Friday, October 15, 2010

What to read about nuclear energy?

Accessible books about nuclear power and its place in the world

reading listAsia is rising as the dominant developer of nuclear energy. China, India, South Korea, and Japan are deeply committed to nuclear energy. Smaller countries like Brazil, Vietnam, and the UAE are lining up their investment in new reactors.

Readers in the U.S. may wonder what we are missing? If the dust up over the financial future of Calvert Cliffs is any indication, the answer is a lot.

Here’s another answer. People in other countries have read books U.S. political and business leaders have not. Our mainstream news media defers to green politics and quarterly earnings reports. Education is a potent remedy to ignorance.

Want to know more? Read a book on nuclear energy and share it with your friends. While it won’t compete with cocktail chatter about ‘Dancing with the Stars’, in fact, nuclear energy is the stuff stars are made of.

Focus on the non-technical

This is a short list of books on nuclear energy for the non-technical reader. In the list, I provide the title, the author’s name, their home page where you can learn about them and their book; and, the Amazon page if you want to buy a copy.

owl-readingThe Amazon page will give you a publisher’s note about the book, a summary of reviews, and reader opinions.

The Amazon page contains the book’s ISBN number which is helpful if you want to read these books for free at your local public library. They should have a copy or can get one for you on inter-library loan. None of these books are obscure. All are in print.

After Nov 2nd, send this list to your elected representative, local newspaper editor, and share it with college instructors and high school science teachers. All of these books are within the grasp of 1st year college students.

The Idaho Samizdat nuclear energy reading list

The Idaho Samizdat short list of books on nuclear energy is not all inclusive.
I welcome suggestions for additions.

There is no particular order to these books.

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The Power to Save the World: The Truth About Nuclear Energy
by: Gwyneth Cravens Amazon

Terrestrial Energy: How Nuclear Energy Will Lead the Green Revolution and End America's Energy Odyssey
by: William Tucker Amazon

Uranium: War, Energy and the Rock that Shaped the World
by: Tom Zoellner Amazon

Whole Earth Discipline: An Ecopragmatist Manifesto
by: Stewart Brand Amazon

Prescription for the Planet: The Painless Remedy for Our Energy & Environmental Crisis
by: Tom Blees Amazon

Nuclear Energy in the 21st Century
by: Ian Hore-Lacy Amazon

Sustainable Energy - Without The Hot Air
by: David JC MacKay Amazon

Aim High! Thorium energy cheaper than from coal
by: Robert Hargraves Amazon

Power Hungry: The Myths of 'Green' Energy
by: Robert Bryce Amazon

The Reporter's Handbook on Nuclear Materials, Energy, and Waste Management
by: Michael Greenberg et.al Amazon

Physics for Future Presidents
by: Richard A. Muller Amazon

Atomic Awakening: A New Look at the History and Future of Nuclear Power
by: James Mahaffey Amazon

Nuclear Firsts: Milestone on the Road to Nuclear Power Development
by: Gail Marcus Amazon

Storms of my Grandchildren
by: James Hansen Amazon

The Rickover Effect: How One Man Made a Difference
by:
Ted Rockwell Amazon

The GeoPolitics of Energy: Achieving a Just and Sustainable Energy Distribution by 2040
by Judith Wright and James Conca Amazon

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Western Lands Uranium Gopher for 10/15/10

NRC issues license for Moore Ranch

This blog post is an edited version of my article published in Fuel Cycle Week V9:N396 October 7, 2010, by International Nuclear Associates, Washington, DC.

gopherA 7,100 acre site in northeastern Wyoming is the recipient of the first NRC license in almost 13 years for an ISR uranium mine. The agency issued it to Uranium One (TSE:UUU) for the Moore Ranch facility in the Powder River basin. The company applied for the license in October 2007.

Rob Buchanan, Manager of Investor Relations at Uranium One, told FCW production is expected to begin in 2012. While there is no NI 43-101 report for resources at the site, Buchanan said one is expected to be released in 1Q2011.

"It's in the works," he said, "but until we release it, I can't cite an estimate of how much uranium is there."

