Scandalous conflicts of interest in Australia’s advice from USA on nuclear submarines.

To an extraordinary degree in recent years, Australia has relied on high-priced American consultants to decide which ships and submarines to buy and how to manage strategic acquisition projects. In addition to the six retired U.S. admirals, the government of Australia has hired three former civilian U.S. Navy leaders and three U.S. shipbuilding executives.

RETIRED U.S. ADMIRALS ADVISE AUSTRALIA ON DEAL FOR NUCLEAR SUBMARINES,

Washington Post, By Craig Whitlock and Nate Jones 19 Oct 22, Since 2015, Australia has hired the admirals and other former Navy officials as high-dollar consultants on shipbuilding,

Two retired U.S. admirals and three former U.S. Navy civilian leaders are playing critical but secretive roles as paid advisers to the government of Australia during its negotiations to acquire top-secret nuclear submarine technology from the United States and Britain.

The Americans are among a group of former U.S. Navy officials whom the Australian government has hired as high-dollar consultants to help transform its fleet of ships and submarines, receiving contracts worth as much as $800,000 a person, documents show.

All told, six retired U.S. admirals have worked for the Australian government since 2015, including one who served for two years as Australia’s deputy secretary of defense. In addition, a former U.S. secretary of the Navy has been a paid adviser to three successive Australian prime ministers.

A Washington Post investigation found that the former U.S. Navy officials have benefited financially from a tangle of overlapping interests in their work for a longtime ally of the United States. Some of the retired admirals have worked for the Australian government while simultaneously consulting for U.S. shipbuilders and the U.S. Navy, including on classified programs.

One of the six retired U.S. admirals had to resign this year as a part-time submarine consultant to the Australian government because of a potential conflict of interest over his full-time job as board chairman of a U.S. company that builds nuclear-powered subs.

Australia has leaned heavily on former U.S. Navy leaders for advice during its years-long push to upgrade its submarine fleet, a seesaw effort that has rattled long-standing alliances and remains beset by uncertainty. After abruptly canceling a pact with France last year, Australia is now trying to finalize a deal with the United States and Britain to build a fleet of nuclear-powered submarines that could cost an estimated $72 billion to $106 billion, when adjusted for inflation over the length of the program.¹

The outcome will have global ramifications and could alter the military balance of power among the United States, its allies and China. Helping the Australians build nuclear-powered submarines would enhance U.S. national security in Asia overall but could strain U.S. shipyards and delay the Pentagon’s own plans to add more subs to its fleet, according to U.S. military officials and defense analysts.

The Australian government has kept details of the Americans’ advice confidential. The Post was forced to sue the U.S. Navy and State Department under the Freedom of Information Act (FOIA) to obtain documents that shed light on the admirals’ involvement.

Under federal law, retired U.S. military personnel as well as reservists must obtain approval from the Pentagon and the State Department before they can accept money or jobs from foreign powers. The law applies to retirees — generally those who served at least 20 years in uniform — because they can be recalled to active duty. Records show that each of the six retired admirals followed the rules and received U.S. authorization to work for the government of Australia.

Between 2015 and 2021, the Navy received 95 applications from retirees to work for foreign governments — and approved every one, according to the documents that The Post obtained under FOIA. Government lawyers fought the release of the records, arguing that they were of little public interest and that disclosing basic details would violate the retirees’ privacy

For three of the retired admirals on Australia’s payroll, the U.S. Navy spent less than a week reviewing their paperwork before granting permission, the documents show. Two of the admirals applied to work for the Australians within one month of their retirement from the military.

Officials at the White House and the U.S. Navy declined to comment for this article.

Compared with the U.S. Navy, which has about 290 deployable ships and submarines, Australia’s fleet is small, with only 43 vessels. But Australia’s strategic importance looms large because of its proximity to the Indian and Pacific oceans, as well as the world’s busiest shipping lanes, near the contested waters of the South China Sea.

If Australia acquires nuclear subs, it will become the seventh country to do so. With only 26 million people, Australia would be by far the least populous member of the club.

To an extraordinary degree in recent years, Australia has relied on high-priced American consultants to decide which ships and submarines to buy and how to manage strategic acquisition projects. In addition to the six retired U.S. admirals, the government of Australia has hired three former civilian U.S. Navy leaders and three U.S. shipbuilding executives.

Since 2015, those Americans have received consulting deals worth about $10 million combined, according to Australian contracting records posted online.

The six retired U.S. admirals who have worked for the Australian government declined to be interviewed or did not respond to requests for comment.

Some Australian lawmakers and defense analysts have expressed doubts about whether the U.S. consultants have been worth the expense. The Americans’ recommendations have influenced a series of ill-fated decisions by Australian officials that could delay the arrival of any new submarines until 2040, almost a decade later than planned.

“We were paying a lot of money [for advice] and it wasn’t obvious to me that we were getting value for money,” said Rex Patrick, a former member of the Australian Senate who has criticized the government’s submarine acquisition plans.

$6.8 million for advice on an aging fleet

In September 2021, after years of futile attempts to replace its aging fleet of six submarines, the government of Australia announced two decisions that surprised the world.

First, it abruptly canceled a long-standing $66 billion agreement to buy a dozen French diesel-powered subs. Then it revealed it had reached a historic accord instead to acquire nuclear propulsion technology for submarines from the United States and Britain……………………………………………….

As Australia negotiates with the United States, it is paying for expert advice from two people who once served in American uniforms: retired U.S. admirals William Hilarides and Thomas Eccles……………………………………….

