H.R. 4979: Advanced Nuclear Technology Development Act of 2016

We support passage of the Advanced Nuclear Technology Development Act of 2016 [H.R. 4979].

H.R. 4979 was introduced earlier this month by Congressmen Bob Latta (R-Ohio) and Jerry McNerney (D-Calif.). The legislation is designed to foster civilian research and development of advanced nuclear energy technologies, improve licensing and enable commercial deployment.

NRC

The bill adopts a straightforward approach to making Nuclear Regulatory Commission fees more equitable. It would continue to require the industry to pay for all agency activity attributable to a licensee or a class of licensees, but disallow collection of fees associated with the agency’s corporate support. This approach would require the NRC to justify corporate support costs to Congress in order to receive appropriations and, in turn, prompt the NRC to control its budget and reduce or eliminate wasteful spending.

The NRC’s budget is approximately $1 billion per year despite significant declines in its workload, including recent premature plant shut downs. The NRC collects 90 percent of its budget from licensees, but the budget has not correspondingly declined, and the remaining licensees are responsible for paying higher annual fees. 

With recent premature shutdowns—and additional reactors decommissioning in the coming years—the current fee structure virtually guarantees that remaining licensees will continue to bear even higher annual fees. And it is effectively impossible to determine whether the fees charged are justified.  (NEI, 4/29/2016)

California Sustainable Groundwater Management Act

The California Department of Water Resources recently wrapped up the public comment period for its draft regulations on Groundwater Sustainability Plans under the 2014 Sustainable Groundwater Management Act (“SGMA”).  The finalized regulations, due June 1, will have a significant impact on the developing role of Groundwater Sustainability Agencies and on just how much control is left at the local level.

Water districts and counties especially should be following these regulations closely and should talk to experts about how best to meet their interests while complying with the new requirements. Likewise, groundwater users should be making sure that their local authorities stay on top of SGMA developments.

In September 2014, Governor Jerry Brown signed into law a three-bill suite collectively known as the Sustainable Groundwater Management Act. The signing of SGMA made California the last of the Western states to enact a comprehensive regulatory scheme for its groundwater resources.

SGMA requires groundwater basins to be managed sustainably at the local level. It provides for the creation of local Groundwater Sustainability Agencies (“GSAs”) with various financial and enforcement powers, tasked with developing and implementing Groundwater Sustainability Plans (“GSPs”) for the basins or sub-basins under their jurisdiction. GSPs must be in place by 2020 or 2022, and must achieve sustainability by 2040 or 2042. At the state level, the Department of Water Resources (“DWR”) supplies technical recommendations and monitors technical sufficiency, and the State Water Resources Control Board (“SWRCB”) exercises the police power to step in if local agencies fail.

GSAs may be existing local agencies or may be newly created for the purpose of SGMA compliance. Existing local water agencies can first elect to be the GSA, but not every groundwater user is under the jurisdiction of an existing local water agency. Counties are made the default GSA for remaining areas, and allowed to opt-out if they so choose. If no other agency then forms a GSA for the left-out areas, groundwater users in those areas must report directly to SWRCB, which can charge fees for having to assume management responsibility.

SGMA defines sustainable groundwater management as the “management and use of groundwater in a manner that can be maintained during the planning and implementation horizon without causing undesirable results.” Six “undesirable results” are enumerated, forming the key criteria for a GSP’s success: (i) chronic lowering of groundwater levels indicating a significant and unreasonable depletion of supply; (ii) significant and unreasonable reduction of groundwater storage; (iii) significant and unreasonable seawater intrusion; (iv) significant and unreasonable degraded water quality; (v) significant and unreasonable land subsidence; and (vi) surface water depletions that have significant and unreasonable adverse impacts on beneficial uses of the surface water

Several milestones in the implementation of SGMA have already been achieved. These include the initial prioritization of basins, completed by Jan. 1, 2015; regulations for modifying groundwater basin boundaries, completed by Jan. 1, 2016; and the identification of “critically overdrafted” basins, completed in January 2016. DWR’s GSP and Alternatives regulations are due June 1, 2016. DWR regulations regarding water available for replenishment and best management practices are both due Jan. 1, 2017. An interim update to Bulletin 118, which delineates groundwater basins based on the latest hydrological and geological data, is due in January 2017 with a comprehensive update due in 2020. (Martens Law, 4/27/2016)

Final 5 Presidential Candidates On Energy

Donald Trump has no voting record on energy policy but his tweets, sound bites and rallies reveal some of his positions.  He wants to bring coal back 100%, and that he is in favor of nuclear power. He likes natural gas and is of the drill-baby-drill philosophy, does not believe in global warming, dismisses renewables, and would like to significantly reduce the influence of the EPA. 

Hillary Clinton supports President Obama’s Clean Power Plan, led the President’s 2012 establishment of a global initiative to reduce green-house gases and other climate-affecting pollutants, and has an aggressive plan for renewable energy to supply power at some level to every U.S. home within ten years.