When Uranium One applied for the license, it said in a press release issued October 5, 2007 the mine holds 3 million pounds U3O8.

The Moore Ranch will send resin for processing to the Irigaray-Christensen Ranch ISL recovery facility. Buchanan said Uranium One is also working toward developing additional projects in the Powder River Basin.

The NRC review of the license application included a Supplemental Environmental Impact Statement published Aug 27 which referenced the agency's Generic Environmental Impact Statement for ISL uranium recovery facilities. A Safety Evaluation Report (SER) concluded the facility can operate safety through management of radiological and chemical hazards. The SER also addressed groundwater protection and decommissioning of the mine.

Russian deal won't affect Wyoming mine

Buchanan also told FCW the pending closure by the end of 2010 of a purchase of a majority share of the parent firm Uranium One, Inc. of Canada by Rosatom, a Russian state-owned corporation, will not affect the mine operations.

"Moore Ranch is 100% owned by Uranium One USA."

kiriyenkoLast August Sergi Kiriyenko, (right) the CEO of the Russian firm, said during an energy conference held in Toronto that the firm plans to use its stake in Uranium One as a kick-off of a global drive to diversify its holdings.

He said acquisitions at the front end of the fuel cycle are part of an effort to achieve vertical integration from the front-end to the back-end including management of spent fuel from Russian reactors sold to other countries.

Rosatom's mining division, ARMZ, reportedly will pay $610 million to increase its interest in Uranium One from 17% to 51% At market close Aug 24, Uranium One (TSE:UUU) was trading at $3.24/share against a 52-week range of $1.97-3.62.

With a market cap of $1.82 billion, an increase in interest in the firm by 34% would be worth $619 million. This suggests ARMZ locked in the deal at an earlier date when the shares were trading at a lower price.

The primary interest ARMZ has in Uranium One is access to its holdings in Kazakhstan which the firm claims will provide it will access to lower cost materials compared to other international holdings.

Rosatom is in talks to build 18-20 new plants including sites in China, Vietnam, Turkey, and eastern Europe.

Kiriyenko also startled conference participants by announcing the Russian firm has plans to build a uranium enrichment plant in the U.S. He did not provide details and said the plans hinge on terms in a U.S.-Russian nuclear cooperation agreement that is still in the works.

Strathmore to buy back stock

An interest in protecting shareholders, who bought 8.3 million shares at $0.55/share earlier this year, has prompted Strathmore Minerals (CVE:STM) to set an policy of buying back up to 4,390,000 shares over the next 12 months. So far the firm has not bought back any shares, but that could change any time.

Steve Khan, President of the company, told FCW there is no target date for the buy back and no target price for the stock.

"We feel the stock is undervalued. We want to support our shareholders."

Khan added that the stock buy-back plan is a contingency option for the company that will remain in place for the next 12 months.

At market close Oct 4, Strathmore traded at $0.66/share against a 52-week range of $0.41-0.80 with a market cap of $58 million based on 87.9 million shares outstanding. If all 4.39 million shares (5% of shares) are bought back at the current price, it would be worth $2.9 million. The firm listed $29 million in cash and short-term investments on its June 2010 balance sheet.

Strathmore begins drilling at Gas Hills

Strathmore began drilling at its Gas Hills property in central Wyoming in September. The drilling will supplement two historical databases the company acquired about the property. The firm said in a statement it plans to issue a NI 43-101 statement about resources by 2Q2011.

Historic resource estimates from the late 1970s for the combined four sites for the property list about 13 million pounds, but these estimates were compiled prior to the inception of 43-101 reporting standards.

The Fall 2010 program for the Gas Hills will consist of approximately 100 drill holes totaling 25,000 feet. Drilling will occur in four prioritized areas: George-Ver/Frazier-Lamac, Day Loma, Loco-Lee, and Rock Hill. Eight geotechnical holes are planned as part of a preliminary evaluation of a mill site. The drilling program is expected to be completed in November.

White Canyon issues JORC for Daneros mine in Utah

White Canyon Uranium (TSX:WU) announced a JORC compliant resource estimate for its operating Daneros mine in central Utah of indicated resources of 700,000 pounds and inferred resources of 455,000 pounds U3O8.

