COLORADO URANIUM MILL AIMS TO OPEN IN 2 YEARS

DENVER - COLORADO

The country's first new uranium mill in 25 years could be operating in Southwest Colorado in early 2012, its chief backer said Tuesday.

But a leading critic of the mill doubts the claim.

Energy Fuels Corp. plans to build the Piñon Ridge mill in the Paradox Valley of Montrose County, about 12 miles west of Naturita.

The company applied to the state health department for a permit to operate last November. By law, the department has until early 2011 to either issue or deny the permit, Energy Fuels President George Glasier said Tuesday at a Colorado Mining Association conference.

“If we didn't think we could get the license, we wouldn't have spent the time and money," Glasier said.

The health department has scheduled a public meeting about the mill for Feb. 17 in Montrose.

Glasier is confident uranium demand will return, although it is now trading in the low $40 range per pound - about $10 less than last summer.

“One of the things the United States needs badly is new uranium mills, because existing mills just cannot handle all the demand there's going to be," Glasier said.

Only mills in Blanding, Utah, and Cañon City have processed uranium recently. The Naturita mill would spur new mining in Colorado and would draw workers from Cortez to Grand Junction, Glasier said.

After state approval in January 2011, the mill could be built in nine months and operating by early 2012, Glasier said.

Others aren't so sure.

“That may be the plan he's promoting," said Travis Stills, a Durango-based lawyer for the mill's opponents. “That doesn't sound very realistic."

In addition to state approval, Energy Fuels needs to secure water rights, an air-quality permit and Environmental Protection Agency blessings for the design of its tailing cells, Stills said. The EPA in particular has a track record of being tough with uranium companies, Stills said.

“That's what a promoter does, is promote a best-case scenario," Stills said.

Glasier also took shots at his environmental opponents.

He had looked at a mill site in San Miguel County but rejected it.

“San Miguel County is where Telluride is, and those people are against mining - any kind of mining," Glasier said.

However, no national environmental groups have joined the fight, he said.

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LOAN GUARANTEES RECHARGE NUCLEAR DEBATE

The Calvert Cliffs power plant

President Barack Obama’s proposal to triple federal loan guarantees for the construction of new nuclear power plants has galvanized critics of the existing program, which they say is on the verge of throwing taxpayer support behind four projects facing untold costs and dependent on unproven technology.

In his $3.8 trillion budget plan for 2011, released last week, Obama called for boosting loan guarantees to $55 billion to help jump-start construction of U.S. nuclear plants. In his Jan. 26 State of the Union address, the president urged “building a new generation of safe, clean nuclear power plants in this country."

His words marked a shift toward more public support for an industry that has brought just one new U.S. nuclear power plant online in 20 years. Utility companies and nuclear reactor builders insist that federal financial backing is necessary to woo investors, wary that only 50 percent of U.S. reactors that have been ordered have been licensed and generated power.

“These loan guarantees will serve as a catalyst to accelerate construction of new nuclear plants, creating thousands of high-paying, long-term jobs in the process,” Marvin Fertel, president of the main industry association, the Nuclear Energy Institute, said in a statement. “By supporting new reactors, loan guarantees also will reinvigorate U.S. manufacturing capability for nuclear energy components.”

But Obama’s push for more loan guarantees — at the same time his administration has gone back to the drawing board on the issue of nuclear waste by defunding the Yucca Mountain, Nev., repository site — also has reinvigorated the debate over the near-term viability of nuclear power.

Administered and pushed by the Department of Energy, the financing scheme would make American taxpayers liable for as much as 80 percent of the likely $7 billion-plus cost of designing, licensing and building each new U.S. nuclear reactor that receives a loan guarantee. The guarantees would extend up to 30 years.

Obama’s new support for nuclear power, which some feel may be a down payment for Republican backing on a climate change bill, follows a much stronger commitment by President George W. Bush. The industry’s stock has soared in Washington after it poured tens of millions of dollars into federal lawmakers’ campaign coffers and spent hundreds of millions on lobbying.

At Bush’s behest, the Energy Policy Act of 2005 provided $13 billion in subsidies to the nuclear power industry for research, construction, operations and site cleanup, and it authorized the loan guarantees. The Department of Energy is selecting recipients for an initial round of $18.5 billion in guarantees.

First four projects face problems
The four projects at the top of DOE’s list for that first round, culled from 19 applications, all are facing problems, including squabbling among partners, cost overruns and reactor design difficulties. Issues such as those, anti-nuclear groups and fiscal watchdogs say, demonstrate that the plants are far too risky for taxpayers to endorse.

