Friday, July 16, 2010

Away

I'll be out of pocket for a few days due to an death in our extended family.

Blogging will return next week.

Wednesday, July 14, 2010

Jaczko’s Vermont Yankee road show

NRC chairman becomes a lightning rod for protests

jaczkoWhat is Gregory Jaczko, Chairman of the Nuclear Regulatory Commission, (right) doing in Vermont that can’t be accomplished by the resident inspector and the utility? The question is raised because the chairman went to Vermont July 14 for a public meeting with “stakeholders” and a private session with plant employees. It was high political theatre.

The outcome of the day trip is that Jaczko appears to have irritated just about everyone who has a dog in the fight about the future of the plant. In the process he made his own agency a lightning rod for “blistering criticism” from green groups, business organizations, and the media itself.

Several business groups, and supporters of Vermont Yankee, who asked for a meeting with Jazcko were given the brush off. A letter of protest from an an alliance of business groups called the meeting with stakeholders “one-sided.” They weren’t alone. [See Rod Adam’s report at Atomic Insights.]

The Brattleboro Reformer filed a protest over the closed meeting at the reactor with plant employees. Green groups and several legislators also filed protests about controversial aspects of the agenda for the day long visit. The NRC defended the closed meet with plant employees as standard practice.

None of the public groups calling for the closure of the reactor when it’s license expires in 2012 were happy with the visit. Wire service reports indicate Jazcko’s session with the anti-nuclear crowd was characterized by shouting and interruptions.

What was Jaczko thinking?

8.09.82 Vermont YankeeWhatever it was that Jaczko hoped to accomplish with the trip is lost to me. He’s added to tensions in Vermont about the future of the reactor and given anti-nuclear groups a highly visible platform to emphasize their message in the news media.

He squashed efforts by people in the business community, who depend on cheap electricity from the reactor for their livelihoods, to speak with him. Did he really chose granola over greenbacks or does it just look that way? In either case, why did he make the trip?

Two years ago this month the NRC dispatched it’s top people to Vermont Yankee to give the utility the NRC’s equivalent of a regulatory tune up. The trip took place in an atmosphere of measured response to a series of incidents at the plant. If the NRC chairman was so concerned about the plant, why didn’t he send the team back for a repeat visit?

Entergy’s yellow brick road to relicensing

EmeraldCityEntergy, the owner and operator of the plant, has applied for a 20-year extension. The NRC is reviewing the application. A key milestone in extending the operations is getting the state legislature to agree to it. Right now there are few legislators who think they can win an election in Vermont and also support the license extension.

Eventually, the legal issue of what authority the legislature has over the federal NRC license could wind up in the courts. It’s unlikely Entergy wants to go there because the uncertainty of a protracted court battle.

Entergy has an uphill battle to regain public confidence because of a series of miscommunications over leaking tritium. In testimony to the Vermont Public Service Board, Entergy said there were no underground pipes that could be the source of leaking tritium.

While the levels of radioactivity released were not a public health threat, it did turn out the leak came from embedded pipes. This sequence of events undermined the plant’s credibility and even provoked Vermont’s governor, nominally supportive of reactor relicensing, to issue the political equivalent of WTF.

Rock in the pond makes waves

What happens in Vermont doesn’t stay in Vermont. Next in line following Vermont Yankee is Indian Point in New York and beyond that lies the future of the nuclear renaissance in the U.S.

Entergy’s future in terms of getting the plant relicensed doesn’t rest solely in Jaczko’s hands. The one thing that is operating in Entergy’s favor is that the NRC has three new commissioners, and one veteran, who will make up their minds based on facts and not media driven hysteria.

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Sunday, July 11, 2010

Western lands uranium gopher for July 11, 2010

Two setbacks for environmental challenges to uranium mines

gopher[This blog post is an edited version of an article published in Fuel Cycle Week, V9:N383 July 1, 2010, by International Nuclear Associates, Washington, DC.]

It was not a good week to be an attorney representing green groups in litigation against uranium miners in the West. In two cases, federal courts said environmental groups seeking to stop development and operations of uranium mines in Arizona and Colorado had overreached in their claims. In both instances, the courts ruled the miners could go forward.

A Federal District Court judge in Arizona denied a request for a preliminary injunction against Denison Mines (TSE:DML) Arizona 1 mine located 45 miles southwest of Fredonia, Ariz., and 15 miles from the rim of the Grand Canyon.

The judge threw out the request on the grounds the plaintiffs, three environmental groups and two Indian tribes, were unlikely to succeed based on the merits of their case. In other words, it made no sense to issue a preliminary injunctions since, based on the merits of the case, the plaintiffs had little likelihood of prevailing overall.

