Canadian uranium news for 02/27/10

This blog post is an edited version of a column published in Fuel Cycle Week, 02/17/10 V9:N364 by International Nuclear Associates, Washington, DC.

Cameco re-enters Cigar Lake mine after flood

Cameco Corp (TSX:CCO) announced Feb 11 its crews re-entered the main working level of the Cigar Lake mine, 480 meters (1,575 feet) below the surface. Lyle Krahn, a spokesman for Cameco, told FCW the re-entry does not mark the re-start of construction, but it is a significant milestone following work to stop the flooding and pump out water from the underground shafts. He said the workers are conducting damage assessments and safety inspections. A technical report is being prepared which will be released by the end of March. He added an update will be provided on Feb 24 when Cameco announces its 2009 financial results.

Krahn said the technical report will focus on a planned re-start of construction activities by October 2010. While Krahn did not give a data for completion of construction, he said that Cameco's goal for the mine is to reach a production level of 18 million pounds/year from the mine. He estimated it would take several years following start-up of production to reach that level.

The mine flood occurred in October 2006. It took three years for Cameco to get a solution in place at the 420 meter level and the source of the water. After direct pumping failed, inflatable seals were used and then covered with concrete.

The mine is expected to be one of the world's richest uranium deposits once it goes into production. The estimated reserves are 226 million pounds with ore grades as high as 20%.

Re-start of the nearby McClean Lake uranium mill will depend on when the Cigar Lake mine goes into production. Earlier this year Areva Resources Canada laid off about two-thirds of its workforce at the mill.

Cigar Lake, located in northern Saskatchewan, is a joint venture of Cameco which owns 50%, Areva at 37%, and two other partners.

Mitsubishi takes direct stake in Canadian uranium project

In a break with long standing practice, Japanese conglomerate Mitsubishi, acting through its Canadian subsidiary, completed the direct acquisition of a 50% stake in CanAlaska's West McArthur uranium project in Saskatchewan. In the past the firm has invested indirectly through consortiums with corresponding lower shares in the production.

If a mine is developed, Mitsubishi will have the exclusive rights to sell 50% of the output to Japanese utilities.

Emil Fung, VP for Corporate Development at CanAlaska, (CVE:CVV) told FCW, this is the first time MC Resources Canada Ltd, the subsidiary, has invested directly in an exploration project. The approvals Fung said, " had to go to the top of the home office corporate structure for sign off."

The two firms are now working on a C$20 million, five-year exploration effort with the objective of developing an ore body capable of producing 100 million pounds of uranium. Fung said the exploration project sounds ambitious, but the payoff could be enormous.

"We believe such an ore body can be found since we are just 8 km (5 miles) from the MacArthur mine in the Athabasca basin."

The kick-off of the exploration project follows completion of a three-year option agreement during which time Mitsubishi invested C$11 million a year in cash and exploration expenditures to earn its 50% stake in the project. The West MacArthur property being developed by the two firms is composed of 12 mineral claims covering 359 square kilomaters (138 square miles).

CanAlaska is also involved in another exploration project in the region at the Cree East project in a C$19 million joint venture with a consortium of South Korean countries. It received its initial funding in December 2007.

Denison forecasts production of 1.8 million pounds uranium in 2010

Denison Mines (TSE:DML) announced it expects to produce and sell 1.8 million pounds of uranium in 2010. This is a 14% increase over its production in 2009. Most of the production will be in the U.S. At price ranges of US$40-50/lb on the spot market, the production could be worth US$72-90 million.

Overall, Denison said it projects revenue in 2010 to be US$119 million which includes $19 million in revenue from vanadium.

The firm said it would spend US$6.3 million on new mine exploration and development activities. The most significant exploration project will be additional drilling on the Wheeler property in the Athabasca basin in Saskatchewan. It involves 45 holes over 22,500meters.

In December Denison announced a 7,500 meter drill program on the Wheeler River Property to further define the high-grade Phoenix discovery made in 2009. The Wheeler River project is a joint venture among Denison, who is the operator and holds a 60% interest, Cameco Corp. (30% interest) and JCU (Canada) Exploration Company, Limited (10% interest).

Another important project is the McLean North property and a scaled back but continued evaluation of the Midwest uranium project with Areva which is the majority owner.

Virginia Energy takes 100% interest in Otish Mountain property

Virginia Energy (TSX:VAE) announced it has taken a 100% interest in four claims in the Otish Mountains of Quebec which are spread out over 202 square miles. The claims are owned by Xemplar Energy. The deal will be closed by transfer of 1.2 million shares of common stock. At market close Feb 16, its stock traded at C$0.235 making the deal worth approximately C$282,000.

Virginia Energy Resources Inc. and Denison Mines Corp. announced the start of drilling on the Hatchet Lake uranium property in Saskatchewan. The 2010 program is budgeted at $700,000 and will include approximately 2000 metres of drilling in 8 to 10 holes in the Tuning Fork area. The firms each hold a 50% interest in the property.

This very large property consists of 11 claims totaling 39,930 hectares (154 square miles). It is located 20 kilometres north of Points North Landing, and 17 kilometres north of the McClean Lake Mill owned by AREVA-Denison-OURD.