The influx of American shipbuilding consultants in Australia began eight years ago…………………………………………………………………………………..

The Australian government created additional naval advisory committees — and stocked them with Americans.

In October 2016, Australian officials announced a new Naval Shipbuilding Advisory Board with Winter, the former Navy secretary, serving as the chairman. He was joined by three retired admirals: Eccles, Hilarides and Sullivan.¹³………………………………………

Marcus Hellyer, a senior defense analyst with the Australian Strategic Policy Institute, a nonpartisan think tank based in Canberra, said the advisory panels could have used more European perspectives to balance out those of the Americans. Unlike the U.S. Navy, he noted, the Australian navy does not design its own ships from scratch and is accustomed to relying on foreign models.

“It’s a very different kettle of fish to the U.S. system,” he said.

A carousel of consultants

By 2019, Australia’s landmark submarine deal with France appeared to be in jeopardy. Delays plagued the design phase. Projected costs rose. Doubts spread about whether the Shortfin Barracudas, which the Australians dubbed their Attack class of subs, would be capable of deterring China’s more imposing undersea fleet.

The American carousel of hired help continued to spin. Sullivan, the retired vice admiral, left the shipbuilding advisory board in 2019. That same year, Johnson resigned as Australia’s deputy defense secretary. But the Australian government added three more U.S. civilian consultants to its advisory panels.

Australian lawmakers grew impatient with the submarine program’s delays and irritated by the Australian government’s unwillingness to let its highly paid U.S. advisers answer questions.

The American carousel of hired help continued to spin. Sullivan, the retired vice admiral, left the shipbuilding advisory board in 2019. That same year, Johnson resigned as Australia’s deputy defense secretary. But the Australian government added three more U.S. civilian consultants to its advisory panels.

Australian lawmakers grew impatient with the submarine program’s delays and irritated by the Australian government’s unwillingness to let its highly paid U.S. advisers answer questions.

‘It’s confidential’

In June 2021, worried about the fate of the submarine agreement with France, the Australian Senate insisted on hearing directly from Hilarides and senior Australian defense officials.

Lawmakers wanted answers: Had the American consultants urged the Australian government to consider modifying, or even killing, the Attack-class submarine deal?

Testifying remotely from the United States, Hilarides was as tight-lipped as Winter had been.

“Because that advice is used to support government decision-making, it’s confidential,” Hilarides said.

Three months later, the Australian government canceled the submarine contract with the French. It also announced a new three-way defense alliance with the United States and Britain, including an agreement to admit Australia to the exclusive club of nations with nuclear-powered submarines.

Only four other countries — China, Russia, France and India — operate nuclear subs. Brazil is trying to develop nuclear reactors for submarines, but its progress has been slow.

Left undecided was whether Australia would buy U.S. or British nuclear subs, and where they would be built. But defense analysts predicted the United States would probably win out.

Australian lawmakers soon began to raise questions about the American consultants and their connections to the U.S. submarine industry.

Donald, the retired four-star admiral on Australia’s Submarine Advisory Committee, has also served as chairman of the board of Huntington Ingalls Industries since 2020. The defense contractor, based in Newport News, Va., is the maker of Virginia-class submarines, the same model that the government of Australia was now thinking about buying.

At a parliamentary hearing in October 2021, a senior Australian defense official acknowledged that Donald’s role with Huntington presented a potential conflict of interest. But the official said the Australian government and Donald hadn’t yet decided if it was necessary for him to resign as a consultant.

Donald remained on the committee for six more months. In his written response to questions, Donald said he resigned in April to avoid any conflicts after “it became evident” his committee “would need to become involved in providing independent critical assessment” on acquiring nuclear-powered subs.

But Australia is still paying other Americans for advice on how to negotiate with the U.S. government.

Winter, the former U.S. Navy secretary, registered with the U.S. Justice Department in September 2021 as a foreign lobbyist working for the Australian prime minister’s office. In his disclosure form, Winter said he would be paid $6,000 a day, plus expenses, to support Australia during its nuclear submarine talks with Washington.¹⁵………………………………………………………

 Australia will almost certainly have to buy its first nuclear subs off American or British production lines.

U.S. Navy and British Royal Navy officials, however, say their shipyards are booked solid making their own submarines. The only way to squeeze in orders from Australia would be to spend billions expanding U.S. or British shipyards.

Hellyer, the Australian defense analyst, said it is hard to envision a scenario under which Australia would receive its first nuclear submarine before 2040. With the Collins-class vessels scheduled for retirement a decade from now, that could leave Australia without submarines for eight years.

“I can’t really see what the way forward is at the moment,” he said. “The whole thing has been completely disastrous.”

About this story

Photos used in the card illustrations from Department of Defense.

Editing by David Fallis and Sarah Childress. Research by Alice Crites. Copy editing by Martha Murdock and Christopher Rickett. Photo editing by Robert Miller and Wendy Galietta. Video editing by Jason Aldag. Design and development by Frank Hulley-Jones, Stephanie Hays and Talia Trackim. Design editing by Christian Font and Matt Callahan. Project management by Wendy Galietta.  https://www.washingtonpost.com/investigations/interactive/2022/australia-nuclear-submarines-us-admi

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Australian taxpayers up for $170Billion, for American nuclear submarines. No problem?

Australia’s Aukus nuclear submarines could cost as much as $171bn, report finds

Australian Strategic Policy Institute report calls project ‘most complex endeavour Australia has embarked upon’ Guardian, Tory Shepherd, Tue 14 Dec 2021 

Australia’s eight planned nuclear submarines will cost $70bn at an “absolute minimum” and it’s “highly likely” to be more than that, defence analysts say.