Separately, the 10th Circuit Court of Appeals in Denver ruled in a close 6-5 decision that the U.S. Environmental Protection Agency overachieved when it claimed a proposed mine would have to get a permit from the feds rather than the State of New Mexico on the grounds the parcel in question was "Indian Land," even though it was not legally part of the Navajo Indian reservation.

Denison deters detractors

rejectedThree environmental groups and two Indian tribes sued in Federal District Court to halt operations of Denison's Arizona 1 mine. They argued that the mine had been closed in the late 1980s and needs a new operations plan and complete environmental impact statement. The court disagreed writing June 16 in its decision that Denison's plan was not invalid and that BLM's environmental assessment was sufficient to evaluate risks.

Ron Hochstein, Denison CEO, told FCW, the court ruling "is a positive development for the industry."

He also praised the "quick action" of the judge in the case.

Travis McKinnon, Public Lands Campaigns Director of the Center for Biological Diversity, was plainly angry with the outcome. He told FCW Denison's mine is part of a pattern of "uranium roulette" and compared current industry practices to the BP oil spill in the Gulf of Mexico.

"Denison has gone beyond just flouting the regulatory environment by demonstrating wholesale ignorance of it."

Sandy Baker, the Sierra Club's Arizona Chapter Director, told FCW the environmental groups which filed the lawsuit are mulling over whether to file an appeal. She said the federal court left open the issue of "irreparable harm," and she said the California Condor, an endangered species, has been seen in the Grand Canyon area.

"This is a hugely important issue for us," she said.

The Arizona 1 mine is an underground operation. According to a statement from Denison, the mine is projected to produce 21,000 tons of ore in 2010. It will take a 300 mile trip by truck to Denison's mill in Blanding, Utah. Denison previously told FCW the ore could yield up to 11 pounds U3O8/ton.

Uranium Resources gets game

A federal appeals court ruled June 15 that a parcel of land near the Navajo community of Church Rock is not Indian land and not subject to regulation by the U.S. Environmental Protection Agency (EPA). The significance of the ruling is that Uranium Resources Inc. (NASDAQ:URRE) can now proceed to renew an underground injection control permit that was originally granted to the company in 1989 by the State of New Mexico.

The court opinion contained strong language which rejected EPA's claim that because a parcel of land is within a reservation it is "Indian land" even if it isn't legally owned and managed by the tribe. The court rejected the concept of "community of reference" because it would turn determination of land status "into a guessing game."  This finding probably means the wheels have come off this argument putting it to rest.

Eric Jantz, an attorney for the Environmental Law Center based in Santa Fe, NM, told FCW his view is the language associated with the 6-5 vote is "precedent setting," and was "difficult" for the court because it split the judges along "ideological lines especially between younger and older members of the appeals panel."

Jantz's organization was not a party to the lawsuit, but has represented some of the groups who were on other matters. He said Uranium Resources now has to renew its UIC permit and that will involve public hearings. He said he expects his organization will be involved in the administrative processes.

miningCEO Donald Ewigleben told FCW the court ruling was a confidence booster for the firm's investors. A week following the appeals court decision, the company raised $9.1 million (after expenses) by selling 23.8 million shares of stock at $0.42/share. The sale took place at a $0.10/share discount against the closing price June 22 of $0.52/share.

Ewigleben told FCW sales of the stock at a discount, "is not unusual," and he said the money raised is an indication of "excellent demand" for the company's shares given the court decision.

"The court decision allows us to move forward," Ewigleben said.

He said the ISR mine on the Church Rock property holds 13.7 million pounds of uranium.

Strathmore completes NI 43-101 for Marquez property in New Mexico

CEO Dave Miller told FCW Strathmore (CVE:STM) completed a NI 43-101 report June 21 for its 14,500 acre Marquez property in New Mexico and hopes to find a buyer for it to raise more cash.

"If we can find an offer, like we got for Reno Creek, that would be ideal," Miller said. He added that Marquez is a "secondary property" for the firm and the primary focus is the Roca Honda mine in New Mexico and the Gas Hills property in Wyoming.

The Roca Honda site is being developed in a joint venture with Japan's giant Sumitomo conglomerate. The firm is making progress, Miller said, and expects a permit in about 18 months.

uranium.millMiller told FCW finding a partner to build a mill at the Gas Hills site is a key objective, but the firm only wants to build enough capacity to meet its own needs.