Bayswater gets drilling permits for Reno Creek

Bayswater Uranium (CVE:BYU) received drilling permits from the State of Wyoming for its Reno Creek project, an ISR mine, which the company says it plans to have in production by 2015. An NI 43-101 report for the site in northeastern Wyoming lists 15.6 million pounds (measured, indicated, and inferred) and a historical resource not 43-101 compliant of 8.4 million pounds.

Judge OKs drilling in Utah forest

A federal judge has rejected claims by opponents of drilling for uranium the Manti-La Sal National Forest in Utah that it would be a threat to human health. Three Moab, UT, environmental groups, including Uranium Watch, asked Judge Dale Kimball to stop the planned drilling by Denison Mines at its Pandora Mine.

They said the U.S. Forest Service had issued the drilling permit without adequate environmental review. They further claimed the drilling would release radon gas from two vent holes that could travel to a nearby town.

Judge Kimball said the environmental information filed by Denison Mines (AMEX:DNN) showed no significant risk to human health or environmental harm and that the Forest Service had followed its own procedures when issuing the permit.

Investor boosts stakes in Uranium Resources

In an SEC filing New York based Marxe & Greenhouse (AWM Investment Company) disclosed that it now owns 14% of Uranium Resources (NASDAQ:URRE). The firm now owns 11.8 million shares worth approximately $15.12 million are market close on Oct 4.

The next largest shareholder in the firm is reported to be Zesiger Capital which owns 13% of shares.

Last June Uranium Resources announced that it has closed its underwritten public offering of 23,809,500 shares common stock at a price of $0.42 per share which was near the bottom of the 52-week range of trading for the stock. Net proceeds to the company, were approximately $9.05 million. At market close Oct 4, Uranium Resources traded at $1.18 against a 52-week range of $0.38-1.44.

Last May the 10th Circuit Court of Appeals in a 6-5 decision rejected contentions that its privately held property in New Mexico was subject to jurisdiction by Indian Tribes. The firm has announced plans to place its Crownpoint Source Materials License in active status and outlined its plans for the license renewal.

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Wednesday, October 13, 2010

Czech utility postpones new build at Temelin

The $25 billion deal will be delayed due to lower demand for electricity

slowdown One of the largest pending deals in the global nuclear industry took a major step backwards Oct 12 with the postponement of construction at the Temelin power station of up to five new reactors in the Czech Republic. The Czech news service reported power producer CEZ is delaying construction of the first two units by at least several years.

Reuters reported Oct 13 that CEZ has pushed back plans to build two new reactors at its Temelin plant 60 miles from the Austrian border as well as up to three more units in Slovakia and at its Dukovany power station in the Czech Republic. The initial phase of the project is estimated to be worth $8 billion.

According to the Czech wire services, the utility’s board of directors was spooked by new estimates of demand for electricity which came out far lower than the numbers that went into the decision to offer the $25 billion tender for bid.

A source close to the board told the news service, “We were too optimistic when we were planning the tender.”

The fact that Germany is keeping its 17 reactors past 2020 may have played a role in these calculations. CEZ may have been counting on supplying electricity across the border from the first two new units at Temelin coming on line in that timeframe.

Martin KocourekCzech Industry & Trade Minister Martin Kocourek (right) confirmed to the wire service that lower electricity demand due to the impact of the global recession was the reason for the delay in moving ahead with the project.

“Estimates of electricity consumption made before the [financial] crisis broke out have changed.”

He didn’t mention German demand in his comments to the wire service. However, he noted that the rates the utility can charge customers have dropped by 15% in the past year. The firm’s share price has tumbled since July from 880 to 800 czk ($50 to $45; a 10% decrease) possibly impacting its ability to raise capital for the new reactors.

Bloomberg wires service reported Oct 13 the decision to delay the new reactors could accelerate the stock slide.

“Nuclear power plants are the cheapest source of energy for CEZ,” Milan Vanicek at Prague-based brokerage Atlantik FT wrote in a note to clients.

