Episode 44

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1. Australia will change nuclear laws to allow plants
2. Queensland law bans nuclear plants
3. Iran’s former nuclear negotiator arrested
4. Engineer Accused of Taking Codes to Iran
5. US and Japan sign nuclear power pact
6. India/US Deal to be approved soon
7. Governor Spitzer Flip-Flops on Indian Point
8. Vermont Wants to Renege on Tax Deal with Vermont Yankee
9. Areva & Constellation Announce New Nuclear Plant Location
10. NJ Sues over Oyster Creek Decision
11. US Supreme Court Closes Coal Emissions Loophole

Nuclear Debate Continues in Australia

The nuclear energy debate continues to churn in Australia. This past week, Prime Minister John Howard told a Liberal Party conference that the 1999 law which bans nuclear power stations in Australia and limits uranium mining is no longer compatible with the need to act on climate change. He said that Australia would need progressively to wind down its reliance on traditional coal-fired power stations and adopt nuclear power generation. I’ve mentioned before that Australia has about one-third of the world’s known easily recoverable uranium, but they don’t refine any of it. The mine the ore and ship it to other countries to refine into usable fuel. And they have only one reactor – one at Lucas Heights that is used for research and for medical isotope production. You might wonder why a nation with such a valuable resource would be missing out on this fabulous opportunity – well the answer is very simple, and all you need to do is follow the money and the political power. Australia also has abundant coal and they generate almost all of their electricity from coal. The coal industry in AU is huge, with giant financial resources, and even greater political clout. The coal industry views nuclear energy as a direct challenge to their monopoly, and their cash flow. So it’s no surprise that the biggest opposition to John Howard’s plans to refine uranium into fuel, build nuclear plants is coming from regions with heavy ties to the coal industry. For example, last year Queensland Premier Peter Beattie supported the passage of a state law called the Nuclear Facilities Prohibition Act of 2006. It’s just what it sounds like – it prevents nuclear plants or uranium enrichment facilities from being built in Queensland, even if the AU federal government removes legal obstacles. Queensland just happens to be one of the two largest coal producing states in Australia. You might recall an earlier story I discussed in which the mayor of Townsville complained that nuclear plants are not welcome there because it would hurt the tourist industry. Well, Townsville is right on the edge of the largest coal mining regions in the state, and much of their income, and political contributions no doubt, are derived from the coal industry.

The anti-nuclear Queensland laws went into affect this week, and Queensland Mines and Energy Minister Geoff Wilson celebrated the occasion, and was quoted as saying "The Act bans nuclear facilities in Queensland in order to protect the health, safety and wellbeing of each and every one of us," He also said "There is no need for Queensland to go down the path of nuclear power plants when we don't need to." "Here in Queensland we have access to abundant, long-term supplies of coal and gas," and "We're confident that clean coal technology will provide a similar level of greenhouse abatement to that of nuclear generation and in a shorter timeframe." I wonder which clean coal technology he’s talking about. There’s still no economical way to remove CO2 from coal plant exhaust, and IF carbon sequestration is ever viable on a large scale, it certainly won’t be for many years.

So the stage is set for a showdown between the Australian states and the federal government over the future of their energy supply. On one side you have a national policy of reducing reliance on coal, on improving air quality, and on limiting CO2 gas emissions, and on the other you have interests in protecting the coal industry. This will be interesting to watch it play out!

Iran’s Position Remains Unchanged

I haven’t talked about Iran in quite some time. There’s been a lot of political haggling and media attention, but in reality there’s been almost no change in the political standoff between Iran and the rest of the world over their renegade uranium enrichment program. More than a year has passed since the dispute first made it to the United Nations Security Council, and the two positions are virtually unchanged. Iran’s president Ahmadinejad continues to proclaim their right to enrich uranium for energy production. The IAEA continues to ask for transparency, and for Iran to stop enriching Uranium because of fears they are developing weapons. Iran continues to install more centrifuges in violation of the UN’s orders. While Iran has allowed some limited IAEA inspections, but they refuse stop the enrichment process. The UN imposed sanctions that really don’t amount to much.

