Category Archives: Media

The Cooch’s Freak Show Dream Team

cooch dream teamBy Peter Galuszka

Ken Cuccinelli just can’t keep away from the bizarre, but perhaps that’s what makes him what he is.

He stages a convention instead of a primary to neuter Bill Bolling. And since a convention is smaller, it draws more GOP hard-righters than  June bugs on a humid night and they succeed in getting Bishop E.W. Jackson and Mark Obenshain selected. They underline the social conservatism that turns millions off and makes Virginia the butt of jokes on late night talk shows.

The Bishop is an even bigger gay basher than Cuccinelli and says that Planned Parenthood is responsible for more fatalities among African-Americans than the Ku Klux Klan. This may be new to a Harvard Law graduate, but women of any color have a legal right to an abortion within limits. The U.S. Supreme Court said so. Look under Roe vs. Wade.

Then there is the attorney general candidate Mark Obenshain of the legacy Republican family. He proposed and withdrew legislation to require any woman in Virginia who miscarries a pregnancy to report it to the police. The idea is so repulsive it is beyond words. A woman may have miscarried to her great sorrow due to medical reasons and then would have to go through the added horror of having to report to the police? Yes, this comes from a cabal that otherwise wants to keep the government out of your lives. Even Josef Stalin wouldn’t think of this.

What does the dream team have to say on the many policy issues facing a troubled state? We have a bunch of lame and poorly thought out tax cuts and Cooch playing hardware store populist. Cuccinelli was against McDonnnell’s mammoth road building tax plan and has since backed away from his opposition.

Is this good news for Terry McAuliffe, who has plenty of issues of his own? Yes, I would think. Cuccinelli doesn’t need the fringe hard right voters. He’s already got them in his pocket. He needs the center and Mark and the Bishop aren’t going to be much help there.

It boggles the mind how Virginia is so schizo. It is attracting hundreds of thousands of newcomers who are running the state’s economy and are dragging it into the 21st century world. Yet the Republicans put up people like this who aren’t dragging us to Virginia’s recent dark past but to medieval times.

Global investors might think twice or three times before investing in this freak show.

“The Grimmest” Gubernatorial Race

mcauliffeBy Peter Galuszka

National media outlets are casting the Virginia gubernatorial match as “the grimmest election” featuring Atty. Gen. Kenneth Cuccinelli as “a Republican nutjob” and Terry McAuliffe as a scummy fundraiser who has revealed his failings in a “self-Borking book.”

Those, at least are the summations from New York magazine and The Daily Beast.

The publications note that given Cuccinelli’s tendencies towards extreme comments, the Democrats should have had an easy time finding a candidate to more than match him.

They chose Terry McAuliffe, who is down 10 points in a Washington Post poll and 5 points down in a Marist poll. The news is filled with stories about McAuliffe’s business plans that never amounted to much, including a green car plant in Mississippi and then a wood pellet that would help tiny Franklin in the Tidewater area recover from the loss of the old Union Camp pulp mill.

My only point is why it takes so long for such snarky trend-setters as the Beast and New York to catch up with the pack. Virginians have known for years about Cuccinelli’s views. I wrote at length about McAuliffe’s gushy book about his years as a Democratic fundraiser several weeks ago and the book isn’t exactly news.

Of course, as I was told years ago as a correspondent and an editor at a national business magazine, “It’s not news until it’s in The New York Times.”

McAuliffe: Can a Schmoozer Transform?

By Peter Galuszka

On Easter Sunday, I was driving in a cold rain to Charlottesville for a family event. My cell phone started beeping with messages from Democratic gubernatorial hopeful Terry McAuliffe.

He said he was on his way to his own family brunch but wanted to tap me for $5. I got similar messages from two other staffers.

Why bother me at Easter? Political analyst Larry Sabato wondered the same thing. In a tweet that day he complained about finding “11 obnoxious messages for $$$. Now I know the answer to the age old Q; Is nothing sacred?”

And that may be McAuliffe’s biggest problem as he faces arch-conservative Ken Cuccinelli in the off-year governor’s race. In my profile of him in Style Weekly, I note that McAuliffe is trying to rein in an expansive personality that has made him a top political schmoozer and fundraiser for Democrats from Jimmy Carter to Bill and Hillary Clinton.

