Time for DOE to Complete Its Part 810 Nuclear Export Reform

This opinion by Margaret was just posted on Nuclear TownHall.

In August 2, 2013, DOE published a supplemental notice of proposed rulemaking (SNOPR) regarding revisions to 10 CFR Part 810, its regulation controlling nuclear exports. The SNOPR was the culmination of years of effort by DOE and industry to modernize a regulation that was based on Cold War era nuclear proliferation policies, politics, and trade patterns. The process is made more complex because the underlying law – The Atomic Energy Act was written during the Cold War and has not been updated either.

For the rest, click here:

I urge other members of the community to add their comments at http://www.regulations.gov/#!submitComment;D=DOE-HQ-2011-0035-0056

 

 

Kill the Goose That Lays Golden Eggs

Once upon a time, a poor state named Vermont hosted a nuclear power plant called Vermont Yankee.

Vermont lacked the money to do many needed things. But it wanted to spend money on luxuries, like cleaning up a lake and generating electricity as expensively as possible.

The power plant, meanwhile, lacked the state’s permission to do needed things that would allow its owner, Entergy, to continue to generate inexpensive electricity on a small plot of land without creating any carbon or huge piles of toxic waste.

The state decided to make Entergy pay lots of money to clean up a lake on the opposite side of the state before it would grant permission to make the small, needed changes on the little plot of land.

Entergy, knowing that its operating costs were so low that it could sell electricity and still earn a reasonable profit, gave Vermont the money it wanted for luxuries.

This was the state’s first golden egg.

Vermont was pleased that it could clean up Lake Champlain without increasing taxes, and even more pleased by the increase in tourists who visited the cleaned up lake.

The state then asked for Entergy to lay another golden egg, this time in the form of annual taxes that would be used for renewable energy investment.

As electricity prices were still high and operating costs at Vermont Yankee still low, Entergy gave the state a second egg.

Vermont, however, was not satisfied. While it wanted the goose to go away, it wanted the golden eggs, too.

It made it harder and harder for Entergy to take proper care of the goose, but still demanded the golden eggs.

Finally, the state demanded that Entergy kill the goose and hand over all of the golden eggs.

The goose will be killed at the end of this year. In the most recent chapter of the fairy tale, Vermont demanded, and Entergy agreed, to one last set of golden eggs as the goose is murdered.

The golden eggs were quite a basketful:

  • $25 million in site restoration beyond what is required by Nuclear Regulatory Commission decommissioning
  • $10 million in economic development for Windham country (which would not be needed, if the plant stayed open)
  • $5.2 million in “clean energy development funds” Entergy also committed to some acceleration of the decommissioning beyond what is required by the NRC.

Specifically, the company committed to moving spent fuel into dry cask storage as soon as it is deemed reasonable. And to start decommissioning work as soon as there are sufficient funds in the decommissioning trust, as opposed to waiting the 60 years allowed by the NRC.

In my opinion, neither of these concessions are going to result in any change in plans by Entergy. Both options are reasonable business decisions on their own merit, but they allowed the state to crow that it extracted a schedule concession, in exchange for killing the goose.

Just like the fairy tale, Vermont will no longer receive golden eggs and, in fact, will lose even more eggs as the families and businesses around the plant will be forced to move away or close when the workers no longer receive their pay to do business there. Just like the fairy tale, the state will one day wake up and wish it still had that goose.

I keep hoping that everyone involved will come to their senses and realize that Vermont Yankee could continue to provide golden eggs to the state for many more years, if only Vermont would just treat it like the good business goose that it is.

I am also watching other nuclear plants in this country. We need to remind people to remember the fable of the Goose That Laid Golden Eggs and not kill these geese.

The clean, reliable, low cost electricity that comes from these plants by itself should be enough to demand that they be kept online.

Throw in the high quality employment and the boon to the local economy, the school system, and public services funded by the taxes, and it just doesn’t make sense to close them.