With inflation, the cost could be as high as $171bn, according to a new report from the Australian Strategic Policy Institute.

The thinktank’s report contained a series of estimates ranging from low to high and conceded that estimating the final cost of the project is necessarily an “extremely assumption-rich activity”…………

The prime minister, Scott Morrison, has said the planned nuclear-powered submarines, part of the Aukus deal with the United States and the United Kingdom, would likely cost more than the scrapped plan for conventional submarines, which would have cost $90bn……..

Australia will partner with either the US or the UK to buy their boat designs, and a nuclear-powered submarine taskforce is working through the details

“We haven’t determined the specific vessel that we will be building, but that will be done through the rather significant and comprehensive program assessment that will be done with our partners over the next 12 to 18 months,” Morrison said in September.

“Now, that will also inform the costs that relate to this, and they are yet to be determined.”

The authors of the Aspi report, Implementing Australia’s Nuclear Submarine Program, wrote that while the Aukus deal has seemed to move fast, the enterprise would still be “a massive undertaking and probably the largest and most complex endeavour Australia has embarked upon”.

“The challenges, costs and risks will be enormous. It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability…….

The Aspi report co-author Dr Marcus Hellyer told Guardian Australia the government needed to work out its priorities and would need to balance capability needs, scheduling and the Australian industry content. He emphasised that picking which submarine to build was “secondary” to picking a strategic partner.

The US is building submarines at a rate 10 times higher than the UK, he said……….

The report canvasses other issues that will need to be resolved.

There are likely to be legislative changes needed to allow nuclear reactors in Australia. The government should consider appointing an internal nuclear regulator, an inspector general of nuclear safety, and how it will responsibly dispose of radioactive waste once the reactors that power the submarines reach the end of their useful lives……..https://www.theguardian.com/world/2021/dec/14/australias-aukus-nuclear-submarines-estimated-to-cost-at-least-70bn

ReplyForward

Need to investigate ANSTO’s tax-payer funded, loss-making, unnecessary nuclear medicine production

Australian government watcher, 28 Aug 21, The production of isotopes for medical purposes by nuclear reactors is a declining industry due to its inherently dangerous and risky nature and its extremely high manufacturing costs

These isotopes are being replaced by cyclotron produced isotopes which are practically and completely free of any risk to the patients and can be produced by relatively easier and safer means at a greatly reduced costs

The only reason that isotopes produced by nuclear reactors are used for medical purposes is that their manufacture is highly and unrealistically subsidised by government grants as is the case with ANSTO in Australia

The rapid growth in the international use of cyclotron isotopes for medical therapies is making the production of isotopes by nuclear reactors obsolete

As a result the continued production of isotopes for medical purposes by ANSTO at Lucas Heights could be stopped
immediately with huge savings in government expenditure and no effect on the provision of medical therapies

There were also arguments within ANSTO against the proposed corporatising of the medical isotopes production since this would expose all of its problems including its obsolete and outdated status and the extremely high production costs

In addition there are concerns both externally and within ANSTO internally about the cost and marketing difficulties with the Synroc technology which is far from the initially promoted commercial success and has been overtaken in many countries by their own developed alternatives to reduce the volume of nuclear waste and treat it to make it suitable for long-term storage and eventual disposal

In view of this it is essential for a full and proper independent inquiry and investigation into ANSTO to determine the true situation and make practical and hopefully cost saving recommendations as to its future operations

ANSTO gets a blank cheque for its nuclear waste production at Lucas Heights?

 Australian tax payers are subsidising the production of isotopes for other countries, and also having to fully fund the waste disposal. It is madness that can only happen when government hands blank cheques to an organisation

Greg Phillips,  No nuclear waste dump anywhere in South Australia , 13 Jan 2021, Congratulations Canada! “Cyclotron-produced technetium-99m approved by Health Canada”. Why rely on a global network of aging, unreliable, toxic spewing nuclear reactors when you can have a local network of clean, reliable cyclotrons? Especially when pandemics hobble global freight networks. From the article: “The process is safe and precise, employing stable targets and producing little to no long-lived radioactive waste. And, with the right target and extraction systems, these cyclotrons can be used to reliably create technetium-99m regionally and without the need for reactor-based materials.”

… I should explain further for those who might be unaware… ANSTO has plenty of room its reactor waste (for many decades). It is their plans to try and supply Technetium to the world that will produce large amounts of extra nuclear waste.

Unlike cyclotrons, ANSTO’s method produces lots of waste – it involves irradiating enriched Uranium plates and then dissolving them in a strong caustic solution. Imagine the complexities (and potential risks) of handling radioactive+caustic waste liquids. Australian tax payers are subsidising the production of isotopes for other countries, and also having to fully fund the waste disposal. It is madness that can only happen when government hands blank cheques to an organisation…  https://www.facebook.com/groups/1314655315214929

USA desperate to sell Small Modular Nuclear Reactors to Australia?

Australia is the great ‘white’ hope for the global nuclear industry, Independent Australia, By Noel Wauchope | 19 November 2019, The global nuclear industry is in crisis but that doesn’t stop the pro-nuclear lobby from peddling exorbitantly expensive nuclear as a “green alternative”. Noel Wauchope reports.

The global nuclear industry is in crisis. Well, in the Western world, anyway. It is hard to get a clear picture of  Russia and China, who appear to be happy putting developing nations into debt, as they market their nuclear reactors overseas with very generous loans — it helps to have stte-owned companies funding this effort.

