News Roundup: Nuke on its way to Wyoming

Nevada mining tax; lease nominations for Bears Ears; Aridification Watch

THE NEWS: Judging by the crowd assembled in person and virtually—a U.S. senator, a governor, a couple of CEOs, the secretary of the Department of Energy, and even Bill Gates—there was something big going down in Wyoming. Maybe Gates and Kanye West were going in to buy the entire Cowboy State, also known as a “tax haven with a view?” 

Not quite. The brouhaha was to announce that Wyoming had been chosen to host the first-of-its-kind advanced nuclear reactor to be developed by Gates’ company, TerraPower, and installed in a retiring coal plant. The demonstration project will include a 345-megawatt Natrium reactor, with integrated molten salt energy storage that can boost output rapidly when needed, and is expected to be operating in 2028. Wyoming Gov. Mark Gordon touted it as a way to replace jobs and revenue lost as the state’s coal industry is caught in a downward spiral. 

THE CONTEXT: Is this news? Yes. Is it worthy of all the brouhaha? Not really. 

Nuclear energy is wild and crazy stuff: You bombard a uranium atom with a neutron, which causes it to shatter and send out a sort of neutron-shrapnel that shatters other uranium atoms and sets in motion a chain reaction that converts mass into energy—oodles of it. Since nothing is burned, the process itself emits no carbon or other greenhouse gases. 

Most nuclear reactors in the U.S. are light water reactors, meaning they are cooled with water and use fuel that is enriched to 5 percent of uranium-235. The Natrium design is a sodium-cooled fast reactor, which uses richer fuel (10-20 percent U-235). By separating the reactor from other components of the power plant, the Natrium saves on cost. And, thanks to the molted salt storage feature, it can ramp output up and down to smooth out the troughs and peaks associated with wind and solar power, something a conventional reactor can’t do efficiently. 

Yet the advanced reactors work on the same principle as conventional ones and, according to a recent report from the Union of Concerned Scientists, the Natrium design is potentially more dangerous than a conventional reactor, less fuel efficient, and produces more spent fuel (i.e. radioactive waste) for each unit of electricity generated. 

As far as reactors go, the one planned for Wyoming—at 345 megawatts—is relatively puny. Palo Verde Nuclear Generating Station outside of Phoenix has nearly ten times that capacity. Heck, the Chokecherry and Sierra Madre wind facility currently being built by Power Company of Wyoming near Rawlins will have a total capacity of 3,000 megawatts. From what I can tell, neither the governor nor the secretary of Energy showed up for that groundbreaking, despite the fact that the wind project will create at least as many jobs and likely more tax revenue for the state. 

At this week’s announcement, Sen. John Barrasso—while somehow managing to invoke Ronald Reagan—hailed the reactor as having the potential to revive Wyoming’s struggling uranium industry, thereby bringing in more mining jobs and revenue to offset those lost in the state’s massive coal mines. Yet even if all the reactor’s fuel were to come from Wyoming mines, it wouldn’t amount to much. 

In 2019, Wyoming’s uranium industry employed just 125 people and produced about 173,000 pounds of uranium—nearly all of the U.S. production for that year. Producers paid no federal royalties on that product and together generated less than $200,000 in severance taxes for the state (now that number is zero since the legislature suspended the tax on uranium through 2026). The state’s coal mines, meanwhile, pay hundreds of millions in federal royalties and severance taxes and employ some 5,000 people

“Perhaps the most dangerous aspect of this latest claim of a ‘silver bullet’ to save Wyoming’s economy,” noted Marcia Westkott, Chair of the Powder River Basin Resource Council, “is that it once again diverts attention away from our very real crisis in revenue, jobs and community survival.”

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And on that note: A bid to retrofit the San Juan Generating Station coal plant with carbon capture equipment in order to fend off its 2022 retirement is falling further behind schedule and failing to attract investors, according to a recent report by the Institute for Energy Economics and Financial Analysis. 

For a deep-dive into the proposal, carbon capture, and enhanced oil recovery, please check out the Land Desk’s Carbon Convolution Part I and Carbon Convolution Part II.

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An oil and gas investment company has asked the Bureau of Land Management to auction off drilling rights on some 40,000 acres of land within the original Bears Ears National Monument boundaries. In late February, a company called Aventine Investments nominated the parcels in the Cottonwood and Butler wash drainages north of Bluff, Utah, and east of the shrunken national monument. The area is rich in cultural sites. 

Nomination is merely the first step in the leasing process and the nomination is currently pending, according to BLM records, yet the move does show that the industry is potentially interested in drilling in the area. Currently all federal oil and gas leasing is on hold while the Biden administration reviews the mineral leasing program. The administration also is considering restoring or expanding the original boundaries of the national monument, which would take the nominated parcels off the table for good

Meanwhile, uranium mining interests have filed six new mining claims within the original boundaries this year, according to a report by KUER’s Kate Groetzinger, lending a greater sense of urgency to the drive to get Bears Ears back as soon as possible. 

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Nevada lawmakers finally passed a new tax on gold and silver mines in that state, the proceeds from which will go to public schools. Nevada is pockmarked by massive open pit mines that together produce about 75 percent of the gold in the U.S., along with a mind-blowing amount of pollution. The owners of those mines—huge, multinational corporations—collectively grossed about $7.6 billion in 2019 from Nevada gold and silver. Yet because they only pay taxes on net proceeds, their effective severance tax rate was a measly 1.6 percent or so. And, thanks to that pesky old 1872 General Mining Law, these corporations paid zero royalties on those minerals.

That means that the state has been bringing in just about $61 million per year from the mining tax. Now compare that to the aforementioned coal mines in Wyoming (as well as oil and gas drillers), which pay a bonus to the federal government when they lease the rights to extract Americans’ coal, then pay a 12.5-percent federal royalty rate on every ton of coal they ship to market (half of which comes back to the state), and also pay a 7 percent severance tax to the State of Wyoming. 

Nevada’s new tax structure will just about double its mining tax revenues, which is a big improvement, but still isn’t on par with what other miners and drillers pay. But that didn’t stop the President of the Nevada Mining Association from telling the Elko Daily Press that his industry was giving the state a “significant, significant gift.” (Insert eye-roll emoji here). 

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ARIDIFICATION WATCH: 

It’s not even officially summer yet, and the entire West is already baking. Phoenix hit 105 degrees and recorded its first heat-related fatality of the year. Despite experiencing a decent winter in terms of precipitation, the Northwest is rapidly drying out, thanks to scorching temperatures—90s in Portland and 100+ in Eastern Oregon. A fire broke out in the Columbia River Gorge, forcing evacuations, and dam operators along the Columbia are downgrading projections for summer hydropower output, driving up power prices in the region. California’s Lake Oroville is shrinking rapidly and state water officials worry it will drop so low that the dam won’t be able to produce power at all. 

It’s gonna be a long, hot, smoky summer, I’m afraid. 

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And my home-river is not immune: The San Juan Mountains of southwestern Colorado got a little bit of precipitation and colder temperatures in recent weeks, keeping the snow around for just a little bit longer. But it’s not enough. Streams are about to hit their spring runoff peak, if they haven’t already, and then the levels will start falling fast unless the region gets a ton of summer moisture. 

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And, finally, if you want to see some of the treasures that were sealed up in a water grave by Lake Powell, now’s the time. The reservoir appears to have hit the bottom of its trough and the piddling spring runoff is bringing levels back up, slightly. Of course, the way things are going, next year the reservoir will be lower still, so more will be exposed.