| Who better than to explain the LES puzzle than | | | | studied the charges. "Here's my take as to why |
| Jim Ferland? As president of Louisiana Energy | | | | they took so long," he began. "Environmental |
| Services, Ferland came onboard nearly three | | | | justice, at that time, was a relatively new |
| years ago. At the time, the LES project was still | | | | concept. There were not a lot of rules or |
| in Tennessee, but rapidly losing traction. Ferland | | | | regulations in place about how you approve |
| admits the situation had gotten so bad in | | | | whether or not environmental racism was going |
| Tennessee that his management team had to | | | | on. They spent a long time, arguing back and |
| look elsewhere. | | | | forth about how to make that decision. How do |
| First, we wanted to clarify exactly who owns | | | | you do those calculations?" |
| LES. Conflicting news reports, found in the news | | | | So what happened? "It is my understanding, at |
| items after LES was awarded the first NRC | | | | the end of all that, LES was found to be in the |
| license for a nuclear facility in nearly thirty years, | | | | clear on that particular issue." What took so long |
| confused us. Ferland straightened us out on this | | | | and why the unusual accusation? "I think it was," |
| point, too. "LES is incorporated in Delaware. It's a | | | | Ferland started, but paused for a moment. |
| limited partnership. I'll give you a quick rundown on | | | | "Anti-nuclear opponents will do whatever they can |
| the ownership. It is confusing." Six month ago, | | | | to slow down the licensing process. It was a |
| Westinghouse Electric owned 24.5 percent of LES. | | | | successful effort by the anti-nuclear folks to put |
| British Nuclear Fuels, which owns a one-third stake | | | | massive delay into the licensing process to the |
| in Urenco, owned Westinghouse. On March 3rd of | | | | point where the owner finally walked away." |
| this year, Urenco bought Westinghouse's minority | | | | Finally, how did Louisiana Energy Services end up |
| interest in LES. | | | | in New Mexico? Abandoning the project in |
| Wait, it gets more confusing. "Back in the original | | | | Louisiana, the company moved to Tennessee. |
| LES, which was back in Louisiana in the early | | | | Some report the locals chased LES out of the |
| 1990s, the utilities did have an equity share at | | | | state. Ferland surprised us with his answer, "LES |
| that time," Ferland explained. "When the Urenco | | | | never submitted the license application to the |
| picked the project back up, to restart it in 2002, | | | | NRC." |
| the utilities tagged along. The utilities, though, did | | | | But what's the real story, here? "I'll be very blunt |
| not have an equity ownership share." According to | | | | about it," Ferland warned us. "Management |
| Ferland, Urenco bought out the three U.S. utilities - | | | | credibility was lost with the local population in |
| Entergy, Exelon and Duke - in exchange for some | | | | Tennessee. A company like ours doing a project |
| cash and more cash payments going forward. "All | | | | like this, even though it's extremely safe and |
| that is happening now is the utilities earn the rest | | | | extremely environmentally friendly, it's a nuclear |
| of their money back as LES meets certain | | | | project." And this is advice to anyone hoping to |
| milestones going forward," said Ferland. "One of | | | | cash in on the nuclear renaissance, "And if you |
| those milestones was (achieved) the day LES | | | | don't have the credibility and trust of the public, in |
| received the NRC license. As of 2002, these three | | | | all honesty, you can not proceed with the |
| utilities had no management say and no equity | | | | project." Ferland cleared the air, "Management had |
| participation. They simply had some rights to | | | | some issues in the way they addressed the public |
| some future cash flows, depending upon whether | | | | and the press in Tennessee that caused them to |
| or not LES was successful. Essentially, we're | | | | lose credibility, and probably rightly so." The |
| paying the utilities back for the investment they | | | | situation had gone so bad, Ferland admitted, "We |
| made in the early 1990s." | | | | could not turn that around." |
| The upshot is simple. Louisiana Energy Services is | | | | Based upon our interviews with state senators |
| a wholly owned subsidiary of Urenco Ltd. But then | | | | and representatives, New Mexico's reaction was |
| again, get ready for a tad more confusion on the | | | | magical compared to what LES endured for the |