Jerry Taylor and Peter Van Doren, senior fellows at the conservative Cato Institute, which opposes all energy industry subsidies, have called the industry’s claims that nuclear power is economically viable nonsense.

“It’s not about the merits of nuclear power, it’s about the merits of these particular projects,” Autumn Hannah of Taxpayers for Common Sense said of her group's opposition to the federal funding. “We are not anti-nuclear, we are anti-nuclear subsidies.” Her group has characterized the four projects in line for initial loan guarantees as “in a shambles.”

“Nothing could be further from the truth,” countered Jarret Adams, U.S. spokesman for French-owned nuclear giant Areva, which hopes to build the reactor for one of the four projects. Adams and other industry representatives told msnbc.com that the problems are minor hiccups on the road to the “nuclear renaissance” they have been predicting for a decade now and are being unfairly trumped up by groups that are dead-set against any new nuclear plants.

While the Department of Energy has not published its short list of contenders for the first round of loan guarantees, and did not answer questions from msnbc.com about the program, DOE officials and some applicants have previously confirmed them to be:

• The Summer Station Nuclear Station’s proposal to add two 1,117-megawatt reactors to its Fairfield County, S.C., site, which currently operates a single reactor. The new reactors would be Westinghouse AP 1000s, not in operation anywhere yet and under new scrutiny from the U.S. Nuclear Regulatory Commission over the design of the shield building and other issues. The station’s owner warned last year that projected cost of the reactors could be $500 million higher than expected.

• A similar expansion plan at the Vogtle site in Waynesboro, Ga., which currently operates two reactors with a total of 2,430 megawatts of capacity. The plant’s owners want to nearly double that by adding a pair of the Westinghouse AP 1000s. In addition to the hurdles faced by the reactors, the project is the subject of a lawsuit over its finances.

• The plan to add a 1,600-megawatt reactor at the Calvert Cliffs Nuclear Power Plant, which operates two reactors near Lusby, Md., with a combined output of 1,750 megawatts. The plant's owner has chosen Areva’s Evolutionary Power Reactor. The first installation of that reactor in Okiluoto, Finland, is running two to three years behind schedule, with cost overruns pushing the price from $4.4 billion to $6.5 billion. And the design has not yet received certification from the NRC.

• The South Texas Project’s bid to become the nation’s largest nuclear power plant by adding a pair of reactors to its Matagorda County facility for a total generating capacity of more than 5,000 megawatts — enough electricity to supply the needs of about 2 million homes and businesses. STP’s plans are threatened by a courtroom squabble among its partners over the estimated cost of the expansion, which has skyrocketed from $6 billion to $17 billion. The Texas project is the only proposal on the loan guarantee list that calls for using a reactor — General Electric’s Advanced Boiling Water Reactor — currently in operation. (General Electric also owns NBC, which in turn owns half of msnbc.com.)

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Obama's Pro Nuclear Power Policy

Obama wants to triple public financing for new nuclear power plants, even as he nixes funds for storing commercial radioactive waste. The policy may be calculated to win votes for climate change legislation, but critics say it's not 'coherent' and carries new security risks.

President Obama has followed up on his support for "a new generation of safe, clean nuclear power plants," laid out Jan. 27 in his State of the Union speech, by proposing to triple public financing for nuclear power.

The Department of Energy recently proposed $36 billion in new federal loan guarantees on top of $18.5 billion already budgeted – for a total of $54.5 billion. That's enough to help fund six or seven new power plants.

It's a full-speed nuclear-power gambit that many say is largely a bid to win votes from pro-nuclear senators for legislation to address climate change. But his strategy is generating a firestorm of opposition, amid warnings that much more is at stake than a political calculus.

From environmentalists to fiscal hawks to nuclear security experts, the Obama plan is sparking near-open revolt. The nuclear-power expansion is not accompanied by any plan to store commercial radioactive waste, they note, and includes a new push by the Department of Energy into spent-fuel reprocessing and small "pocket nuke" reactor research, which they see as a proliferation risk. The Obama nuclear policy is at cross purposes to his nonproliferation goals, they add, and might even cement his energy legacy as the president who revived a moribund industry that hadn't built a nuclear plant in decades because of the financial, environmental, and security risks involved.

"It's ironic, but Obama could end up being the biggest pro-nuclear power president since Dwight Eisenhower," says Henry Sokolski, executive director of the Nonproliferation Policy Education Center, a nuclear deterrence expert who served as deputy for nonproliferation policy in the Department of Defense from 1989-1993 under President George H.W. Bush.
One antidote to global warming?

