Platts - Tuesday, July 25, 2006 http://www.platts.com ------------ Sanction threats already hampering energy investment in Iran: US Washington (Platts)--25Jul2006 The international community's decision to give Tehran a "clear choice" -- opt either for incentives or for punishment -- when deciding whether to continue to pursue nuclear enrichment activities has already hampered investment in the country's energy sector, a US State Department official said Tuesday. "Iran, already, even before sanctions have been imposed, is a less desirable place to invest," said Paul Simons, deputy assistant secretary for economic and business affairs at the State Department. Simons was testifying before the Senate and House's Joint Economic Committee on Iran's energy sector and economy. "Putting the sanctions option front and center has had a significant impact," he said. "It's affected the political risk calculations of business and banks" by making it difficult for international companies to reach agreement on terms for new energy investments that would mitigate the high political risk of such deals. The threat of sanctions has also caused banks to downgrade Iran's credit rating, he added. Simons said US unilateral sanctions against Iran that began in the 1980s and the broad prohibitions on US business transactions in Iran imposed in the mid-1990s also have played a role in slowing global investment in Iranian energy investment. "US companies were certainly not investing in this period," he noted. The Iran-Libya Sanctions Act, a US law that threatened reprisals against non-US countries that sought to invest in Iran's energy sector, also played a role in tamping down foreign investment, he said, even though ILSA sanctions were never levied despite several high-profile energy investments by international oil companies. "There was a lot less involvement by the rest of the world than there would have been had we not gone down this road," Simons said. Simons said he would not answer questions in "an open session" of Congress on whether Iran's threat to use oil as a weapon in the nuclear dispute was credible. But he did note "the importance of oil and energy to Iran's economic engine." Iran has not ruled out using oil as a weapon in the dispute over its nuclear program, and oil market concerns about the potential for Iranian supplies to be disrupted helped drive crude prices towards the record highs of more than $78/barrel seen earlier this month. Oil and gas account for 80% of Iran's export revenues and its oil and gas exports represent about 20% of its Gross Domestic Product, said committee chairman Representative Jim Saxton, a New Jersey Republican. Simons insisted the US and its allies could "handle" a potential shutoff of Iran's 2.5 million b/d of oil exports by using "various methods at our disposal" including use of emergency crude oil reserves held by the member countries of the International Energy Agency. The US does not import any oil from Iran. --Cathy Landry, cathy_landry@platts.com For more news, request a free trial to Platts Nucleonics Week at http://nucweek.platts.com or subscribe now at http://www.platts.com/infostore/product_info.php?cPath=22_41&products_id=67 ------------ UK's HSE approves decommissioning of 560-MW Dungeness A nuke London (Platts)--25Jul2006 The UK's Nuclear Installations Inspectorate, part of the Health and Safety Executive, has given formal consent for British Nuclear Group to decommission the 560-MW Dungeness A nuclear power station in Kent once it ceases generation at the end of 2006, BNG said Tuesday. British Nuclear Group's site manager at Dungeness A, Nick Gore, said: "By the time the station ceases generating in December, it will have provided electricity safely for 40 years." He added that the application for decommissioning was a "transparent and inclusive process" for which BNG produced a "detailed Environmental Statement." The decision follows an application by the licensee, BNG, which has responsibility for decommissioning and nuclear clean-up, and operates the Dungeness A power station. The current owner of the station is the Nuclear Decommissioning Authority. The first stage of decommissioning is to remove all the fuel from the two Magnox reactors and transport it to Sellafield for reprocessing. BNG said current plans schedule this work to be completed by 2009, resulting in the removal of the vast majority of the radioactive inventory from the site. All plant and buildings, except for the reactor containment, will be removed by 2021, with final site clearance scheduled for 2111. BNG said it is working with the NDA, to "develop a business case to accelerate the site clearance process in line with the NDA's declared strategy." Dungeness is one of four Magnox power stations still generating in the UK. In May, the NII gave consent for another of the Magnox plants, the 420-MW Sizewell A nuclear power station in Suffolk, to be decommissioned. Both Sizewell A and Dungeness A are scheduled to stop production this year. The last Magnox plant to close was the 194-MW Chapelcross plant, which stopped production in 2004. Of the other Magnox plants, the 430-MW Oldbury plant is scheduled to shut in 2008 and the 1,240-MW Wylfa plant in 2010. The Nuclear Decommissioning Authority confirmed closure plans for Wylfa on July 21. For more news, request a free trial to Platts Power in Europe at http://www.platts.com/Request%20More%20Information/ or subscribe now at http://www.platts.com/infostore/product_info.php?cPath=2_31&products_id=55 ------------ NRC creating office for oversight of new reactor activities Washington (Platts)--24Jul2006 NRC is creating an office of new reactors by splitting off part of the Office of Nuclear Reactor Regulation, the agency announced July 24. NRR will focus on the oversight of the existing US nuclear reactors, while the new office, called NRO, will take responsibility for the licensing and oversight of new reactor activities. NRO is expected to be in place by January. Separately, NRC said it will create another deputy regional administrator position in the NRC Region II office to head new construction inspection activities. ------------ NRC to launch Office of New Reactors, to be ready by January 2007 Washington (Platts)--24Jul2006 The US Nuclear Regulatory Commission said Monday that it will reorganize its Office of Nuclear Reactor Regulation to create an Office of New Reactors by January 2007. The new office would ensure effective oversight of operating nuclear power plants and prepare for the industry's interest in licensing and building new nuclear power plants in the near term, it said. The agency also is adding a new organizational unit, headed by a Deputy Regional Administrator for Construction in its Atlanta office, to oversee inspections related to expected new construction of nuclear facilities, it said. "This change will ensure we maintain our focus on the safe and secure operation of existing nuclear power plants, while enhancing our effectiveness in processing the anticipated new plant licensing workload," said Luis Reyes, executive director for operations. The new Deputy Regional Administrator position and organizational unit in Atlanta will focus on the agency's Construction Inspection Program, announced earlier in 2006. This program would be responsible for the agency's oversight of any new nuclear power plant construction for the entire country, it said. The reorganized Region II office "will be better equipped to carry out construction inspection activities while maintaining its focus on ensuring safe operation of nuclear power plants in Region II," NRC said. NRC said it is expecting several applications for new nuclear power plants in late 2007 and early 2008, with initial construction activities "soon thereafter." For more news, request a free trial to Platts Nucleonics Week at http://nucweek.platts.com or subscribe now at http://www.platts.com/infostore/product_info.php?cPath=22_41&products_id=67 ------------