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March 16, 2011

Neil Wilson, AAP
Herald Sun

JAPANESE and Australian share markets today regained some lost ground as confidence wavered by the hour with the Fukushima nuclear threat.

Japan’s Nikkei initially had its strongest rebound in a few years of 6.5 per cent while the two ASX key indexes were up by 1.12 per cent before falling back but still posting the Australian market’s first gains in eight days.

ASX indexes followed the Japanese market up, then down to finally rally again toward a positive close after a day of uncertainty in Tokyo.

The benchmark S&P/ASX200 index finished up 29.5 points, or 0.65 per cent, at 4,558.2 points, while the broader All Ordinaries index was up 34.1 points, or 0.74 per cent, at 4,644 points.

On the ASX 24 at 4.31pm, the March share price index futures contract was 32 points higher at 4,567 points, with 125,885 contracts traded.

The Nikkei jumped back from its luncheon slump to be 5.68 per cent higher despite deep concerns over a new earthquake and raised radiation levels from the damaged nuclear site 150km away.

Three fresh earthquakes shook the Tokyo area today at 12.50pm ( 2.50 pm Melb. time) and the crisis over fires in the nuclear plant goes on.

Some multinational firms – including Citigroup and ICAP – gave their expats the option of leaving and many sent their families away from the capital or Japan altogether. Some Japanese companies were redeploying workers away from Tokyo.

The pull back from yesterday’s losses was far from universal in Asian markets.

Singapore’s Straits Times index was up by 0.58 per cent late in the day’s trade, the Seoul composite by a healthy 1.77 per cent but Hong Kong’s Hang Sen was 0.22 per cent down.

Japan’s central bank again injected funds to maintain liquidity for domestic consumers and businesses, with 3.5 trillion yen $43.81 billion release into the economy, following the $183 billion investment two days ago.

Nikkei investors boosted international firms including car makers, with Toyota up 9.1 per cent, Nissan up by 6 per cent and and Honda by 3.9 per cent after days of lower share prices due to plant closures.

Manufacturers which supply 40 per cent of electronic components and 20 per cent of the world’s electronics goods also clawed back some of their losses, with Sony up nearly 9 per cent, Canon 3.1 per cent and Toshiba by 4 per cent.

The movement came after Wall Street closed down 1.1 per cent – a slighter drop than most feared – by rallying towards the end of its session on a positive economic outlook from the US Federal Reserve.

Plant operator Tokyo Electric claims the fire was quickly put out but more smoke was seen billowing from the plant just after 12.30pm (Melb. time) amid reports of storage ponds boiling in plant No.3 and continuing scheduled blackouts across Japan.

Tokyo Electric shares had plunged by 25 per cent in most recent trading, with its losses since the tsunami raising questions on whether it could remain viable.

International anlaysts were also questioning Japan’s AA2 credit rating from Moody’s and how the nation would be able to fund its reconstruction with a debt to GDP ratio already among the highest in the developed world. The nation’s low external debt and high domestic savings rate was pointed out as one iof its strengths.

Falls were smaller in the US overnight and investors were following the confidence of US Treasury officials in the American recovery.

Wall Street opened significantly lower but recovered somewhat during the day, helped by comments from the Federal Reserve that the US economy was on "firmer footing".

The Dow Jones industrial average lost 1.1 per cent to 11,855.42, the S&P 500 dropped 1.12 per cent to 1,281.87 and the Nasdaq composite index fell by 1.25 per cent to 2667.33.

CMC Markets chief strategist Micahel McCarthy said the possibility of a major meltdown disaster had receded somewhat in the minds of investors, though more fluctuations were possible.

"That’s not to make light of the humanitarian disaster that has already occurred, but in terms of the economy, at this stage it is not enough to derail Japan let alone the world," Mr McCrathy said.

Mr McCarthy said the market was ignoring ongoing deterioration in the Middle East’s political situation and the surprisingly soft oil price.

He said uranium stocks shone today on the ASX, regaining between a quarter and a third of their plunge on Monday and Tuesday.

Rio Tinto Ltd-majority owned Energy Resources of Australia was up 73 cents, or 10.33 per cent, at $7.80 and Extract Resources added 46 cents, or 5.75 per cent, to $8.46.

Paladin Energy gained 44 cents, or 13.5 per cent, to $3.70 after saying in late trade that it continued to believe the medium and long-term outlook for nuclear power remained positive.