“The report of a possible delay is not a good one for investors and we expect a negative market reaction.”

Intense competition continues

The bidding for Temelin remains an intense three-way contest between Areva, Westinghouse, and Rosatom, the Russian state-owned nuclear agency. The bid by Rosatom is the first effort by that group to propose to build a reactor within the European Union.

The Russians are claiming their VVER design has new safety features and the agency reminds potential customers of the country’s uranium processing capabilities including a commitment to take back spent nuclear fuel. Areva can make a similar claim.

Tender manger has conditions

Vaclav BartuskaThe Czech utility is very aware of how deep a deal the new reactors will be. The New York Times reported Oct 11 that Vaclav Bartuska (left) , the official driving the bid process, told the newspaper, “You are choosing a friend, a collaborator, a supplier for the next 100 years.”

In September Bartuska told the New York Times that the Temelin project “is the biggest tender in Europe … and it’s unique as it is open for both east and west.”

The competitive edge, in apparent defiance of European Union rules, will hinge on local content and technology transfer. Bartuska told the Times “high local content” would make a difference in the winning bid. He told Dow Jones News Wires September 18 “the project is going to tie local industry with the winning bidder.”

He added that “the biggest fight in the tender will be over technology and transfer of know-how.”

In response, Westinghouse is reported to have made a claim of being willing to source up to three-quarters of components from Czech firms. Kerry Hanahan, the Westinghouse proposal manager for the Temelin project, told the NYT in September, “we buy where we build.”

Challenges ahead

However, Bartuska did not comment on how the reactor project would be financed or whether suppliers would be expected to take equity stakes in the project. Recently, the UAE updated its $20 billion deal with South Korea to build four new reactors gaining $10 billion in bonds, export credits, and other investment mechanisms to fund the project.

project_managementAdditionally, at the time Bartuska made his statements about technology transfer, he did not mention that the utility planning to build the reactors was also having second thoughts about whether it could sell electricity from them.

The new numbers driving the announcement this week are likely the results of months of number crunching by CEZ.

In a September 2010 presentation to investors, CEZ reminded them the firm plans to sell its electricity to neighboring countries including Germany and Poland.

It isn’t clear how CEZ factored in total regional demand for electricity in its sudden change of heart for the Temelin tender. It is plausible Germany’s recent decision to keep its 17 reactors operating past 2020 played a major role in revising the outlook for electricity demand from new reactors. The first two new units at Temelin would have come online in that timeframe.

The Temelin project has been a point of political contention between the Czech government and Austria, which has strident anti-nuclear politics. NGOs in Austria get significant official government backing and funding for protests. The Prague Monitor reported one provincial government agency gave NGOs (euro) 200,000 ($280,000) to fund activities that began this past August.

Energy security is green

green economic growthThe postponement of the Temelin tender may also impact the country’s ability to meet its commitments to decrease greenhouse gas emissions. About two-thirds of the country’s electricity comes from coal-fired power plants. Russian supplies three-fourths of the country’s natural gas and oil.

If the Czech government wants to meet green goals, and achieve energy security, it will have to think hard about when and how to build up its nuclear infrastructure.

Bartuska apparently understands this point. The country’s energy future drives the nation’s fate. He told the NYT, “we will either be high tech or dirt poor.”

If work were to have started on the first two new reactors by the end of this year, they would have been expected to enter revenue service by 2021. The two units at the current site were completed in 2002.

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Tuesday, October 12, 2010

Your government at work

Life goes on for the Department of Energy

apologyThe Department of Energy woke up after a three-day slumber through the Columbus Day holiday and said it would try to bring Constellation back to the negotiating table for a loan guarantee for the $7.7 billion Calvert Cliffs III nuclear reactor.

The Office of Management and Budget (OMB), which got the lion’s share of the blow of the negative publicity over Friday’s press barrage, told Platts Tuesday Oct 11 it has “a whole new set of modified terms” to present to the utility.

Previously, the government had told Constellation it wanted a reported 11.6% “risk premium" for the project which would require nearly $900 million. Constellation told the government to take a walk, but instead the feds just sat on their hands despite protests from Maryland’s democratic governor Martin O’Malley and Rep. Steny Hoyer, (D-Md), a senior party leader.