A decades’ long political operative who has never been in elected office, he can be bombastic and smooth, as his recent dealings with GreenTech Automotive shows. He flirted with Virginia for a hybrid  car plant before going to Mississippi. He has been accused of somehow using the car plant to win special visas for foreign workers and maybe misleading the Virginia Economic Development Partnership about his intentions in the Old Dominion.

Meanwhile, he must overcome some of his misunderstandings of traditional Virginia thinking. However, it’s probably a good thing that he’s going to skip the Shad Planking in Wakefield tonight with its Confederate flags where Cuccinelli will be keynote speaker.

While polls are about 50-50 in the race, McAuliffe’s fundraising prowess has shown brightly. In the first quarter, he raised more than $5 million — more than double the take of Cuccinelli, who has hamstrung by not being allowed raise money during the General Assembly session because of his position as Attorney General. Read on…

(Also, here as a Q&A with McAuliffe)

Cuccinelli’s Strange Lesson in Federalism

By Peter Galuszka

(Note: You’ve heard from Jim and Les on Ken Cuccinelli’s book. Here’s my review that runs in this week’s Style Weekly).

Kenneth Cuccinelli, Virginia’s firebrand attorney general and Republican gubernatorial hopeful, is typically full of fire and vinegar that make him such a lively politician. But you’d never know it from his much-touted book, “The Last Line of Defense, The New Fight for American Liberty” (Crown Forum).

Nowhere do Cuccinell and co-author Brian J. Gottstein, his media man, get into the marquee issues that have made headlines such as bashing gay rights, driving legal abortion clinics out of business by tightening clinic rules, and unsuccessfully hounding Michael Mann, a former University of Virginia climatologist who has the temerity to believe that humans are responsible for global warming.

What we get instead are 250 or so dry pages of a primer on Constitutional federalism. States retain power and give it to the federal government, not vice versa. The Obama Administration, in his view, has seriously endangered this crucial balance and “are the biggest set of lawbreakers.” His chief exhibits are ObamaCare, The Environmental Protection Agency, the Department of the Interior, the National Labor Relations Board and the Federal Communications Commission.

Mind you, Cuccinelli is running for governor but nowhere in this book does he talk about serious problems specific to Virginia, such as creating jobs, dealing with military industry budget cuts, funding schools or finding a way to pay to unclog the states poorly-maintained highways.

In the Cuccinelli and Gottstein view, the far more pressing issues read like an outdated Tea Party template from a couple of years back. Obama’s Affordable Health Care Act is seen as dangerous and unconstitutional because it requires all Americans to buy health insurance. Along with a couple of dozen Republican attorneys general from other states, Cuccinelli spends much time recounting his frontal assault.

In fact, he drags readers through practically half of the book, quoting patriots like Patrick Henry along the way, before we learn on page 141 that the U.S. Supreme Court upheld most of ObamaCare as constitutional on June 28, 2012. He does offer some solutions for health care, but they are the usual, garden variety stuff, such as allowing insurance companies to sell policies across state lines.

After wasting our time with ObamaCare, Cuccinelli shoots blanks at everything else. He claims the FCC is trying to regulate the Internet which has not been in the headlines for a while.

He goes into a controversy, covered endlessly by the Wall Street Journal, that the NLRB handled a complaint that charged Boeing with unfair labor practices when it moved some production work for is 787 Dreamliner aircraft to South Carolina, which is unfriendly to labor unions. The NLRB later dropped the complaint. That tends to destroy Cuccinelli’s argument that it is a threat to our freedom.

On other matters, he’s just plain wrong. He criticizes the Interior Department for going beyond a 1977 strip mining law by insisting on issue permits for coal mining. He writes that the law gives the states the exclusive right to issue permits, but in fact, the federal government oversees the state’s permit-letting in some states and handles it itself in states where the is no partnership agreement.

As for Cuccinelli’s big complaint that the EPA overstepped its bounds when it declared that masses of carbon dioxide are pollutants that need to be regulated, he ought to read the Clean Air Act that does give the EPA such authority. He claims that new rules to reduce carbon emission at coal-fired electricity stations are putting Virginia miners out of work. Nowhere does he mention that a flood of cheap natural gas brought on by controversial hydrofracking drilling is the most important reason.

