The Nuclear Dominion

I've mentioned before the importance of the Pittsylvania uranium deposits for not only Southside but all of Virginia. Now, with a conservative Governor about to be sworn in on Saturday, all of the pieces are starting to come into place for Virginia to become the "Nuclear Dominion" and take a lead in the nuclear renaissance on the horizon. This doesn't have to be a partisan issue as Senator Jim Webb has taken the lead nationally in advocating for expanded nuclear production. And, as we close out Kaine's administration, I want to look at one success of his otherwise lackluster time in office. James Bacon outlines the work Kaine did to bring "critical mass" to Virginia's nuclear energy cluster.

Virginia's nuclear power industry cluster has gained a major new player: AREVA Newport News. The French nuclear giant AREVA, which makes uranium-filled fuel rods in Lynchburg, has partnered with Northrup Grumman Shipbuilding, builder of nuclear-powered naval vessels, to invest $363 million and create 540 jobs at a new 368,000-square-foot nuclear reactor manufacturing facility.

Said Gov. Timothy M. Kaine in announcing the deal: “This joint venture project is tremendous news for Virginia. Both AREVA and Northrop Grumman are stellar companies with strong reputations and a solid presence in Virginia. We are strong supporters of the nuclear and shipbuilding industries in Virginia, and we will continue to support this facility and compete aggressively for future expansions. Emission-free nuclear energy produced in the United States is a positive step toward reducing greenhouse gases and reducing our dependence on foreign oil.”

Added AREVA Inc. CEO Tom Christopher: “We are establishing a world-class entity that fully supports the deployment of a fleet of U.S. Evolutionary Power Reactors made in America by Americans and for Americans. Here in Virginia, we have access to a great workforce for both the manufacturing and engineering expertise we need."

Naturally, there are subsidies involved. According to the Daily Press, state and local governments are putting up $23 million in incentives. The includes $3 million from the Governor’s Opportunity Fund, a $1.5 million performance-based grant from the Virginia Investment Partnership program, workforce training and other benefits.

I'm normally a big critic of incentives, but these make as much sense as any subsidies (incentives) can.

(1) Bringing the nuclear-component manufacturing facility to Virginia builds upon, and strengthens, an existing nuclear power cluster. An industry cluster will have more staying power than an individual company such as, say, the Volkswagen USA headquarters.

(2) The deal brings high-skilled, high-paying jobs to a region that is beginning to hurt economically. Unemployment reached 4.8 percent in August, and prospects bode ill for the next few years as a new presidential administration ponders deep cuts in the military. Many of the jobs created will require skills that the local workforce already possesses.

Bacon's bottom line: This may be the biggest economic development coup of the Kaine administration with the most positive long-term implications.

This is on top of the other assets Virginia already has, or is investing in:

As it happens, Lynchburg, about an hour's drive north of Danville, is home to BWX Technologies and Areva NP, major providers of engineering, design and maintenance services to the nuclear power industry. Over in Hampton Roads, the Northrop Grumman shipyard in Hampton Roads builds nuclear-powered submarines and aircraft carriers.

Between Dominion's power plants, Pittsylvania's uranium mines, Lynchburg's nuclear manufacturing/service companies and Northrop Grumman's shipyard, Virginia has the potential to assemble a world-class nuclear power cluster -- not just mining, but designing, manufacturing, installation and servicing. With all those capabilities concentrated in a small geographic area, who knows what synergies might develop?

I have read that once oil hits $100 per barrel, the long term factors flip in favor of nuclear energy for the Navy's ships. Oil is already close to $80 per barrel and we haven't even hit economic recovery yet. Virginia is well positioned for competing in nuclear energy and in shipbuilding. What more can we ask for?