New ownership could revive Texas waste plan

Thursday, February 1, 2018

Edward Klump, reporter
E&E News

Waste Control Specialists LLC, after months in corporate limbo, may look at restarting its push to store high-level radioactive waste in West Texas.

That’s because an investment affiliate of J.F. Lehman & Co. recently acquired WCS, ending the company’s hazy status under Valhi Inc.

WCS asked the Nuclear Regulatory Commission last year to suspend — temporarily — the review of its high-level waste proposal, citing the cost and its limited financial resources. The company was waiting to see if a deal to sell WCS to EnergySolutions, a well-known industry player, would close. The transaction fizzled after a judge blocked it (Energywire, June 22, 2017).

Instead, WCS is joining J.F. Lehman’s portfolio. In a statement last week, Glenn Shor, managing director at J.F. Lehman, said the partnership "with WCS will ensure that the business has the resources required to support its long-term growth strategy across the government and commercial marketplace." The deal also gives WCS closer ties to NorthStar Group Services Inc., which is involved in the nuclear decommissioning business.

"This is not the end of the line for WCS as it still has much more to accomplish," Rod Baltzer, who had been CEO at WCS, said in a statement.

The request for a delay last year in the NRC’s high-level waste review was surprising because WCS had championed its potential to help store spent fuel from U.S. reactors, though Valhi had recorded operating losses from its waste segment for years. It remains to be seen how J.F. Lehman may help to boost volumes of various types of waste at WCS and perhaps pursue high-level storage. While a number of West Texas voices have touted potential economic benefits from the high-level waste plan, critics have blasted the idea over safety and environmental concerns (Energywire, Feb. 24, 2017).

Last year, J.F. Lehman announced that an investment affiliate had "recapitalized" NorthStar and a related entity in partnership with another firm. The new WCS deal means it and NorthStar are under a shared umbrella. J.F. Lehman is a private equity firm that has an interest in areas such as aerospace, defense and maritime holdings. Under the WCS deal, Valhi said the acquirer would assume WCS’s third-party indebtedness and take on certain liabilities.

Scott State, an executive with NorthStar, was listed last week by J.F. Lehman as CEO of WCS. Baltzer is no longer an employee or officer at WCS, though he is consulting during a transition period.

Efforts by E&E News to obtain further comments this week from J.F. Lehman and State about plans for high-level waste and the NRC process for WCS were unsuccessful. Baltzer said in a statement last April that WCS expected to go forward with the project as soon as possible after a sale, though EnergySolutions was the potential acquirer at the time.

One prominent WCS critic expects the push for high-level waste in West Texas to re-emerge now that new parties are involved.

"It seems likely to me that they will push for it," said Karen Hadden, executive director of the Texas-based Sustainable Energy and Economic Development Coalition. She added: "We remain concerned and ready to fight to protect Texas and New Mexico."

If there is movement with the application, Hadden called for the NRC to start the licensing process over in terms of scoping meetings and public notice. The application will need to be revised in light of new WCS ownership, she said, suggesting there could be questions on finances, technology and safety.

"The public deserves the opportunity to thoroughly examine what gets put forward and to comment on a fresh version of their application," she said.

NRC process

The NRC indicated this week that the WCS review process hasn’t been restarted. The commission is also reviewing documents from Holtec International about a different interim storage proposal for a site in New Mexico (Energywire, April 6, 2017).

Scott Burnell, an NRC spokesman, said via email the agency expects to "re-notice" and restart the environmental scoping process if there’s word that WCS wants to restart. He said the NRC is doing an acceptance check on the Holtec application, meaning a full review could start if it’s acceptable.

Issues around how to deal with potential interim storage and a permanent repository, such as Yucca Mountain in Nevada, remain tied up in Congress (Greenwire, Jan. 25).

Yesterday, the National Association of Regulatory Utility Commissioners issued a statement saying 20 years have passed since the federal government defaulted on a legal responsibility to store nuclear waste. NARUC said damages related to the government’s failure to act are in the billions of dollars and could rise substantially.

The association called on Congress to act, saying additional appropriations from the Nuclear Waste Fund already collected are needed to help with a review of the Yucca Mountain license application.

Hadden has opposed interim high-level proposals from WCS and Holtec, as well as the potential to use Yucca Mountain in the long term. She called for a "viable permanent repository" that has the right systems and geology for permanent disposal.

The Brattleboro Reformer newspaper in Vermont recently quoted State, WCS’s new CEO, as saying the new corporate setup wouldn’t reduce waste-removal prices for the Vermont Yankee nuclear plant decommissioning. That reactor ceased power generation in late 2014. State said the WCS deal would streamline the relationship between the company and NorthStar, according to the newspaper. Both companies hope to be involved in proposed decommissioning at the plant site.

WCS operates an existing low-level radioactive waste disposal business in Andrews County, Texas.

"The management of Waste Control will be 100 percent focused on the needs of NorthStar," State told the Brattleboro Reformer. "We will be able to better control and manage the activities for shipping waste and disposing of waste that comes out of Vermont Yankee."

Alex Harman, a partner at J.F. Lehman, in a statement last week expressed excitement at the idea of helping with the long-term success of WCS, including by "strengthening the partnership with NorthStar" on nuclear power plant decommissioning. State, in the same release, said WCS’s site has "significant capacity for growth."

Low-level waste should be a good business, according to Fred Beach, an assistant director for policy studies at the Energy Institute at the University of Texas, Austin. That could come from realms including medical and energy businesses.

Beach wondered about the likelihood of creating an interim site for high-level waste, saying it’s a tough business. He has suggested the United States look to close its fuel cycle for nuclear power and recycle fuel. If that isn’t politically feasible, he said Yucca Mountain could still be a permanent disposal site.

"WCS has a bright future and should reap synergistic benefits from the tighter ties with NorthStar and their plans for the nuclear power plant decommissioning market," said Baltzer, the former CEO.

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