According to Platts, DOE and OMB are now mulling over whether to change the methodology for calculating the risk premium. That issue is at the heart of Constellation’s complaint. Constellation said in a letter to DOE Undersecretary Dan Poneman that OMB stonewalled the utility when it tried to discuss the issue.

EDF and Constellation still have to make up their minds whether and how they can continue to do business together. EDF is pretty hot under the collar, at least in public, about Constellation’s midnight press release last Friday. If there’s enough money on the table, and sufficient fear of failure, they’ll find a way to get back together.

Nuclear Energy Office asks for help

While the DOE office in charge of loan guarantees was huddling with OMB, the office that actually does something about nuclear energy was updating the trade press on $30 million in technical assistance contracts to six engineering firms. The award was made last June, but Shaw Group gained some ink with Engineering News Record about it Oct 6.

The companies will help the Nuclear Energy Office come up with new techniques for design and construction of nuclear plants and provide “analytical assessments” on conceptual designs. Also, the firm will provide advice on R&D requirements.

A DOE spokesperson told this blog Oct 12 the firms include:

  • The Shaw Group working with Westinghouse, Exelon, and Longenecker Associates
  • AREVA, with Battelle, B&W, JNFL, URS and Duke Energy;
  • CH2M Hill, with BCP Engineers;
  • Enercon, with Entergy, S.M. Stoller and Anatech;
  • EnergySolutions, with AECL, Booz Allen Hamilton, UK National Nuclear Laboratory, Exelon, International Nuclear Services, Sargent and Lundy, Talisman International, Teledyne Brown, Columbia Basin Consulting Group, Northwind and Terranear PMC LLC;
  • GE Hitachi, with Ernst and Young, Fluor, Lockheed Martin and Dupont;

My question is why isn’t some of this money going to the NRC to help the agency get smart on small modular reactors? That would make a lot more sense right now.

Also, none of this work covers the Next Generation Nuclear Plant (NGNP). A planned $40 million contract to two consortiums was cut back to one last May. General Atomics completed its $22.6 million work scope, but Westinghouse did not come to terms with the government for its piece.

Note to Engineering News Record – there are not six $30 million contracts, just one.

Nuclear Energy roadmap

roadmapThe government is very big on roadmaps. The Nuclear Energy Office published last April a roadmap for its work on the nation’s nuclear energy future.

Assuming we still have a nuclear future, given the way the Obama administration is handling loan guarantees, the roadmap lays out objectives in important areas. They include reactor life extension, the nuclear fuel cycle, reactor economics, and protecting reactors from terrorists.

These are all important mission objectives. I wonder how much funding any of them will get as the deficit spooked Congress returns in February 2011 to develop the next round of appropriations bills?

For that matter, any discretionary funding is going to be under tight scrutiny no matter who wins the elections. The next two years will be tough for federal budget writers.

That’s all folks.

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Sunday, October 10, 2010

Unanswered questions about Constellation

What really happened with Calvert Cliffs?

angry seaIn the middle of the night early Saturday Oct 9, long after the stock exchanges had closed, Constellation Energy Group (NYSE:CEG) issued an angry press release that it was walking away from the Calvert Cliffs III nuclear power plant. The utility said the reason was failure to come to terms with the government over the "risk premium" for a loan guarantee for 80% of the $7.2 billion reactor. The rest of the rhetoric sounded more like storm and fury on the Chesapeake Bay than the measured cadence once associates with the environment of a corporate boardroom.

Negotiations had dragged on for months with the government first demanding 12% or $864 million to insure a merchant project. Later the government climbed down from that high number to 5%, or $360 million, which was still way too high. Plus, the government added conditions that made the lower number look like less of a good deal.

By comparison, Southern, which is building two reactors in a regulated environment, reportedly paid less than 2% of the cost of its $8.3 billion loan guarantee. If the risk premium was 1.5%, then the cost of the risk premium was $125 million.