But when it comes to Western democracies, where the industry is supposed to be commercially viable, there’s trouble. The latest news from S&P Global Ratings has made it plain: nuclear power can survive only with massive tax-payer support. Existing large nuclear  reactors need subsidies to continue, while the expense of building new ones has scared off investors.

So, for the nuclear lobby, ultimate survival seems to depend on developing and mass marketing “Generation IV” small and medium reactors (SMRs). …..

for the U.S. marketers, Australia, as a politically stable English-speaking ally, is a particularly desirable target. Australia’s geographic situation has advantages. One is the possibility of making Australia a hub for taking in radioactive wastes from South-East Asian countries. That’s a long-term goal of the global nuclear lobby.   …..

In particular, small nuclear reactors are marketed for submarines. That’s especially important now, as a new type of non-nuclear submarine – the Air Independent Propulsion (AIP) submarine, faster and much cheaper – could be making nuclear submarines obsolete. The Australian nuclear lobby is very keen on nuclear submarines: they are now promoting SMRs with propagandists such as Heiko Timmers, from Australian National University. This is an additional reason why Australia is the great white hope.

I use the word “white” advisedly here because Australia has a remarkable history of distrust and opposition to this industry form Indigenous Australians…..

The hunt for a national waste dump site is one problematic side of the nuclear lobby’s push for Australia. While accepted international policy on nuclear waste storage is that the site should be as near as possible to the point of production, the Australian Government’s plan is to set up a temporary site for nuclear waste, some 1700 km from its production at Lucas Heights. The other equally problematic issue is how to gain political and public support for the industry, which is currently banned by both Federal and state laws. SMR companies like NuScale are loath to spend money on winning hearts and minds in Australia while nuclear prohibition laws remain.

Ziggy Switkowski, a long-time promoter of the nuclear industry, has now renewed this campaign — although he covers himself well, in case it all goes bad, noting that nuclear energy for Australia could be a “catastrophic failure“. ……

his submission (No. 41) to the current Federal Inquiry into nuclear power sets out only one aim, that

‘… all obstacles … be removed to the consideration of nuclear power as part of the national energy strategy debate.’

So the Environmental Protection and Biodiversity Conservation Act (EPBC Act) should be changed, according to Switkowski. In an article in The Australian, NSW State Liberal MP Taylor Martin suggested that the Federal and state laws be changed to prohibit existing forms of nuclear power technology but to allow small modular reactors.

Switkowski makes it clear that the number one goal of the nuclear lobby is to remove Australia’s national and state laws that prohibit the nuclear industry. And, from reading many pro-nuclear submissions to the Federal Inquiry, this emerges as their most significant aim.

It does not appear that the Australian public is currently all agog about nuclear power. So, it does seem a great coincidence that so many of their representatives in parliaments – Federal, Victorian, New South Wales, South Australia and members of a new party in Western Australia – are now advocating nuclear inquiries, leading to the repeal of nuclear prohibition laws.

We can only conclude that this new, seemingly coincidental push to overturn Australia’s nuclear prohibition laws, is in concert with the push for a national nuclear waste dump in rural South Australia — part of the campaign by the global nuclear industry, particularly the American industry, to kickstart another “nuclear renaissance”, before it’s too late.

Despite its relatively small population, Australia does “punch above its weight” in terms of its international reputation and as a commercial market. The repeal of Australia’s laws banning the nuclear industry would be a very significant symbol for much-needed new credibility for the pro-nuclear lobby. It would open the door for a clever publicity drive, no doubt using “action on climate change” as the rationale for developing nuclear power.

In the meantime, Australia has abundant natural resources for sun, wind and wave energy, and could become a leader in the South-East Asian region for developing and exporting renewable energy — a much quicker and more credible way to combat global warming. https://independentaustralia.net/politics/politics-display/australia-is-the-great-white-hope-for-the-global-nuclear-industry,13326

“Chernobyl” is scary. The costs of nuclear power are even more scary

What’s more chilling: watching Chernobyl or cogitating on the cost of going nuclear? Michael West Investigative Journalism Jun 20, 2019,  The sudden push by the Murdoch media and Coalition right-wingers to overturn Australia’s nuclear power ban ignores the chilling economic cost —  huge public subsidies, storing radioactive waste for thousands of years, the heavy costs of decommissioning and, potentially, radiation-related health costs. Veteran nuclear writer Noel Wauchope reports on the popular TV series, Chernobyl, and the economics of nuclear power.

THE frightening TV miniseries “Chernobyl” could put a few Australians off the idea of nuclear power but nuclear economics might turn out to be the bigger scare.

It is bad news for the Minerals Council of Australia and nuclear lobbyists, that Chernobyl has now arrived on some Australian TV screens, but pro-nuclear advocates are continuing to push their campaign anyway.

The miniseries “Chernobyl” has just finished in Europe and USA, outdoing “Game of Thrones” in popularity. HBO’s Chernobyl topped film and TV database IMDB’s list of the greatest 250 TV shows of all time.  The first episode was screened on 12 June, 2019 in Australia, on Foxtel.

The series has had a big impact. It was highly praised by numerous reviewers but criticised by pro-nuclear lobbyists, and infuriated some Russian politicians. ………

The Coalition’s renewed push for nuclear power

In March this year, 11 Coalition MPs (Andrew Broad, James Paterson, Tony Pasin, Tim Wilson, Chris Back, Craig Kelly, Eric Abetz, Andrew Hastie, Warren Entsch, Bridget McKenzie and Rowan Ramsey) urged then Prime Minister Malcolm Turnbull to put nuclear power on the table as an electricity source for Australia. That call is now repeated by  Queensland and Coalition MPs calling for an inquiry into the feasibility of nuclear power in Australia.

