeting with the NRC to discuss design certification.

According to the minutes of the meeting (ADAMS link), NRC officials told KEPCO to take a number and wait for at least two years. The agency said that with its current reactor design work it has no resources for a new project. See also from NRC ADAMS (KEPCO Slides) (KEPCO's proposed schedule)

NRC also said during the meeting, in no uncertain terms, that the meeting held last November with KEPCO engineers did not initiate a reactor design certification process.

A reasonable schedule is that KEPCO might get a place in line for reactor certification in 2012. However, no U.S. utility is likely to step up to be first. U.S. utilities are a somewhat cautious lot and new reactor designs take some getting used to before executives running multi-billion publically-traded firms buy one.

Instead, they will send engineers, lots of them, to get information on how well the plants operate, and what they cost, over at least a three-to-five year period. Bear in mind that the caution of the utilities is mirrored by their investors. No one is going to put up the money to build one until the revenue numbers are well understood. Add to this the time it takes to get a license application and the math comes out to a date near 2020 more or less.

Movie magic or reality?

NASA Colliding galaxiesWhere this leaves us is that once again AEHI has made claims which are worthy of skepticism. The firm has taken a ten-year time frame and proposes to compress space and time to reduce the project schedule by major orders of magnitude. It is great movie magic, but it is not reality.

Don Gillispie must sincerely believe in the statements he issues to the media. This one fails the baloney test. Now I know that every time I say this it annoys AEHI all to pieces.

There is a simple remedy. The firm must stop making extraordinary claims about what it can accomplish. The nuclear industry does not work this way. If wishes were fishes, AEHI would be knee-deep in flounder, but they’re not.

Invisible investors?

Given its financial resources, any claims about building a reactor in Idaho, or Colorado, need to be matched by investors. Where are they?

At market close, the firm’s stock price was $0.10/share with market capitalization of $11.6 million. The firm has been through three investment bankers, and none ever raised the millions if not billions needed to start and complete the process to build a new nuclear reactor.

One of them, Silver Leaf Capital Partners, which is no longer associated with AEHI, is now under investigation in Utah for defrauding its customers. AEHI received a $150 million financing commitment from SilverLeaf Capital Partners. AEHI never received the money, and a $25,000 deposit it gave the firmto secure the deal was never returned, according to a statement from Don Gillispie, AEHI's CEO, to the July 26 , 2009, Salt Lake City Tribune.

"It's been well over a year since the refund was due. Repeated letters and calls were to no avail. He would promise, but never deliver. Further, I later learned he was not even a licensed broker," Gillispie said.

The Tribune reports Silver Leaf expressed surprise over AEHI's claim and also denied any wrong doing. Update: In late June Shane Baldwin, CEO of Silverleaf Financial, took a deal with Utah prosecutors in which he pled guilty to two counts of attempted theft. The pleas will be set aside if he finishes probation without committing further violations of Utah securities laws. Baldwin also made restitution to several investors, but Gillispie was not one of them.

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No clue on status of loan guarantees

Department of Energy is mum after promising awards just before the holidays

~ Comments & updates below ~

Warren MillerLess than a month ago, the Department of Energy (DOE) was giving strong signals that a long-running impasse with the Office of Management & Budget (OMB) had been resolved on the pricing of premiums for federal loan guarantees for new nuclear power plants. An ebullient Warren (Pete) Miller, DOE Assistant Secretary for Nuclear Energy, (right) was quoted Dec 17 in wire service reports that “we will have loan guarantees by the end of the year.”

That time has come and gone. Today, Jan 5, a spokesman for DOE told this blog the agency is “still crossing t’s and dotting i’s.”

Asked if the dialog with OMB had been resolved, the spokesman would only say the agency is not ready to announce the winners of the loan guarantees. This outcome is a puzzle since last November Secretary of Energy Steven Chu announced a new director of the loan guarantee program.

It has been an open secret since last Spring that DOE has a short list of four projects which have passed the agency’s rigorous standards for due diligence and market readiness. However, on Dec 24, just one week after Ass’t Sec. Miller voiced considerable optimism, another DOE official threw cold water on the prospects for any awards in 2009.

What other issues are in the mix?

Daniel PonemanThe New York Times reported that Daniel Poneman, Deputy Secretary of Energy, (right) said the DOE's negotiations with energy companies on loan guarantees for "first mover" reactors “still has some distance to cover.”

According to the newspaper, DOE and OMB remained at odds over the credit subsidies that nuclear developers would have to pay up front to cover the risk of a loan default.

"We have worked with, and continue to work with OMB very cooperatively, on trying to get these things resolved ... . It's obviously mission-critical to figure out if the [project] transactions will work. It's not surprising that this would be a number that gets pretty closely scrutinized. We're getting close, but we're not done.”

