[ RadSafe ] News article: Interest in Building Reactors, but Industry Is Still Cautious

[John Jacobus]

>From Today's New York Timesa at
http://www.nytimes.com/2005/05/02/politics/02nuke.html

If this is a duplicate posting, sorry for sending it
again.

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May 2, 2005
Interest in Building Reactors, but Industry Is Still
Cautious
By MATTHEW L. WALD 
 
ASHINGTON, April 30 - President Bush may be
cheerleading for nuclear power, but the electric
industry is not ready to order new reactors. 

Electric companies have shown more interest in
building nuclear reactors in the last few months than
they have in the last two decades. But conditions are
not yet right to induce companies and investors to
gamble the billion or two it would take to build a
reactor and see whether the country is ready for a
second round of plants, according to industry experts.

The chairman of the Nuclear Regulatory Commission,
Nils J. Diaz, said he expects five or six applications
by 2008 and has asked Congress for money to add staff
members to handle them. "I have no proof, but that's
what they tell me," he said in a telephone interview
on Friday. "They come around and whisper, 'You need to
have the people there.' " 

But others remain cautious. John W. Rowe, the chairman
of Exelon, the largest nuclear operator in the United
States, says that the high price of natural gas is an
incentive to build new plants, but that an offsetting
factor is the continuing low cost of coal. The lack of
a solution for nuclear waste is also a deterrent.

Mr. Rowe's company, though, is spending millions of
dollars to win early approval from the nuclear
commission for a new reactor site next to its existing
reactor near Clinton in central Illinois. The company
is at least five years from a decision on whether to
build there, Mr. Rowe said.

Dominion, an energy company based in Richmond, Va., is
also applying to have a site approved for a new
reactor. But Thomas E. Capps, the chairman and chief
executive, said in a telephone interview, "We aren't
going to build a nuclear plant anytime soon.

"Standard & Poor's and Moody's would have a heart
attack," said Mr. Capps, referring to the debt-rating
agencies. "And my chief financial officer would, too."


Mr. Capps said substantial government aid would be
needed, perhaps to pay the interest costs during
construction, which could take six and a half years.
He said that ideally, Congress would also help prevent
the project from being dragged into the federal
courts. Both ideas would face substantial resistance
in Congress.

Some experts also think a revival is much further
away. Peter Bradford, a former member of the Nuclear
Regulatory Commission and the former head of the
public service commissions in New York and Maine, said
that in the last 20 years, predictions of a revival
had "rivaled - in frequency and in accuracy -
forecasts of the second coming of the messiah." But
the technology is still uneconomic, he said.

And there is still the risk of accidents, which could
devastate the industry even if no one outside a plant
was harmed.

"The abiding lesson that Three Mile Island taught Wall
Street was that a group of N.R.C.-licensed reactor
operators, as good as any others, could turn a $2
billion asset into a $1 billion cleanup job in about
90 minutes," Mr. Bradford said in an interview
conducted by e-mail. 

The accident at Three Mile Island was 26 years ago,
and the far more serious accident at Chernobyl, in
Ukraine, was 19 years ago. The industry asserts it has
sharply reduced the risk of accidents since then. 

Environmentalists remain divided. "Many people in the
environmental community think it should be off the
table," said John Holdren, a professor of
environmental policy at Harvard. "On the other hand,
if people are as sensitive about climate as they say
they are, how can you throw out the window one of the
largest carbon-free sources of energy?"

The president's suggestion this week that the federal
government provide insurance to plant builders against
the risk of delays might be helpful, some experts
said, but a lot of other factors would have to come
into line first. 

The most prominent is the price of natural gas. Most
of the electric plants built in the 1990's were
powered with natural gas, but lately gas has sold for
between $6 and $8 per million B.T.U., the standard
unit in which it is sold. The average price in the
1990's was under $2 per million B.T.U. At that price,
a kilowatt-hour of power costs more than 4 cents just
for the fuel, and in many hours of the day, that is
uncompetitive with coal and other power sources. 