Let’s make sure that Vermont Yankee and Kewaunee are the only nuclear geese that get killed, shall we?

Working together we can find ways to keep costs competitive, generate carbon free electricity, and keep the geese laying golden eggs for everyone for decades to come.

———-

This article was originally published in Fuel Cycle Week #550, 1.3.14.  where Margaret is a regular columnist. To become a subscriber, go to fuelcycleweek.com or contact the publication at info@fuelcycleweek.com.

Report from 10th annual Platts Nuclear Conference

I’ve just spent an interesting two days at the 10th annual Platts Nuclear conference. Once again, I met with old friends and colleagues, as well as some new folks in the nuclear industry. We are a small industry, but there are so many interesting things going on.

The conference theme was “Opportunities for Growth and Investment” and we spent a great deal of time learning about both the US and the international market.

The opening session on Tuesday was chaired by the inimitable Donald Hoffman, president of Excel Services and current president of the American Nuclear Society. Don’s energy and enthusiasm for this industry is infectious. As he’s done for the past several years, he reminded everyone in the room that they should be members of the American Nuclear Society and should be active in working with the society to help get the important message about our industry out to policy makers and everyone else in the world.

The first plenary speaker was Dr. Peter Lyons, Assistant Secretary for Nuclear Energy. Dr. Lyons provided a fairly typical overview of DOE’s activities in nuclear technology. During the Q&A, he reminded me of something I’ve been reminding people about. Many decisions that affect nuclear power are actually taken at the state level and the federal government has only limited influence on those issues. We, as an industry, need to pay attention to LOCAL politics as well as federal level. The old adage, “All politics are local” is most certainly true.

Next up was Dr. Allison MacFarlane, current chairman of the US Nuclear Regulatory Commission. Dr. MacFarlane provided no real new insights into the NRCs thinking or direction. Of course, the commissioners usually reserve those comments for their own spring event, the NRCs Regulatory Information Conference (RIC) in early March. She did talk about the NRCs efforts to mold and guide regulators around the world. I find frustrating that US industry is not encouraged to help teach INDUSTRY in these developing countries how they should be thinking and behaving as well.  If the industry side of that relationship does not understand what is expected, there are significantly more issues and much more likelihood of a failure in the regulatory oversight process. These expectations are frequently more cultural, than regulation driven. For example, if workers feel unable or unwilling to report issues, or find fault with work done by their peers, verification processes fail. Yet, in many cultures, it is deeply impolite to imply that someone has made an error. These cultural norms take more than a good regulator to overcome. The US industry can help other companies understand and comply with these concepts in parallel to the work being done by the NRC. High time the NRC acknowledged that, and encouraged more participation.

The final speaker before the break was Christofer Mowry, president and CEO of mPower, B&Ws SMR program. Chris MOSTLY avoided being an advertisement for the mPower design, talking about the market landscape for SMRs and debunking some common SMR myths. I have to take exception to Mr. Mowry’s argument that SMRs can load follow and pair with wind and solar just as well as methane. There are some fundamental cost profile differences that make that economically unreasonable. While the smaller SMR is PHYSICALLY more nimble and able to load follow more easily, the fact that SMRs are still a high capital cost proposition make SMRs a poor choice to pair with renewables, unless there is a sea change in Washington regarding a price on carbon emissions that changes the cost profile for methane based electricity.

SMRs are still a great choice for replacing older, dirtier coal plants and some innovations to allow them to be “black start” facilities on the grid make them even more appealing as replacement for coal facilities.

There were two more speakers after the break discussing new build in the United States, but I had an appointment and had to leave. Stay tuned as I will be talking about Wednesday afternoon and Thursday morning in my next blog (or two).

NRC and Regulatory Capture

My blog last week got some interesting reactions regarding the larger picture of regulatory issues. I chose to look at quality as it is an area where significant changes in the broader context of quality control have occurred since those regulations were written and an update is overdue. This is also completely within the control of the NRC.

