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Massively rich Koch brothers buy America’s political system

Koch-climate-changeTogether, Charles and David Koch control one of the world’s largest fortunes, which they are using to buy up our political system. But what they don’t want you to know is how they made all that money

 Limitless Life By  | September 24, 2014“………..The volume of Koch Industries’ toxic output is staggering. According to the University of Massachusetts Amherst’s Political Economy Research Institute, only three companies rank among the top 30 polluters of America’s air, water and climate: ExxonMobil, American Electric Power and Koch Industries. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation’s waterways than General Electric and International Paper combined. The company ranks 13th in the nation for toxic air pollution. Koch’s climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.

For Koch, this license to pollute amounts to a perverse, hidden subsidy. The cost is borne by communities in cities like Port Arthur, Texas, where a Koch-owned facility produces as much as 2 billion pounds of petrochemicals every year. In March, Koch signed a consent decree with the Department of Justice requiring it to spend more than $40 million to bring this plant into compliance with the Clean Air Act.

The toxic history of Koch Industries is not limited to physical pollution. It also extends to the company’s business practices, which have been the target of numerous federal investigations, resulting in several indictments and convictions, as well as a whole host of fines and penalties.

And in one of the great ironies of the Obama years, the president’s financial-regulatory reform seems to benefit Koch Industries. The company is expanding its high-flying trading empire precisely as Wall Street banks – facing tough new restrictions, which Koch has largely escaped – are backing away from commodities speculation.

It is often said that the Koch brothers are in the oil business. That’s true as far as it goes – but Koch Industries is not a major oil producer. Instead, the company has woven itself into every nook of the vast industrial web that transforms raw fossil fuels into usable goods. Koch-owned businesses trade, transport, refine and process fossil fuels, moving them across the world and up the value chain until they become things we forgot began with hydrocarbons: fertilizers, Lycra, the innards of our smartphones.

The company controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline. Until recently, Koch refined roughly five percent of the oil burned in America (that percentage is down after it shuttered its 85,000-barrel-per-day refinery in North Pole, Alaska, owing, in part, to the discovery that a toxic solvent had leaked from the facility, fouling the town’s groundwater). From the fossil fuels it refines, Koch also produces billions of pounds of petrochemicals, which, in turn, become the feedstock for other Koch businesses. In a journey across Koch Industries, what enters as a barrel of West Texas Intermediate can exit as a Stainmaster carpet.

Koch’s hunger for growth is insatiable: Since 1960, the company brags, the value of Koch Industries has grown 4,200-fold, outpacing the Standard & Poor’s index by nearly 30 times. On average, Koch projects to double its revenue every six years. Koch is now a key player in the fracking boom that’s vaulting the United States past Saudi Arabia as the world’s top oil producer, even as it’s endangering America’s groundwater. In 2012, a Koch subsidiary opened a pipeline capable of carrying 250,000 barrels a day of fracked crude from South Texas to Corpus Christi, where the company owns a refinery complex, and it has announced plans to further expand its Texas pipeline operations. In a recent acquisition, Koch bought Frac-Chem, a top provider of hydraulic fracturing chemicals to drillers. Thanks to the Bush administration’s anti-regulatory­ agenda – which Koch Industries helped craft – Frac-Chem’s chemical cocktails, injected deep under the nation’s aquifers, are almost entirely exempt from the Safe Drinking Water Act.

Koch is also long on the richest – but also the dirtiest and most carbon-polluting – oil deposits in North America: the tar sands of Alberta. The company’s Pine Bend refinery, near St. Paul, Minnesota, processes nearly a quarter of the Canadian bitumen exported to the United States – which, in turn, has created for Koch Industries a lucrative sideline in petcoke exports. Denser, dirtier and cheaper than coal, petcoke is the dregs of tar-sands refining. U.S. coal plants are largely forbidden from burning petcoke, but it can be profitably shipped to countries with lax pollution laws like Mexico and China. One of the firm’s subsidiaries, Koch Carbon, is expanding its Chicago terminal operations to receive up to 11 million tons of petcoke for global export. In June, the EPA noted the facility had violated the Clean Air Act with petcoke particulates that endanger the health of South Side residents. “We dispute that the two elevated readings” behind the EPA notice of violation “are violations of anything,” Koch’s top lawyer, Mark Holden, told Rolling Stone, insisting that Koch Carbon is a good neighbor.

Over the past dozen years, the company has quietly acquired leases for 1.1 million acres of Alberta oil fields, an area larger than Rhode Island. By some estimates, Koch’s direct holdings nearly double ExxonMobil’s and nearly triple Shell’s. In May, Koch Oil Sands Operating LLC of Calgary, Alberta, sought permits to embark on a multi-billion­dollar tar-sands-extraction operation. This one site is projected to produce 22 million barrels a year – more than a full day’s supply of U.S. oil………

The Koch family’s lucrative blend of pollution, speculation, law-bending and self-righteousness stretches back to the early 20th century, when Charles’ father first entered the oil business. ……….

in the real world, Koch Industries has used its political might to beat back the very market-based mechanisms – including a cap-and-trade market for carbon pollution – needed to create the ownership rights for pollution that Charles says would improve the functioning of capitalism.