"The high gas prices are making all the utilities stop
and think twice about solid fuel," said David E.
Dismukes, an associate professor at Louisiana State
University and the associate director of the Center
for Energy Studies there. But solid fuel, meaning
conventional or lignite coal, carries its own risks
because no one is sure what the rules on emissions
will be in the decades over which a new plant would
operate, experts say. For example, a carbon tax
imposed in 2015 could make companies wish they had
placed an order for nuclear power instead.

But Dr. Dismukes said there were competitors to new
reactors, including liquefied natural gas, also
proposed by Mr. Bush in the same speech. The Bush
administration would like to give the Federal Energy
Regulatory Commission authority to approve liquefied
natural gas plants over the objections of state and
local governments, which often are wary because of
safety and security considerations.

Liquefied natural gas could push the price of natural
gas down to about $3 per million B.T.U., said Dr.
Dismukes, who added, "I don't know that nuclear works
so well" with natural gas in that price range. 

Oil prices are up, too, of course, but new nuclear
plants would not reduce oil use significantly. 

Nuclear power also has an unattractive financial
history that industry backers say they must overcome
to obtain financing for new plants. 

"There is a perception in the capital markets, and
with the general public, that the next generation of
nuclear plants needs help in getting past the
perception of risk," said Ray W. Ganthner, the senior
vice president for new plants at Areva, a
French-German company that has sold components for a
new plant in Finland and is hoping to do the same here
soon. His company recently began the process of
obtaining a license for its design here.

The nation has 103 operating plants, but about the
same number were ordered and then canceled, in some
cases after hundreds of millions of dollars had been
spent on construction, in the 1970's and 80's. 

The last nuclear reactor ordered in this country that
was not later canceled was the Palo Verde plant, in
Arizona, in late 1973. The last reactor commissioned
was the Tennessee Valley Authority's Watts Bar
reactor, in 1996 (23 years after the construction
permit was obtained). Industry supporters have been
predicting a renewal of orders throughout the 80's and
90's. In the mid-90's, there were persistent rumors
that a plant had been ordered, but no one could
confirm it; in October 1993, a trade publication,
Nucleonics Week, joked that the phantom plant should
be called Elvis 1.

But industry executives say they are closer now. Gary
Taylor, the president and chief executive of Entergy
Nuclear, which runs 10 reactors around the country,
said in a telephone interview on Friday that there was
a high likelihood of a nuclear plant being ordered in
the next few years. His company, like Exelon, has
applied for early approval at its Grand Gulf site, on
the Mississippi River south of Vicksburg, Miss.
Dominion is seeking approval for a site at North Anna,
Va., about 40 miles northwest of Richmond. And a
fourth company, Duke Power, has expressed strong
interest in a reactor without naming a site.

"With the president saying this is important to the
country, that brings us to a whole new level of
playing field," Mr. Taylor said. 

The competition over what type of generating plant to
build, he said, is often within a company. In the
South, Entergy's biggest area of operation, nuclear
competes against gas, the price of which is expected
to stay high, he said.

Still, he said, the industry would require financial
help. The underlying economics would have to be sound,
he said, but that would not be enough. 

"It's got to be shown that it's a business, but it has
got to be jump-started," he said. "The only people who
can make that happen is the president of the United
States and the government." Mr. Taylor said loan
guarantees and risk insurance of the kind mentioned by
Mr. Bush would be very helpful. 

The risk of licensing problems has been on the minds
of nuclear advocates for decades. To try to limit
risk, the Nuclear Regulatory Commission began a
licensing process in 1989 that was meant to avoid the
debacles of the mid-80's. The process, known
colloquially as "one-stop licensing," is mostly
untried. Under it, a utility can apply for "early site
approval" with no commitment to build, and vendors can
submit completed designs for preapproval.

Copyright 2005 The New York Times Company 

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"Embarrassed, obscure and feeble sentences are generally, if not always, the result of embarrassed, obscure and feeble thought."
Hugh Blair, 1783

-- John
John Jacobus, MS
Certified Health Physicist
e-mail:  crispy_bird at yahoo.com

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