Prime Minister Scott Morrison said he is open to considering nuclear power if it can stand on its own two feet. Energy Minister Angus Taylor told The Guardianon 12 June 2019 he wouldn’t rule out revising Australia’s nuclear ban “when there is a very clear business case which shows the economics of this can work”. Two days later, Environment Minister Sussan Ley also told TheGuardian she was open to the review considering a removal of the ban.

But — are the economics of nuclear power viable for Australia?

When even Australia’s former top nuclear promoter has doubts, it doesn’t look promising……….

How viable is nuclear power elsewhere?

Nuclear economics in America is really a tale of woe. You hardly know where to start, in trying to assess how much this industry is costing communities and tax-payers. There are the attempts to save the nuclear industry via subsidies. There are the continuing and ever-increasing costs of radioactive wastes.  There are the compensation payments to workers with radiation-caused illnesses, $15.5 billion and counting, and the legal battles over where to put the wastes. Needless to say, really, America is not initiating any new nuclear “big build”. The much touted “Small Modular Nuclear Reactors” are turning out to have no market and little prospect of being economically viable……

The UK nuclear industry is in the doldrums with repeated postponement of new projects – Hinkley Point C, Wylfa Newydd, Moorside, Sizewell C, Oldbury B and Bradwell B……The 2018 forecast for future clean-up of Britain’s aging 17 nuclear power stations has blown out to £121 billion which has had to be spread across the next 120 years……

France’s Flamanville nuclear project is taking years, remains bogged down with costly problems. Electricite de France (EDF)  has financial woes but hopes to save itself by switching from nuclear to renewables. France’s former nuclear giant AREVA went bankrupt and has changed its name to Orano and Framatome — and French tax-payers are still caught up in Areva/Orano costly legal corruption scandals.

Canada is up for increasing costs for managing its nuclear wastes. Interestingly, Canada abandoned its nuclear project for producing medical radioisotopes and now leads in non nuclear production of these isotopes.

India had grand plans for nuclear power, but has cut these back, and recently cancelled 57 reactors. It continues to have problems and many outages, at its huge Kudankulam nuclear station. ….

Russia keeps offering “generous” funding to the buyer countries. But will those countries end up with big debts? Reuters reports that in China, “No new approvals have been granted for the past three years, amid spiralling costs” ………. https://www.michaelwest.com.au/whats-more-chilling-watching-chernobyl-or-cogitating-the-cost-of-going-nuclear/

 

Global nuclear lobby doesn’t care if South Australia’s radioactive trash dump is not economically viable

The global nuclear lobby surely does not care about whether or not the South Australian nuclear waste importing scheme is economically viable. Their fairly desperate need is to sell nuclear reactors to those countries that don’t already have them. In particular, the ‘small nuclear” lobby sees an urgency now, with ‘big nuclear’ failing, to get their industry happening.

A commitment by an Australian State to take in nuclear waste could do the trick for them – as Oscar Archer put it – by unblocking the back end of the nuclear fuel cycle.

Mixed motives in South Australia’s nuclear waste import plan. Online Opinion, Noel Wauchope, 23 Aug 16  In South Australia the continued nuclear push focusses solely on a nuclear waste importing industry. Yet that might not be economically viable. Behind the scenes, another agenda is being pursued – that of developing new generation nuclear reactors.

First, let’s look at the message. The message from the Nuclear Fuel Cycle Royal Commission (NFCRC) is clearly a plan to make South Australia rich, by importing foreign nuclear wastes. …..This theme has been repeated ad nauseam by the NFCRC’s publicity, by politicians, and the mainstream media.…..

Whereas other countries are compelled to develop nuclear waste facilities, to deal with their waste production from civil and military reactors,that is not a necessity for Australia, (with the exception of relatively tiny amounts derived from the Lucas Heights research reactor).

So, the only reason for South Australia to develop a massive nuclear waste management business is to make money.

If it’s not profitable, then it shouldn’t be done.

Or so it would seem.

There is another, quieter, message. When you read the Royal Commission’s reports, you find that, while the major aim is for a nuclear waste business, in fact, the door is kept open for other parts of the nuclear fuel chain………

Nowhere in the NFCRC report, do they make a link between establishing the waste repository and planning for nuclear reactors. It is as though the two projects are not related. But they are.

The clearest explanation of this came early in 2015, just as the NFCRC was starting, in an ABC Radio National talk by Oscar Archer. He outlined a plan:

Australia establishes the world’s first multinational repository for used fuel – what’s often called nuclear waste. This is established on the ironclad commitment to develop a fleet of integral fast reactors …The development of the intermediate repository and the first reactors is funded by our international partners……

By unblocking the back end of the nuclear fuel cycles for our international partners and customers, rapid development in conventional Generation III+ nuclear technology receives a strong boost …

Each PRISM “power block”, or set of twin reactors, adds 622 megawatts of saleable zero-carbon generation to Australia which further improves the revenue position. …….The transition to PRISM world-wide is under-way on the back of Australia’s pioneering embrace of this technology with support of key partners.