Strateco closes C$15 million private placement

Strateco Resources (TSX:RSC) closed a C$15 million private placement through the Sentient Group, a private equity firm in the U.S. Strateco plans to use the proceeds to fund its exploration and mine development work for its Matoush project in the Otish Mountains of Quebec.

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Idaho Sen. Mike Crapo at NEI Nuclear R&D Summit

A view from the Senate Environment and Public Works Committee:
The Effect of Climate Change on the Nuclear Energy R&D Portfolio

Sen. Mike Crapo (R-Idaho)
NEI Conference Agenda

(Two video clips below)

• Full text of speech (16 min)
• Q&A session on federal support for next generation and small reactors (12 min)

NUCLEAR ENERGY IS THE FUTURE
By Idaho Senator Mike Crapo

For far too long, one of our most promising alternative energy options has been left to languish—nuclear energy. Nuclear power should be a central, key part of our national energy strategy. It is encouraging that the President’s Fiscal Year 2011 budget provides stronger support for nuclear energy through a significant increase in loan guarantees for construction of new nuclear plants. I firmly believe in the benefits of nuclear energy, which can provide energy and economic security to our country’s energy supply, and I have been a strong proponent of nuclear loan guarantees since the program began in 2005.

Despite America’s reputation throughout the 20th century for being at the forefront of science and technology, the United States trails many countries in using nuclear power to meet our growing energy needs. Fifty-six plants are under construction across the globe---21 in China---yet none are currently under construction in the United States. Nuclear energy accounts for less than 20 percent of our electrical supply, a figure that hasn’t changed much since the 1970s. During that same time period, other countries have recognized and increased their use of nuclear-generated electricity: France is at 76 percent, Japan is at 25 percent, South Korea is at 37 percent and Sweden is at 42 percent. The United States is falling behind, and we must catch up.

The tone of the nuclear debate has changed dramatically over the last decade. It is no longer mainstream opinion that more nuclear power will result in environmental and public health disasters. In fact, even some former opponents of nuclear power have come out in support of it because of its value in meeting the President’s ambitious emissions reduction goals. The tide of public opinion is turning toward nuclear power.

The Department of Energy has estimated that each new nuclear unit here in the U.S. would create approximately 2,400 jobs. In addition, a serious investment in new nuclear reactors would provide a proven, reliable source of carbon-free power from the moment that these facilities are open for business. In the debate over the merits of nuclear energy, nuclear wins.

The demands of energy security, economic sustainability and environmental needs require an aggressive nuclear R&D agenda to expand the low-carbon benefits of this proven technology, but neither the government nor industry can do it alone. By working together, we can put this country on the right path toward a low-carbon energy, made right here in America.

Idaho Senator Mike Crapo
Speaking at Nuclear Energy Institute R&D Summit
Washington, DC Feb 22, 2010

Sen. Crapo Q&A session at NEI Nuclear R&D Summit

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Nuclear news roundup for 02/26/10

TVA to test MOX fuel

The Tennessee Valley Authority will consider using MOX fuel in its Sequoyah and Browns Ferry plants. The National Nuclear Security Administration announced today that it has signed an interagency agreement with TVA to evaluate the use of mixed oxide (MOX) fuel.

TVA will have to submit a license change for the plant to the NRC to carry out the work. The agreement is the next step is the implementation of the government’s efforts to burn plutonium from surplus nuclear weapons in commercial nuclear power plants.  NNSA says the MOX fuel will be as cheap or cheaper than conventional nuclear fuel.

“The MOX program is an important example of this administration’s commitment to irreversibly disposing of surplus nuclear weapons material in a way that realizes the energy value of the material and advances our nuclear nonproliferation agenda,” National Nuclear Security Administration Deputy Administrator Ken Baker said. (press release)

The MOX fuel plant being built at Savannah River, SC, will convert 34 tons of the stuff to MOX fuel.  It is expected to be operational in 2016.  The plant is being built by a partnership of The Shaw Group and Areva.

The paradox of anti-nuclear sentiments is that green groups appear to have a reflex opposition to anything nuclear even if it means ridding the world of nuclear weapons materials.

“This sends the wrong signal around the world and creates a potentially dangerous and risky program at these TVA plants,” said Tom Clements, the Southeastern Nuclear Campaign Coordinator for Friends of the Earth.

Around the world nearly three dozen nuclear reactors already burn MOX fuel with 20 of the reactors in France, ten in Germany, and others in Japan.

MOX Fuel Approved For Japan’s Fukushima-Daiichi-3

22 Feb (NucNet) The governor of Japan’s Fukushima prefecture is to approve the use of mixed oxide (MOX) fuel at the Fukushima-Daiichi-3 nuclear unit, owned and operated the Tokyo Electric Power Company (TEPCO).

Governor Yuhei Sato said at the Fukushima Prefectural Assembly on Feb 16 that he intended to approve the use of MOX fuel at the boiling water reactor (BWR) unit, paving the way for the program to continue after a nearly decade-long hiatus. In Japan local governments have de facto veto power over start-up of nuclear power stations.

