Wednesday, December 28, 2011

Gnomes from the Northern Kingdom defend Jaczko

Peter Bradford and Mark Cooper have words for the other four NRC commissioners. They're wrong.

Peter Bradford
former NRC Commissioner
The New York Times reports that two leading anti-nuclear activists based in Vermont have spoken up in defense of Gregory Jaczko, the controversial chairman of the U.S. Nuclear Regulatory Commission (NRC).

Peter Bradford, a former NRC Commissioner himself, and Mark Cooper, an energy analyst, answered questions from reporters during a conference call Dec 28 in which they said there is no such thing as a nuclear renaissance.

In the course of the dialog, they offer the view that Gregory Jaczko is the victim of a conspiracy by the "nuclear party" which they describe as a body of pro-nuclear interests that transcend political and party differences.

To back it up they claim that what the other four commissioners were really up to in writing a letter to the White House about Jacko's reported abrasive management style is to show him the door.

That's the first of two things they go wrong.  The other is that the outlook for nuclear energy is bleak.

Why there is no conspiracy

My view is that the reason the letter was written is that the four commissioners couldn't agree on anything else. When asked during a hearing of the House Oversight Committee whether Jaczko should resign, two said yes (Svinicki, Ostendorf), the other two said no (Magwood, Apostolakis).  Note that all four are united in the letter to White House Chief of Staff William Daley about the issue of a "chilled environment," per se, but that is after they failed to agree on whether Jaczko should resign as chairman.

The truth at the heart of the personality dispute is found in a comment by Apostolakis who said he was OK with Jaczko staying on the job as long as he could learn to control his temper.  The issue of what authority the chairman really has will have to be hashed out in quieter times.  Clearly, this is not a situation like the famous gunpowder plot of Guy Fawkes against the British Parliament.

Guy Fawkes,
famous conspirator
What we have here is a failure to communicate. There are a couple of intractable disagreements and they've prevented all four commissioners from presenting a united front to the Chairman's use of emergency authority during the Fukushima crisis.

The fact that the other four commissioners couldn't agree on whether Jacko should stay or go because he has a hot temper sounds almost comical, more like an echo of a Bob's Big Boy commercial.

This isn't a debate about keeping the trademark for a chain of sit down fast food joints. It's a serious issue of how a top federal official conducts himself in office.

For Bradford and Cooper to call it a "conspiracy" misses the point.  Dealing with inexcusable behavior in a professional setting is something that should have been handled with kid gloves with behind closed doors and that would have been a conspiracy. If there is blame to be assigned to Jaczko for objectionable outbursts,there is also a portion of blame to be assigned to the other four commissioners for not dealing with the issue as a united group.

Worse, the disagreement, e.g., should he stay or should he go, was most likely seen as a sign of weakness by the politically astute Jaczko who, having worked the as a staff aide in both the House and Senate, apparently has more focus on the implications such nuances than technocrats.

It follows that by the time the personality conflicts inside the NRC reached a flash point, that inability to agree on how to reign in the rambunctious chairman was turned into an consensus to kick the problem upstairs the the White House.

That, in my view, was a mistake since it likely served only to annoy a President, and his Chief of Staff who have much bigger fish to fry.  Jaczko's apology was not really to the other commissioners. It was to the president for creating a needless distraction and for offering the Republican House yet another dartboard with his likeness pasted in the bulls eye.

In summary, there is no conspiracy to get rid of Jaczko because the alleged conspirators didn't have their act together as a group. They punted hoping for success with the DC equivalent of a 46 yard field goal.  The kick went wide of the mark blown off course by ill-favored political winds.

Even Rep. John Shimkus, (R-IL), who explicitly said he wanted Jaczko fired, also said that the whole ruckus didn't amount to much since there were no legal grounds to force Jacko out of the job.

Why the "bleak" assessment is wrong

Mark Cooper,
Energy Analyst
Bradford and Cooper say in their comments to the New York Times the outlook for the nuclear renaissance is "bleak."

As long as critics of nuclear energy like Bradford and Cooper do not look beyond the U.S. coastline, their views may prevail, but globally they are off the mark.

In Asia China, India, and Vietnam are aggressively developing nuclear energy.

In Europe the Czech Republic has released a tender for up to five reactors $28 billion.  The UK has started down a road to build 17 GWE of new nuclear powered generating capacity.  That new build is worth approximately $68 billion.

In the Middle East the UAE is building four new nuclear reactors supplied by South Korea in a project worth $30 billion.

The really big news is that in 2012 Saudi Arabia will release a tender for up to 16 new reactors expected to be worth $112 billion.

Also, Bradford and Cooper seem to have missed the news that TVA completed Browns Ferry in 2007, will complete Watts Bar in 2013, and has let over a $1 billion in engineering and construction contracts to finish Bellefonte by 2020.

It seems that globally there is a reality check on their "bleak" outlook for the industry.  It doesn't take much energy analysis to add up these numbers.

Consider the source

Both Bradford and Cooper have long standing views that the use of nuclear energy is not a sound policy for the U.S.  Coincidentally, both men are listed as adjunct faculty of the Institute for Energy & Environment of the Vermont Law School.  Both men are supporters of Vermont Governor Peter Schumlin's campaign to close the Vermont Yankee reactor.

