Green River nuclear power proposal sparks big questions

Money » State water engineer must determine if plan is economically feasible.
This is an archived article that was published on in 2010, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A fledgling company's plan to build a 3,000 megawatt nuclear power plant near the Green River in eastern Utah is generating more questions than answers.

What would happen to the spent nuclear fuel from the two-reactor plant proposed by Utah-based Blue Castle Holdings?

If the Utah Division of Water Rights deems there is enough water in the Green River for the plan, what happens to 50,000 acre feet of water required each year to cool it?

Who would get the electricity generated by the plant?

And last, but not least, is the proposal economically feasible, or would it require federal loan guarantees and tax incentives? And are those means available?

Spent fuel » The spent fuel rods would remain at the proposed site, which is about 5 miles northwest of the small Emery County town that takes its name from the river that runs through it.

Should the Green River plant be built -- a fast-track scenario would put it online in 2020, although historically such projects have taken longer -- spent radioactive rods would be stored in dry casks on a 1.5-acre pad at the plant, said Blue Castle CEO Aaron Tilton.

Although the federal government has struggled for decades to establish a storage site at Yucca Mountain, Nev., it is questionable whether the controversial facility will ever open. The casks could be safely stored at the Green River plant for 100 years, say Blue Castle officials.

The waster's fate » Unlike some nuclear reactors, all the water that would be used annually by the plant -- equal to the capacity of East Canyon Reservoir -- would be given off as steam after cooling the nuclear reactor.

It's unknown as this point which of five reactor designs certified by the federal Nuclear Regulatory Commission would be built by Blue Castle. Some of those designs return heated water to its source.

John Flitton, an attorney representing HEAL Utah, an environmental organization protesting the state water application, argues that 50,000 acre feet is a significant amount for arid Utah and not the best of use of a resource that already may be over-allocated.

Flitton is among dozens of individuals and organizations, including the U.S. Fish and Wildlife Service and the federal Bureau of Reclamation, that are protesting the proposed water diversion.

During 2002, the Green River's second-driest year on record, the proposed 50,000 acre feet would have been equivalent to 10 percent of the river's total flow. But in an average year, the volume required for the plant would be less than 2 percent of the river's water. (An acre foot --- 365,000 gallons -- is enough to supply two typical households for one year.)

During dry years, there may not be enough Green River water to go around, Flitton said. "For water users up and down the Green River, it's not a pretty picture."

But Blue Castle officials counter that 2002 was a "once-in-100-years" occurrence and a planned 2,000-acre foot reservoir on site would mitigate such shortfalls. The planned lifetime of the reactors is 40 to 60 years, after which they would be dismantled.

Construction of the plant depends, at least initially, on whether the Utah Division of Water Rights approves diversion applications by Kane and San Juan counties, which have agreed to lease water to Blue Castle.

"It's one of the very most complicated applications the state engineer will ever work on," said John Mann, assistant state water engineer.

Paying for the plant » The decision hinges on criteria beyond how much of the Green River is already allocated for other water rights or potential environmental impacts. Among them, according to Utah law, is whether the project is economically feasible.

That goes to potential investors and where the electricity would be sold. Presently, Tilton concedes, none of the plant's $16 billion to $20 billion construction cost is in hand. Rather, Blue Castle plans to secure the Green River water, then obtain a license from the NRC before it begins to raise money to build the plant.

Nils Diaz, a former chairman of the NRC and a minor stake holder in Blue Castle, said the "step-by-step process" is necessary to reduce financial risk for investors. "No major financial commitments will be made without a [NRC] license."

The issue if further complicated, however, by the fact that Utah law disallows water diversions "for purposes of speculation." That means the state water engineer must determine whether Blue Castle's multi-faceted, 10- to 20-year business plan makes financial sense in a growing and shifting energy market.

"Some of this stuff is on the subjective side," Mann conceded.

But Jerry Olds, a former state water engineer who is now a consultant for Blue Castle, said the Division of Water Rights does not have to prove beyond a reasonable doubt that the nuclear plant is financially viable.

But rather, "Is it reasonable to believe the applicants have the ability to move the project forward?"

Blue Castle officials are optimistic, according to Diaz, because nuclear power plants "are big money makers" and a streamlined NRC licensing process makes them more advantageous for investors.

Supply and demand » The West will be in need of new power sources in the coming decades, Blue Castle officials say. They plan to sell up to 50 percent of the electricity in Utah.

Nuclear power will be at the forefront of the nation's power base, they say, because it doesn't put CO2 into the atmosphere, like coal-fired plants.

Nonetheless, Diaz conceded that the upfront capital cost has to be overcome.

Those construction costs could keep Blue Castle from becoming a reality, said Christopher Paine, nuclear program director at the National Resources Defense Council. Like other nuclear power projects, the huge expense and risks mean banks and other private investors likely won't buy in. That leaves taxpayers to underwrite the plant in federal loan guarantees.

Selling electricity in the West is competitive, Paine noted, because there are many sources, including hydro power. And the future will include power from wind, solar and geothermal plants.

"It sounds like a high-risk project if they're counting on [electricity] sales in a competitive market," he said of the Blue Castle project. "If federal loan guarantees are not available, it's going nowhere."