However, it brings up another question. Many have looked at what happened at Fukushima and concluded that the regulator was “captured” by the industry and was no longer an effective independent regulator. Some have accused the NRC of the same problem. Regulatory capture is a real and legitimate concern for all regulators and industry. What are the causes of such “capture”?

Let’s look at each scenario and determine whether the NRC might be affected.

The regulator is also responsible for promotion.

That was the direct cause for demise of the Atomic Energy Commission in the 1970’s. In the original design of the Atomic Energy Act, the Atomic Energy Commission was responsible for both regulation of nuclear power and its promotion. Interestingly, that was the model for the regulation of oil drilling until after the Deepwater Horizon oil spill in 2010.

Today, the NRC has NO role in promoting nuclear power in anyway. They communicate about the technology and their role in oversight. They prefer to present themselves as a competent regulator, which has sometimes been interpreted as promoting the industry.

The regulator and industry are providing jobs for each other

In essence, the regulator is either from industry directly, or guaranteed a position within the industry after departing the regulator. In Japan, TEPCO and NISA, a position on TEPCO’s board of directors was known as “the chair of heaven” and was guaranteed to be given to departing senior members of NISA.

In general, the NRC rarely hires from industry in any place other than entry level review positions. Commissioners also very rarely come from industry. The current five commissioners have virtually NO experience in the nuclear industry. They come from government (DOE, military, or congressional aides) or academia. Former commissioners have frequently gone back to academia or retired. Occasionally, they have become consultants, but with rare exception, NRC commissioners, or other high level staff, have not ended up in high level industry positions. Those exceptions have been looked at quite carefully (Richard Meserve, for example) and, to date, allegations of inappropriate ties have not been borne out by the Justice Department.

Expertise in the regulation can be powerful in assuring compliance within the industry. Putting former regulators in positions of authority can be helpful in enforcing compliance. In reverse, industry expertise in how a technology really works in practice can allow more effective regulation. However, guaranteed positions of employment going either way is clearly problematic.

Payment by industry to Regulator

The industry pays fees and review costs and funds a large fraction of the NRC’s operating budget. From the NRC’s website in response to a question about the oversight of NFS:

Do NRC fees to the licensee create a conflict of interest in regards to fair regulation? Ninety percent of the NRC’s funding is recovered from the plants that it regulates

No. The NRC operates with funds approved by the U.S. Congress that come directly from the U.S. Treasury. The fees collected have no affect [sic] on the approved NRC budget. The fees paid by licensees go directly to the U.S. Treasury …

While the NRC does not benefit directly from the fees paid by industry, clearly its budget is tied to receiving those fees. The separation of fee payment and service rendered (license maintained, or inspections passed) does prevent the NRC from seeing any one licensee as more important or more valuable than another. In fact, some of the fees assessed are directly related to having issues with the licensees. The more issues a facility is having, the more hours of inspection the NRC requires, which results in more fees.

More problematic is the area of new technology. The NRC has so little funding from the government that isn’t tied to income from industry that the efforts to develop regulation for new technologies (like SMR, or Gen IV) will have to come from industry itself. This process is definitely fraught with risk that the NRC may be overly influenced by the industry itself. While the funds do not flow directly to the NRC, they are clearly aware of their own funding sources.

Fundamentally, the problem with this arrangement is the APPEARANCE of regulatory capture. The question is – Do other oversight agencies operate the same way? And do they have any issues?

Conclusion

There is no direct evidence of industry capture by the NRC. They consult with industry on new regulation, but they also encourage the public to weigh in on these regulations. However, inherently, the NRC is parasitic on the industry. If the nuclear industry were to be abandoned entirely, much of the purpose for the NRC would immediately end and the commission’s role would be significantly reduced.

Two areas that should be monitored and considered are the potential for cross hiring to contaminate the independence of the commission and the issue of funding for specific areas of responsibility within the NRC.

How do other agencies get funding and hire and maintained a qualified, yet independent staff?

Russian Gold!