Bradford lists in his online bio that he is vice-chair of the board of directors of the Union of Concerned Scientists, a group which frequently takes anti-nuclear positions.

Cooper lists a long history of engagements in rate hearings and related energy economics issues.  He has frequently testified on behalf of anti-nuclear contentions against the construction of new nuclear reactors.

Both men have sprung to Jaczko's defense clearly indicating that his future tenure at the NRC is aligned with their interests.

Consider the environment

What's interesting is their use of the term "bleak."  Could it be something about Vermont?

NEK in winter
The Northeast Kingdom of Vermont is a ruggedly rural and heavily forested area prized by outdoor enthusiasts in all seasons. It is also thought to be inhabited by gnomes, said to be a clannish people.

In 16th century renaissance Europe they identified with interests who opposed advances in the arts, sciences, and what we now call the humanities. Perhaps the term 'gnomes' is a metaphor for a state of mind.

Getting back to Vermont, the state that is, the winter in the Kingdom can be a bleak landscape and the climate is a challenge to commerce. Perhaps Bradford and Cooper had that environment on their minds when they spoke with the newspaper.  Perhaps that's what makes it hospitable to gnomes. The climate keeps people out.

Well, that won't too much longer if the atmosphere keeps heating up because we as a species are building lots of natural gas plants, which still spew CO2, instead of nuclear reactors which produce none.

In any case, a bias towards seeing conspiracies where none exist, and a provincial perspective that stops at the water's edge when it comes to the fortunes of a greenhouse gas emission free global industry, do not serve the nation or the planet well.

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Monday, December 26, 2011

Predictions, speculations, and raw random ideas for 2012

Another fearless look ahead

Each year this blog posts its fearless outlook for the coming year.  For 2012 I will add the caveat that while no one can predict the future, there are plenty of pointers to how things might work themselves out over time.  That's what this blog is reporting here.

Japan
 
A
teeth rattling report issued Dec 26 indicates the government's nuclear safety agency was so unprepared for a major nuclear event, that on the basis of news media reports alone, it seems there are potential grounds for charges of criminal negligence.


The Japanese government will consider criminal prosecution of TEPCO and government employees for lapses of judgment during the early days of the Fukushima crisis and for outright willful disregard of repeated warnings about tsunami threats.

While no deaths are attributable to radiation exposure, more than 80,000 people were evacuated from a 20 km circle around the reactors and may not be able to return to their homes and businesses for months if ever.  In the nuclear energy world, a "near miss" is considered to be as serious as a fatality itself.

Japan's nuclear utilities will struggle to restart 48 reactors which are now shut down.  The national government may have to intervene with provincial officials who want political air cover for the decision to return the units to revenue service.  The Prime Minister Noda may dangle the prospect of funding high-value infrastructure projects in return for locals dropping opposition to the safe restart of the reactors.

Japan is less than 50% self-sufficient on food so it must pay for imports with exports of high value durable goods and heavy industrial products.  The factory lights can only be kept on in a financially sustainable future if the electricity comes from the currently shuttered nuclear reactors.  Japan cannot afford a fossil fuel future.


Areva

The French state-owned, vertically integrated, global nuclear giant will struggle to regain its financial footing.  New CEO Luc Oursel has inherited a firm that is over-committed and under-capitalized hence his decision to put some projects on hold.  Yet, he also faces competitive pressures that may force the firm to seek capital at market rates to insure market share in new reactors and uranium enrichment services.

Areva CEO Luc Oursel
The firm has to balance the need for cash among current and new projects. It is facing continuing challenges to complete two reactors under construction – one in Finland and the other in France – that are over budget and behind schedule.

Oursel cannot count on much help from French President Sarkozy who is facing an uphill battle against an anti-nuclear coalition of Socialists and the Greens.  To avoid making the May 2012 election a referendum on nuclear power, Sarkozy is likely to emphasize jobs and the economy in his campaign messages.

In the U.S. Areva must balance the need to conserve capital relative to start of the construction phase of the $3 billion Eagle Rock Enrichment Plant against competitive pressures from Urenco's operating plant in New Mexcio and a new deal between USEC and the Russians for uranium enrichment that runs to 2022. 

Waiting too long could result on losing significant market share.  Under the original construction schedule, the plant would have broken ground by now with a start date of 2014 and then reaping a 25% share of U.S. enrichment needs.   A two year delay by Areva could encourage Urenco to proceed with NRC licensed plans to double the capacity of the its U.S. operation sooner than 2018.


US CEO Jacques Besnainou told nuclear bloggers in December the firm has a $2 billion loan guarantee for the plant from the U.S Department of Energy. He noted that the assurance investors for the additional $1 billion want is that once Areva starts construction it will finish the job. 

While Besnainou said in the blogger conference call that he expected capital could be found by late 2013 or 2014, the firm later clarified that it would start construction as soon as capital is obtained for the project.