In fact, it appears the very essence of the Koch business model is to exploit breakdowns in the free market. Koch has profited precisely by dumping billions of pounds of pollutants into our waters and skies – essentially for free. It racks up enormous profits from speculative trades lacking economic value that drive up costs for consumers and create risks for our economy.

The Koch brothers get richer as the costs of what Koch destroys are foisted on the rest of us – in the form of ill health, foul water and a climate crisis that threatens life as we know it on this planet. Now nearing 80 – owning a large chunk of the Alberta tar sands and using his billions to transform the modern Republican Party into a protection racket for Koch Industries’ profits – Charles Koch is not about to see the light. Nor does the CEO of one of America’s most toxic firms have any notion of slowing down. He has made it clear that he has no retirement plans: “I’m going to ride my bicycle till I fall off.”

From The Archives Issue 1219: October 9, 2014 http://limitlesslife.wordpress.com/

September 29, 2014 Posted by | politics, Reference, USA | Leave a comment

Very worrying financial implications for South Africa’s nuclear deal with Russia

scrutiny-on-costsflag-S.AfricaNuclear urgency raises alarm, Mail & Guardian , South Africa  27 JUN 2014  LYNLEY DONNELLY The state seems set on going the atomic route despite the huge financial implications. Pressure to find a nuclear solution to South Africa’s power problems continues unabated, despite persistent concerns over its affordability.

Experts point out that nuclear vendor financing may be the way to fund the country’s nuclear ambitions, but there are unresolved legal and financial implications.

There is speculation in the energy sector that political pressure cost former energy minister Ben Martins his job, because he failed to secure a nuclear deal with Russia’s Rosatom.

Martins was replaced by Tina Joemat-Pettersson in President Jacob Zuma’s recent Cabinet reshuffle and goes back to Parliament as chairperson of the portfolio committee on public works……….

The apparent urgency about nuclear procurement runs counter to key government policies, specifically the National Development Plan, which calls for an in-depth investigation of the financial viability of nuclear procurement, and the draft update of the integrated resource plan (IRP), published last year. The document, which is government’s electricity planning road map, suggested that a nuclear decision could be delayed given revised projections of electricity demand.

Nevertheless, a decision about ways to procure nuclear power could be expected within the next two months, theMail & Guardian understands.

Elusive payment plan
The answer to how South Africa will pay for a planned 9 600 megawatts of nuclear capacity remains elusive. Eskom was named the owner and operator of new nuclear plants by the Cabinet, but it is in dire financial straits. It has declared a R225‑billion funding gap and has been placed on credit watch by ratings agency Standard & Poor’s………

The cost of nuclear energy could reach R1-trillion and faces competing energy investment demands.

Nuclear vendor financing models have been touted as a way to get around this, which Martins confirmed is the preferred model. “It was never the intention that South Africa would fund the entire nuclear programme. The stakeholders that have an interest in it would substantially fund the nuclear programme,” he said.

Ross Harvey, a visiting research fellow at the South African Institute of International Affairs, said a likely arrangement is that a nuclear vendor would build, own and operate a plant and take full responsibility for the financing.

Buy-back guarantee
In turn, an electricity buy-back guarantee by the government is the most likely way for the vendor to recover costs.

But it is not clear what legislative and tender processes would need to be in place to manage procurement, he said, and much more work is needed to create “legislative coherence” to govern a nuclear bid.

And, although this model would eliminate initial capital constraints, the government would still have to make good on a buy-back guarantee, Harvey said. It is also not clear that, in the time taken to complete a nuclear build programme, there would be sufficient electricity demand, supported by heavy industrial activity, to support such a guarantee. In addition, other technologies could rapidly develop to provide cheaper base-load power.

Rosatom is constructing a similar “build, own and operate” project in Turkey.

Harvey estimated that, based on Rosatom’s investment there, a Rosatom plant would cost between $5-billion to $7-billion, which is a “massive investment to recoup”. http://mg.co.za/article/2014-06-26-nuclear-urgency-raises-alarm?ars=true

September 27, 2014 Posted by | politics, South Africa | 1 Comment

Lack of accountability of Russia’s nuclear corporation Rosatom

Russian-BearAnalysis: Why we won’t be getting any nuclear power plants from Russia anytime soon, Daily Maverick, DIRK DE VOS SOUTH AFRICA  25 SEP 2014 …….who is this Rosatom, then, and what is their track record? Full details of Rosatom are hard to find, but the organisation is tracked by a Norwegian-based NGO, the Bellona Foundation, which has a significant presence in Russia. It was cobbled together from the husk of the Soviet era nuclear programme, incorporating more than 250 enterprises and scientific institutions, including all civil nuclear companies of Russia and nuclear weapons complex’s facilities. It covers everything from exploring, mining and enriching uranium, constructing and operating nuclear power plants, nuclear plant decommissioning and managing and storing spent nuclear fuel. It emerged from Russia’s energy 2003 strategy of 2003, which prioritised reducing reliance on natural gas-based power supplies which could be more profitably exported.

