Jeremy L. Dillon
RW Monitor
9/4/2015
EnergySolutions has prohibited the use of its type-A casks for use in shipping waste to Waste Control Specialists, WCS President and CEO Rod Baltzer said this week. The cessation of WCS cask shipments caused delivery delays for the West Texas waste treatment and storage company in the second quarter, resulting in a $8.1 million operating loss for the period.
EnergySolutions and WCS are embattled in a legal dispute over WCS’ alleged “monopolistic behavior” in refusing to enter into a disposal contract to take EnergySolutions’ Semprasafe-produced downblended Class B and C low-level radioactive waste. EnergySolution (which declined to comment on the matter) is alleging anticompetitive conduct from WCS for trying to harm a competitor to maintain its monopoly standing.
In a Q&A with RadWaste Monitor, Baltzer also discussed WCS’ recent leadership changes, as well as the company’s pursuit of interim storage of spent nuclear fuel and Greater Than Class C disposal.
To start things off, WCS has gone through leadership changes within the last week, and you have taken over as president and CEO. Did you want to comment at all on these changes? How will things change? And how will they stay the same?
Bill Lindquist had some health issues, and he’s been kind of out of the office for a couple of months. One of the things Bill has told us is that he has a light switch that switches on/off, and it’s not a dimmer switch. It’s hard for him once he gets going to do anything other than full speed ahead. And, that wound up impacting his health, and so I think he wanted to step back a little bit and pay more attention to his health and things like that. We’re happy that Bill is still with WCS. We still have him as a resource, and can utilize him. I have some special projects for him. But he stepped down as CEO because of those health issues. He is still fine. It did not mean that he was sliding or had a dip or anything.
For WCS, I’ve been with the company for 18 years. The owners and the parent company are very familiar with me, and so I think it was a natural fit to go from president to president and CEO. I will continue to guide the company, and there is some consistency there, continuity. The transition did not take very long. This will be a great opportunity for me, and we plan to continue the success WCS has had.
Is there any area within the industry you would like to steer the company that may have differed from previous strategies?
We are going to continue the plan we have had for decades, which is a one-stop shop. As you see over time, we have gotten our low-level radioactive waste disposal licenses, we’ve expanded into the very low-activity, exempt-type waste, now we are looking at Greater Than Class C disposal, and then spent fuel storage. We continue to strive for those solutions, and then as we see needs and gaps as things change in the industry, we have tried to fill those in as well, mainly related to transportation casks and other things.
Speaking of those casks, a large problem affecting WCS’ quarterly profits, specifically in this last quarter, has been the availability of shipping canisters to ship waste to the company facility in Andrews County, Texas, and there was an expectation that that had been solved with the Robatel cask acquisition. What seems to be the problem with that? How do you plan to remedy it?
There are really two types of casks, a type-A cask and a type-B cask, and the Robatel casks were type-B. When we started, one of our competitors took the type-B casks out from use, so it seemed obvious we needed to fill that gap, as they mainly went to us. So, we bought the Robatel casks and have been utilizing those. Recently, that same competitor took their type-A casks and decided they would not ship those to WCS as well. So, we have entered into that type-A market. It took us a little bit, but we have long-term leases for some TAG casks that are type-As. We are now providing that solution to our customers as well and making us more self-sufficient for shipping. Hopefully, we have gotten most of the kinks worked out on that now, but it did take a couple of months to find those solutions and implement them and have them in place.
Looking at interim storage, can you provide an update as to where WCS stands in its submittal process to the NRC?
For interim storage, we have had one pre-application meeting with the NRC. We have filed a letter of intent. We had a general meeting, and we have some more scheduled for the end of the year. But so far, the discussions have gone well. Our goal on interim storage is to keep it simple. We have a site that has done very well characterized for low-level waste disposal and all other processing we do there as well, transportation, storage treatment, etc. We are using AREVA and NAC International, and their systems have already been licensed. They are already in place at nuclear utility sites, so this is stuff the NRC has seen before and approved before. We are combining that into one package at our site, so we hope that speeds up the licensing process. That should go well. I don’t anticipate any hurdles. This has all been licensed and approved before through very similar programs.
Is WCS still on track for an end of 2020 operations start date for the interim storage site?
We are. The only X-factor out there is legislation. Will Congress actually allow a private company to store and to allow DOE to take title and pay for that storage? We will get the license, but will we actually be able to ship this waste and pay for storage? That’s the biggest X-factor.
At the time of the announcement, WCS said it needed at the least a sign of congressional willingness, as well as some clarification on the suitability of the project under the Nuclear Waste Fund, to move forward. Has WCS received positive indications from Congress on those fronts?