Archer’s plan is significant because it illustrates a very important point about South Australia’s nuclear waste plan – IT SOLVES A GLOBAL NUCLEAR INDUSTRY PROBLEM. Both in ‘already nuclear’ countries, especially America, and in the so far non nuclear counties, such as in South Asia, the nuclear industry is stalled because of its nuclear waste problem. In America, the “new small nuclear”, such as the PRISM, technologies (Power Reactor Innnovative Small Module) cannot even be tested, without a definite waste disposal solution. But, if South Australia provided not only the solution, but also the first setting up of new small reactors, that would give the industry the necessary boost……..

Once Australia has set up a nuclear waste importing industry, the nuclear reactor salesmen of USA, Canada, South Korea, will have an excellent marketing pitch for South Asia, as the nuclear waste problem has been removed from their shores.. And South Asia is exactly the market that the NCRC has in its sights. The NFCRC eliminated most of the EU, Russia, China, North America as customers. This was explained by Dr Tim Jacobs, of Jacobs Engineering, (financial reporters to the NFCRC), at the recent hearing of the South Australian Parliamentary Joint Committee on Findings of the Nuclear Fuel Cycle Royal Commission .

Globally, the ‘conventional’ nuclear reactor business is struggling, The ever escalating costs of USA’s nuclear reactorsbeing built, of France’s Flamanville reactor, and most notable lately, Britain’s Hinkley C nuclear fiasco, have cast a gloom over ‘big nuclear reactors’

However, this is quite good news for the ‘small nuclear’ lobby. In the USA, the charge is led by Bill Gates, and a bunch of billionaires, who work to get governments, and taxpayer funding to support their novel nuclear reactor projects. In Britain, the nuclear charity (yes, it has charity status!) the Alvin Weinberg Foundation , and 33 new nuclear companies are practically ecstatic at the news that Teresa May’s government is having doubts about Big Nuclear.

Australia has its own cadre of small nuclear enthusiasts. These individuals have, in a short period of time, achieved world recognition as advocates for the various types of new small nuclear reactors. On the international scene, leading lobbyists are the Breakthrough Institute, with their Ecomodernist Manifesto. (They put in a submission to South Australia’s NFCRC), and Australian lobbyists Barry Brook and Ben Heard……..

South Australia’s government is influenced by a strong nuclear lobby push and the Royal Commission advocacy for solving that State’s present financial problems by a futuristic nuclear waste repository bonanza scheme.

The global nuclear lobby surely does not care about whether or not the South Australian nuclear waste importing scheme is economically viable. Their fairly desperate need is to sell nuclear reactors to those countries that don’t already have them. In particular, the ‘small nuclear” lobby sees an urgency now, with ‘big nuclear’ failing, to get their industry happening.

A commitment by an Australian State to take in nuclear waste could do the trick for them – as Oscar Archer put it – byunblocking the back end of the nuclear fuel cycle. The NFCRC plan also promises the chance of a market in Australia for the mini nuclear reactors.  http://www.onlineopinion.com.au/view.asp?article=18465&page=1

Uranium mining companies come and go; taxpayers cop the clean-up costs

Taxpayers to foot the bill for mine closures, Independent Australia  26 July 2016 Mine rehabilitation – to avoid toxic seepage – is a costly business which taxpayers look likely to fund, writes Michael West.

MINING COMPANIES and regulators have gravely underestimated the costs of mine rehabilitation, leaving taxpayers in the gun for billions of dollars in clean-up costs, says Rick Humphries.

He should know. Humphries was Rio Tinto’s top adviser on land use before heading up mine rehabilitation for base metals groupMMG.

The environmental scientist has since “switched sides” to consult for conservation groups on mine closure.

Humphries told us in an interview last week:

“The problem is there is a very large and growing environmental liability and if it’s not put in check it will cost taxpayers dearly, and result in large scale degradation of national resources.”

There are some 50,000 abandoned mine sites in Australia. Many are small and old. Others though, such as Century Zinc Mine, Ranger Uranium and the first of the mega coal mines to close – Anglo American’s Drayton and Rio Tinto’s Blair Athol – are large, toxic and present a formidable challenge to close properly.

The humongous Ranger and Century open cut voids alone, will cost around $750 million to $1 billion to rehabilitate and the residual risks and liabilities for their parent companies (Rio Tinto and MMG) are as yet unknown. 

What has been missing in the clean-up debate so far, however, is specifics, detailed research that is of particular company exposures. It is only when investors come to grips with the costs of closure that company directors and regulators will properly address the challenge, says Humphries.

So he has been doing the rounds of stockbrokers and institutional investors in recent days with analysis of Oz Minerals, MMG, ERA’s Ranger Mine, Rio Tinto’s Blair Athol Mine and Australia’s dirtiest power generation assets, the Yallourn, Hazelwood and Loy Yang brown coal mines in Victoria.

It’s “heads we win, tails you lose”

Humphries’ report, Mine Rehabilitation and Closure Cost – a Hidden Business Risk, sheds light on the caprice and inaccuracy of closure provisions and how mining companies account for their liabilities……….

Risks and costs of mine closure are poorly understood

The case of Century raises serious questions over the accuracy of the provisions for MMG’s other assets, says Humphries, and it illustrates (along with the ERA case study below),

“… that mining companies have a habit of systemically underestimating the real cost of closure because the complexity, risks and costs of mine closure are poorly understood.”

ERA’s Ranger Uranium mine is the classic case of escalating cost estimates. Humphries details the continual revision of estimates over the years from $149 million in 2008 to more than $600 million this year. Rio Tinto’s Blair Athol mine enshrines a different challenge entirely, that of a major mining group flogging a depleted asset to a small player with little ability to fund a clean-up.