The action will bring to a close a decade old black mark on the industry.  The Japanese government granted approval in 1999 to change the reactor installation, but the program was suspended in 2002 after the utility was found to have falsified records at the plant, which has six BWR units.

Build breeders - Blees

The United States has the technology and fuel to provide electrical power for a thousand years, but lacks the political will to build nuclear breeder reactors,

Speaking to a community seminar near Tuscon, AZ, Tom Blees, author of “Prescription for the Planet,” said solar and wind will not provide enough power for the planet.

Leonard J. Koch, an engineer who worked on a breeder reactor at Argonne National Lab, said breeder reactors are more efficient because they consume uranium and spent nuclear fuel, thus extending the fuel supply and significantly eliminating the disposal problem.

The speakers noted that the Obama Administration has awarded $8.5 billion in loan guarantees for a nuclear plant in Georgia. However, they added it is aimed at conventional LWR reactors. The issues that are still open are long-term fuel supply and waste disposal.

Koch said the problem is that power companies are afraid of the uncertainties of developing breeder reactors, and stockholders will not back such projects. Koch and Blees said President Carter stopped breeder reactor development in the 1970s and President Clinton followed suit in the 1990s.

Blees said breeder reactors are being built by France, Russia, China and India, and those countries are seeking to create a consortium, along with the U.S., to build breeder reactors.

Favoring Nuclear ‘Does Not Mean Being Against Renewables’

15 Feb (NucNet) The nuclear industry must make it clear to the public that it  is possible to be in favor of nuclear energy while also supporting wind power and carbon capture and storage, a conference heard today.

Environmentalist Stephen Tindale (left) told PIME (the conference on Public Information Materials Exchange) in Budapest that the industry has made a mistake in sending out the message that you have to support one or the other.

Mr Tindale, former head of Greenpeace UK and co-founder of the website Climate Answers said the industry also needed to be more transparent about the cost of nuclear energy.

“The fact is that people distrust the industry, not the technology,” he said. “We need to be open about the full cost of nuclear, including construction, generation, decommissioning, waste and insurance.”

He said environmentalists were shifting to nuclear energy because of concern about climate change. “Nuclear is not zero carbon, but it is low,” he said. “It produces about 10% (lifecycle) of the CO2 of old coal power stations.”

Mr Tindale told NucNet in an interview in October 2009 that people need to stop arguing about which is the best of the low-carbon options and accept that we need to pursue all of them, including nuclear, and pay for all of them, and that it won’t be cheap.

Sweden plans for 10 new reactors

19 Feb (NucNet) The Swedish government has put forward a draft law that would allow the construction of 10 new nuclear units in the country to replace existing units as they are shut down.

The proposed law scraps a previous ban against building new nuclear reactor units, revoking a 1980 referendum decision to phase out nuclear energy.

Any new reactors would be built on the three current nuclear plant sites in Sweden, which has 10 reactor units in commercial operation.

It would be up to the power companies to decide on the size of the new reactors. The draft law does not put any limit on the size.

The draft law also proposes quadrupling the sum owners of nuclear reactors should pay in damages in case of an accident.

At present reactor owners are obliged to cover costs of up to 3 billion kronor (about 415 million US dollars, 233 million euro), but the sum would be increased to 12 billion kronor, according to the government's proposal.

The government said reactor owners should sign up to a mutual insurance system, noting that this is in place in other countries.

The measure could become law on 1 August 2010, although the energy spokesman for the opposition Social Democratic Party said yesterday that the red-green coalition – the Social Democratic Party, Left Party and the Green Party – still wants to phase out nuclear power and if it wins a September 2010 general election would abolish the new law.

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Worth reading – NRC’s Dale Klein

Speech is at federal engineers award ceremony

In a world consumed by fantastic fads and tenuous trends, it is worth the occasional reminder that principles matter. This month that message comes from outgoing NRC commissioner Dale Klein.

He was the keynote speaker at the Federal Engineer of the Year award held Feb 18.

Klein is one of those people for whom the phrase “honor before elegance” seems to fit. Now I’ve never heard him say this nor do I have any idea he would agree with this metaphor. It seems to me it works.

Klein’s remarks discuss two obligations for engineers – service and professionalism. He tells his audience in this speech that government service is a calling which is not appreciated.

Note that this year’s winner of the award is from the U.S. Department of Interior. That’s one of the things that makes this speech noteworthy. How many agency senior officials would show up for an event like this with no one from their agency sharing the center stage limelight?

How many engineers?

Of the 96,000 federally employed engineers identified by the U.S. Department of Labor's Bureau of Labor Statistics, only 28 were nominated for this award and only one of 10 finalists was selected for the award. It is a crowning achievement for the award winner and the federal agency or military branch the engineer represents.

The nominated engineers are evaluated based on factors such as engineering achievements, education, professional and technical society activities, awards and honors, and civic and humanitarian activities.

Here's some highlights of what Klein had to say.

