DALLAS – The future of a bond-financed nuclear waste disposal site in Texas may be influenced by the appointment of former Texas Gov. Rick Perry as energy secretary.
As governor, Perry was instrumental in launching the first low-level radioactive waste repository in Texas, a 14,900-acre site in sparsely populated Andrews County near the New Mexico border.
President-elect Donald Trump last week chose the former governor to head the Department of Energy even though Perry once vowed to eliminate the department during his unsuccessful 2012 presidential campaign.
Nuclear waste disposal is a core mission of the Department of Energy, which was once on Perry's hit list.
"Trump is nominating a person to run the agency who has vowed to get rid of the agency but couldn't remember its name," said Robert Alvarez, former senior policy adviser to the U.S. Secretary of Energy in the Clinton administration.
Perry's famous "Oops" moment in his failed 2012 campaign for President came during a televised debate when he could not name the third cabinet agency he was promising to eliminate if elected – the Department of Energy.
As energy secretary, Perry would help shape policy in the Trump administration on nuclear energy and weapons. DOE is responsible for maintaining about 7,000 nuclear warheads.
"This program makes up the single largest piece of the DOE budget and is experiencing out-of-control costs," Alvarez said. "Military nuclear spending makes up nearly 60% of the DOE's budget."
Despite the department's name, and Perry's background as the 12-year-governor of the nation's largest producer of oil, the energy secretary has little say over fossil fuels beyond decisions involving the Strategic Petroleum Reserve, Alvarez told The Bond Buyer.
Minerals and mining regulation falls under the Department of the Interior.
In addition to monitoring the nuclear weapons, Perry would oversee cleanup of nuclear weapons manufacturing sites around the country and policies involving disposal of waste from reactors generating civilian power.
Cleanup of contaminated nuclear weapons sites now costs about $6 billion per year, with an estimated total liability approaching $400 billion, Alvarez said.
Disposal of spent fuel rods from power-generating reactors could cost $7.2 billion to $27.2 billion over 40 years, he added.
The company developing the Andrews County waste disposal site, Waste Control Specialists, LLC, founded by the late Dallas billionaire and Republican campaign donor Harold Simmons, needed state legislation and $75 million of local general obligation bonds to open the site.
Voters in Andrews County approved the taxable bonds in 2010 after Simmons failed to find private financing for the facility.
The county pledged a property tax of 15 cents per $100 value if revenues from the waste dump did not cover the $5 million annual debt service.
ExxonMobil, the county's largest taxpayer, accounted for about 14% of county tax revenue at the time of the vote.
"You can't have a facility like this if the county is not strongly behind it," WCS spokesman Chuck McDonald told The Bond Buyer Friday.
In 2014 Perry led a campaign to license the WCS site for interim storage of spent fuel rods from the nation's nuclear plants. Perry sought a permit from the Texas Commission on Environmental Quality for high-level radioactive waste.
In April WCS filed its federal application for a 40-year license to store spent fuel from nuclear reactors. Perry is likely to head the DOE when regulators make their decision on the matter. WCS officials have said they expect a decision within three years.
Boosters are confident that Perry would take a favorable view of the license.
"We do think it's a positive for Texas and the country that we could have an energy secretary that understands radioactive waste disposal issues," McDonald said. "He was governor during the time that the site became operational."
Current Energy Secretary Ernest Moniz told the Senate Appropriations Subcommittee on Energy and Water Development on Sept. 14 that the DOE was encouraged by the "novel approach" of companies like WCS to build interim storage facilities for nuclear waste.
If WCS has complaints about the Obama Administration, they focus more on the Department of Justice than the Department of Energy. The DOJ has filed a lawsuit seeking to block the proposed acquisition of WCS and its parent firm Valhi Inc. by Salt Lake City-based Energy Solutions Inc.
Energy Solutions specializes in decommissioning and remediation of nuclear sites and facilities, management of spent nuclear fuel, the transportation of nuclear material and the environmental cleanup of nuclear legacy sites.
In its lawsuit the DOJ contends that the combined company would be "the only option for customers in nearly 40 states." Energy Solutions maintains that there are disposal sites for low-level radioactive waste operated by competitors.
"Through merging the two companies, the new entity will realize significant cost synergies through a decrease in management, selling, and administration expenses," the company said in a prepared statement. "Those savings, in turn, can be passed on to utilities and consumers of nuclear electricity. In addition, this merger will save costs on nuclear decommissioning."
Trump's designee to head the DOJ, Alabama Sen. Jeff Sessions, is widely expected to lighten the regulatory hand of the federal government.
If the merger is approved, Energy Solutions has agreed to defease the $75 million of GO bonds used to build the Andrews County site, McDonald said. The DOJ challenge in Delaware's U.S. District Court must be resolved within six months, he said.
Permitting the Texas dump site is just one piece of the puzzle, Alvarez said. A permanent storage facility does not technically exist.
The Trump Administration is expected to revive the Yucca Mountain long-term waste disposal site that was approved by Congress in 2002 and shut down by the Obama administration in 2011.
According to the General Accountability Office, the site was closed for political, rather than safety issues.
Another unresolved issue is transportation of the spent fuel rods to interim storage. No data exists for basing a decision on how the spent fuel could be safely transported, Alvarez said.
Currently, nuclear power plant operators pay a fee toward long-term storage of spent fuel rods at Yucca Mountain, Alvarez said. However, there is no fund to pay for transportation of the fuel to an interim storage site such as WCS.
Even if Congress votes to raid the existing fund for long-range waste storage to pay for transportation to WCS or other interim storage sites, it could still be 15 to 20 years before the first trucks roll, Alvarez said.
"There's a lot more to energy policy than doing favors for your pals in Texas," he said.