Yes. We are very encouraged by the Senate bill that is out, which anticipates interim storage, so we like what it says in there. That is something that would enable us to move forward. In the House, they really haven’t had a bill come out. I know there is really two schools of thought. One is that you got to go to Yucca. You got to open Yucca before you do anything else. And I think there is another school of thought that thinks, well, maybe we need to do something else, and look at what the Senate is doing, and facilitate, especially for these shut-down sites, some storage that would enable them to finish that cleanup and turn those sites back to the local community for beneficial use.
Counting on Congress to get anything passed these days is kind of difficult. Would WCS be willing to move forward without anything officially passed?
We have continued through the licensing process, and we always said there is no way we would construct or do anything further before we got any kind of approval that would allow DOE to actually pay for storage. We did a lot through low-level waste, and learned a lot of lessons there. One of those is how to do consent-based siting, and how to work with the local community. That’s all gone fantastic, but we also know that if it’s not going to work, you don’t want to put money into it. We just need to get some indicators from Congress and DOE that they want this to work.
Have any conversations taken place with DOE about logistics, terms of the contract, etc., yet? If so, what does that look like?
We have had some preliminary discussions with DOE. I think there is an interest at DOE in something like this to happen. They have some ability to do transportation and other things, as a precursor to opening Yucca Mountain, so I think they have the ability to do some things, and I hope they do. Transportation is definitely one of those items that is a long-lead item, and so getting those transportation contracts in place to develop railcars and things like that, establish the routes and start working through things like that, would be very beneficial.
How about from more of a local front in terms of consent. How has WCS measured the willingness of the community, the surrounding community, and the state?
We have a vice president of community relations in Andrews, and he is very active in the community on several boards and things. He has had a lot of discussions with the local elected officials. We try to keep that finger on the pulse. Obviously, a lot of our employees are in the community and run in different circles, and just that feedback and whatnot seems to be very positive at this point.
Statewide, we have also stayed in touch with our local officials, congressmen, and senators, both at the state and national levels, making sure that they understand the project and to see if they have any concerns. So far, everything looks very positive for us at the state and local levels.
Is WCS going to need an official declaration of consent from the state similar to one the company would like from the U.S. Congress about its willingness to go forward with the project?
It’s obvious that at some point there will be some sort of host payment, similar to how for our low-level waste we have a percentage of our gross receipts go to the state and a percent goes toward Andrews County. I think something like that would happen for our spent fuel storage as well. At that point, the Texas legislature would weigh in on it. I think that would be a good measure of support and consent.
As WCS looks to license its facility to take GTCC, what makes WCS suitable for GTCC disposal?
We have an incredible facility. The geologic characteristics of that facility are the best in the nation and one of the best in the world. They clays are just so tight, so impermeable to water. The arid nature of it. It’s not an erosional system, it’s depositional. So as we look at our performance assessment and that PA is incredibly robust. It factors in a lot of characteristics, and you start playing with different inventories. One of the things we did after getting our low-level license is to see what else we could do with it. Are there other problem areas out there that need a solution that have been waiting for a while like depleted uranium and GTCC?
So we loaded both of those inventories into our performance assessment to see how that would model. We modeled it out to a million years; obviously DU has a really long life. Both of those were acceptable. We combined all the inventories from the facility and modeled it all together to make sure if you take DU, you can take GTCC, etc. The modeling has been great, and the model continues to improve and get updated as we get additional information. It’s just a wonderful site.
How do you gauge the NRC’s willingness to allow the state to oversee the licensing and regulation of GTCC?
I was at the recent NRC briefing on GTCC, and I thought it was informative. I don’t think the commissioners before that briefing really understood that if somebody other than Texas, if NRC licensed it directly, most likely would mean a different landfill. That federal facility we have, there is an agreement between DOE and [the Texas Commission on Environmental Quality] that was negotiated over a period of years. To accomplish that again would really be an effort. And then what else would you put in that new landfill at had a NRC license?
So, I hope they go with the staff recommended option two that would allow Texas to license the facility. I think they understood the benefits to the industry and the safety precautions. I know Texas in its comments made statements that they really wanted to work with NRC and utilize that expertise to make sure the performance assessment was done correctly and stood up to the regulatory burdens. We’re confident it will.
EnergySolutions has alleged anti-competitive conduct from WCS for trying to harm a competitor to maintain its monopoly standing for WCS’ intentions to end its relationship with Erwin Resin Solutions. Any comment in response to these allegations?
There is a lawsuit out there, and so my comment would have to be limited. I will say that WCS is very competitive. We do offer a full suite of solutions. We are happy to work with any generator, and hope to continue services for the long term.
Baltzer will also deliver a company update at the 2015 ExchangeMonitor RadWaste Summit, which is scheduled for Sept. 8-11 in Summerlin, Nev. The conference will include presentations from a host of government and industry speakers; registration and agenda details can be found here.