Among environmentalists, who saw Mr. Obama as a friend of renewable energy, the sense of betrayal is acute.

"Every new nuclear power plant built would be a step backwards when it comes to solving global warming," Anna Aurilio, a spokeswoman for Environment America said a statement. "Clean energy solutions like energy efficiency and renewable energy sources such as wind and solar are far more effective."

Obama's stance won plaudits from the industry, however.

"The administration's initiative will make a meaningful difference in bringing about development of the nuclear energy facilities that our nation needs," Marvin Fertel, president of the Nuclear Energy Institute, said in a statement.

Budget hawks have a different set of concerns. They oppose government "subsidies" to the industry (in the form of federal loan guarantees), saying taxpayers assume a huge risk given the industry's track record of cost overruns – and loan defaults – in the 1980s.

"We didn't have good experience recently with the mortgage industry, and we ought to keep that in mind with nuclear power," says Doug Koplow, president of Earthtrack, an energy consulting firm. "For each power plant, we're talking about something like $8 billion in taxpayer exposure to a single asset owned by a private firm. To me that seems unprecedented."

Various studies and the US Government Accountability Office warn of potential loan default rates on the order of 50 percent. The Department of Energy, though, says safeguards are in place to prevent that.

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Nuclear Energy Firms Seek More Than Loan Guarantees For Revival

Department of Energy Secretary Steven Chu told reporters on Friday that the DoE budget, which will be released on Monday, would call for a $54 billion loan guarantee program, tripling the current amount.

Raising the amount of federal loan guarantees available for new nuclear plants is just part of what the industry wants Congress to do to spur its revival.

The move was praised by industry lobbyists but criticized by some environmental and fiscal watchdog groups for putting too much taxpayer money at risk.

Congress has already approved an $18.5 billion loan guarantee program in hopes of reassuring Wall Street investors about an industry with a history of cost overruns. But the industry said additional financial support was needed. The loan guarantee program prompted 17 applications for projects that were estimated to cost $122 billion to build.

The announcement of the additional loan guarantees “is a very important signal of the seriousness about getting a clean energy industry back up and running,” said Jim Connaughton, a former director of the White House Council on Environmental Quality in the Bush administration.

Connaughton is now an executive at Constellation, an electric utility that operates five nuclear reactors at three sites. Constellation was one of three utilities to win an initial loan guarantee.

Connaughton said negotiations with DoE are ongoing over what percentage a company should have to pay to DoE to reduce its risk. The industry wants to keep the “credit cost” at 1 percent or below the anticipated total cost to build a new plant. A company would be required to pay DoE $100 million to reduce the risks for a $10 billion project, but industry critics have sought a much higher percentage.

The guarantees would mean the government would step in to repay 80 percent of a loan should a company default.

In addition to loan guarantees, the industry is also lobbying to remain eligible for support from a clean energy fund Congress is also considering.

The entity would support a variety of clean energy technologies through loans, grants and guarantees to reduce greenhouse gas emissions.

Industry lobbyists participating in the United States Climate Action Partnership (USCAP), a coalition of environmental groups and energy companies that support climate change legislation, are working within the group to have nuclear power counted as clean energy in a Clean Energy Standard.

Such a standard would be an alternative to a Renewable Energy Portfolio renewable production mandate under consideration in Congress that is now limited largely to wind and solar power. It is opposed by environmental groups within USCAP.

The industry also continues to press for regulatory changes to speed the time it takes the Nuclear Regulatory Commission (NRC) to approve a nuclear application. Industry officials say the long process of winning regulatory approval discourages potential investors.

Utilities like Constellation and Exelon, which operate nuclear plants, also continue to press for a cap-and-trade bill that would give the plants a competitive advantage over coal and natural gas plants that emit carbon dioxide.

And Connaughton said the industry would press for an even higher level of loan guarantees.

There are around 100 nuclear reactors in operation, but the NRC has not approved a new application for a reactor in more than two decades.

Politically, the industry has already undergone a revival of sorts. Before DoE announced it would seek additional loan guarantees, President Barack Obama said a comprehensive climate and energy bill should include support for new nuclear plants.

Nuclear power is likely to be a central component of the climate legislation compromise that emerges from the negotiations led by Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.).

But much of the industry’s agenda will be opposed by environmental groups and by fiscal watchdogs that worry billions of taxpayer dollars are at risk with the loan guarantee program.

“Increasing loan guarantees for nuclear power beyond what Congress already has authorized would shift unacceptable risks from the nuclear industry to U.S. taxpayers,” said Ellen Vancko, nuclear energy and climate change project manager at Union of Concerned Scientists.