Rosatom is part of a central concept in Russia’s President Putin’s economic policy of having national champions or vertically integrated companies in strategic sectors that are expected to become self-sustaining, but also to advance the interests of Russia. Rosatom is the result of Putin’s efforts at restoring its nuclear energy industry, subsidised up to 2015 by $42.7 billion from the federal budget to nuclear power and industry development before 2015. Quite quickly, Rosatom has become a major player in the global nuclear sector. Rosatom owns the world’s 2nd largest uranium reserves, is the 5thlargest uranium miner, is the 4th largest in electricity generation, provides 40% of the world uranium enrichment services and 17% of the world nuclear fuel market.

…..the corporate and governance structure of Rosatom is unusual. It is governed by its own legislation, enacted in 2007, roughly translated as “On the State Atomic Corporation Rosatom“.  The Corporation is not a part of the government apparatus and does Kiriyenko--tsarnot report to government either. It has been headed by Sergey Kirienko from the outset, who, in terms of the specially adopted legislation, is appointed by the Russian president and can also be dismissed by him. The president retains wide-ranging powers. For example, by decree various enterprises and organisations can be placed under the auspices of Rosatom and become a property investment of the Russian Federation. While it is separate from the state, its funding is closely tied to the state budget.

More unusually, especially in the context of nuclear energy, its powers cover important aspect of the licensing and control over the activities of entities engaged in development, preparation, experimentation, transport, storage, liquidation and dismantlement of nuclear weapons and military nuclear energy installations. Rosatom also has the responsibility for assuring government control for the safety of nuclear materials transport, for radiological installations, and also for taking measures to warn of nuclear and radiological disasters. It therefore exercises significant oversight functions over its own activities and this function is not monitored by the Russian state either. Instead it operates under its Director General, appointed at the discretion of the Russian president.

This is not an insignificant point: When there is no history of independent nuclear regulators standing at arm’s length to the state, the processes and detailed assessments required to guarantee safety of any future facilities in the country were they are to be built are not necessarily top priority. Nuclear firms from western countries can point to a tradition of independent regulation. Safety is not just about reactor design; the Rosatom reactors  1200 MWe VVER (AES-2006) appear up to standard. Safety in nuclear is about relentless quality control, which is harder when there is no regulatory background, or when there are questionable records on quality control and corruption……

Rosatom’s success in building its book is widely ascribed to the financing terms it is able to offer. This is described in detail in different postings in a fascinating blog run by Aaron Stein who runs the nonproliferation programme at the Centre for Economics and Foreign Policy Studies in Istanbul, where he works on security and proliferation issues in the Middle East. In one posting, he gives a fascinating and detailed history of the efforts to build a (desperately needed) nuclear power plant  at a site known as Akkuyu. The history goes back to the 1980s, when Turkey’s government developed a build-operate-transfer (BOT) financing model for nuclear procurement. This would see the supplying company pay 100 percent of the construction cost, operate the reactor for a specified period of time, and then transfer the operation and ownership to a local firm. The foreign nuclear firm would recoup its expenses through guaranteed electricity sales at a fixed cost.

Eventually in 1996, Stein describes how Turkey tried to open a bidding process, but after intense lobbying by nuclear firms and several missed deadlines, this mismanaged tender process was cancelled in 2001, only to be revived in 2008. Because Turkey insisted on its BOT financing model and the tight construction deadlines imposed, only a Russian-led consortium submitted a bid. The BOT financing model was one of the major reasons for this lack of interest. The problem for Turkey was the price of electricity to be generated from the facility. Eventually, this tender was also cancelled. Rather than pursue a new nuclear tender, Turkey and Russia opted to negotiate bilaterally and came to an agreement for four reactor units at a total cost of $20 billion. …..http://www.dailymaverick.co.za/article/2014-09-25-analysis-why-we-wont-be-getting-any-nuclear-power-plants-from-russia-anytime-soon/#.VCXSO2ddUnl

September 26, 2014 Posted by | politics, Russia | Leave a comment

Japan’s government looks to financially supporting the nuclear industry

text-my-money-2flag-japanEditorial: Nuclear plant support measures run counter to official policy, Mainichi 22 Sept 14 拡大写真The Ministry of Economy, Trade and Industry is considering boosting support for nuclear power plants as Japan moves toward full liberalization of its electricity retailing market.

Under the system eyed by the ministry, consumers would shoulder the huge costs of building and decommissioning reactors so that even if there were an electricity price war, power companies wouldn’t go into the red. In essence, the system makes it easy to build and rebuild nuclear power plants and maintain them in the future.

But proposals that attempt to extend the life of nuclear power plants when the government has yet to present a picture for the future of the nation’s energy policies cannot be justified.

Nuclear power costs much more than thermal and other forms of power, yet for decades power companies have recovered expenses, protected by regional monopolies and the full cost pricing method that tacks the cost of producing electricity onto power bills.