A couple of months ago there was an interesting development when Russia refused to deliver fuel to Iran for the first core load at the Bushehr nuclear plant because Iran had failed to make payments owed Russia. That little squabble poured some cold water on an otherwise very cozy relationship between the two nations. It was interesting to watch Moscow’s posture with Iran toughen when the dispute was in full swing. I heard that the contract required payment in US dollars, but Iran tried to pay in another form of currency and the Russians refused. There’s some speculation that Iran is mishandling it’s cash flow and didn’t have the dollars to pay.

Ahmadinejad has Political Opponent’s Nuclear Expert Arrested

In a sign of the continued internal political dissatisfaction over Ahmadinejad’s policies, last week police arrested Hossein Mousavian, the country’s former nuclear negotiator. He was hauled him off to prison for interrogation, and Iranian newspapers report that Mousavian could face an espionage charge. Mousavian is an ally of former Iranian president Rafsanjani who remains a political adversary Ahmadinejad’s. Rafsanjani has maintained a more moderate stance toward the international community over Tehran’s nuclear program.

Mousavian was a member of the Iranian nuclear negotiating team until 2005. When Ahmadinejad defeated Rafsanjani, he replaced the entire nuclear negotiating team, including Mousavian. There’s some speculation that Ahmadinejad is attempting to eliminate anyone within Iran who might question his hard line positions, and Mousavian is someone with the knowledge and experience to speak intelligently about Iran’s nuclear position in international relations.

Engineer Arrested in US for Iran Trade ban Violation

In another but seemingly unrelated story, an Iranian born Engineer who worked at Palo Verde Nuclear Plant in Arizona for 16 years was arrested by US federal agents last week as he got off an airplane just having returned from Iran. Mohammad Alavi, who is a US citizen, has been charged with violating the trade embargo that prohibits Americans from exporting goods and services to Iran. If convicted, he would face up to 21 months in prison. While there are not many details of exactly what Mr Alavi did, it involved taking nuclear plant training software and computer access codes with him to Iran. In October, authorities alleged, the software was used to download training materials from Tehran, using Palo Verde user credentials.

The FBI said there's no indication the training software had any terrorist connections, and there is no evidence to suggest the software access was linked to the Iranian government. According to court records, the software is used only for training plant employees, but allowed users access to details on the Palo Verde control rooms and the plant layout. Officials of Arizona Public Service Co., the Phoenix-based utility company that operates the Palo Verde Nuclear Generation Station, said the software does not pose a security risk because it doesn't control any of the nuclear plant's operating systems.

That makes perfect since to me because designs for nuclear plants like Palo Verde are not secret. The security systems and procedures would be safeguarded, and would not be available using that sort of software. None the less, the utility said it has changed software procedures.

India/USA Cooperation Bill Close to Approval

The India/USA Nuclear Cooperation Deal is close to being approved. The two sides have been negotiating for the last several months, and reports indicate most issues have been resolved. Later this month Nicholas Burns, the US Undersecretary for Political Affairs will travel to New Delhi to finalize the deal and sign the agreement. There is recognition in both the USA and in India that with the US presidential elections nearing, they need to get this resolved and on the books soon. The deal is set to go into effect in 2008 and will open the door for cooperation between the two nations in developing nuclear power plants and civilian nuclear energy related industries.

Japan and USA form GNEP Partnership

Japan and the USA have formed the first international agreement under the GNEP or Global Nuclear Energy Partnership. The two nations will work jointly on reactor designes and new types of fuel for Generation-4 reactors that may be built around the world. Assistant Energy Secretary Dennis Spurgeon said 222 reactors are planned for construction under the GNEP program. Interestingly enough, some elected officials in the new Democratically controlled Congress are of the opinion that GNEP was kicked off without sufficient congressional oversight. For example, Jeff Bingaman, the new chairman of the Senate Energy Committee stated he is looking forward to having the energy committee review the program. Bingaman took the reigns of the committee from Senator Pete Dominici, who is a strong supporter of nuclear energy. So here’s a classic example of how a change in the political party in power, and the subsequent change in committee leadership can cause previously approved programs to be drug back into the legislative process. It gives the new party in power the opportunity to weigh in on the policy and to attach their pork barrels to the programs. This is also an example of how shifting political winds create the environment of legislative uncertainty that makes investors second guess making long term investments. The Global Nuclear Energy Partnership will reduce the amount of used nuclear fuel that has to be stored in the USA because the used fuel would be reprocessed and reburned in the modern reactors. The new designed will be proliferation resistant, so concerns over diversion of reactor fuel for weapons are addressed. Critics say that the program is being invented as it moves along, but isn’t that always the way when you’re dealing with cutting edge technologies? You rarely have all the questions answered when you start. If engineers and technicians used the same logic when building and growing the Internet, we’d still be using 28K dial up modems!