“...a good engineer and a good public servant means more than just technical skill. Let me repeat something my friend Ed McGaffigan [NYT profile] (right) said, about a year before he died. Ed spoke these words to some young incoming employees to the NRC. But they apply equally well to anyone considering public service in general… or for that matter, life in general:

“If you conduct yourself with honor, with integrity, and with diligence, you will have a great career. ‘Honor’ often involves telling people, perhaps colleagues, perhaps supervisors, what they do not want to hear. “

I have throughout my career let the facts determine my position on issues. That can upset ideologues and theorists of all persuasions who do not let facts get in the way of their ideologies or their theories. And it may make you enemies. You can afford such enemies, but you can not afford to compromise your honor, your personal compass.”

These are the qualities we must all strive for. In part, because we owe it to ourselves as professionals. But also because whether or not we do our jobs well, and set high standards for ourselves, can have very far-reaching consequences.

Support for engineering schools & societies

To the senior leadership in this room I want to say that it seems to me all of us need to do two things to maintain that heritage and a high level of engineering excellence in federal service. First, we need to support the institutions that “feed” future engineering needs – especially schools and engineering societies.

An old Chinese proverb says: “If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people.”

I am a professor and will soon be returning to academia in Texas. I plan to make strengthening the connection between academia and public service one of my goals. But even those of you not in academia can help encourage the next generation by supporting engineering societies, such as this one… and by sponsoring and mentoring young people.

The second thing we can do is to promote high engineering standards in the government by providing personal examples of excellence in our own behavior and conduct. We can work on cultivating the qualities that Ed talked about and exemplified: honor, a unwavering devotion to the truth, and a willingness to do the right thing, even when the price seems high. By cultivating these qualities, we can show by example that federal service attracts the very best.

I think that engineers contemplating public service want to know that their efforts will be recognized for its contributions to society. But they also want challenging and interesting work, and to know that they can grow and develop, both professionally and personally, in their careers.”

& & &

The Obama administration has nominated three highly regarded individuals for seats on the NRC. Their confirmation votes are expected in the Senate. Perhaps when it comes their turn to make a speech to federal engineers in future years they’ll draw on this one for inspiration.

# # #

Pebble-bed reactor loses funding

PBMR to lay off 75% of staff

The South African government will stop funding research and development work on the Pebble Bed Modular Reactor (PBMR). About 600 of the 800 staff will be let go which is expected to trigger an exodus of nuclear expertise from the country.

Public Enterprise Minister Barbara Hogan told Bloomberg wire service from Cape Town Feb 18 the government can no longer afford to fund the project. According to Bloomberg, Hogan said:

“We have no arguments with the PBMR technology, we just felt we could no longer justify putting more money into the project,” Hogan said. A decision on the future of the technology will be made in August, she said in a statement.

Hogan said that due to economic conditions the country is shifting priorities to education, health care, and development of its industrial base to provide jobs. As of Feb 23, the Economist magazine reported 24% of the adult population is unemployed and GDP declined by nearly 2% in 2009.

Was technology development done in by runaway R&D costs?

The science journal Nature reported Feb 24 the underlying reason for the decision is “runaway costs.” Since 2007 the South African government reportedly invested US$935 million in the project. Nature reported that the cost of the completed demonstration 110 MW plant was estimated to be US$3.9 billion. Another issue is that PBMR, the company developing the reactor, failed to secure customers for the product.

The reactor was to have dual roles of generating electricity and supplying process heat to petro-chemical companies. The helium-cooled reactor was being designed to have a core temperature of 750-1,600 C. Alternative designs intended to use conventional materials in the secondary loop drove an approach to produce steam with temperatures of 450-550 C.

Nature reported that John Walmsley, past president of the South African Society of Nuclear Engineers, said PBMR was trying to do too many things with the design. He called the R&D effort "a BMW" and said PBMR should have scaled back its objectives to a "Morris."

The term “pebble” comes from fuel elements, which are about the size of a tennis ball. Each fuel pebble is enriched uranium wrapped in graphite. Test fuel sent by PBMR to the Idaho National Laboratory last year for assessment was enriched by a Russian vendor to 9.6%. One of the features of the design is its inherent safety. The fuel elements are designed to avoid a melt-down if the helium coolant is lost.

Conventional LWR reactor tender put off

PBMR had planned to build a fleet of two-dozen pebble bed reactors with the ability to generate electricity in the range of 100-160 MW. Two years ago South Africa issued a tender for conventional light water reactors, but cancelled it when it became clear it did not have the funds to pay for them.

Eskom, which is the state-owned utility that would have been the primary customer for the pebble bed reactor, has not been able to keep up with demand for electricity in South Africa. In January 2008 the country’s mines lost power for a week sending shockwaves through the economy.

U.S. rescue for PBMR in limbo?

Last September PBMR appealed to U.S. Department of Energy Sec. Steven Chu for assistance. World Nuclear News reported Sept 17 a bilateral Agreement on Cooperation in Research and Development of Nuclear Energy was signed in Vienna on 14 September by US energy secretary Steven Chu and South African minister of energy Dipuo Peters.

“Its aim is to facilitate cooperation in advanced nuclear energy systems and reactor technology, and will see the two countries collaborate in R&D of advanced reactor technologies as well as expanding efforts to promote and maintain their nuclear science and engineering infrastructures. The agreement follows on from discussions between the presidents of the two countries during July's G8 summit and further bilateral discussions in August.”