United States

Vogtle construction site

Two U.S. nuclear utilities will get combined construction and operating licenses from the NRC for reactor projects in Georgia and South Carolina.  Construction of the twin  1,100 MW Westinghouse AP1000 reactors at each of these sites – Southern's Vogtle and Scana's V.C. Summer – will be watched closely by public utility commissions in both states.  

Under the doctrine of "construction while in progress" or CWIP, the utilities can apply for rate increases to cover the costs of the reactors while they are being built. The savings of not having to borrow the money at commercial rates will be in the range of $ billions.


Any cost overruns will likely produce contentious rate proceedings as publically funded consumer advocates and anti-nuclear groups will see to stop any project that can't stay on schedule or within budget.

The rest of the nuclear industry will be watching closely as well since the AP1000, which was approved this month by the NRC, is slated for two other sites in Florida and one  more in South Carolina.  Progress Energy plans to build two on Florida's west coast and FPL has plans for two at a site near Miami.  Duke will have to contend with rate commissions in North and South Carolina for its William States Lee III plant in South Carolina.

Duke's merger with Progress will be challenged by the potential cost of repairing the containment structure of the utility's Crystal River nuclear plant in Florida.  A botched job of do-it-yourself cutting into the containment building for a steam generator replacement will require repairs that could cost as much as $2.5 billion. Some of the repair costs may be covered by insurance, and some of the power replacement costs may be covered by rate decisions.  There will be plenty of costs left over to worry Duke's stockholders.

India

Planned nuclear reactors for India
Map: World Nuclear News

The Indian government will move to load fuel in two Russian built 1,000 MW VVER reactors at Kundankulam despite vigorous local protests fueled in part by organizers from Greenpace.  The government will start work on twin 1,600 MW Areva EPRs at Jaitapur. 

The reason is the Indian government knows it cannot grow its economy on coal and must have imported nuclear reactors as part of its energy mix.

The ambitious plan to build 20 GWe of new nuclear generating capacity will have to be scaled back unless the government can find a political solution to revise its current supplier liability law. 

U.S. firms are locked out of the Indian market due to the current provisions of the law.  Even the Russians and French governments, which self-insure, have complained about the statute.

India may also seek to import nuclear reactor technology from Japan and ramp up construction of its 700 MW heavy water reactor design adapted from CANDU technology.

Bharat Heavy Electricals Limited (BHEL) will get into the international market for nuclear reactor turbines. It has an agreement with Alstom thus putting it in competition with Siemens. India's lower labor costs will be a competitive advantage. The turbines will also be used for India's domestic power stations.

Also, the firm has an agreeemnt with GE-Hitachi manufacture large components of nuclear reactors. A factory is planned near the site of a prosposed new nuclear power station. The factory, if built, will speed up access to the very large components of a reactor pressure vessel and lower reliance on Japan for them.

China

China will re-start official approval of new nuclear reactor projects following completion of revised nuclear safety regulations and staffing up of an independent nuclear regulatory agency.  China will shift its technology focus from a domestic GEN II design to GEN III+ technology transferred as a result of its deal with Westinghouse.  That firm is building four AP1000 reactors in China.

Chinese reactor containment under construction

China may eventually become an exporter of nuclear technology though competition for market share will be tough especially against aggressive market push by Russia, France, and Japan.

China will continue to place multiple bets on fast reactor R&D projects with the idea that at least one or two of them will pay off in the long run.  China knows that it cannot be the world's leading importer of uranium forever.  

Fast breeders and reprocessing of spent fuel will make the use of nuclear energy in that country sustainable for a much longer period of time. However, a roadmap of China's R&D path shows that plutonium fueled fast breeders don't become commercially viable for another 20 years.


Russia

Russia will compete hard for the $28 billion, five reactor, Temelin project which was advertised for bid last month.  Responses are due in July with a contract award in 2013.  It is Europe's biggest new nuclear reactor project. The other two bidders are Areva and Westinghouse. Once they are built the plants, which will be operated by Czech utility CEZ, will likely have Germany as one of their largest customers.

The Russians are building the first two of eight planned nuclear reactors in Vietnam, but Japan has the contracts for the next two.  A tender expected in 2013 for up to 16 new nuclear reactors in Saudi Arabia has all nuclear vendors in a frenzy to get ready to submit bids.

U.K


The British government will surprise Europe by steadfastly moving ahead with support for construction of 17-19 GWe of new nuclear powered generating capacity by 2025. 

EDF will commit to building two Areva EPRs at Hinkley Point. RWE and E.on, two German utilities, will likely find investment capital to build Westinghouse AP1000s at Wylfa.  One source of capital will be support from the German government with export credits. 

Like Japan, German political leaders see no conflict between shutting down nuclear reactors at home while exporting them to other nations. 


The U.K. government will complete its loan to Forgemasters building a western challenge to Japan Steel Works for large components of reactor pressure vessels.

The U.K's nuclear future will be limited by the ability of its universities and trade schools to produce the engineers and skilled workers needed to build the reactors. Also, a committee of Parliament has been critical of the government's shorting of funds for advanced nuclear R&D which it says will put the nation at a disadvantage in future years.

There's a lot more out there. What's your prediction? 


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