To their credit, Cuccinelli and Gottstein write clearly and concisely. The book, for which Cuccinelli reportedly got a $30,000 advance, is an easy read. But given the fact that he’s been running for government for months, one has wonder whether Cuccinelli, along with Gottstein, another public servant, wrote this book on the public dime – that is, when he wasn’t filing politically-charged lawsuits against the federal government that went nowhere.

Visa Reform and Farmville’s Private Gulag

By Peter Galuszka

Surrounded by coils of security wire, the cream-colored metal complex sits in a small valley just outside Farmville, 60 miles southwest of Richmond. On the ridges above the private Immigration Centers of America-Farmville detention facility, a row of signs warns: “No photos or filming.”

Inside the facility’s entry, just before the airport-style metal detector, displays in Spanish and English warn visitors of a strict dress code. Women’s shorts “shall cover customarily covered areas of the anatomy, including the buttocks and groin area, both when standing and sitting.” For men, muscle shirts and gang colors are verboten. Everyone must wear shoes.

The $21 million jail, opened two years ago by three Richmond businessmen with federal approval, has the feel of a gulag for Spanish speakers. The 1,000 or so detainees inside tend to be Latin Americans who arrived to take low-paying jobs and lack proper visa documents. Some may have committed crimes and await deportation.

Indeed, the ICA-America-Farmville facility is a touchstone of the thorny issue of illegal immigrants who number about 11 million in this country. The privatized jail was created a few years ago during the height of an anti-immigrant craze that was a battle cry for the tea party and some Republicans, such as Prince William County supervisor Corey A. Stewart, who promoted Arizona-style laws to make it easier for police to arrest people they suspect of being in the country illegally.

The mood, however, is shifting rapidly. Republicans are moderating their tough stances after Mitt Romney garnered only 27 percent of Latino voters in the presidential election. President Barack Obama made comprehensive immigration reform a highlight of his Feb. 12 State of the Union address. “Both sides realize that the Hispanic vote is very important,” says Michael Zajur, president of the Virginia Hispanic Chamber of Commerce. He hopes a comprehensive reform plan that allows illegal immigrants to become legal will be in place within two years.

The problem goes far beyond Latin American newcomers here to handle the dirty jobs that the American-born don’t want, such as washing dishes or working in poultry factories. The country’s most significant federal immigrant law, passed in 1952, didn’t anticipate the country’s drastic need for high-tech workers that American schools can’t supply. Policies for H-1B visas, which allow American businesses to temporarily hire foreign-born workers, limit annual admission to 60,000.

High-tech companies in Richmond and Northern Virginia are desperate for qualified engineers and computer experts. The situation, says Debra J. C. Dowd, an immigration lawyer at Richmond’s LeClairRyan law firm, has become so strained that employers take bizarre steps to meet their need for foreign talent.

Some West Coast technology companies, for example, couldn’t get visas for needed foreigners. So they leased a cruise ship and set it up with work stations, Dowd says. The foreign engineers worked aboard ship as it cruised just off the U.S. coast and came into port to attend business meetings. That way, the workers could get into the country as tourists and then return to the ship and sail off to safe waters again.

“It is a function of not being able to find the workers they need,” Dowd says, adding that it also speaks to the weakness of the American educational system. In another example, Facebook had to place 80 foreign engineers in Dublin, Ireland, because it couldn’t get visas for them to work in California, The New York Times reports.

Solutions to such problems include allowing more foreign workers in high demand into the country, speeding up the visa process and perhaps allowing guest workers in for extended periods.

A major sticking point is how to handle the 11 million or so people who are living in the country without legal documentation. Early attempts to address this issue, including an initiative by former President George W. Bush that was regarded as progressive, were shot down by hard-liners who demand deportation for illegal immigrants. Some say a general amnesty is the only answer. The Dream Act, first proposed in 2001, would allow illegal immigrants to stay in the country if they arrived as minors, graduate from high school and are of good moral character.

Obama appears to be taking the middle ground by proposing a clear path to U.S. citizenship for illegal immigrants, but cautions against placing them ahead of foreign nationals who already are here legally. With the growing power of the Latino vote, such proposals stand a chance of passing both houses of Congress.