Poneman is an expert on nonproliferation issues which creates a question of why he’s involved in the loan guarantee issue. There’s been criticism of the Obama administration’s work on the loan guarantee program from nonproliferation experts like Sharon Squasonni at the Carnegie Endowment who has written several highly critical reports. Of course, it’s impossible to say whether they are influential. It would be helpful if Ms. Squasonni would get some of her facts straight. For instance, Ameren would be surprised to learn there are no commercial nuclear reactors in Missouri.

Congressional impatience surfaces

As DOE and OMB remain locked in a stalemate, Congress is getting frustrated as evidenced by a letter sent from six Senators, including Idaho’s Sen. Mike Crapo, to Peter Orszag, the director of OMB.

There’s a lot of pent up impatience in the letter. While the language is couched in the parlance of congressional budget technicalities, the message is clear. Get the lead out and get the job done. How could that not be more clear?

Secretary Chu has few good options if OMB is keeping the loan guarantees bottled up. Going over the head of the budget agency to the White House is a risky step which could backfire. Chickens could come home to roost in future bureaucratic tangles.

Also, there remains the question of whether OMB is digging in its heels on its own initiative or if there is White House pressure showing up on this front. It may take a White House intervention to clear out the tangled issues that have yet again shown the at best lukewarm support for nuclear energy coming from the Obama administation.

Comment from Ed Kee

Blogger's note to readers ~ normally comments appear in a link below an article, but this one from Ed Kee shines new light on process and expected outcomes. Full text follows.

"I appreciate the desire to see action on loan guarantees now, but this may be inconsistent with the process.

Secretary Chu, in a 22 Dec 2009
letter to Congress
outlined the DOE Loan Guarantee process and schedule.

The next step is for the short-listed applicants and DOE to agree on a term sheet; this will become the "Conditional Commitment" defined in
10 CFR Part 609.

Loan Guarantee closing (i.e., the point when an applicant could begin to draw upon a guaranteed loan) will not happen until all conditions are met. A key condition is that the nuclear project's COL application has received NRC approval.

If DOE has not signed any Conditional Commitments by the time the first units receive COL approval, there could be delays in project construction.

However, no US nuclear project is expected to receive an NRC COL approval before late 2011."

Idaho Samizdat responds

This is my response to Ed Kee's comments which I thought were very good. I am offering readers a set of rhetorical questions. These questions will only be answered at some future time when DOE makes an official announcement about the loan guarantees.

1. Will DOE change out any of the utilities on the short list while it is making up its mind? For instance, NRG, which is one of the short-listed firms, is having a real dust-up with CPS Energy, one of its potential investors and customers, over a reported $4 billion price increase cited by Toshiba. which is the EPC contracto.r for the twin 1,350 MW ABWR reactors.

CPS sued NRG and the Mayor of San Antonio is trying to get both parties to settle their differences without protracted litigation.

If the price really is going up that much, how will it affect DOE's 'due diligence' review of the financials for the project? Note that the “alternate” project on the list, if one of the top four goes south, is likely to be Luminant’s Comanche Peak project with twin Mitsubishi 1,750 MW APWRs. The parent firm has its own financial difficulties which could complicate DOE's choices.

2. Does it follow that delays in awarding the loan guarantees actually work in DOE's favor since none of the utilities on short list can really use them until they get their licenses from the NRC? The earliest any licenses will be granted is 2011/2012.

By 2011 OMB may have been worn down by the stalemate, or the principals involved will have moved on to other issues or jobs. Their replacements might not be so heavily invested in the pricing issue. Also, it lowers the risk of DOE going over OMB’s head, after the 2010 elections, to get a decision from the White House.

3. Do utilities really want an early decision and commitment since investors, who's loans would be guaranteed, are not going to show up until the NRC licenses are issued and the reactor projects can break ground? None of the utilities will want to pay the fees for the loan guarantees until they can use them to draw against loans.

4. If time doesn't matter, at least until the NRC issues the licenses, why are DOE and Congress making so much noise, respectively, about the awards and the delays? Is this really just another case of inside-the-beltway political theatre?

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Int’l Isotopes submits NRC license

Firm plans to build a facility in Hobbs, NM, to extract fluorine from depleted uranium

International Isotopes Inc. (OTC:INIS) announced Jan 4 it submitted its license application to the Nuclear Regulatory Commission (NRC) for its depleted uranium de-conversion and fluorine extraction processing facility.

The plant would convert depleted uranium hexafluoride (UF6) into depleted uranium oxide, a form which is more chemically stable. The fluoride compounds extracted in the process would be sold commercially. The depleted uranium hexafluoride is expected to come from commercial enrichment facilities.