Also in September the Energy Department released a $40 million funding opportunity for design work on the Next Generation Nuclear Plant. It is expected to be a high temperature, gas-cooled reactor. However, the deadline for the announcement of the award of funding was December 2009. DOE officials have not said when they expect to make a public announcement. One firm said informally it has been notified it will receive funding once all the internal government approvals are in place.

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Vermont Senate votes against reactor

Shumlin thumbs his nose at the White House

The New York Times reports that the Vermont Senate has voted 26-4 to deny Entergy’s (NYSE:ETR) Vermont Yankee nuclear power station a ‘certificate of public good.” The vote against the plant was led by State Senate leader Peter Shumlin.

In effect, the legislature has entered uncharted waters seeking to impose itself on the federal government’s legal authority to regulate nuclear reactors. While the vote has no legal impact on the NRC's authority, it will be widely perceived as an action to close the plant.

In a related move late Wednesday afternoon the NRC issued a “Demand for Information” related to an internal investigation Entergy undertook with an independent law firm to assess whether its managers intentionally misled the legislature over tritium leaks from pipes at the plant. [More on this late breaking news below.]

Shumlin snubs Obama

With his precipitous politics, State Senator Peter Shumlin, (D-Windsor), (right) who is running for governor as a Democrat, has won no friends at the White House. Just one week ago President Barack Obama committed the significant political capital of his administration to $8.3 billion in federal loan guarantees for Southern’s Vogtle site.

In doing so Obama reached out to environmental activists opposed to nuclear energy by pointing to its benefits in the efforts to slow the global growth of greenhouse gases.

Sen. Shumlin’s leadership in the Vermont legislative this week has the effect of thumbing the state’s nose at the spectacular turn around by the President in favor of nuclear energy. Yes, Vermont Yankee has problems, but Shumlin has exploited them, and magnified their significance in the press, as part of his ambitious drive to become Governor of Vermont.

Shumlin also knows many of his constituents feel as one said this week. "I'd rather have my electricity rates go up than be lit up in a meltdown." He draws power from these kinds of perceptions.

FUD no dud and hits with a thud

The vote in state senate is a clear case of the triumph of fear, uncertainty, and doubt over science, reason, and facts. At the same time, the plant has been literally its own worst enemy with a series of high profile missteps.

The Nuclear Regulatory Commission has not formally found significant safety lapses. However, the latest uproar over minor leaks of tritium, and the way the utility communicated information about them, may well have tipped the balance in terms of public views about the future of the reactor.

Entergy denies intentional mis-leading statements

The tritium leaks were reviewed by the legislature with testimony under oath from Vermont Yankee managers. Entergy told the New York Times Feb 24 statements the mangers made about underground pipes “were incomplete and misleading.”

The newspaper reported that Entergy spokesperson Craig Hebert said the company took disciplinary actions with “financial consequences” against five employees” involved in the testimony. Another six employees were also taken to task by the company. The release of sensitive personnel information by the firm is an extraordinary step.

Entergy said in a statement issued Feb 24 that an investigation by an independent law firm determined that none of its employees intentionally misled the legislature.

“The report noted that the communications in question were made by Entergy employees in the context of the scope defined by the state’s contractor, Nuclear Safety Associates, in performing the reliability assessment. The Entergy responses were limited to only pipes that touch soil (not those encased in concrete), that carry liquid (not gaseous matter) and that are part of whole systems as defined by law. However, the Entergy employees’ failure to specify the context of their communication led to misunderstandings and, taken out of that context, the responses were incomplete and misleading, the report maintained.”

“As a result of that failure, Entergy has removed five senior Vermont Yankee employees from their positions at Vermont Yankee and placed them on administrative leave. They are the vice president for operations, director of nuclear safety assurance, manager of licensing, technical specialist and senior project manager.”:

“The company also reprimanded an additional six managerial employees. All the discipline taken had financial consequences for the employees involved.
Michael Colomb, Entergy Vermont Yankee site vice president, was reprimanded for failure to maintain an organization that adhered to the highest standards of conduct in all actions and communications.”

“In a statement, Colomb said he was disappointed in how the contradictory or misleading information was given to the state and he, as the lead Entergy official at Vermont Yankee, took responsibility for what happened.”

Exaggeration in defense of the environment is no victory for it

None of this could have possibly helped the utility’s case with the legislature. Just add in prior mishaps involving a cooling tower, a dropped spent fuel cask, and other incidents. It easy to see how the public’s tolerance for things nuclear became frayed and unraveled into the current political mess.

What’s hard to swallow are the duplicitous charges that have been made such as one that weapons grade materials were being made at the plant or that the tritium had leaked into the Connecticut River. The first is technically out of the question and the second is merely an assertion by consultant Arnie Gundersen.

For the curious on the first claim, see Stephen Packard’s outstanding recent post “Why you can't make a bomb from spent fuel.” On the second issue, even state health officials agree their sampling and measurements indicated no tritium has leaked outside the plant boundary.

NRC responds to Vermont Yankee Vote

Only the Nuclear Regulatory Commission has the the legal authority to renew or deny renewal of an operating license for a reactor. Entergy has applied for a 20-year renewal. The current license expires in 2012.

