---------- DOCUMENT HEADER ----------
---------- DOCUMENT HEADER ----------
ARIZONA HOUSE OF REPRESENTATIVES
Forty-ninth Legislature First Regular Session
AD HOC COMMITTEE ON ENERGY AND WATER DEVELOPMENT
Minutes of Interim Meeting
Monday, November 30, 2009
House Hearing Room 5 -- 9:00 a.m.
Co-Chairman Gowan called the meeting to order at 9:10 a.m. and attendance was noted by the secretary.
|
Senator Al Melvin, Co-Chairman |
Representative David Gowan, Co-Chairman |
|
Senator Thayer Verschoor |
Representative Franklin Pratt |
|
Senator Amanda Aguirre |
Representative Russ Jones |
|
Senator Barbara Leff |
Representative Robert Meza |
Co-Chairman Gowan welcomed the Members and expressed his thanks to the staff and everyone who contributed to each of the four meetings, and to Salt River Project for their assistance.
Co-Chairman Melvin echoed his appreciation and stated that he would like to continue to meet quarterly to find affordable water and electricity. He stated his hope that Arizona has the political will to get this task accomplished.
Presentation on Energy and Water-Related Grants at the University of Arizona
Jeff Goldberg, Dean, College of Engineering, University of Arizona, explained that part of the land grant mission of the University of Arizona is to educate and to work on energy and water issues in the state (Attachment 1). He informed the Members that the University is increasing enrollment in the sciences and is improving student retention.
He stated that the University has many energy programs and he described one which is offering freshman engineering courses in the high school, then recruiting those students to the University. The goal is to get high school students interested in engineering. The program uses University graduate students to run it and has been implemented at six high schools to date, with plans to grow to 20 by next year. Dr. Goldberg stated that this program has been greatly helped by Science Foundation Arizona and added that the University receives foundations, scholarships, and endowments from many corporations.
Co-Chairman Melvin stated the importance of creating engineering jobs in Arizona and retaining students for those jobs. He listed some opportunities, including energy parks, recycling, and nuclear energy as examples. Dr. Goldberg concurred, stressing the importance of lifelong learning for engineers who will contribute to the economy.
Presentation on Uranium Mining In Arizona
Jim Briscoe, LibertyStar Uranium and Metals Corporation, informed the Committee that Arizona has large stores of uranium and that his company does mining here (Attachment 2). Uranium is as common as tin or zinc, and is found in most rocks. He stated that a thimbleful of uranium is equivalent to 17,000 cubic feet of natural gas and emits no carbon dioxide. A nuclear plant is the most compact of any kind of generating facility with equal capacity. He described the geology of the 9,000 to 10,000 breccia pipes in Arizona, which can be as old as 150,000,000 years. The most important concentration of the breccia pipes is located near the Grand Canyon, which is only 3,000,000 years old.
Mr. Briscoe addressed the environmental concerns associated with uranium mining by explaining that his company limits the site to five acres, utilizes dust control, uses limited signage, camouflages the operation, and ensures total reclamation after only 18 months. He added that all drainage is routed to the interior of the mine, which is then backfilled. There is no surface drainage. The capacity of such a mine is 2,000 tons per day and trucks are used not only to deliver ore, but to pick up tailings to be returned into the mine.
He described how both mining and milling can be done in Arizona, with a finished product of yellow cake and other minerals there is no need to enrich uranium as that is done in Canada.
He stressed that nuclear power is most efficient working at peak (base) load.
Co-Chairman Melvin asked if the breccia pipes are on Bureau of Land Management land. Mr. Briscoe answered in the affirmative, adding that they are also on private land. He stated that breccia pipes are typically 300 feet in diameter and 1,000 feet underground, so any uranium mine is an underground mine.
Presentation on Opportunities to Develop Medical Isotopes
Mel Poy, Nuclear Consultant, Canada, explained to the Committee that medical isotopes are used in 50,000 medical procedures every day in the United States, which include the detection of both cancer and heart disease along with cancer treatment. When used for diagnostic purposes, medical isotopes often facilitate an earlier and more complete disease diagnosis (Attachment 3). He stated that the United States depends upon foreign importation of medical isotopes, receiving 60 percent from Canada where the main reactor has been shut down for repairs.
With demand expected to increase in the U.S. by 8 to 20 percent every year for the next twenty years, Arizona can benefit greatly by utilizing the infrastructure already located here or building a new facility. Such a move would allow Arizona not only to provide for its needs but also to function as an exporter to the rest of the United States, moving away from reliance upon foreign markets. Arizona has the potential to convert the current Palo Verde nuclear reactor as one option without limiting power production or pursue a license from the U.S. Nuclear Regulatory Commission to build a new 20 megawatt reactor. Mr. Foy stressed that it takes four to six years to create these production and distribution operations.
Co-Chairman Melvin stated that this looks like a huge opportunity for Arizona and for research at Arizona universities; he asked what the Legislature can do to facilitate this. Mr. Foy replied that to combine the public and private sectors would be the most effective way.
Co-Chairman Melvin commented that there will be a public relations debate about the importance of atomic energy to medicine and that this could help sell the idea of more nuclear plants.
