May 4, 2013

Barry Halvorson
Bay City Tribune

A federal law dating back to the Cold War is being used as the basis for the Nuclear Regulatory Commission to oppose the licensing for units 3 and 4 of the South Texas Project.

In a news release issued by the SEED Coalition, a group that has intervened in the licensing process, along with the South Texas Association for Responsible Energy and Public Citizen, the NRC told an independent panel of judges assigned to hear the case that the applicant for the project, Nuclear Innovation of North America (NINA) "is subject to foreign ownership control or domination requirements and does not meet the provisions of the Atomic Energy Act."

"This NRC notice is great for us as opponents of two proposed reactors at the South Texas Project," said Karen Hadden, executive director of SEED. "We hope that we’ll soon see clean, safe energy developed in Texas instead of dangerous nuclear power. We must prevent Fukushima style disasters from happening here."

NINA Chief Executive Officer Mark McBurnett said his company does meet the standards and such questions being raised are simply part of the licensing process.

"We’ve had a dialogue going with the NRC for a couple of years on this," McBurnett said. "We pressed the NRC position to get this ultimately resolved. And NINA is committed to seeing this project through and fully expects to resolve this issue."

In looking at the project, Buddy Eller, STP General Manager for communications and external affairs, said the Matagorda County plant was actually designed with the proposed expansion included in the original plans for the site.

"It was designed for four units," Eller said. "We have the water, the transmission lines and the land to support the two additional units."

SEED, the Sustainable Energy and Economic Development Coalition, gives an Austin address on its website. The site describes SEED as being a group that "works for clean air and clean energy in Texas" and an "advocate for energy efficiency, renewable solar, wind and geothermal power. We fight dirty coal power plants and dangerous nuclear plants."

At the local level, Matagorda County Judge Nate McDonald said he is unaware of any opposition to the licensing and construction of units 3 and 4.

"The support in Matagorda County is complete and unadulterated," the judge said. "Everyone I come in contact with only is concerned with the questions of ‘if’ and ‘when’ with the follow up being better sooner rather than later, I’ve never had anyone in my presence speak against it."

McDonald added units 3 and 4 will be an important part of the area’s future in terms of both investment dollars and employment.

"It would be another economic development cornerstone for the county," he said. "It is a project that would benefit several generations of Matagorda County citizens. A plant like this is going to be operating 40 to 60 years or more and that means billions of dollars of investment and tens of millions of dollars in terms of salaries and jobs. It is a huge, huge project for us and a very favorable one."

While an independent company, McBurnett said NINA is 90 percent own by NRG, a North American based company. The interveners (opponents) of the license application are claiming that it is actually owned by the Japanese Company Toshiba North America Engineering (TANE) based on funding. He explained that Toshiba does have a 10 percent stake in the STP expansion and is loaning NINA the funds to pay for the licensing process.

"Our position is that we are not a foreign owned company," McBurnett said. "Our ownership is domestic. This is a point on which we do not agree with the NRC position. And that is why you have this hearing process.

During the licensing process, McBurnett said, someone can intervene and then the NRC has to appoint an independent panel of judges to hear and rule on the case.

"There are three participants," he said. "The intervener, the applicant, which in this case is NINA, and the NRC staff. Each presents its arguments before the judges, who then make a ruling. After that, there is a period to appeal that ruling. But it is an independent review process."

McBurnett added all sides are anticipating the hearing will be heard sometime in a September to October time frame.

The interveners are basing their arguments on TANE’s funding the licensing process. TANE is a wholly owned subsidiary of Toshiba America, Inc, a Japanese corporation. Opponents contend that this makes them ineligible for licensing.

"Federal law is clear that foreign controlled corporations are not eligible to apply for a license to build and operate nuclear power plants. The evidence is that Toshiba is in control of the project and this precludes obtaining an NRC license for South Texas Project 3 and 4," said Brett Jarmer, an attorney representing the interveners. Attorney Robert Tye added, "Foreign investment in U.S nuclear projects is not per se prohibited; but Toshiba is paying all the bills for the STP 3 and 4 project. This makes it difficult to accept that Toshiba doesn’t control the project."

"Foreign ownership, control or domination policy is spelled out in the Atomic Energy Act (AEA) of 1954," said Tom Smith, director of Public Citizen’s Texas Office. "In Section 103d it says that no license may be issued to an alien or any corporation or other entity if the Commission knows or has reason to believe it is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government."

While not opposed to the process that is taking place, McBurnett did say the law being used was passed in a different political climate.

"When it was passed, we were in the middle of the Cold War," he said. "The provisions concerning not allowing foreign control was based on opposing the Soviet Union and preventing them from gaining access to either our nuclear materials, such as enriched Uranium, or our technology at the time.

"Today, you are looking at an extremely integrated industry where we are actually sharing information so that we can continue to improve both quality and safety."

The interveners’ release said the factors that will be considered in the hearing include the extent of foreign ownership, whether the foreign entity operates the reactors, whether there are interlocking directors and officers, whether there is access to restricted data and details of ownership of the foreign parent company.