With the full liberalization of electricity retailing set to be implemented in fiscal 2016, however, those power companies will lose their regional monopolies. And then the full cost pricing method will be abolished. If more newcomers enter the electricity market and the price of electricity drops, it will become even harder for power companies to recover costs associated with nuclear power.

The Ministry of Economy, Trade and Industry therefore proposed new measures to support nuclear power at a meeting to deliberate the role of the nation’s nuclear power plants. With respect to the system guaranteeing a set price for electricity produced though nuclear power, the ministry proposed that the cost of decommissioning nuclear reactors and the disposing of spent nuclear fuel be made part of a standard price, with consumers forced to cover the difference if the market price falls below that standard.

The ministry is also reportedly set to consider revisions to accounting systems to ease the effects of reactor decommissioning on management.

In terms of fuel alone, nuclear power plants can be run more cheaply than oil-fired power plants or those running on liquefied natural gas. This is probably why power companies are rushing to restart reactors. But when it comes to building a new nuclear plant or rebuilding an existing one, then the circumstances are entirely different. The latest support measures indicate that if market principles were to be given free reign, then the option of maintaining nuclear power would vanish…….http://mainichi.jp/english/english/perspectives/news/20140918p2a00m0na003000c.html

September 22, 2014 Posted by | Japan, politics | Leave a comment

Japan’s politicians look for nuclear plan B – burying reactors

Politicians mull idea of burying power plants  Politicians discuss plan B in nuclear power push: underground reactors, Japan Times BY ERIC JOHNSTON 21 Sept 14 For more than four decades, the Kansai region has relied on Fukui Prefecture’s nuclear power plants, including 11 operated by Kansai Electric Power Co. (Kepco), to keep the region powered up.

But now that a growing number of plants are nearing or have reached the end of their 40-year life cycle, the question is: What’s next?

While most of the discussion is focused on whether to continue running or decommission them, there is an interesting — to be polite — school of thought among certain politicians that says they should be replaced with underground reactors……http://www.japantimes.co.jp/news/2014/09/21/national/politics-diplomacy/atomic-plan-b-go-underground/#.VCChHpRdUnk

September 22, 2014 Posted by | Japan, politics | Leave a comment

US Congress may not be keen to prop up bank supporting nuclear exports

Congress Props Up Ex-Im Bank But Leaves Nuclear Energy To Dangle Congress has decided to prop up the U.S.-Export Bank for nine more months, after threatening to cut its cord and saying it typified corporate welfare. In “preserving” the 80-year-old institution, U.S. lawmakers have given American exporters — both big and small — a chance to regroup, especially the nuclear energy industry.

No other industrial sector has been knocked down — and gotten back up — more than nuclear companies. But the latest fight over whether to continue funding the “Ex-Im Bank,” has been a blow delivered by its “backers,” or conservative lawmakers who generally support such development. Now, though, those congressional members have momentarily caved to a broad swath of the bank’s friends, consisting mostly of members who are pro-business and who want to see U.S. companies expand their franchises internationally. The ultimate question is whether that concession is temporary or permanent………

It’s a controversy that extends well beyond the safety and efficiency record of nuclear power plants. It’s mostly about one that delves deeply into how foreign projects would be financed — and whether a U.S. public agency ought to bankroll construction at favorable rates. …….

Despite the short-term “victory,” supporters of the Ex-Im Bank realize that complacency is the enemy. While the bank has gotten a nine-month reprieve, the battle over whether to continue it after that will resume early next year — just after a new Congress is sworn in. The outcome of the upcoming November elections is unknown. But if Republicans take it over, they may get dominated by the Tea Party, which calls the Ex-Im Bank unnecessary, saying that private institutions could make the same loans if they were so inclined…….

In the current rough-and-tumble political environment, however, it’s less about “wiser heads” and more about “one-upping” the opposition, leaving the nuclear energy industry to dangle even longer and all in the midst of a tenuous future in the United States. http://www.forbes.com/sites/kensilverstein/2014/09/21/congress-props-up-ex-im-bank-but-leaves-nuclear-energy-to-dangle/

September 22, 2014 Posted by | politics, USA | Leave a comment

Finland’s government at risk, over Russian-backed nuclear-power project.

flag-Finland Nuclear Project Threatens Finland’s Government, WSJ,  JUHANA ROSSI  Sept. 18, 2014 HELSINKI—Finland’s ruling coalition looks closer to breaking up after the head of the Green League said he would ask his party to leave the government over a controversial Russian-backed nuclear-power project.

logo-Finland-GreensAn exit by the Green League won’t trigger an immediate government collapse or snap elections, but will make it tougher for the four remaining coalition partners to pass confidence votes and have draft laws approved in Parliament. The Green League will make its formal decision this weekend.