"We've learned a lesson not to rely on what other companies say about their needs for mill capacity. We are going to proceed as if there are no other miners."

Miller said the company has not been severely affected by the economic downturn because it postponed plans to taking loans to develop a mill in New Mexico.

"If we had done so, we'd be forced into production at the current low price just to service the debt."

Right now, Miller says, the firm has a good cash position to complete the permit work and then hunt for investors on the assumption the price of uranium will rise over the balance of the decade as new nuclear plants come online.

Permit review progress for Pinion Ridge mill

The State of Colorado is holding a series of public hearings on a proposed 500 ton/day uranium mill to be located in Montrose County. The Department of Health and Environment held one of a series of meetings June 10 on Montrose. There about 60 people showed up. Of that number, just 12 reportedly offered comments.

Gary Steele, VP for Investor Relations at Energy Fuels (TSE:EFR), told FCW he's relieved the numbers aren't in the hundreds which was the case when the firm was applying for a land use permit from the Montrose County Commission.

"The focus of the hearing is on technical compliance," Steele said. "We're confident about how things are going."

The Sheep Mountain Alliance, one of the opponents of the mill, has challenged the county's land use decision in state district court as well as Energy Fuels water rights filing.

Energy Fuels has previously told FCW it believes the lawsuit is without merit.

Hillary White, a spokesperson for the organization, alleged that Energy Fuels doesn't have the investors to develop the mill and called it a "speculative company."

Like other uranium miners, Energy Fuels has seen its stock value slide since the start of the year due to stagnant uranium prices. However, the firm has a market cap of $12.5 million. On June 28 the stock closed at $0.15/share against a 52-week range of $0.15-$0.38/share.

Steve Anthony, CEO, said in a statement the firm is working to assure it has sufficient funds to maintain liquidity through the process of getting a license for the mill.  On July 7 the firm raised $3 million through a non-brokered private placement.

Separately, Steele said Energy Fuels is maintaining environmental compliance monitoring for the Whirlwind and Energy Queen mines.

"We're ready to move into production," Steele told FCW. He declined to cite a price that would be an incentive for the firm to re-open mines saying only that an evaluation of market conditions would drive the decision.

Virginia Uranium values Coles Hill project

Perhaps the most studied uranium deposit east of the Rockies, the 3,000 acre Coles Hill site in southwestern Virginia is estimated to hold 119 million pounds of uranium. Getting it out of the underground formations will employ as many as 350 workers with an annual payroll of $23 million. These and other numbers about the economic impact of the proposed mine were released by Virginia Uranium (TSE:VAE) June 20.

Patrick Wales, the site project manager for Virginia Uranium, said in a statement the construction of new nuclear reactors worldwide means the demand for fuel is growing. The region will see job growth, Wales said, because there will be a market for the uranium from the mine.

The company estimates if the mine can overcome significant political and regulatory hurdles to open, it could produce 1 million tons of ore a year graded at about 2 pounds U3O8/ton.

There has been a moratorium on uranium mining in Virginia since 1982. However, the state legislature is waiting for the outcome of a scientific and technical study being conducted by the National Academy of Sciences expected to be done in Fall 2011.

Caleb Jaffe, an attorney with the Southern Environmental Law Center, told FCW the socio economic study doesn't answer his group's concerns about potential environmental impacts. In what is becoming a familiar refrain among anti-nuclear groups, Jaffe compared the planned mine operations to BP's oil spill disaster in the Gulf of Mexico. He said the organization has "grave concerns" about the need for contingency planning in response to the potential for flooding of the site due to hurricanes. He said four major storms have hit the area since 1996.

South Dakota ponders Powertech permit application

The State of South Dakota is not happy with a permit application from Canadian uranium miner Powertech (TSE:PWE)for an ISR mine in the Edgemont area near the Wyoming border. The Department of Environment and Natural Resources (DENR) said for the second time the firm's application for an underground injection control permit is incomplete.

Both officials from the government and the miner said the updated evaluation is not a surprise.  Brian Walsh, a hydrologist with DENR, said in a statement to the news media the original application submitted last August, and an update submitted in February, still contain items that are not complete.

Key issues are groundwater reclamation and estimates of costs for the closure operation. Mark Hollenbeck said the complexity and amount of information in the 8,000 pages of material submitted to the state is bound to raise questions.  He said the firm will close the gaps.

Other permits also in the application pipeline include a mining permit from the State Board of Minerals & Environment and a license from the U.S. Nuclear Regulatory Commission. Hollenbeck has told FCW earlier this year he's frustrated with "the glacial pace of regulatory reviews."

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