Platts - Thursday, January 05, 2006
http://www.platts.com

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NRC issues bans to four ex-FirstEnergy employees over Davis-Besse

Washington (Platts)--5Jan2006

The US Nuclear Regulatory Commission staff on Thursday issued orders to
four individuals prohibiting their involvement in NRC-regulated activities
because of their roles in providing incomplete and inaccurate information to
NRC on conditions at the Davis-Besse nuclear power plant in 2001, it said.

The Davis-Besse plant, located at Oak Harbor, Ohio, is operated by
FirstEnergy Nuclear Operating Co.

In 2001, the NRC directed all holders of operating licenses for
pressurized water reactors, including Davis-Besse, to inspect the tubes that
penetrate the reactor vessel head for possible leakage by Dec 31, 2001.

FirstEnergy requested that it be permitted to operate an additional three
months before shutting down for the inspection, and the NRC staff, based on
information submitted by FirstEnergy, permitted the plant to operate until Feb
16, 2002.

Subsequent examination of the reactor vessel head by FirstEnergy showed
that leakage through the tubes had caused substantial corrosion damage to the
head.

"The four individuals subject to the orders, including three former
utility managers, engaged in deliberate misconduct by providing inaccurate and
incomplete information about the extent of reactor vessel head cleaning and
inspection," said James Caldwell, NRC Regional Administrator.

"Had the NRC known that the plant was being operated with leakage through
the reactor vessel head, the agency would have taken immediate action to shut
down the plant," he added.

In April 2005, the NRC levied a $5.45-mil civil penalty against
FirstEnergy for violations associated with the damage and for providing
incomplete and false information to the agency. The civil penalty was paid by
FirstEnergy on Sept 14.

The four individuals subject to the orders are no longer employed by
FirstEnergy. Orders prohibiting involvement in NRC-regulated activities for a
period of five years were issued to: David Geisen, who was manager of design
engineering; Dale Miller, who was regulatory affairs compliance supervisor;
and Steven Moffitt, who was technical services director.

An order prohibiting involvement in NRC-regulated activities for a period
of one year was issued to Prasoon Goyal, who was a senior design engineer at
Davis-Besse.

The NRC orders are effective immediately, and the individuals have 20
days in which to request a hearing. The NRC previously issued an order in
April 2005 to Andrew Siemaszko, who was a system engineer at Davis-Besse,
which, if sustained, would prohibit his involvement in NRC-regulated
activities for a five-year period. A hearing on that action is ongoing.

Siemaszko was responsible for ensuring that the reactor vessel head was
cleaned and inspected during a refueling and maintenance outage in 2000.

In addition to these enforcement actions, the NRC previously has referred
issues related to the Davis-Besse reactor vessel head damage to the Dept of
Justice, it said. Davis-Besse remained shut down for two years after the
deiscovery of the problems to address equipment and staff-performance issues.

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http://www.LNGdaily.platts.com.

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Paris (Platts)--5Jan2006

Chirac outlines French energy strategy, backs new nuclear plants

French president Jacques Chirac Thursday outlined France's energy
strategy for the next thirty years, and committed the country to build a new
model nuclear power reactor for a new generation of reactors by 2020.

In a speech to trade unions and business leaders following the
Russia-Ukraine gas crisis, the president highlighted energy saving, greater
use of renewable energy and nuclear power and spoke of the need for a
Europe-wide energy policy.

"Climate change and the 'after oil' era are the challenges of this new
century," Chirac said. "We will have to cut our greenhouse gas emissions by a
quarter by 2050, it's unavoidable. We have to learn progressively to do
without oil," he said.

While France currently emits "40% less greenhouse gas per inhabitant than
the average in developed countries," it now has to speed up the implementation
of the energy choices set out in last July's energy orientation bill, he said.

"We must first intensify our efforts to save energy in the home. And as a
priority in existing buildings, with the aim of cutting energy consumption by
a quarter by 2050," he said. A program has been launched that should allow
French people to save the equivalent of the annual output of two nuclear power
units, he said.

"France has to cut back oil use and boost its consumption of biofuels,"
Chirac said. "We must reserve the use of oil for transport and chemicals and
develop as many substitutes as possible."

BIOFUELS

French biofuel output would be "multiplied by five" over the next two
years, he said. "By the end of 2007, cars used by state administrations (for
example police, schools, hospitals) will have to use biofuels for a third of
consumption," he said.

Chirac said he wanted France's industrial innovation agency to
"contribute this year" to plans to develop clean coal power stations.