Status of the deconversion facility

In March 2009, the company announced the selection of a 640-acre building site for the facility just west of Hobbs, New Mexico. In June the company announced completion of the Conceptual Design Report (CDR) for the project. The final cost of the plant could be in the range of $55 million according to previous estimates announced by the firm.

The NRC license review is expected to take approximately 18 to 24 months to complete. The company plans to select a design and build contractor next year and may initiate some pre-license construction activities at the Hobbs site in 2010, subject to NRC approval.

The INIS facility is planned for a location about 15 miles west of Hobbs, NM, and will consist of both depleted uranium de-conversion and fluorine gas extraction processes.

Fluorine extraction equipmentINIS holds patents that give it exclusive rights to the Fluorine Extraction Process (FEP), which produces high value, high purity gases in conjunction with uranium de-conversion, and thus, provides a key commercial advantage to the de-conversion plant.

INIS expects to hire about 150 construction workers for the project and anticipates that it will eventually have a full time staff of approximately 130 to 150 employees for plant operations. Construction of the $55 million facility is anticipated to begin in the third quarter in 2011, after Nuclear Regulatory Commission licensing is complete, and to begin operations in late 2012.

Consistent with an agreement with the State of New Mexico, no waste from the plant will be disposed of in that state. A low-level waste facility is located just over the New Mexico border in Andrews, TX.

NRC public meeting in Hobbs, NM, Jan 14

nrc logo The Nuclear Regulatory Commission will hold a public meeting Jan. 14 in Hobbs, N.M., to discuss the agency’s license review process for a uranium de-conversion plant proposed to be built in Lea County. (NRC press release)

The meeting will be held in the Banquet Hall of the Lea County Events Center, 5101 N. Lovington Hwy., in Hobbs, NM, (map) from 5 p.m. to conclusion. NRC staff members will be available beginning at 4 p.m. for informal discussions with interested members of the public.

International Isotopes, Inc., submitted an application Dec. 31 for a license to construct and operate a depleted uranium de-conversion and fluorine extraction processing facility in Lea County.

At the Jan. 14 meeting, NRC staff will explain the technical and environmental review processes for the proposed facility, as well as NRC inspections should a license be granted. The staff will also answer questions from the public.

Update on uranium enrichment in the U.S.

International Isotopes will have plenty of opportunity to acquire the raw inventory for its fluorine extraction process. With four new uranium enrichment plants, with combined production of at least 8 million SWU, coming online over the next four years, there should be no shortage of depleted uranium.

Uranium enrichmentLES: The nearest plant to the Hobbs, NM, site is a $2 billion, 3 million SWU, uranium enrichment facility owned and operated by Louisiana Energy Services (LES) located in Eunice, NM, 20 miles due south of Hobbs. That plant is currently spooling up its first centrifuges and is expected to to begin production this year.

Areva: A $2 billion, 3 million SWU uranium enrichment plant will be built and operated by Areva, 18 miles west of Idaho Falls, ID. Areva has submitted a license application to the NRC. The license for the Eagle Rock Enrichment Facility is expected to be issued in 2011, and the plant is expected to start operations in 2014.

Additional uranium enrichment plants are planned to be built in the U.S. by GE-Hitachi and USEC.

GEH:The GE-Hitachi plant is based on a new laser enrichment process that separates U235 from the heavier U238 in a process similar to the way a laser printer deposits various amounts of toner on a piece of paper. GEH submitted an NRC license application in June 2009. According to a schedule published by the NRC, the license is expected to be issued in March 2012. Assuming the firm breaks ground at that time, the plant could be operational by 2014.

GEH is planning to conduct the project in two phases, a test phase and a commercial-scale enrichment plant phase. The Test Loop, which is being built at GE's nuclear fuel fabrication facility in Wilmington, NC, will verify performance and reliability data for full scale, commercial facilities. This engineering demonstration program is currently under construction.

USEC (NYSE:USU) applied for, but did not receive, federal loan guarantees for its American Centrifuge Facility. The Department of Energy said in its evaluation in July 2009 the technology was not yet reliable and the company’s finances were not in shape to meet government due diligence requirements.

Prospects for completion of the plant without the loan guarantee at this time are not good. On Dec 18, 2009, Moody's downgraded USEC ratings, citing credit, competition and liquidity risks.

& & &

At market close Jan 4, the INIS company stock traded at $0.55/share against a 52-week range of $0.16-$0.85.

Prior coverage on this blog

  • June 2008 – International Isotopes announces major expansion
  • November 2008 – International Isotopes raises $2M
  • March 2009 – International Isotopes chooses Hobbs, NM

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