The vote in the Senate for now is largely symbolic unless the House goes along. If both chambers agree, the next step will be lawsuits all around. The NRC is unlikely accept the legislature’s efforts to usurp its authority.

In a new developmentr the NRC entered the fray late on Feb 24. Eliot Brenner, a spokesman for the agency, told this blog Feb 24 the NRC was issuing a Demand For Information “… which is a way we as an agency legally communicate with the plant. Responses must be made under oath and carry more weight than an exchange of letters.”

Brenner said the demand for information is based on Entergy’s investigation relative to the testimony by its mangers about underground piping at the reactor.

“The demand for information will require a report on the quality and veracity of the information provided to the NRC. It will cover the safety activities we regulate and their impact on the plant’s safety culture.”

Brenner said the demand for information would be formally released on Feb 26, but he did not know at this time what deadline the NRC staff would set as for a response from Entergy.

Brenner added that he could not comment in response a question about whether the demand for information, and Entergy’s response, would have any bearing on the company’s application for a 20-year license extension.

Here’s the main text of the NRC press release:

The Nuclear Regulatory Commission will issue a Demand For Information (DFI) to Entergy to determine what, if any, regulatory actions are necessary regarding the Vermont Yankee nuclear plant. In accordance with our Enforcement Policy, the NRC staff will issue the DFI to Entergy to provide information under oath to allow us to make this determination. This step is being taken in response to Entergy’s investigation of their interactions with the State of Vermont.

Earlier this month I told the Vermont Congressional delegation that the NRC would closely monitor the developments at Vermont Yankee. Once Entergy responds, the NRC will assess and independently verify the information provided to ascertain the implications on NRC-regulated safety activities and the impact on safety culture at the site. The NRC will determine whether it needs to take any further action.

This is the latest of several steps that the NRC has taken on this matter. Senior personnel will soon arrive at Vermont Yankee to verify assertions and information that Entergy has provided regarding its recent licensing activities. In addition, the NRC has sent a Region I manager to the site to provide additional oversight, augmenting the NRC Resident Inspectors assigned to Vermont Yankee.

Stay tuned . . .

Prior coverage on this blog

• August 23, 2008 – Lug nuts come off at Vermont Yankee
• March 1, 2009 – Playing chicken with Vermont Yankee
• August 23, 2009 – A hardball pitch to save Vermont Yankee

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Blix to head UAE nuclear board

Former UN weapons inspector has new role with civilian nuclear agency

The United Arab Emirates (UAE) announced it hired Hans Blix (right) to head up a nine-member board of nuclear energy experts to monitor the nation’s development of a massive civilian nuclear energy program. In December the UAE awarded a $20 billion contract for construction of four 1,400 MW nuclear reactors to Korea Electric Power Corp (KEPCO).

Blix served as the head of the International Atomic Energy Agency (IAEA) for 16 years from 1982-1998. He led the UN Security Council’s disarmament commission for Iraq.

The first meeting of the board was held Feb 23 in Abu Dhabi. The session was also attended by UAE agencies responsible for developing the reactors and for regulatory control of safety and nuclear materials. [See list below of members of the board headed by Blix.]

The UAE has won backing from the U.S. and other countries for its nuclear program with guarantees that it will not seek to develop its own uranium enrichment capabilities or fuel reprocessing. The nuclear fuel contracts for the new reactors haven’t been awarded yet, but Areva, which lost out on the main contract, could be in line to supply and reprocess the fuel for the conventional light water reactors to be built by KEPCO.

U.S. Energy Sec. Chu pledges cooperation with UAE

As part of a trip to strengthen partnerships in the Middle East, on Feb 23 U.S. Energy Secretary Steven Chu (right) signed an agreement on peaceful uses of nuclear energy with the United Arab Emirates’ Minister of State for Foreign Affairs, Dr. Anwar Gargash.* [profile and photo below].

The agreement will enhance cooperation on civil nuclear energy and nonproliferation and facilitate joint training, exchanges, and seminars in nuclear safeguards and nuclear management systems.

The training programs will complement Emirati capacity on safety, security and nonproliferation, while reinforcing U.S. support for a major regional ally.

"This Arrangement is part of the Obama Administration’s commitment to peaceful nuclear power," said Secretary Chu. "We welcome this collaboration with the UAE to reduce carbon pollution through the development of clean sources of energy."

A spokesman for DOE noted that nuclear energy has a key role to play in a low-carbon future – helping satisfy the increasing demand for baseload electricity while reducing carbon emissions.

“The United States is engaging with countries around the world to enhance cooperation on nuclear energy, so countries can meet their energy needs while minimizing the risks of proliferation.”

Critics not happy with UAE’s development of nuclear energy

Greenpeace International was critical of the board and the UAE’s nuclear program. Jan Bernaek, a spokesman for the organization, told a UAE newspaper it did not approve of the UAE’s efforts to development nuclear energy. He said the $40 billion to be spent on the four reactors, fuel, and related grid infrastructure should be spent instead on solar and wind technology.

In an effort to emphasize the time it takes to build nuclear reactors, he said, “The opportunity [for renewables] could be developed in weeks or months.”