If the party members back their leader Ville Niinisto’s proposal, as is widely expected, it will leave Prime Minister Alexander Stubb’s alliance with only 101 votes, the thinnest possible majority in Finland’s 200-seat Parliament……..

the project has been struggling to attract funding as concerns over nuclear power’s operating economics and safety have grown within the European Union……

Rosatom’s central role has sparked controversy in light of the geopolitical tensions caused by the Ukraine crisis and the economic sanctions the European Union has imposed on Russia for its role in the crisis.

Write to Juhana Rossi at juhana.rossi@wsj.com   http://online.wsj.com/articles/nuclear-project-threatens-finlands-government-1411046734

September 20, 2014 Posted by | Finland, politics | Leave a comment

Belgium to close all nuclear reactors by 2025, but extend 2 old ones until then

Belgium May Extend Lifespan Of Old Nuclear Reactors: Sources REUTERS SEP. 17, 2014  BRUSSELS Belgium could keep two of the country’s oldest nuclear reactors running for up to 10 years longer than planned if other plants remain offline because of safety shutdowns, two sources close to government coalition talks said. The 433 megawatt (MW) Doel 1 and 2 reactors operated by GDF Suez unit Electrabel, built in 1975 and scheduled to for shutdown in 2015, may now be kept operational until 2025, by which time Belgium plans to decommission all its nuclear plants…….

the new government will not change the target agreed in 2011 for the the closure of all Belgium’s reactors by 2025, one of the sources said.  http://www.businessinsider.com/r-belgium-may-extend-lifespan-of-old-nuclear-reactors-sources-2014-9#ixzz3DhXWh77N

September 18, 2014 Posted by | EUROPE, politics | Leave a comment

South Africa’s nuclear power plans clouded in secret deals

secret-dealsflag-S.AfricaEskom not taking part in nuclear acquisition   BUSINESS DAY BY CAROL PATON, 15 SEPTEMBER 2014, ESKOM, FORMERLY DESIGNATED THE “OWNER AND OPERATOR” OF SA’S NUCLEAR PROGRAMME, WILL NOT BE INVOLVED IN THE UP COMING NUCLEAR PROCUREMENT, SAY DEPARTMENT OF ENERGY OFFICIALS, EXCEPT AS THE PURCHASER OF POWER FROM A NEW — POSSIBLY FOREIGN — NUCLEAR ENTITY.

The Cabinet subcommittee on energy security is deep into the technical work needed to procure a massive nuclear fleet. Key to the procurement going ahead will be the financing arrangements, as the construction of nuclear plants has enormous capital costs.

While the Nuclear Energy Policy for SA of 2008 designates Eskom as the “owner and operator of nuclear power plants in SA”, department acting director-general Wolsey Barnard said recently that both Eskom’s financial circumstances and the availability of alternative financing arrangements for energy meant this would have to change.

“The nuclear policy has not yet changed, but what needs to be realised is that the financial position of Eskom has deteriorated since 2008 and to expose Eskom to such a project at this stage would not be sustainable. ……..

Insufficient consultation

Though the government feels confident that public opinion has been taken into account, neither business nor labour agrees that consultation has been sufficient.

The National Development Plan urged caution on nuclear power, saying other options — such as natural gas — should be explored first.

Business Unity SA (Busa) acting CEO Cas Coovadia said “an effective debate on our energy options in the long term” was urgently required. Busa is working to draft an energy policy both for SA’s immediate and long-term needs, he said.

National Union of Mineworkers general secretary Frans Baleni, whose union is a leading opponent of nuclear energy in the Congress of South African Trade Unions, said the union was dead-against nuclear power over safety and cost issues.

“As a country we have not had a dialogue on nuclear power. The process is not transparent and will be easily corrupted. It will make the arms deal look like a Sunday picnic. And the National Development Plan (NDP) is not positive on nuclear. Government can’t pick and choose on the NDP; if they do it is not a plan,” said Mr Baleni……….

Eskom spokesman on nuclear power Tony Stott. said there would be another opportunity for comment through the National Nuclear Regulator’s and Nersa’s licensing processes.

However, these will be long after the contracting is completed. http://www.bdlive.co.za/business/energy/2014/09/15/eskom-not-taking-part-in-nuclear-acquisition

September 17, 2014 Posted by | politics, South Africa | Leave a comment

South Africa’s very suspect plan for vendor-financed nuclear power

flag-S.Africa A nuclear tale that sounds too good to be true Business Day BY CAROL PATON, 15 SEPTEMBER 2014, BUILD now, pay much later. That is the good news story about nuclear energy being told to SA’s decision-makers. In this model, a nuclear vendor and a financier — usually the government of the country of the vendor or a state-owned enterprise or bank — come as a package. The loan from the financier is repaid from the electricity tariff over the long term, 15 to 20 years, and repayments begin when electricity is produced.

This is the simple picture, which has given rise to the perhaps apocryphal story in which a very senior member of the executive told Treasury officials after meeting his Russian counterparts: “We don’t need to pay for it!”