Last week I discussed why the Russians might be asking the NRC for a Design Certification of the VVER. I concluded it had little to do with the supposed “gold standard” of certification the NRC provides. In reality the Russians need any independent certification to participate in the international market with smaller countries that lack resources to do their own certification.

Why should we care? Is this a good thing or a bad thing? Let’s look at the puts and takes.

The Gold

  1. Having the NRC certify the VVER would at least assure the design has a similar safety level and attention to quality that we demand in the U.S. This would be the “gold standard” we believe we have in the US.
  2. The Russians would have to pay for the review for this certification, bringing outside capital into the government. Estimate vary on how much, but the NRC charges a hefty $274/hr to the applicant for the privilege of reviewing their application. The work involves many dozens of reviewers and extends for several years. The AP1000 took five years in the latest round. The VVER would likely take longer. Only twenty full time reviewers can make the costs exceed $10MM.

Note: I’ve heard this phrase from some folks that “the NRC has never rejected a license application”. Here’s what really happens. The reviews are extensive and iterative. The NRC asks many, many questions (for DCD’s they can run to hundreds). And the applicant is paying $274/hr, plus all of their own people’s time in responding. At some point it becomes clear to the applicant that the license is not going to be satisfactory as is. Then the application is withdrawn to stop paying the NRC for further reviews. Sometimes, the applicant will fix the issues and resubmit, but sometimes the request is never resubmitted. So the NRC never rejects an application, but the thing they approve will have been modified to address their concerns and/or the concerns of members of the public who have chosen to intervene (called Intervenors).

The Dross

  1. The NRC has limited qualified resources to do these kinds of reviews. Nuclear expertise is not a quick study of a few months or years. To do a thorough review of a design requires significant expertise in this industry. However, the NRC rarely hires from industry, except at the lowest levels of reviewer. This means that leadership, oversight, and project management have to be grown from within the agency.
    If the NRC chooses to perform a review of the VVER, these highly trained individuals will not be available to perform reviews of designs and other licensing applications for projects that impact the U.S. industry directly.
  2. Providing this certification for the VVER without some commensurate US project means that the U.S. government has helped a competitor to US industry without any benefit of long term jobs and/or security for the United States.

Conclusions

The NRC has in the past demanded that someone demonstrate interest in a design before significant resources are applied to moving the application forward in the process. If they stick to this policy, the VVER may never see the light of day within the NRC.

That is, if the US industry keeps moving new reactor designs and licenses forward. If that effort stalls out, then the VVER may well be a way for the NRC to keep staff on board. You see, the NRC staffed up in anticipation of the dozen or so stated interests in new reactors around the U.S. Rather than lay people off (difficult to do in the government), I’m sure the NRC will fill its time with reviews of these reactors.

All-in-all, I don’t think the U.S. government should be helping Rosatom, a Russian owned and operated company, compete against companies that at least have a major presence and work-force in the U.S, like Westinghouse, GE-Hitachi, B&W, and Nu-Scale. These companies are creating U.S. jobs, and developing U.S. infrastructure as well as competing for international opportunities that will keep the U.S. out there influencing the development of nuclear around the world. A goal that I think is a good one.

Russian Gold? or U.S. Gold Standard

No, this is not a post about the upcoming Olympic Games, although we will talk about some of the countries playing in those games. This is a different set of games and one that affects the nuclear industry playing fields.

The recent announcement of Rosatom’s intent to seek Design Certification for the VVER in the U.S. has created some discussion about why they might be doing this and whether or not it is appropriate for the NRC to review such a submittal. While the NRC will review any acceptable application put before it, NRC staff and the commissioners have mentioned time and again that they are resource constrained and that some activities will have to be deferred while the commission deals with issues arising from events at Fukushima Daiichi in Japan.

So, why might Rosatom request such a certification?