Since Obama took office, some 400,000 people have been deported, although Dowd says that the Obama administration has been trying to limit deportation to people who have committed serious crimes. Others see the president as not moving very far with immigration. “He should stop the deportations,” says Isabel Castillo, a waitress and immigration rights activist from Harrisonburg, who says Obama is “hypocritical” for voicing support for reform but doing little.

Castillo is an example of how muddled the immigration bureaucracy is. Now 28, Castillo arrived in the United States without documents when she was 6 years old. In 2004, her stepfather petitioned for her citizenship, she says, but the waiting list dates back to 1993.

Should Congress vote for comprehensive reform, what happens to facilities such as ICA-Farmville and other privately owned detention operations in other states? One problem for the ICA-Farmville’s owners is that their success depends on a steady stream of prisoners being investigated by the Immigration and Customs Enforcement division, known as Ice, of the Homeland Security Department, or have been convicted of a serious crimes and will be deported. There will be a need for detention facilities, Dowd says, “but perhaps not as many of them.”

Farmville officials have said they like having the detention facility because the city can get paid $1 to $2 per day per prisoner in fees and it provides jobs.

The ICA-Farmville, built by Richmond businessmen Ken Newsome, Warren Coleman and Russell Harper, does not readily give out information about its operations. In the entrance way to the detention center, a man identifies himself as Jeff Crawford and says he’s the facility director, but declines to speak with Style Weekly. Repeated telephone calls to immigration officials in Fairfax and Washington weren’t returned by press time.

It may take several years, but comprehensive immigration reform could seriously impact ICA-Farmville’s business plans if not put it out of business. “You have plenty of serious criminals out on the streets,” Zajur says. “We have people who only want to better their lives. We don’t need to put those people in a facility like that.” 

Note: This post first appeared in Style Weekly.

Reports of King Coal’s Death Are Greatly Exaggerated

 By Peter Galuszka

It seems such a short time ago.

In the gnarled hills of Southwest Virginia’s coalfields, prominent Republicans Ken Cuccinelli, Robert F. McDonnell and others were on the stump for Mitt Romney. The key theme was how Barack Obama’s environmental rules were putting a stranglehold over the coal industry.

A little farther north in Ohio, Robert Murray, a strident conservative and head of Murray Energy,  was laying off coal miners and allegedly forcing others to attend a pro-Romney rally. It was, he said, a “drastic time” and they were in “survival mode layoffs” thanks to Obama.

Flash forward to now. While natural gas has eaten into King Coal’s share of the U.S. electricity market, the coal industry has managed to increase its exports of thermal product to Europe from 39.5 million short tons in the first months of 2011 to 51.1 million short tons in the same period of last year. The reason: while Americans enjoy cheap natural gas, Europeans are paying three times the normal rate for it.

Meanwhile, Bristol-based Alpha Natural Resources, which, to its credit, did not blame its losses last year on Obama, is expecting a bit of a recovery in the coal industry this year.

The firm lost $2.4 billion in 2012 as it suffered from big utility stockpiles thanks to a warm winter and competition from natural gas, but CEO Kevin Crutchfield expects some recovery in 2013. The firm also managed to double its exports of Eastern thermal coal to six million tons – part of the unexpected  European demand. Alpha took over troubled Massey Energy, based  in Richmond, in 2011.

As for Murray Energy, Obama must be doing a bad job at killing King Coal, because there are reports that Murray Energy is rehiring some miners.

True, there’s renewed interest in carbon dioxide rules that will impact coal and perhaps place it further out of marketability. But there export market is strong in Europe and Asian demand for coking coal may pick up.

Part of the problem, as Crutchfield notes, is that Central Appalachia, which includes Southwest Virginia, southern West Virginia and eastern Kentucky coalfields, is just too expensive for production, compared to Wyoming’s Powder River Basin or Northern Appalachia’s Pittsburgh seam.

All the complaining in the world about the EPA and Obama can’t change that.

Shameless self- promotion: My book, “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal,” was reviewed by the New York Times Book Review on Feb. 10.

Back on Front Burner: Controlling Carbon

By Peter Galuszka

On frosty mornings, Virginia’s single largest-contribution to global warming can be seen belting out dense steam clouds from its three smokestacks near Interstate 95’s interchange with Route 288. The 1,600 megawatt Chesterfield Power Station provides owner Dominion Virginia Power with enough electricity for four million customers and represents 12 percent of all of the Richmond-based utility’s power generation.