NY Governor Spitzer Flip-flops on Indian Point

The new governor of NY State Elliot Spitzer is flip-flopping his position on Indian Point Nuclear plant. When he campaigned for Governor Spitzer promised to shut down Indian Point. I guess reality has set in; he knows that without Indian Point NY State can’t avoid skyrocketing electricity prices, can’t meet greenhouse gas reduction goals, and can’t prevent summer blackouts. So now he says Indian Point will have to stay on line until replacement power is built. That doesn’t mean he’s going to completely forget his promise to the anti-nuclear radicals who supported his election; this past week he joined Senator Hillary Clinton in calling for an independent safety assessment of Indian Point. He stated there were two reasons that the Independent Safety Assessment is needed; because IP was late installing emergency sirens with battery backup power, and because of ground water leaks from the spent fuel storage pool at the site. Let me explain why Spitzer’s logic is flawed: first of all, neither of the issues he cited has any safety significance at all. I’ve talked about the fuel storage pool leak before, and it has zero safety significance. Radiation can be measured at extremely low levels. Let me give you an example – the average person in the USA gets about 350 mrem per year from natural background radiation. According to the NRC web site, if your house was on the edge of the Indian Point site, and the plant was releasing radiation at the legal limit, which they are not, you’d get 6 more mrem per year. The minute amount of leakage from Indian Point is far less than the legal limit, so in reality you’d get less. By comparison, one dental x-ray gives about 3 mrem, and you would not think twice about getting two or three x-rays if you had a tooth ache!

On the issue of the battery backup for Indian Point’s emergency sirens – you might remember some discussion I had about this on a prior show. No other plant in the USA is required to have battery backups. Hillary Clinton managed to get this added to the Energy Policy Act of 2005 to appease her anti-nuclear supporters. Having a battery backup to emergency sirens may make them less likely to fail in some low probability off-the-wall situations, but it does not add appreciably to public safety. If they did, then it would be a part of federal law and would be required of all nuclear plant in the USA, and it is not. Indian Point was just fined $130,000 for being late implementing this new requirement; even though there is no safety value added, and even though they began the installation project voluntarily well before Hillary succeeded in making it a legal requirement. So back to the original issue, Hillary and Spitzer both know that the state of NY can not survive without Indian Point, but they are going to do everything they can to increase the cost of power they generate, and they’ll use the plant as a favorite target when they want to show how much they care about the voters.

Vermont Lawmakers Trying to Squeeze Vermont Yankee for More Taxes

Since I’m talking about politicians making “special” rules for nuclear plants, I need to mention what’s going on in Vermont. This past Tuesday the VT senate approved a bill that will levy a special $37 million tax on Vermont Yankee Nuclear Plant to fund a state-wide energy efficiency program. That might not seem like a lot, but just last year Vermont Yankee agreed to contribute $25 million to a clean energy fund in exchange for state approval for a 20% power uprate. Some VT lawmakers are taking the position that because the plant is making good profits the state should take a larger share. Do you think they’d be making the same argument if it was a computer factory, a dairy farm, or a sawmill? Doesn’t it seem against the whole concept of a free market and capitalism to ask for more taxes just because a company does a good job and makes a greater return on their investment? Vermont Yankee will already pay more in income tax if they make higher revenues, so this is a tax on a tax. Come to think of it, it sounds a bit like socialism! Vermont Yankee is fighting the proposed tax increase because the State is reneging on the deal they made just a year ago. Vermont enjoys some of the lowest electricity rates in the nation, and has the lowest greenhouse gas emissions of any state for one reason and one reason one only – Vermont Yankee. It’s ironic that the same politicians who claim to be interested in preventing climate change, and protecting the ratepayers are the same ones who are trying to tax their nuclear plant out of business.