The vendor-financed option has made the scary R1-trillion price tag, wielded by Department of Energy and Treasury officials as a warning to their political principals, disappear in a puff of smoke. The nuclear option appears even more attractive when vendors move onto the next part of the story: as operating costs for nuclear energy are low, and the expense lies in construction, once the loan is repaid, energy becomes a virtual “cash cow” for the operator, and any private investors, for up to 30 years………

The clear frontrunners in this are French company Areva and Russian state-owned enterprise Rosatom. Both offer technology and finance in one package, with some differences. At the heart of both is a power purchase agreement in which the operator of the grid, Eskom, would make an irrevocable commitment to purchase the electricity at an agreed tariff………

An important part of the financing package for vendors interested in SA is the government’s commitment in the nuclear policy of 2008 to a fleet approach. Vendors are able to offer better prices if a fleet of reactors is procured as they get better at building them. Some vendors will not consider SA at all without a fleet procurement.

fighters-marketing-1

This is what lies behind SA’s curious decision in the IRP 2010, SA’s electricity plan, to include 9,600MW of nuclear power in the energy mix. This would amount to a fleet of six Areva reactors (or more, if other vendors with smaller reactors are selected). As electricity demand is far from certain, and has not grown as expected over the past two years or more, overbuilding capacity is a risk.

Independent analysts, such as Prof Harald Winkler of the University of Cape Town, argue that even a nuclear fleet would be more expensive than other options and would lock SA into even higher electricity prices with negative effects on the economy.

Costs such as insurance in the event of a nuclear accident, dealing with the waste, and decommissioning the plant, are not built into the construction prices.

The conclusion of all of this is that the magnitude of the government guarantees required in a R400bn-R800bn nuclear plant building exercise remain very difficult to estimate. Whatever the size of the guarantee and its purpose — for construction or as a guarantee to purchase the power — it would have to find its way onto SA’s contingent liabilities……..

Despite the good “build now, pay later” message being punted by nuclear vendors, the probability is that it will be business and consumers that not only pay later, but pay much more. http://www.bdlive.co.za/business/energy/2014/09/15/news-analysis-a-nuclear-tale-that-sounds-too-good-to-be-true

 

September 17, 2014 Posted by | business and costs, politics, South Africa | Leave a comment

Political risk for Finland’s government in Russian nuclear build deal

flag-FinlandFinnish Greens Warn Over Russian Nuclear Project Junior Party Opposes Reactor to Be Built by Finnish-Russian Consortium  WSJ By  JUHANA ROSSI Write to Juhana Rossi at juhana.rossi@wsj.com Sept. 15, 2014 

HELSINKI—Finland’s Prime Minister Alexander Stubb said he is confident his government will remain in office despite a junior party’s threat to quit the government over a proposal to allow a Finnish-Russian consortium to proceed with its controversial nuclear power-plant project in Finland.

logo-Finland-GreensFinland’s Minister of the Environment Ville Niinisto said Monday he will take the Greens of Finland out of government if it issues on Thursday a preliminary permit for Fennovoima Oy to build a nuclear reactor on a greenfield site on the west coast of Finland. The Greens party is a junior partner in Finland’s five-party coalition government…..

Mr. Niinisto said that the Greens cannot abide by a potential government decision. In case the decision goes against the Greens’ wishes, Mr. Niinisto said he would submit a request at a party meeting this weekend for the Greens to withdraw from the government. If the Greens choose to exit, the government will command a razor-thin majority of 101 votes in Finland’s 200-seat parliament…….

The escalation of the Ukraine crisis this year has cast further doubt over Fennovoima. Mr. Niinisto cited Rosatom’s close links with Russian government as one of the reasons why he is firmly opposed to Fennovoima’s project…….

Deterred by risks and the potentially high costs associated with nuclear power, several of Fennovoima’s Finnish investors have backed away from the project in recent years. As a result, now only 54 percentage points of Voimaosakeyhtio SF’s 66% stake in Fennovoima have actually been subscribed to by Finnish investors, while remaining 12 percentage points don’t have an assigned investor.

Mr. Vapaavuori said that at least 60% of Fennovoima has to be owned by investors from Finland or more broadly from the EU. Otherwise Fennovoima won’t be granted a building permit, the final stage in the approval process for a new nuclear reactor. http://online.wsj.com/articles/finnish-greens-warn-over-russian-nuclear-project-1410805908

September 17, 2014 Posted by | Finland, politics | Leave a comment

UK’s Renewable Energy Association (REA)’s blueprint for the next government

ballot-boxSmflag-UKRenewable manifesto sets out blueprint for next government http://blueandgreentomorrow.com/2014/09/14/renewable-manifesto-sets-out-blueprint-for-next-government/  Sunday, September 14th, 2014 By  Ahead of next year’s general election, the Renewable Energy Association (REA) has published a blueprint for the next government, outlining plans to create jobs, investment and growth whilst helping the UK catch up in the global energy race.

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The UK currently gets 5% of its energy from a renewable industry that supports over 100,000 jobs and has received over £30 billion of private investment since 2010.

In order to meet a legally binding target of having 15% of the national energy demand met by renewables by 2020, the UK must more than double the share of renewable electricity, more than double the share of renewable transport fuels and more than quadruple the share of renewable heat.