The first reaction was that they are going to seek customers in the U.S. This seems highly unlikely. The market in the U.S. for new reactors has slowed considerable from the high number of announced intentions in 2005. They are also approaching the market with yet another PWR design. There are several already approved (AP-1000) or in review (EPR, APWR, etc). This would seem to be a pretty saturated market for them to successfully compete in. In addition to fighting the uphill battle of willingness to actually buy Russian technology in the U.S., my crystal ball says they are not planning to actually sell any VVERs here in the U.S.

So what’s the real plan?

Some have speculated that Rosatom is seeking U.S. NRC certification in order to sell reactors in a wider market. To date, almost all VVERs have been sold to former USSR states, or nations that have been more closely aligned with Russia in past years (India, for example). Some in the U.S. believe that the NRCs certification is a “gold standard” of sorts with smaller nations that have insufficient resources to perform such detailed certification assessments. In years past, I would have agreed with that assessment. Certainly, Mexico and Taiwan have largely relied upon U.S. regulatory reviews. To a lesser degree, Japan, Switzerland and Spain have as well.

Today, however, the U.S. position as a “gold standard” is in serious doubt. Other regulators have grown up and created their own high standards of review. The French government while perhaps in its earliest days relied up the U.S. has gone their own way for many years, as has Germany, Sweden, and the U.K. In addition, the U.S. has not built a new commercial reactor for many decades, and has never completed a reactor under the new 10CFR52 licensing regime.

All of that said, many smaller nations considering nuclear power for the first time, lack resources and expertise to do a thorough assessment of a design. Thus, in their requests for proposal, they’ve asked that the design be already certified in another country.

What countries are doing certifications of reactors not of “domestic origin”? It turns out, not a whole lot. France has only certified and built designs by AREVA (or its predecessors). South Korea has only certified in country designs as well. China doesn’t really certify designs as near as I can tell. Same in India. I don’t think the Russians actually certify their designs either. Other countries have limited programs with reliance on other countries.

The U.K. has created a robust program of certification in that past few years after several years reorganizing and rewriting its nuclear regulation. The U.S. has the 10CFR52 process that provides a clear certified design.

So Rosatom is requesting certifications from the two countries that really provide those things, most likely to allow them to go after those other markets. Not that the U.S. is a gold standard. It’s just one of a very few countries that fulfill the potential need.

So what might be the next question. Why should we care whether or not the Russian Design gets certified? That is for the next blog. There’s more to that question that meets the casual observer.

Vacation Blog #3: Almost there!

The cruise take five full days from Vancouver to Hawaii, I’m sitting on my balcony on the 4th day of open cruising enjoying the first truly tropical feeling day of the cruise. The wind has died down to about 5-6 knots of direct head wind.

We’ve been experimenting with and observing science though, as that is just a part of my nature. With so much open ocean and equally open skies, one can make observations on the effects of light. And experiment a little with polarizing lens. Your typical polarized sun glasses are set up to stop glare from horizontal surfaces, like car hoods, chrome bumpers and things like that. When you rotate them 90 degrees, the light that passes through changes. You’ll see the sky change colors as well as the clouds and the contrast in the sea changes as well.

I have a circular polarizing filter on my camera that allows me to change the orientation of the light as well, and so I took pictures of the same scene from our balcony with the filter turned 90 degrees. You can see the significant difference in the same scene below.

Pacific Ocean view 2Pacific Ocean view 1

It is this trick of light orientation that is used in modern 3D film making, by putting on glasses with the light polarizing at 90 degrees difference, the filmmaker can take advantage to cause one eye to see something slightly different than the other. Our brain combines these two images to create a 3 dimensional view of whatever is on the screen.

Seeing things in different ways is one of those things that engineers are supposed to do. We are trained to solve problems and find better solutions to problem presented to us. However, there are three traps that affect our ability to get to the best solution.

1)      We get stuck in a rut of seeing the problem in only one way and thus seeing only a single solution. The definition of idiocy is doing the same thing over and over and expecting different results.