Greenpeace isn’t the only group critical it the UAE’s nuclear drive and what’s interesting is that one outspoken critic works for the International Renewable Energy Agency (IRENA) which has its headquarters offices in Masdar City in the UAE. It is the government’s showplace for solar, wind, and energy efficiency technologies.

Helene Pelosse, (left) a French government official who heads up IRENA, said in 2009 that her government background will not provide a preferred position for Areva or EDF in the development of nuclear energy technologies in the UAE. The two firms were partners in the French government’s bid for the contract won by KEPCO.

“Irena will not deal with nuclear energy, simply because it is not renewable,” she said in an interview. “Nuclear and renewable energy have nothing to do with each other.” NYT

“IRENA will not support nuclear energy programs because it’s a long, complicated process, it produces waste and is relatively risky.” Reuters

She also told Reuters that besides assisting its member states on how to best promote renewable energies nationally, “Irena will raise the awareness worldwide that a world powered by 100 percent renewables is possible.”

Both Greenpeace and IRENA appears to have unrealistic expectations about the speed at which renewable energy technologies can be developed and their ability to meet demand for baseload electricity.

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Members of the UAE nuclear energy advisory board

Hans Blix, Sweden
• Director general of the International Atomic Energy Authority from 1981 to 1997
• Chairman of the Weapons of Mass Destruction Commission, a Stockholm-based organisation funded by the Swedish government

Jacques Bouchard, France
• Special adviser to the chairman of the French Commissariat L’Energie Atomique

KunMo Chung, South Korea
• Twice minister of science and technology in South Korea

Thomas Graham, US
• Executive chairman of Lightbridge Corporation, which holds patents on a thorium-based nuclear fuel. The firm is also a consultant to the UAE government on its nuclear energy program.

Takuya Hattori, Japan
• President of Japan Atomic Industrial Forum (JAIF) and president of JAIF International Co-operation Centre

Lady (Barbara) Judge, UK
• Chairman of the UK Atomic Energy Authority

Mujid Kazimi, US
• Professor of nuclear and mechanical engineering at the Massachusetts Institute of Technology (MIT)

Jukka Laaksonen, Finland
• Director general of the Radiation and Nuclear Safety Authority

Sir John Rose, UK
• Chief executive of Rolls-Royce, which manufactures nuclear components

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* Anwar Muhammad Gargash [right] is a prominent businessman, scholar, and government official in the UAE. He gained international attention when, as chairman of the National Elections Committee, he oversaw the first elections held in in December 2006.

He is also the senior executive of one of the most important family business enterprises in the U.A.E., a respected academic, and an important figure on the cultural scene in Dubai. His education includes BA and MA degrees in political science at George Washington University in Washington, D.C., and a Ph.D. from Kings College, Cambridge University, in 1990.

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Texas nuclear renaissance moves ahead with the lure of loan guarantees

NRG makes peace with CPS

President Obama's announcement (videos) Feb 16 of an $8.3 billion loan guarantee for twin Westinghouse 1,150 MW AP1000 reactors at Southern's Vogtle site in Georgia has snapped heads to attention in Texas. Obama also said he would ask Congress for an additional $36 billion in loan guarantee authority as part of his FY2011 budget.

There were two immediate effects.

First, NRG (NYSE:NRG) settled its ugly legal dispute with San Antonio's municipal electric utility CPS Energy over its planned investment in twin Toshiba sourced 1,350 MW ABWR reactors in the South Texas Project.

This move opens the way for support from CPS for the crucial federal loan guarantee. NRG said repeatedly without it the utility could not proceed with the project.

Second, while CPS reduced its investment from 40% to 7.6%, it will now stand shoulder-to-shoulder with NRG in support of DOE loan guarantees for the project. This financial confidence builder is a key success factor for STP units 3&4. Having CPS Energy endorsing the NRG project will be an important signal to DOE when it comes to a decision about the project. And that decision is will be here soon.

Read the full story exclusively at the EnergyCollective.

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Exelon still thinking about Texas

But that’s about all

The citizens of Victoria, Texas, could be forgiven if they do not take kindly to questions about Exelon’s (NYSE:EXC) intentions to build two nuclear reactors there. After a whirlwind courtship, the nation’s largest utility backed out of the relationship and said it just wanted to be friends.

Part of the reason is a bad case of parental disapproval. For the Victoria project, Exelon had hitched up with the 1,530 MW GE-Htiachi (GEH) ESBWR reactor design.

Unhappily for Exelon, two chaperons said this was the wrong girl to bring to the dance.

The NRC said GEH had some more explaining to do about her family ties and the Department of Energy said the girl might just be too young to be dating.

Translation – NRC wasn’t satisfied with the responses it was getting to requests for additional information as part of the reactor certification process. The Department of Energy did not consider the time-to-market for the ESBWR to be a near-term or even a sure thing, and rated it low relative to Exelon’s application for a loan guarantee. Exelon then switched to the GEH ABWR, but that move did not improve its prospects.