| ownership issue. | | | | past 16 years. "Marshall Cohen and his team did a |
| Urenco's British partner wants to sell its one-third | | | | very good job in New Mexico," Ferland explained. |
| stake in the company. We asked Ferland if | | | | "We have, if it is done correctly, a relatively good |
| perhaps British Nuclear Fuels (BNFL) was unhappy | | | | project to sell. We can take folks to see the |
| with the New Mexico enrichment facility. "I don't | | | | operating enrichment facility in Europe, which we |
| think so," he answered. "This is my personal | | | | are essentially copying." LES did that just that. We |
| opinion because I'm certainly not a member of | | | | interviewed New Mexico State Senators Leavell |
| management of BNFL. BNFL is looking to get out | | | | and Kernan, who both gave Urenco's Almelo |
| of the nuclear business completely. Recognize that | | | | facility their blessing. "It's ultra clean, ultra high tech |
| BNFL is a government-owned entity. I think the | | | | and has an extremely good environmental record |
| government has decided they don't need to be in | | | | for as long as it's been in existence, which is |
| the nuclear business. They've done many things. | | | | 25-plus years." Ferland said with steel in his voice, |
| They are in the process of closing the transaction | | | | "If you do it right, it's a pretty easy project to |
| of selling Westinghouse. Their nuclear | | | | sell, and if you do it wrong, you can drive it into |
| decommissioning group is up for sale. The last | | | | the ditch very quickly." |
| major piece of the BNFL nuclear business is the | | | | CONCLUSION |
| one-third ownership they have in Urenco. Naturally, | | | | The LES project has gone past the "selling phase." |
| given that they're selling the other two, they have | | | | Ground breaking is in late August. Ferland told us |
| some interest in divesting that ownership piece as | | | | construction began this past week. LES will |
| well." | | | | provide Lea County, New Mexico and Andrews |
| Who will finally own BNFL, and thus become | | | | County, Texas with more that 800 construction |
| one-third owner of Urenco, and indirectly an | | | | jobs to build the National Enrichment Facility (NEF). |
| owner of the New Mexico enrichment facility? | | | | "We expect the first cascade to go online in late |
| Last week, London's Daily Telegraph reported the | | | | 2008," said Ferland. Because this is a modular |
| French nuclear power firm, EDF, had offered to | | | | design, more cascades will go online through 2013, |
| buy the BNFL stake for about two billion pounds | | | | when the plant reaches its full capacity. |
| sterling. An EDF spokesman denied an offer had | | | | "We hope to deliver our first product in early |
| been made. According to Reuters, both the | | | | 2009," he added. This will be a relatively small |
| German and Dutch stakeholders would oppose | | | | amount. "Ballpark, we'll roughly come up with 20 |
| EDF's participation. | | | | percent of our output per year," Ferland explained. |
| This latest wrinkle is just one in another of | | | | This comes to about 600,000 SWU (Separative |
| several disruptive episodes as LES moves | | | | Work Units). |
| forward into operations. We talked with Ferland | | | | It takes about 10 pounds of U3O8, which utilities |
| about charges of environmental racism in | | | | provide to the enrichment facility, to create one |
| Louisiana, where LES first began its long journey | | | | SWU. "It's a three million SWU facility," Ferland told |
| to obtain an NRC license. As with every question | | | | us. Three million SWU is about 25 percent of the |
| and concern we voiced, Ferland did not dither or | | | | U.S. requirement, he added. |
| back down, but instead methodically responded, | | | | From all indications, Ferland is running a tight ship. |
| "Urenco and its partners did begin the licensing | | | | Urenco appears to be solidly behind this tenacious, |
| process for LES around 1990. Come 1997, they | | | | but level-headed corporate executive. He knows |
| still did not have the NRC license. Seven years | | | | how to run this business, he's built his team, and |
| pursuing a license is a long time. There were a | | | | they've created a miracle in New Mexico - the |
| variety of issues. One of them was environmental | | | | first step in New Mexico's nuclear renaissance. |
| justice." | | | | COPYRIGHT © 2007 by StockInterview, Inc. |
| Ferland hadn't yet arrived at the time, but he had | | | | ALL RIGHTS RESERVED. |