Co-Chairman Gowan asked about the possibility of building small nuclear reactors for medical purposes. Mr. Foy explained that the cost of one would be $3-$4 million but that the investment could be regained by the sale of medical isotopes.
He distributed a list of questions and answers about this topic (Attachment 4).
Presentation on Nuclear Engineering at Arizona State University
Keith Holbert, Energy Engineering Department, Arizona State University (ASU), stated that interest in nuclear power is growing due to concerns about greenhouse emissions and climate change (Attachment 5). He described two types of energy:
Dr. Holbert stated that ASU is developing a graduate level certificate program, a multidisciplinary professional option within the ASU School of Engineering. He explained that most engineers working at nuclear power plants are not nuclear engineers and this program will help educate them for work in the nuclear power industry.
He added that the Nuclear Regulatory Commission (NRC) is offering student scholarships as well, but an ASU strategic plan is required so that these scholarships are an integrated element in that plan.
Presentation on the Economics of Energy
Stan Reynolds, Economics Department, University of Arizona, stated that recently he began to focus his research and teaching on the general area of energy economics. He stated his belief that a market-based system is effective to organize the production and distribution of energy and can play a very important role (Attachment 6). The government focus in markets should be to secure a good system of property rights and to enforce economic rules, but sometimes markets do not work well and problems can be more acute in energy and water use than for other kinds of products. Energy and water production and distribution can become a natural monopoly situation where competition can be ineffective.
There are also external issues such as pollution, unsightly or noisy grids, and drawing from aquifers to the detriment of other consumers. This explains why government involvement is often necessary in the organization of the electricity and water sectors. This involvement can range from public utility regulation (like the Arizona Corporation Commission) to municipal ownership of water and power systems to a host of state and federal regulations dealing with the environment and renewable energy.
Dr. Reynolds defined two energy challenges for Arizona:
He stressed that water and electricity demands are connected with one another:
Dr. Reynolds stated that Arizona should move away from state regulation of electric utilities and towards a market-based system, which would require a restructuring of electricity. Right now costs are passed on to the consumer if approved by a regulatory agency, whereas in some states such as Texas retail providers offer options to consumers. Restructuring would not eliminate regulation of local distribution, which would still require an independent system operator to coordinate the grid.
Co-Chairman Melvin asked about states rights and federal regulation and how to restructure energy, particularly when the grids and lines cross state lines. Discussion ensued on this topic and on the renewable portfolio standard issued by the Arizona Corporation Commission. Dr. Reynolds commented that Arizona Corporation Commission involvement is largely a political issue. He added that 30 percent of the electricity generated in Arizona is shipped out of state.
Senator Verschoor inquired about the effect on infrastructure of moving to a market-based system. Representative Pratt inquired about differentiating between residential and commercial infrastructure and if standardizing the laws across the state would include the taxing structure. Dr. Reynolds stated that regulatory procedures should be standardized, but not the taxing structure.
Presentation on Issues facing the Solar Industry in Arizona
Todd Landfried, Director, Renewable Energy Contracting, Ironco, addressed the Committee to discuss the issues impacting the solar industry (Attachment 7). He stated that nuclear and solar energy are not mutually exclusive because they serve different demands: nuclear provides baseload power and solar provides intermittent power (because storage capabilities do not allow baseload capacity at the present time). The costs of construction are similar, if comparing a utility-scale solar plant. The land use, or footprint, requirements are similar. He stressed that solar construction jobs are local jobs, whereas nuclear facilities require specialized construction.
Mr. Landfried stated that if Arizona went to daylight savings time it would extend solar use into peak periods, adding that the intermediate and peaking demand is growing faster than the baseload demand. He informed the Members that fuel is a significant ongoing expense for any traditional power plant, whereas solar energy spends $0 on fuel.
He informed the Committee that, in contrast to a nuclear facility, only four years are needed to construct a utility solar plant, there is no waste to store, only minimal security procedures are needed, a small buffer area is required as there is no environmental impact, smaller staff can run the plant, and local workers can construct and maintain the facility. The cost of a solar facility is $1.5 billion, compared to $6 billion for a nuclear facility.
Mr. Landfried opined that the Arizona Corporation Commission is dithering on solar as a utility and is holding up $300 million in commercial and governmental solar projects, including solar service/power purchase agreements that make it easy for people to buy solar.
Senator Verschoor stated the importance of developing diversified sources of energy.
Co-Chairman Melvin thanked all the presenters for their preparation and participation and stressed the importance of meshing all these energy sources together for Arizona.
Eric Wnuck, CEO, Enhanced Medical Imaging, stated his support for medical nuclear isotope development. He informed the Committee that there are opportunities in the area of medical imaging using medical isotopes and he urged the State of Arizona to pursue these opportunities.
Without objection, the meeting adjourned at 12:14 p.m.
__________________________________________
Jane Dooley, Committee Secretary
December 8, 2009
(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)
---------- DOCUMENT FOOTER ---------
AD HOC COMMITTEE ON ENERGY AND WATER DEVELOPMENT
November 30, 2009
2
---------- DOCUMENT FOOTER ---------