Why wasn't the White House paying attention?

rahm and obamaThe net effect of Constellation's action is that it handed a political hot potato to the Obama administration. Someone in the White House who should be paying attention to the future of the nuclear industry was asleep at the switch, or maybe was distracted by the departure of Rahm Emanuel, the president's chief of staff, who returned to Chicago to run for Mayor.

Meanwhile, the White House also lost the opportunity to help all democrats running for office in the small state of Maryland with an award of the loan guarantee and the 4,000 plus jobs that would be created by the reactor project. That includes the democratic candidate for governor who surely would have appreciated the help at a campaign rally attended by the president last week.

To make matters worse, the same week Constellation smacked OMB with a 2 x 4, the Department of Energy awarded a $1.06 billion loan guarantee to a wind farm in Oregon with none of the heavy handed conditions it sought to impose on the nuclear utility.

From where this blog sits, it looks like in an mid-term election year the Obama administration reverted to type in pursuit of green votes from the Clinton wing of the Democratic party.

What about the other nuclear utilities waiting for loan guarantees?

NRG is building the South Texas Project expansion with two new 1,350 MW ABWR reactors. The good news is the utility has financial support from the export bank in Japan. The reason is reactors are being supplied, and built, by Japanese firms. Also, Japanese nuclear utility TEPCO has indicated, well before the NRC license is in hand, that it will also take a stake in the NRG project.

In South Carolina, Scana says it doesn't need loan guarantees though it has applied for one and is on DOE's short list for award. Also, it has the prospect of new investors in the form of two of the South's biggest utilities.

pie_slice

Duke Energy and Progress have put their plans for a total of four new reactors in North Carolina on hold due to lower demand for electricity. Progress wants a 550 MW slice of the Scana project. It isn't enough electricity demand for a new reactor, but fits nicely as an investor profile into someone else's project.

Waiting in the wings is Luminant's expansion of the Comanche Peak plant with two huge Mitsubishi 1,700 MW APWR reactors to meet growth expectations in Texas. Like NRG, the project may benefit from export financing from the Japanese government.

What was OMB thinking?

Under the arcane federal laws that govern loan guarantees, OMB was mostly doing what it was required to do. The problem is no one at OMB has any direct experience with the nuclear industry or the financial models that make it work. In effect, you have the appearance of a case of nine blind analysts and an elephant.

Trying to make sense out of financing a nuclear reactor at OMB is like trying to repair one of today's high tech cars with a screwdriver and pair of pliers. You need an entirely different tool set and you need hands-on training and experience to do the job right. Did OMB have the right methods for calculating the risk premium?

From here it looks like not only was the agency stuck in bean counting mode, it was doing the work without the benefit of the expertise needed to get to closure on the deal.

Did Constellation have the right to act on its own?

Sarkozy 2nd nuclearProbably not. Electricite de France (EDF) owns 49% of the company and is a state-owned corporation. If EDF was just another stockholder group, lawyers might run up some fees with litigation, but now it's a diplomatic issue.

The reason is Areva, another French state-owned corporation, was slated to supply the reactor for Constellation. This is the flagship project for the entry of the two firms into the U.S. market.

Chopping down the flag pole in the U.S. is going to get a lot of people in Paris really mad. Note that EDF and Areva are still smarting from losing a $20 billion reactor deal in the UAE to South Korea. A major setback in the U.S. is not going to help matters.

U.S. Secretary of State Hillary Clinton may love the green voters her wing of the Democratic party brings to congressional races, but she's going to hate taking a call from her counterpart in France about Constellation's midnight press release.

Did Constellation really walk away?

The short answer is no. The utility did not withdraw its application with DOE. What it could be waiting for is an expected change over on the House side in Congress, and more republican votes in the Senate, which will swing the door open to $25 billion in new loan guarantees for new nuclear reactors along with better terms for merchant plants. It could be July 2011 before such a legislative measure hits the president's desk.

Until then we are going to see all sorts of sad laments about this move by a hot-headed CEO, who may have had political theater more on his mind than stockholder value. It isn’t the end of the nuclear renaissance in the U.S., but it is an ugly turn of events.

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