REA states, “The next government will be responsible for the UK succeeding – or failing – in meeting its 2020 renewable energy targets. It could also be the government that turns the government that turns the budding renewable energy industry into the main economic engine for creating jobs and growth in the energy sector and reducing the UK’s reliance on imported fossil fuels.”

Currently the UK is 26th in the EU renewables league tables, but by REA argues that with forward-thinking policies the UK can move up the rankings and benefit as a result. Nina Skorupska, REA chief executive, said, “From clean power infrastructure to Zero Carbon Homes and from heat networks to sustainable transport, this is the most comprehensive guide a government could wish for if they’re seeking to maximise the value of this young, vibrant and innovative industry.

“Looking out to 2020, this manifesto sets out how the government can keep up the progress on renewable electricity, and accelerate the roll-out of renewable heating technologies and transport fuels.”

September 15, 2014 Posted by | politics, renewable, UK | Leave a comment

Uncompetitive nuclear industry is rigging regulations and “spinning” media in order to survive

Flag-USAKilling the Competition
The Nuclear Power Agenda to Block Climate Action,  Stop Renewable Energy, and Subsidize Old Reactors, Report by Nuclear Information and Resource Center (NIRS) Sept 14 
The electric utility industry has begun an aggressive push to change energy policy in the  United States to favor nuclear power. Led by the country’s largest nuclear generators,  Exelon and Entergy, this campaign represents what would be the single largest change in  energy policy in twenty years. While their intent is to make nuclear the preferred energy  source, the changes they seek necessarily go far beyond that. They would also support  coal and natural gas-fired electricity generation, and block the growth of renewable energy and attempts to address climate change.
nukes-sad-

Exelon and Entergy see sustainable energy  solutions—renewable energy, efficiency,  conservation, etc.—as a long-term threat to
their profits. This is not because of excessive  regulations or safety requirements on nuclear  power: the industry has not had to implement  a single safety upgrade due to the Fukushima  meltdowns and faces less regulatory  enforcement than it did twenty years ago. The  closure of a record number of reactors since  2013 has exposed fundamental economic  problems facing the industry, and a growing  number of nuclear plants simply cannot  compete with modern, efficient, cost-effective
energy resources.

The industry’s campaign is an attempt to “fix”  this problem and restore the economic  viability of nuclear power for the next 20 years  or more. But in effect, these corporations  would have us sacrifice our best opportunity to create millions of jobs, revitalize our  economy, and rise to the challenge of  addressing climate change—just to keep old,
obsolete, uncompetitive nuclear reactors in business
This agenda would be unpopular at best, so  Exelon and Entergy have focused on  drumming up fears of job losses, power
shortages, and carbon emissions if some of  their unprofitable reactors were to close in the  coming years. They have only discussed their agenda in vague terms, and disclosed  particulars in piecemeal fashion.
Like the Manhattan Project that gave birth to nuclear  technology, they are counting on people not  putting the pieces together so they can see the full picture. The purpose of this brief is to  complete that picture, and enable America to  see the nuclear industry’s plan in full and to  understand the implications.
Nuclear’s Economic ProblemIn order to survive, the nuclear industry must remain economically competitive or prove that
it is necessary and should be propped up. But if uncompetitive reactors close and more of our energy needs are met by economically and environmentally sustainable solutions,  the rationales offered for producing electricity  by splitting atoms would lose relevance The industry’s economic problem is actually quite simple:
 Running nuclear reactors is becoming
more expensive as they age.
 Electricity markets generally favor the
lowest-cost energy sources.
 Energy prices have fallen to levels
lower than the costs of running
reactors.
 Energy efficiency has reduced growth
in electricity demand.
 The costs of renewable energy
sources are falling dramatically………
The industry has settled on a three-part
strategy:
 Repeal or weaken renewable energy
and efficiency programs
 Include subsidies for nuclear in carbon
reduction programs.
 Rig energy markets to guarantee

 

September 13, 2014 Posted by | Legal, politics, Reference, spinbuster, USA | 2 Comments

Scotland’s independence movement makes UK’s nuclear Trident programme look unsustainable

in the face of such opposition from Scotland — even in the possible wake of a decided No vote — it will remain difficult for the UK government to continue its absurd and costly pursuit of renewing the Trident nuclear weapons system against the backdrop of international negotiations to ban nuclear weapons.

Britain’s wee nuclear problem, IFP.com  Erika Simpson and Bill Kidd, Special to QMI Agency Friday, flag-ScotlandSeptember 12, 2014″…..The SNP pledges it will negotiate the removal of the UK’s Trident nuclear weapon system from the Faslane naval base, 40 km from Glasgow. The UK’s four Vanguard submarines are stationed on the Firth of Clyde, a series of rivers, estuaries and sea lochs.

A Yes vote would mean Britain’s 20-billion-pound replacement of the four Trident submarines during the next decade could not go ahead.

It also could mean the UK’s commitment to nuclear weapons would need to be rethought.