Clinton favors non-fossil fuels over fossil fuels. Clinton wants to ban offshore drilling, implement a windfall profits tax on oil companies, work to strengthen national pipeline safety regulations, invest heavily in grid and energy infrastructure, is against the Keystone XL pipeline, supports natural gas over coal, supports making renewable tax credits permanent, and wants to spend $30 billion to help coal communities transition away from coal production.

Clinton generally supports nuclear energy. She does not want to close nuclear power plants, in particular the New York Indian Point and other nuclear power plants in that state, as her opponent does. Clinton has said that “rapidly shutting down our nation’s nuclear power fleet puts ideology ahead of science and would make it harder and more costly to build a clean energy future. Clinton opposes the Yucca Mountain nuclear repository and supports the Blue Ribbon Commission’s recommendations for our nuclear future, generally continuing President Obama’s policies on nuclear power.

John Kasich who, as Ohio Governor and a nine-term member of Congress, has voted on energy issues many times, although his major committees were Budget and Armed Services. He acknowledges global warming as a problem, but froze Ohio’s Renewable Portfolio Standard when he became Governor in 2010. He supports free market fixes to most environmental problems. He originally wanted to frack for natural gas in state parks, but never followed through on it. Kasich has supported some clean water and air quality initiatives, supports higher taxes on fracking for natural gas, but supports the Keystone XL pipeline.

He strongly supports coal which produces over 50% of Ohio’s electricity, but is mum on nuclear power even though it is the state’s third largest source, just behind natural gas.

Ted Cruz stands for fossil fuels and against renewables. He considers climate change to be a hoax. Cruz is in favor of drilling and mining anywhere and everywhere, even in parks, and is against all regulations. He is mute on nuclear, but wants to abolish the Department of Energy

Bernie Sanders wants to ban fracking completely, as well as all offshore drilling, Arctic drilling, natural gas exports, and mountaintop coal mining. The fossil fuel subsidy that Sanders does support is the highly-regarded Low Income Home Energy Assistance Program that assists low income families with their heating bills.

Sanders is for a 100% renewable energy future.

Sanders is vehemently against nuclear power. He wants to stop all nuclear license renewals and shut all nuclear power plants as fast as possible Like Clinton, Sanders opposes the Yucca Mountain nuclear repository.  (Forbes, 4/18/2016)

Peabody Coal Company Files Chapter 11 Bankruptcy

Peabody Energy, the world’s largest private-sector coal company, has filed for bankruptcy.  It’s the fourth major U.S. coal company to go bankrupt in the last year.  This energy sector has been hit hard by the natural gas boom. 

In a statement, the company said that with the Chapter 11 filing, it intends to reduce its debt level, improve its cash flow, and “position the company for long-term success, while continuing to operate under the protection of the court process.” 

Peabody is more than $6 billion in debt. Last month, the company missed a $71 million interest payment and its credit rating was downgraded to a “D” by Standard and Poor’s. Recently, Peabody had been attempting to sell off mines in New Mexico and Colorado in order to stay afloat, but the company’s statement notes that those planned sales have been terminated. (Peabody’s Australian arm is not part of the bankruptcy filing.)

Peabody had “self-bonded” to cover $1.4 billion in mine reclamation and cleanup costs.  Peabody has announced that it intends to continue to work with the applicable state governments and federal agencies to meet its reclamation obligations.  (Grist, 4/13/2016)

Coal Companies In Trouble

A worsening financial crisis for the nation’s biggest coal companies is threatening their existence, as Peabody Energy, the world’s largest publicly traded coal company, has been forced to appeal to creditors for an extra time to pay its debts. Two of the four other biggest U.S. coal companies have declared bankruptcy in the past six months.

Several coal giants are struggling to make payments on debts for ill-timed multibillion-dollar acquisitions of their rivals in recent years. On top of that, they have been financially squeezed by competition from cheap natural gas and declining U.S. and Chinese demand for coal.

Peabody alone has cleanup obligations of nearly $1.4 billion guaranteed by self-bonding, according to statements filed by the company last year with the Securities and Exchange Commission. Arch Coal and Alpha — the nation’s second- and fourth-largest coal companies — have self-guaranteed liabilities exceeding $485 million and $640 million, respectively, in reclamation costs.

The coal giants are currently in no condition to spend those amounts. Arch and Alpha filed for Chapter 11 bankruptcy protection last year. Peabody stock prices have fallen by more than 97 percent over the past year, and the coal behemoth’s market value at Thursday’s closing price was less than $44.3 million. Barclays Capital said the company’s debt-to-capital ratio was a towering 88 percent.

Alpha bought rival Massey Energy for $7 billion. Arch Coal bought International Coal for $3.4 billion. Peabody paid $5.1 billion for Macarthur Coal. And Walter Energy bought Western Coal for $3.3 billion.

In 2011, when the merger wave picked up speed, natural gas prices were at a healthy $4 a thousand cubic feet, there was an international commodity boom and China’s economy was speeding ahead. Now commodity prices have slumped, China has slowed and natural gas prices hover around $2 a thousand cubic feet. (Wash Post, 4/1/2016)