But the country had to preserve its "superiority" in nuclear energy, he
said. "...we must take new initiatives: many countries are working on the new
generation of reactors for the years 2030-2040, which will produce less waste
and will better exploit fusion materials," he said.

"I have decided to launch, from now on, the conception, with the CEA
energy atomic commission, a prototype fourth generation reactor which should
go into service by 2020," Chirac said. France would team up with any
industrial or international partners who wanted to take part, he added.

The French president said it was "obvious" that energy policy transcended
national boarders. "It is at a European level that we must build an ambitious
energy policy. It cannot just be about opening the (energy) market to
competition." France plans to submit a "memorandum" on energy policy at
Europe's next Council of Ministers meeting, Chirac said.

--Chris Eales, newsdesk@platts.com

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Gas crisis fuels nuclear energy debate in German government

London (Platts)--5Jan2006

The gas supply dispute between Russia and Ukraine has reignited the
nuclear power debate in Germany, which has pledged to phase out all atomic
fuel by 2021.

Germany, which imports about 35% of its 100-bil cu m/yr of gas demand
from Russia, should not turn its back on nuclear power, said its economics
minister Michael Glos in parliamentary debate Tuesday. Nuclear technology, he
added, was "fit for the future." "The minister has said that he hopes the last
word [on nuclear] has not been spoken and there was no harm in trying to find
out more," a spokesman for the ministry said Wednesday.

The new "grand coalition" government between the ruling CDU and the SPD
party agreed late last year to uphold the so-called "atom consensus" agreed
between the previous SPD-Green party coalition with industry in 2001 to
withdraw the country's then 19 nuclear power plants after an average lifespan
of 32 years. Germany has since closed two reactors.

Glos, who is a member of CDU partner, the CSU, has an ally in research
and technology minister Annette Schavan of the CDU, who warned against the end
of nuclear research. CSU chief and Bavarian minister president Edmund Stoiber
also supports Glos, saying the subject would be discussed next week in a
closed meeting of the federal cabinet.

GLOS WANTS TO AVOID COALITION CONFLICT

According to a report by the BBC Monitoring Service Wednesday, Glos
repeated his demand that, in view of the gas dispute, phasing out nuclear
energy must be rethought. He added though that his party wanted "fair" talks
with the SPD and did not want to start a coalition conflict.

But SPD general secretary Hubertus Heil said the coalition treaty was
"very unequivocal" with regard to the nuclear phase-out, while parliamentary
state secretary in the environment ministry Michael Mueller, also of the SPD,
said the atom consensus was irreversible.

"In the interests of the coalition succeeding, I can only advise Mr Glos
not to touch it," said Mueller. The future "really does not lie in nuclear
energy," he added, noting that worldwide uranium deposits would be exhausted
in about 25 years. Thus the energy policy of the future must concentrate, he
said, on energy efficiency and renewable forms of energy.

The Federal Association of German Industry (BDI) supported the economics
minister's nuclear energy-friendly position. Carsten Kreklau, a member of the
BDI chief executive secretariat, said: "A balanced energy mix is part of a
reliable energy supply. Nuclear energy must play a role in this, also in the
future."

Ulrich Kelber, deputy chairman of the SPD Bundestag group, said giving up
nuclear energy had nothing to do with gas deliveries from Russia. "Mr Glos
should know when a battle is lost," said Kelber.

To find out more about the Russia/Ukraine gas dispute go to
http://www.platts.com/Natural%20Gas/Resources/News%20Features/ukrainegas/index.xml

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Virginia seeks NRC Agreement State status

Washington (Platts)--4Jan2006

Virginia says it wants to become an NRC Agreement State. In a Dec. 14 letter,
released by NRC yesterday, Virginia Gov. Mark Warner said he feels Virginia
"should assume a more prominent role in the protection of its citizens from
unnecessary radiation." To that end, Warner said, the state intends to pursue
an agreement with NRC to assume oversight of certain radioactive material
within its borders. Warner noted that radioactive materials are used by
Virginia's industry, universities, and healthcare system. "While such usage
benefits all of us, radiation safety has always been a prime concern," he
said. There are currently 33 NRC Agreement States. NRC is expected soon to
approve an agreement that would make Minnesota the 34th Agreement State.

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Framatome ANP to replace two steam generators at TMI-1

Washington (Platts)--3Jan2006

Framatome ANP will replace steam generators at Three Mile Island-1, parent
company Areva said today in a press release. Scheduled for delivery in 2009,
the two new once-through steam generators offer "significant operability and
reliability improvements and reduced maintenance costs," Areva said. The
contract amount was not disclosed. Areva supplied this type of steam generator
to Arkansas Nuclear One-1 in 2005, the company said. Both units are of the
Babcock & Wilcox (B&W) design. Areva owns B&W's former nuclear power assets.