UniStar Picks Calvert Cliffs Site for New Nuclear Plant

On a brighter note, this week Unistar, the joint venture between Constellation and Areva, announced they’ve selected the Calvert Cliffs site in Maryland as the location of their new nuclear plant, an EPR. They notified the NRC that they will be applying for a construction and operating license for a new unit that will be the third reactor at the site. Unistar has also discussed the possibility of adding another new unit at their Nine Mile site in New York, but with Elliott Spitzer at the helm that’s unlikely.

New Jersey Appeals NRC Ruling on Oyster Creek

There’s a legal battle being waged between the State of New Jersey and the US Nuclear Regulatory Commission over the Oyster Creek Nuclear Plant license extension. The outcome could have ramifications for the entire US industry. Oyster Creek is applying for a 20 year license extension, something that 48 other nuclear plants have already been granted in the USA. Recently the state argued that the NRC should consider the possible impact of a terrorist attack on the plant prior to granting the extension. The NRC considered the state’s request, and after a thorough review concluded that New Jersey’s concerns are speculative and theoretical, and potential terrorist attacks are already addressed in day to day oversight of the facilities. Needless to say, the state didn’t like the Commission’s ruling. Last Wednesday NJ State Attorney General Stuart Rabner filed a petition in the Federal Third Circuit Court of Appeals to challenge the ruling.

This is yet another example of how anti-nuclear groups use the legal system in an attempt to block nuclear plants from operating, or at a minimum it can raise costs by imposing more requirements, more evaluations, and more legal fees.

This is a similar approach to the case earlier this year in California where anti-nuclear groups succeeded in forcing the NRC to consider terrorist attacks in Diablo Canyon’s application for a license for dry cask fuel storage.

If NJ wins the appeal, then the same case could be made in more than 30 other license renewals that are either already underway or expected in the next few years. That does not mean that the license extensions would be blocked, though. It means that the license extensions would have to consider the potential impact of terrorist attacks which might make the reviews lengthier, and more costly. As you would expect, the Sierra Club celebrated New Jersey’s decision to appeal.

US Supreme Court Closes Loophole on Coal Pollution

And finally, last Monday the US Supreme Court acted to uphold Environmental Protection Agency rules that require aging coal powered electricity plants in the USA to install pollution controls when they do extensive upgrades. I’m probably overly simplifying, but the issue is this; the Clean Air Act requires new coal plants to include pollution control systems in their design. The law also required old plants to install similar equipment if the owners decide to do major upgrades to existing plants. This aspect of the law is designed to prevent owners of older dirtier plants from choosing to indefinitely upgrade and refurbish them to keep them running in lieu of building newer cleaner plants.

There’s also a provision from 2003 called the New Source Rule that allowed some older plants to be upgraded without installing pollution controls. Going back more than 10 years there are cases being argued between utilities and the EPA over whether or not plant upgrades or modifications should have included pollution controls.

In a nutshell, the ruling this week stated the New Source Rule was so lenient that it violated the Clean Air Act. Because of the new ruling, it will be much more difficult in the future for old coal plants to continue running indefinitely without installing pollution controls. That’s was the whole intent of the Clean Air Act, so it seems that the Supreme Court got us back on track. By closing this loophole in the EPA rules, the Supreme Court has made it more difficult for older coal plants to keep running. That means new power plants will have to be built to replace them. It also provides more incentive for emissions free electricity sources such as nuclear energy.

New Nuclear Energy Video

I’ve talked a lot about the demand for new talent in the nuclear industry, and how nuclear technology and engineering offers fantastic careers and high paying jobs. The Department of Energy is working to generate interest in nuclear careers and they released an informational video that targets young people. If you go to my web site at this week in nuclear.com you can view a copy of the video, or see it here: http://www.youtube.com/watch?v=TWF8HxuWIBI . I’ll cover it in more detail in the next show.

Go Green! Go Nuclear!

John Wheeler