The deal is not done yet but an agreement was struck a few weeks ago for Rio to sell its Blair Athol coal mine to a small ASX-listed company TerraCom. The mine was sold for $1, including Rio’s slated $79 million clean-up liability.

But as the Humphries report notes, the financial assurance calculated by the government’s methodology comes up with a rehab cost of twice that, $160 million.

IEEFA director Tim Buckley describes this as a “heads we win, tails you lose” scenario for TerraCom’s promoters. The company has $150 million in debt and no equity and its success rides on a bounce in the price of thermal coal. It has risen lately but, as Buckley says, thermal coal appears to be in structural decline………

The Humphries Report illuminates the challenge for the mining sector and state governments and it contains just five case studies……

For the environment, the risks are clear, the Mary Kathleen uranium mine, once controlled by Rio, was rehabilitated and relinquished in 1986, winning an award for technical excellence at the time. The waste dump has since failed and the liability and attendant costs now reside with Queensland taxpayers.

Mary Kathleen, whose AFL side once won three regional premierships, is now a ghost town. Radioactive waste has seeped into the water systems.

This article was originally published on michaelwest.com.au under the title ‘Mine voids: big party, now for the hangover’ and has been reproduced with permission. You can read more from Michael on his website and follow him on Twitter @MichaelWestBiz. https://independentaustralia.net/environment/environment-display/taxpayers-to-foot-the-bill-for-mine-closures,9280

A money losing venture – importing nuclear waste to South Australia

Real juries hear both the Prosecution and Defence cases in open court. What I fear is that my fellow citizens selected for citizen’s jury duty will get to read and hear only what the State Government wants them to read and hear, so that they will give Premier Weatherill the “social licence” he wants in order to proceed with the dump.

South Australians do not need to mortgage their descendants’ future by building a high level nuclear dump in order to make ends meet. The alleged riches that the dump has been claimed to bring are a mirage, but the long-term risks are not.

How a high-level nuclear waste dump could lose money  http://indaily.com.au/business/analysis/2016/06/07/how-a-high-level-nuclear-waste-dump-could-lose-money/ June 7 2016  The economic case for a high level nuclear waste facility in South Australia is far from convincing, writes Richard Blandy. 

The Nuclear Fuel Cycle Royal Commission delivered its report early in May. I submitted my InDaily article on the Royal Commission’s tentative findings to the inquiry for its consideration. I received no acknowledgement, but I know that the article was discussed within the royal commission’s processes. It does not appear to have had any substantive effect on the report.

Having read the relevant sections of the report, I continue to believe that South Australia should not use part of its land mass as a dump for highly radioactive used fuel from overseas nuclear reactors (sp-called “high level waste”) which, in the royal commission’s own words, “requires isolation from the environment for many hundreds of thousands of years”.

The only reason why most South Australians would give a high level nuclear waste dump even a second’s thought is because it is being sold to them as a financial bonanza – a no-risk economic lifeline to a state down on its luck. Something for nothing.

In the summary of its report, the royal commission says that a high level waste dump “could generate more than $100 billion income in excess of expenditure over the 120-year life of the project (or $51 billion discounted at 4 per cent)”. Note that the report says “could”, not “would”.

But, in Appendix J, the report says that “applying a commercial pre-tax discount rate of 10 per cent the net present value of profits to the State would amount to $11.5 billion”. This is a big reduction from the headline number in the summary of $100 billion.

Also in Appendix J, the report says the commission undertook sensitivity analysis of the value of the dump if less of the world market for used fuel were captured and the price was lower. The royal commission concluded that: “Under these scenarios, the project achieved lower profits than the baseline scenario, but remained highly viable.”

On the page following that statement, Figure J.6 shows that at a price for dumped nuclear fuel equal to Swedish costs of constructing a nuclear waste dump, and assuming half or more of the world’s available high level nuclear waste came to South Australia, the dump would have a net present value of profits of about $5 billion.

At a world price for dumped nuclear fuel equal to Finnish costs of constructing such a dump, the dump would have a net present value of profits of only about $2.5 billion.

In fact, if South Australia’s dump could only attract a quarter of the world’s high level nuclear waste, at prices equal to Swedish or Finnish costs of construction (approximately A$1.13m/tonne of heavy metal and A$0.65m/tonne of heavy metal, respectively), our dump would lose money and would have a negative net present value.

The reason why the royal commission says our dump could make more than $100 billion income in excess of expenditure is because a high price to dump used fuel has been chosen of A$1.75m/tonne of heavy metal.

The commission’s precise thinking on this point is worth quoting:

“Based on detailed analysis, the Commission considers that a reasonable baseline price for the purpose of assessing viability would be A$1.75m/tHM for used fuel. This is based on a reasonable baseline ‘willingness to pay’ estimate of A$1.95/tHM less A$0.2m/tHM to account for costs incurred by customers in preparing and delivering the waste to South Australia.
The financial modelling derived the baseline ‘willingness to pay’ figure of $A1.95m/tHM as a mid-point between the estimated highest and lowest willingness to pay.”

The truth, therefore, is that the price that the royal commission has chosen for its “baseline” analysis is a guess, based on its estimates of the costs that some countries might face to dispose of their waste themselves.

Economics I teaches that price equals marginal cost in a profit maximising competitive market – not “willingness to pay”. “Willingness to pay” is some price above the actual market price that varies from buyer to buyer. Only a perfectly discriminating monopoly supplier could charge each country a price equal to their willingness to pay.

We should not continue to entertain the fantasy that we have been given a “Get Out of Jail” card in the shape of building a high level nuclear waste dump in South Australia.