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Talks may occur in next year on first new US power reactors

Washington (Platts)--3Jan2006

Spent fuel contract talks may have to take place in the next year or so for
companies planning to license and build some of the first new power reactors
in the US, according to Nuclear Energy Institute legal counsel Mike Bauser.

Although a negotiated contract for the disposal of a reactor's spent fuel
would not have to be in place when an application is filed with NRC for a
combined construction permit-operating license, one would be needed for the
issuance of the license, Bauser said in an interview yesterday. A contract
would be required whether a new reactor is built on a greenfield or at an
existing nuclear power plant site, he said.

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2006 seen as important year for fuel market

London (Platts)--3Jan2006

For the nuclear fuel market, 2006 is shaping up as a particularly important
year. Developments market analysts are watching include:

LES is still on track to receive an NRC license to build and operate a
centrifuge enrichment plant in New Mexico.

USEC Inc.'s American Centrifuge development strategy will either be validated
or not.

Companies currently investigating Silex Systems Ltd.'s laser enrichment
process will probably decide one way or the other on whether to invest in a
pilot 250,000 SWU/year plant.

The winning bidder to take over Westinghouse likely will be known, as will the
company that will buy RWE Solutions and its key RWE Nukem uranium trading
unit.

There should be much more clarity as to the impact of the court decision
declaring SWU to be a service on the commercial SWU market, as well as on the
Russian antidumping suspension agreement, which is currently undergoing a
sunset review.

The spot price of uranium is likely to climb over $40 a pound U3O8, but the
rapid rise of the spot price?an increase of 75% in the past year and 150% over
the past two years?won't continue, most analysts say.

Consolidation of the more than 200 junior uranium companies will probably
accelerate.

Regarding the spot price, most analysts now see it climbing above $40/lb
sometime during the first half of the year. But there is no consensus as to
how much higher it will climb. A big unknown is whether buying by hedge
fund/investment companies will continue in 2006 at its 2005 pace. As the year
ended, analysts said that almost 10-million lb were in the control of these
entities, which have so far been content to hold their inventories. Also it is
unclear how much supply will be available to meet continuing demand of
utilities, many of which are taking steps to build inventory. For example, in
a Dec. 21 filing with the U.S. Securities & Exchange Commission, the owners of
the South Texas Project said the owners committee had approved the acquisition
of "a strategic refueling reload of uranium."

Although analysts believe that the spot price will not continue to rise
indefinitely, they also suggest that until supply catches up with demand there
is not going be much sustained downward pressure on the price. Consultant
International Nuclear Inc. (INI) estimates 2006 worldwide uranium production
at 110-million lb, with consumption around 170-milllion lb.

But how soon that gap will be closed is unclear. Bullish estimates of
production out of Kazakhstan by 2010?as much as 39,000,000 lb U3O8?may be off
by as much as a third, say some analysts. INI estimates 2006 production in
Kazakhstan at close to12-million lb U3O8 and projects that production in 2010
could be as much as 22.5-million lb.

But there are hurdles that could hinder a smooth production increase. Wallace
Mays, one of the key figures in UrAsia Energy Ltd.'s foray into production in
Kazakhstan, said in a paper delivered at the World Nuclear Association's
annual meeting in September, that a key bottleneck to production by in situ
leach mining is the availability of drill rigs in Kazakhstan. "Many of the
manufacturers of drill rigs have gone out of business," Mays said. And in
Kazakhstan, "the lack of competition from government-licensed drilling
companies (only two are licensed) has limited the development of competitively
effective drilling equipment and methods," he added.

There are also indications that the expansion of BHP Billiton's Olympic Dam
copper-uranium operation may proceed more slowly, driven in large part by BHP
Billiton's strategy in the copper marketplace.

Among the junior uranium companies, Paladin Resources is expected to begin
production at its Langer Heinrich mining operation in Namibia late this year.
In a recent coup, Paladin announced that it had hired Wyatt Buck, Cameco's
general manager of the McArthur River mine and Key Lake mill, as the general
manager of the Langer Heinrich mining operations. Buck will start work for
Paladin Feb. 1.

And Mestena Uranium has started up its Alta Mesa ISL project in Texas.

And Uranium Resources Inc. is hoping for increased production in 2006.

This story was published in full in Platts Nuclear Fuel. Request a free trial
at http://www.platts.com/Request%20More%20Information/

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