"Recent events could further exacerbate the supply situation, ironically putting Paladin in an even better position with respect to global demand," the miner said in a statement on Wednesday.

Rio Tinto was up $1.53 at $78.94 and fellow mining giant BHP Billiton put on 60 cents to $43.57.

Banking stocks were mixed, with Commonwealth Bank up 25 cents at $50.00 and Westpac down 13 cents to $22.46, while ANZ inched one cent lower to $22.62 and NAB was seven cents firmer at $24.35.

Among energy stocks, oil and gas giant Woodside was up 37 cents at $41.95 while coal miner Macarthur Coal put on 59 cents, or 5.69 per cent, to $10.95.

The spot price of gold in Sydney at 4.35pm was $US1,397.40 per fine ounce, down $US17.37 from Tuesday’s closing price of $US1,414.77.

Preliminary national turnover was 4.49 billion securities worth $7.40 billion, with 844 stocks up, 404 down and 295 unchanged.

RT America March 16, 2011 Interview with Investigative Journalist Greg Palast

March 16, 2011

By ELIZABETH SOUDER

Dallas Morning News

New reactors are in the extreme expensive, and unless the government, vendors, investors and major clients share the burden, it’s hard to make a financial case to build in Texas’ deregulated electricity market.

The company has been negotiating for years with its Japanese vendor, Toshiba Corp., and investment partners, the utilities owned by the cities of San Antonio and Austin. NRG wants to share the financial risk of building the reactors. In Texas, power companies must build plants on their own and only make money by selling electricity.

Credit rating agency Moody’s Investors Service said: "In light of recent events and the capital needs nevertheless unfolding at TEPCO, we would not be surprised if TEPCO’s efforts to invest internationally were scaled back materially."

The massive expense

Both Texas projects require government loan guarantees because of the massive expense. The Department of Energy has the money to guarantee loans for probably one more nuclear expansion project. NRG is a front-runner in the competition.

"There’s lot of passions on this issue, and nuclear’s as much a political issue as things are a science issue," said David Johnson, a managing director at Protiviti business consulting firm.

March 11, 2011

By Nora Ankrum
Austin Chronicle

New coalition opposes nuke proposal

A new environmental coalition has formed in opposition to NRG Energy’s proposal that the city enter into a nuclear power purchase agreement with the South Texas Project. City-owned Austin Energy owns a 16% share of STP’s two operating units; NRG plans to build two new units there and is looking for customers to buy power from it. The Solar Sí Nuclear No coalition held a press conference Tuesday with representatives of some 14 different organizations present, along with former Austin Mayor Frank Cooksey (1985-1988) and Matagorda County resident Susan Dancer, who said the financial prosperity originally promised Matagorda residents when STP was built there have never materialized; meanwhile, she said, "our environment has been permanently disadvantaged." Cooksey recalled STP’s cost overruns, noting that he served as mayor during the time when AE’s electric rates first absorbed the high costs. He also pointed to safety concerns: "I think it is immoral to create these [spent] fuel rods without having an adequate solution to safely store them and render them harmless," he said. NRG has distanced itself from STP’s past, saying that the new design is based on a unit already built in Japan without the budget and timing mishaps associated with STP. Nonetheless, the SEED Coalition’s Karen Hadden said the PPA could cost the city $13 billion to $20 billion it might otherwise invest in wind and solar. AE spokesman Carlos Cordova confirmed those numbers as "in the ballpark for the proposal that we have heard."

Events in Japan cast a long shadow

March 18, 2011

By Nora Ankrum
Austin Chronicle

A week before the earthquake in Japan triggered the world’s worst nuclear emergency in 25 years, the nuclear industry had cause for celebration: The U.S. Nuclear Regulatory Commission announced March 2 that two proposed reactors at the South Texas Project had passed a final environmental impact assessment, bringing the project an important step closer to obtaining a construction and operating license. It was a milestone for the project, which in 2007 was the first in almost 30 years to file an application with the federal agency; nonetheless, it still has a way to go, and hopes for its success – which have hinged on whether utilities like Austin Energy would choose to take part – have now been eclipsed by events on the other side of the world.

