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Enviro Groups Challenge Nuke Plant Water Rights

by Sarah Kramer
- Posted // 2012-02-15 - The path to a commercial nuclear reactor in Utah has met an unexpected roadblock in the form of an appeal of State Engineer Kent Jones’ Jan. 20 decision granting water rights to Blue Castle Holdings for the project.-

The appeal, announced Feb. 9, was filed by environmental-advocacy and nuclear-watchdog group HEAL Utah along with over 20 other groups. The decision to file a request for reconsideration was the direct result of another blow to the Blue Castle Project: The revelation that LeadDog Capital, LLC, the hedge fund that had offered to put up $30 million to fund the project, is under investigation by the Securities and Exchange Commission for falsely inflating the company’s assets and concealing from investors potential conflicts of interest. A second request was also filed by Moab-based environmental groups.

In a press release from Jan. 27, Blue Castle declared that while LeadDog had expressed interest, Blue Castle had “determined not to use” the hedge fund as a source of capital. If this is the case, they neglected to mention the decision to Jones, who mentioned LeadDog by name in his decision to approve the water-rights lease, or to CW when Blue Castle CEO Aaron Tilton was interviewed in March 2011. At the time, Tilton said Blue Castle had entered into agreements with LeadDog but had yet to execute them.

The State Engineer cannot approve water-rights applications for speculative projects. The dual appeals and loss of potential capital from LeadDog spell trouble for Blue Castle. While Tilton has placed net revenue from subsidiary Willow Creek (a pipeline-construction company) in the neighborhood of $30 million, HEAL Utah says its research reveals less than $6 million in gross sales in 2010. The permits from the Nuclear Regulatory Commission for construction and licensing are projected to cost around $100 million. In addition, in a Dec. 2011 for trade publication Nuclear Engineering International, Blue Castle COO Thomas Retson and Senior Vice-President Robert Graber wrote that once the licenses have been granted, the company intends to “transfer the project assets” to a new owner, who can begin building the reactors immediately or “wait until economic conditions are more favorable.” This means an economic boom Green River residents hope could come from plant construction and operations could be decades away, if it happens at all, and most likely won’t involve Blue Castle.

The requests for reconsideration also challenge the State Engineer’s assertions that the Green River’s flow is able to support the diversion of 53,600 acre-feet for the Blue Castle Project, and call into question Blue Castle’s ability to bring the plant to fruition with no prior experience in the nuclear-energy industry.

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Posted // February 17,2012 at 09:07

Challenging water rights is part of the process of aquiring the water rights.  I own 3 water share in Eastern Utah and had to publish three days in a row in Newspapers how many and what I was using them for.  Then any challenges had to be dealt with at State Water right level.

 

 
 
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