2)     We have a solution, but no corresponding problem. solution in search of a problem

3)     Sometimes we are only comfortable with a few solutions so we try to make our problem fit. If all you have is a hammer, everything begins to look like a nail.

Even people in policy making positions that are supposed to spend their time finding innovative solutions to difficult problems can get caught in any of these three traps. Worse, for some policy-makers and organizations it becomes more about keeping a reason for the organization’s existence alive. It becomes more important to sustain the agency that to solve the problem for which the agency was developed. Or the founders of the organization can’t see changing circumstances that make their pet solution or problem irrelevant.

I have spent many years taking my problem solving skills and applying them to problems in unique ways. One thing I’ve found is that by spending time ensuring that your organization truly comprehends and agrees on the problem that is being solved, you are much more likely to find creative solutions that actually fix the problem rather than the symptoms. So many times an organization gets caught up in the way things “should be” or the way people want them to be rather than the way things really are. When an organization spends the time understanding this, it can be a powerful tool for recognizing when a profound change in direction is required and finding ways to make that change happen.

The energy policy of the United States is in need of such an effort. Too many people have their polarizing sunglasses on and oriented in only one direction so they see solutions only in the light their eyes are receiving. The lack of a comprehensive long term strategy for the nation is putting us at peril for our ability to remain leaders in the world. Our country’s policy has been at the mercy of too many shortsighted interest groups and politicians looking for short term gains in order to win or maintain power in the immediate term. We desperately need leadership in government that can stand up and look at the science and the need and develop a road map to the next millennium.

Vacation Blog #2: Smooth Sailing (finally)

Still on vacation, on a cruise ship somewhere in the middle of the Pacific Ocean. This cruise is called a repositioning cruise, the ship we are on the “Radiance of the Seas” does an Alaska cruise in the summer months and an Australian cruise in the winter months. So, spring and fall are an opportunity to take what are called repositioning cruises. In this case, we’re sailing from Vancouver, BC to Hawaii and then around the islands for about a week. The ship will then go on to Australia, via Bora Bora and Tahiti. We will, sadly, get off the ship in Hawaii.

So for the first five days of this cruise, which my husband chose quite intentionally, the idea was to unplug and unwind from a very eventful year and a sometimes stressful life. Of course, the first two days, the Pacific was anything but pacific. We had pretty big waves and rain and wind and even some of the crew was a bit seasick. Mark and I are pretty insensitive to such things, but none-the-less, I was glad when after two days, we could see the moon through the flying clouds, and the morning dawned with a few puffy white clouds.

I’m sitting on our balcony on the aft of the ship looking at the ships wake and a beautiful blue ocean, no land in sight at all, no other ships, just our cruise ship plowing forward at 18 knots at a heading almost due SW toward Kona, Hawaii. The in room TV has a display of the ship’s position on a globe along with information about the weather and our speed and the ocean depth (it’s now over 3 miles deep below us).

The ship I’m on is powered by huge diesel engines. In fact, we were late getting out of port while enough fuel was loaded for a trip from Vancouver to Hawaii. It’s a long ways and running out of gas in the middle would not be a good thing. There are no sails on this ship as a back-up plan if something happened. I’m not sure they would do any good anyway. This is a mid-sized cruise ship by todays standard, but she’s bigger than the Titanic.

I’ve considered before the possibility of using small modular reactors in the transportation sector. There are several areas for which such machines are great application and a natural fit. Big ocean-going ships are one of the most obvious. It doesn’t take a great leap of logic to consider that nuclear navy ships are still just ships. Cargo ships like large container ships and tankers would seem like logical ships to use nuclear power, but there’s always a security risk with such ships in unfriendly waters. Cruise ships tend to stay in friendlier parts of the world and could also benefit from the cleaner form of transportation. One could envision a system much like the navy where the ship is refueled perhaps once every five years or so, about when these ships require some refitting and updating of the interiors anyway.

When the first nuclear cruise ship is built, I hope I can sail on her maiden voyage. That would be an exciting day!