Austin Energy owns 16% of the nuclear power plant’s two reactors, which have operated at Matagorda Bay since the late Eighties. NRG Energy owns 40% and is behind the proposal to double the site’s number of reactors, in partnership with Toshiba. NRG hopes to bring the first reactor online in 2016. First, however, the project needs the license, which is dependent on last week’s environmental impact statement as well as completion of a safety evaluation report and a ruling from the federal regulatory commission. NRG Energy also needs customers willing to buy the power. According to Juan Garza, NRG’s president of advanced technology, "It’s important to us that we get [power purchase agreements] … to show the federal government that there is a market for what we’re trying to do." Now, the crisis in Japan – where engineers at several reactors have been struggling to prevent nuclear meltdowns – could make that task difficult. As Reuters reported Monday, both Standard & Poor’s and Moody’s bond rating houses are now making gloomy predictions for U.S. nuclear projects like STP, suggesting they are at risk of rising costs, delays, and even cancellation.

While Austin Energy General Manager Larry Weis said Monday that the crisis in Japan is not affecting his outlook on STP specifically, he acknowledged it is a likely setback for the entire industry. NRG proposed last month that Austin Energy enter into a power purchase agreement for energy expected to eventually come from the new reactors. Such a contract would theoretically shield AE from unknowns by allowing it to pay a fixed price – particularly important given the energy utilities’ rocky past with the South Texas Project, which for many years was plagued with cost overruns and delays. Over time, however, the nuclear power plant has become one of Austin Energy’s lowest-cost resources, and as NRG officials point out, the plant was named one of "America’s Safest Companies" last year. Garza also says that the new units – advanced boiling water reactors – would show vast improvements over the older ones because they’d feature the same modular design as four reactors already built within budget and on time in Japan.

According to NRG spokesman David Knox, none of those four reactors are among those making headlines right now; those units sit farther from the earthquake’s epicenter and are younger, as well. Nonetheless, the events unfolding across the Pacific – the mass evacuation of residents around the affected power plants and the actions of those risking their lives to cool the reactors – make plain the dangers both of living near and of working in a nuclear plant. As pointed out over the weekend by Karen Hadden, executive director of the Sustainable Energy and Economic Development Coalition, "Any reactor can have a meltdown."

The SEED Coalition has joined with other environmental and public interest groups to oppose any Austin Energy involvement with the new reactors, citing both safety and financial concerns. The nuclear commission’s Atomic Safety and Licensing Board has granted hearings on three of the SEED Coalition’s contentions: "fire safety" (asking if the power plant can adequately manage a fire emergency); "co-location" (asking how an emergency at one reactor might affect three others); and "need for power" (the South Texas Project must explain the need for adding 2,700 megawatts of power when new building codes are likely to save nearly as much simply through energy efficiency). The first hearing is likely to take place this fall, says Hadden.

The SEED Coalition is also opposing efforts to extend the operating licenses for the two existing reactors by 20 years (to 2047 and 2048, respectively), citing concerns about a cooling reservoir leak and tritium, a radioactive isotope, found in nearby wells and the Colorado River. The Nuclear Regulatory Commission is accepting public comment on the renewal through April 1. The licensing effort could also be yet another potential casualty of the events in Japan. According to a weekend statement from Moody’s, "issuers that recently filed for a 20-year operating license extension with the NRC are likely to receive additional scrutiny."

While environmental concerns loom large in arguments against the South Texas Project, NRG cites environmental reasons in its favor. "To me, there’s an element of emergency," says Garza, "in that it’s an opportunity to build 2,700 megawatts of capacity that essentially are carbon-free." With Austin Energy’s climate protection goals in mind, NRG has also offered to buy the utility’s share of the coal-burning Fayette Power Project.
So far, AE isn’t biting. While the utility remains open to a nuclear power purchasing agreement, says Weis, it simply isn’t in the position to be "shopping" for baseload resources. With a goal of beginning construction in 2012, NRG officials have expressed hope of securing a deal with AE this summer. Weis, however, says the utility feels no such urgency. Right now, he says, Austin Energy is prioritizing its renewable energy goals, an effort made possible by the recent passage of an affordability forecast allowing the utility to move forward with its generation plan, several years in the making. "It’s kind of a timing thing," says Weis. "We can’t add all these things at the same time."

For more on the South Texas Project’s license renewal, or to make comments, call the Nuclear Regulatory Commission at 301/415-6337 or see austinchronicle.com/s/?e=1162263.