The fact that the government has started this month to hand out federal loan guarantees for new nuclear power plants casts new light on the question of where Exelon stands in Texas. Exelon will submit an Early Site Permit (ESP)for the Victoria site sometime later this year, perhaps as early as this Spring. However, the ESP does not commit Exelon to choose a reactor design or apply for a license to build and operate one.

Craig Nesbitt, an Exelon spokesman, told the Victoria, Tex. “Advocate” Feb 19 that poor economic conditions make for poor prospects for building a reactor in the region. He said, “Right now the market is down. It doesn’t show any signs of coming back anytime soon.”

And despite the President’s request to Congress for another $36 billion in loan guarantees, Exelon isn’t sure it will affect its decision to build or not in Texas. Nesbit told the newspaper, “…that’s not entirely answerable right now.”

Exelon not happy about lack of action on Cap & Trade

John Rowe, Exelon CEO, (right) is a staunch advocate of trading systems on carbon emissions. As the head of the nation’s largest nuclear utility, with 17 reactors, he knows that once a price is put on carbon, people will beat a path to his company’s door. That’s because nuclear power plants do not emit CO2 nor other greenhouse gases.

Rowe told Bloomberg Wire Service Feb 17 without carbon taxes and a trading system there is not going to be a nuclear renaissance in the U.S. and there certainly is not going to be anybody from his company building reactors in Texas.

“We may see more and faster development of new plants now. We probably won’t see a full-blown nuclear renaissance in the next five to 10 years.”

So what is Exelon doing about it? The company’s growth strategy for nuclear energy is a $4.4 billion series of up-rates of power and plant infrastructure over the next few years.

Taken together, the individual actions will add a fleet-wide increase of 1,300-1,500 MW or the equivalent of a new reactor. In short, Exelon may get the electricity generation capacity it planned to build in Texas by improving the performance of the power stations it already owns.

Do investors get it?

Put another way, Exelon can get the equivalent of just around $3,000/Kw for the power increase equal to a new reactor. That’s a very competitive price. You would think investors would be grateful, but apparently they’re not.

Exelon’s stock has been falling since Dec 11 from a close of $51.61with market close on Feb 22 of $44.78, The 52-week range is $38.41-$54.47.

Without cap-and-trade legislation in place, Rowe won’t have the capital or the profits to meet earnings objectives.

According to ChicagoBusiness for Feb 22, a leading stock analyst has downgraded Exelon as an investment from “outperform” to “market perform.”

The newspaper reports that Hugh Wynne, analyst at Sanford C. Bernstein & Co. LLC. Mr. Wynne, "a longtime bull on Exelon based on its low-carbon power-generation fleet," on Feb. 5 downgraded his rating on Exelon's stock"

Even if Exelon wanted to do more, the question is where will it get the money. Wynne thinks cash flow will fall to $400 million in 2012 from $2.3 billion this year. That’s a long way down.

And there is competition in Texas

Getting back to Victoria, Exelon was a late entry into the Texas nuclear renaissance.

NRG was the first mover in September 2007 with a plan for two new 1,350 MW ABWR reactors at the South Texas Project. It’s on the short list for a federal loan guarantee.

Luminant has plans for two gigantic 1,750 MW Mitsubishi APWR reactors at its Comanche Peak site. It is thought to be in fifth place as a “runner up” for a loan guarantee if one of the four short-listed firms fails to make the final cut.

This leaves Exelon more-or-less out in the cold. With only one more year in his term as CEO, Rowe isn’t likely to chase after another hostile takeover of a nuclear reactor company.

He fell short in an effort with an all stock deal to take over NRG. Investors rejected the offer last July, but Exelon VP William Von Horne Jr. told Chicagousiness that increasing the price offered for NRG's stock would have meant “over paying for it.” Last November, Rowe said he was through trying to make deals and would concentrate on profits for investors.

What could change?

Some things could get better. The one factor that really matters is the U.S. economy, but other things have to improve as well and they are.

First, GEH finally submitted the information NRC wanted and was able to declare a victory of sorts. The ESBWR design is still referenced by Detroit Edison for the FERMI III project, but with the collapse of the auto industry in Michigan, the timeframe for a new reactor could be far in the future.

Second, Exelon might choose to return to the ESBWR for Victoria, Texas, in the next two decades, which is the approximate shelf life of an Early Site Permit.

In the short-term, it is holding on to water rights from the Guadalupe River for the plant. There may be life in the project, but the question of “when” remains more significant than “what.”

Mr. Nesbit back at Exelon’s corporate HQ in Chicago gets the last word here. He says the decision whether to build a reactor in Texas depends on the timing of the nation’s economic recovery. Until we know what that is, the clock will just keep ticking.

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Obama supports two Georgia reactors

He approves $8.3 billion in the first federal loan guarantees for nuclear energy

President Barack Obama finally came out in support of nuclear energy after a year of apparent indifference.

This past week he approved $8.3 billion in federal loan guarantees for two new Westinghouse AP1000 1,150 MW nuclear reactors at Southern's Vogtle site.

In doing so he also extended a hand across the partisan aisle to Republicans in the Senate in an effort to gain support for pending climate change legislation.

Read the full story exclusively at CoolHandNuke, a web portal for jobs in the nuclear energy industry and a whole lot more.

 

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