The UK government has assumed since 1968 that the Nuclear Non-Proliferation Treaty gives it some kind of right to possess nuclear weapons.

If an independent Scotland fulfills its policy to remove the submarine-based Trident nuclear weapons system from its territory, the UK will need, within four years, to find another stationing location for all its sea-based nuclear warheads, since it costs too much to deploy them at sea for months at a time.

This will be a difficult task, almost as tough as it would be for Vladimir Putin to find another home for Russia’s Black Sea fleet stationed in the Crimean Peninsula.

If the UK wants to maintain its nuclear-armed submarines, it would need to find another deep-water port, preferably on British turf and not on another colony’s territory….. The UK government says other potential locations in England are unacceptable due to their proximity to population centres, although the UK has housed nuclear submarines and loaded nuclear weapons onto them not far from Glasgow since 1969. If Westminster does decide to relocate the weapons, cost estimates vary enormously.

Some argue building a new base would cost merely 2.5 billion to 3.5 billion pounds ($4.47 billion to $6.26 billion), while others say moving the Tridents will cost closer to 50 billion pounds. Certainly, it would be a lot extra for English and Welsh taxpayers to pay for in the wake of their country’s partition and probable economic decline……..

if an independent Scotland decided to join the alliance, it could follow the example of other NATO states such as Canada, Norway and Lithuania, which do not allow nuclear weapons on their soil. Furthermore, if an independent Scotland spearheaded initiatives to establish more international treaties to prohibit nuclear weapons, its approach could have a major impact on other NATO members, despite the inclination to erect a new central front in Europe to protect the Baltic states.

Even if not enough Scots vote Yes to win independence, their voting patterns could provide an opportunity for Britons as a whole to rethink their approach to nuclear weapons. The very high costs of replacing the submarines, coupled with the logistical challenges of relocating the weapons, means there is a strong opportunity to reject the nuclear option, should a Westminster political party adopt such a policy.

For their part, representatives of the SNP are prepared to participate actively in the humanitarian initiative on nuclear weapons and support negotiations on an international treaty to prohibit nuclear weapons, even without the participation of the nuclear-armed states. Such a treaty would make the possession of nuclear weapons unambiguously illegal for all, putting them on the same footing as biological and chemical weapons.

In the face of such opposition from Scotland — even in the possible wake of a decided No vote — it will remain difficult for the UK government to continue its absurd and costly pursuit of renewing the Trident nuclear weapons system against the backdrop of international negotiations to ban nuclear weapons. Scotland’s vote this Thursday could go either way, but it is already sure to push Mother England to overcome her Cold War thinking about security by undermining traditional arguments in favour of maintaining these weapons of mass destruction.

— Bill Kidd is the Scottish Member of Parliament for Glasgow Anniesland and a member of the Scottish National Party, which supports an independent and non-nuclear Scotland.

— Erika Simpson is an associate professor of international relations in the politics department of Western University. http://www.lfpress.com/2014/09/12/britains-wee-nuclear-problem

September 13, 2014 Posted by | politics, UK | Leave a comment

Obstacles in the way of nuclear restart for Japan’s Sendai reactors

speed-bumpSeriously? Japan Plans to Restart Nuclear Reactors http://inhabitat.com/seriously-japan-plans-to-restart-nuclear-reactors/ by , 09/10/14 Despite the devastation wreaked by the Fukushima meltdown in 2011, Japan wants to restart two nuclear reactors that were shut off in the wake of the disaster. According to the Guardian, Japan’s nuclear watchdog has said the reactors can be started up again, as long as the operator can convince the local communities they are safe. That might not be an easy task as the Japanese public has been wary of nuclear power since Fukushima, which was the worst atomic disaster since Chernobyl.

Japan’s Nuclear Regulatory Authority (NRA) only gave permission to open the Sendai plant in southern Japan after a 400-page safety report and months of public consultation. Plant operator, Kyushu Electric Power still needs to get two more NRA approvals for other facilities at the plant, as well as the all-important public approval. So it’s unlikely the plants will open until sometime in 2015.

Newly-appointed Japanese Industry Minister, Yuko Obuchi will have to be persuasive to restart the plant, and she acknowledges she has a tough road ahead of her. “If people say they are worried, I think it’s only natural,” she told the Guardian. “If you are a mother, I think it is a kind of feeling that everyone has. The central government must offer a full explanation to these sentiments.” She added that it’s important to earn the “understanding of hosting communities” who might not like nuclear facilities operating in the backyard, despite the new safety rules.

But Greenpeace Japan is campaigning to have the country abandon nuclear power altogether. The organization says the government is ignoring the fact that Japan has done just fine without nuclear power over the past year, and that it favors dangerous nuclear energy over renewable sources. “The government . . . is ignoring the lessons of Fukushima and attempting to prevent the renewable energy revolution, trying to take the nation back to its dependence on dangerous and unreliable nuclear power,” Kazue Suzuki of Greenpeace Japan said in the Guardian.

September 11, 2014 Posted by | Japan, politics | Leave a comment

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