Is South Australia likely to be a global monopoly provider of high level nuclear waste dump services? This is not plausible.Many countries are going to build geological disposal sites for high level nuclear waste including, as the report notes, Belgium, Canada, Finland, France, Germany, Sweden, Switzerland, the United Kingdom and the United States of America. Four case studies examined by the royal commission itself – Belgium, Finland, Sweden and Switzerland – are located in crowded Europe, confront difficult terrain and heavy rainfall. The United States itself has a huge program of nuclear waste disposal. Further, the global “accessible market” for high level nuclear waste (in the commission’s parlance) excludes India and China.

Why are these countries not going to open up their own waste depositories to other countries? They have already decided to build nuclear dumps for their own purposes and have already found locations. The marginal cost of extending their dumps to take in high level nuclear waste from other countries will be low. They will be able to subsidise their own domestic waste disposal programs by taking in nuclear waste from other countries at a price above or equal to their low marginal cost.

The international price for dumping high level nuclear waste in the market that will form is very likely to be well below the average cost of Sweden and Finland, which are, in turn, far below the price used to predict huge profits from a dump in South Australia. In which case South Australia’s high level nuclear waste dump will be unviable, because it will have to cover all of its costs from sales, not just its marginal costs.

As if anticipating this prospect, the royal commission left itself an “out”, when it said: “The facility would not be developed unless the proponent could secure a pre-commitment of used fuel volumes at a price to fully fund the development of the project”.

I hope that the citizen’s jury that is being chosen to consider whether there is a “social licence” to proceed with a high level nuclear waste dump in South Australia will be allowed to read my articles, let alone have me speak to them. We should not continue to entertain the fantasy that we have been given a “Get Out of Jail” card in the shape of building a high level nuclear waste dump in South Australia.

Real juries hear both the Prosecution and Defence cases in open court. What I fear is that my fellow citizens selected for citizen’s jury duty will get to read and hear only what the State Government wants them to read and hear, so that they will give Premier Weatherill the “social licence” he wants in order to proceed with the dump.

South Australians do not need to mortgage their descendants’ future by building a high level nuclear dump in order to make ends meet. The alleged riches that the dump has been claimed to bring are a mirage, but the long-term risks are not.

As the royal commission’s report itself says: “A person standing one metre from an unshielded used fuel assembly would receive a lethal dose of radiation in a few seconds… used fuel requires isolation and containment from the environment for at least 100,000 years.”

This is safe? I don’t think so.

Richard Blandy is an Adjunct Professor in the Business School at the University of South Australia and a weekly contributor to InDaily.

Overseas junket of South Australia’ s pro nuclear businessmen and politicians to support Royal Commission’s nuclear waste dump goal

Business SA chief Nigel McBride, who will join the tour, told InDaily the delegation would examine “what most people regard as a state-of-the-art piece of engineering [in terms of a] high-level waste repository”. “We don’t want to see people rely on fear and oozing-green Simpsons-cartoon-like imagery”

SA leaders to tour key nuclear sites, Committee for Adelaide, 25 Apr 15    A high-powered delegation of South Australian business leaders and parliamentarians will jet off to Europe next month to visit key nuclear sites in a bid to facilitate a community debate on the merits of expanding the state’s role in the nuclear fuel cycle.

The trip was organised after consultation with Kevin Scarce’s Royal Commission, which last month handed down tentative findings outlining a multi-billion-dollar economic boon if SA established a high-level nuclear waste dump.

The delegation – to be capped at 10, plus prospective MPs and their staff – was organised by the Committee for Adelaide, an independent think-tank of community leaders, and will likely include representatives from environmental business consultants Golders, property group Knight Frank, engineering consultancy Mott MacDonald and Business SA, among others.

Committee for Adelaide general manager Matt Clemow told InDaily the tour would take in France, Finland, the UK and possibly Sweden, and was designed “to understand the issues and opportunities involved in the nuclear fuel cycle with specific focus on safety, alignment with agriculture and tourism, and associated industry regulations”.

“From the very start, one of the key purposes of the Committee for Adelaide was for industry to take a leadership role in important decisions,” he said…….

The tour also aims “to create a cohort of SA people who have experienced the operations of the nuclear fuel cycle and will be able to contribute to the public discourse”.

The delegation – whose members will pay their own way – departs in late April, returning the day before Scarce hands down his final recommendations on May 6……

 Business SA chief Nigel McBride, who will join the tour, told InDaily the delegation would examine “what most people regard as a state-of-the-art piece of engineering [in terms of a] high-level waste repository”.

“We don’t want to see people rely on fear and oozing-green Simpsons-cartoon-like imagery”

“I also personally want to talk about sovereign funds, and how they can work in situations where this kind of industry can be created,” he said…….

Pro-nuclear Labor whip Tom Kenyon is likely to join the delegation, while Liberal whip Peter Treloar confirmed: “I’ve had a couple of my Opposition colleagues express some interest in it.”

Treloar himself says he has been “very supportive of the RoyalCommission and very interested in it”.

He wrote on his blog in October after visiting the Lucas Heights reactor in NSW: “It’s my personal view that we shouldn’t sugar-coat the fact that we have a struggling state economy – an expanded nuclear industry presents us with a unique opportunity to turn around our economic fortunes.”

However, he told InDaily: “I can’t fit this trip in my schedule.”

Liberal MP Adrian Pedrick has also expressed an interest, but is yet to “fully commit”…….http://committeeforadelaide.org.au/sa-leaders-to-tour-key-nuclear-sites/