The downside is that the power plant’s four coal-fired and two combined gas cycle units were the state’s top single source last year for carbon dioxide emissions that contribute to climate change. Their output totaled 6.1 million tons of carbon dioxide, according figures recently released by the U.S. Environmental Protection Agency.

That’s not all. Dominion’s Clover Power Station and the Chesapeake Energy Center hold the No. 2 and No. 3 slots on the EPA list. All three produce 14 million tons of the 44.6 million tons of carbon dioxide tallied on EPA’s survey. In all, Dominion was responsible for 20 million tons or 46 percent of the state’s total greenhouse gas emissions.

For Virginia-based environmentalists, the Chesterfield plant and its sisters are powerful examples of what needs to change as they prepare to attend a Feb. 17 rally in Washington to push President Barack Obama to take a harder stand on global warming. “Every year that Dominion delays moving away from fossil fuels and to wind, solar and energy efficiency raises the costs to all of us,” says Glen Besa, head of the Virginia Chapter of the Sierra Club.

In his state of the union speech Feb. 12, Obama said that weather phenomena such as Superstorm Sandy and their connection to climate change cannot be denied. He stated: “I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

Regarding Dominion’s role in carbon pollution, utility spokesman Dan Genest says that his firm has almost 700 megawatts in its portfolio, including biomass, hydroelectric and wind.  As for its Chesterfield plant, Genest notes that it is “one of the cleanest coal facilities” in the country. Dominion has invested $1 billion since 2000 to reduce sulfur dioxide, nitrogen oxides and particulate pollutants, he says. Carbon dioxide, however, isn’t on the list.

It soon could be. Forgive the pun, but after several years of simmering, the campaign against global warming is again gathering steam, as Obama’s speech attests. The bad economy made it politically toxic. During last year’s election, Republican candidates tried to paint carbon-cutting rules as damaging conspiracies to cut kill jobs and the coal industry, the largest single source for electricity generation in the nation.

A contributing factor was the unexpected flood of cheap and less polluting natural gas, some of it produced through controversial hydraulic fracking drilling methods. Gas gives off half the carbon as coal, produces far fewer occupational fatalities and doesn’t cause massive environmental destruction that coal’s mountaintop removal surface mining does. Utility executives love natural gas’s low cost and its user-friendly image.

Obama’s big electoral left the deep-pocketed coal lobby licking its wounds The big questions now: Is Obama free to take big steps towards stemming greenhouse gases? Or, will the glut of cheap gas actually slow the advance of renewable energy such as solar, wind and thermal because they are more expensive and will require government subsidies to get rolling?

Some believe the timing is right for utilities to start engaging in setting rules to reduce carbon dioxide. So far, Obama has proposed new carbon-reducing regulations on new power stations that aren’t in operation yet, but hasn’t really addressed existing power plants that are the biggest polluters. Some foreign countries and the state of California have introduced “cap and trade” systems to control carbon but efforts to set up a similar national system or other solutions have fizzled in the United States. Obama alluded towards renewing setting up some market-based system to control carbon dioxide emissions in his State of the Union address.

From their point of view, utilities might want to join the rule-setting process now so they will have more of a say in what evolves, some environmentalists believe. “Dominion has a tendency to anticipate what the EPA would do and did it,” says Besa. Another big coal-burning power firm, Charlotte’s Duke Energy, “would sue” when confronting changes by EPA, Besa says.”

Manik Roy, vice president for strategic outreach at the Arlington-based Center for Climate and Energy Solutions, says that if any progress comes, it will have come from EPA regulations since “we are not expecting Congress to be very active on this issue” because it has been sidetracked by “more fundamental things.” Roy expects the EPA to start considering carbon dioxide rules for existing power plants within a few months and utilities should start preparing for it.

Another unaddressed problem is that the system that sets goes regarding what percentage of power utilities should plan on getting from renewable energy sources is haphazard and piecemeal. There is no federal plan, at least not yet. States have set a mish-mash of mandatory and voluntary guidelines about what the goals should be as far as renewable power generation. The rules come under what is called the “Renewable Portfolio Standard,” but they vary widely.

In some states, moving to a certain percentage of renewable energy sources must be done but the utility will receive an incentive to do so. New Jersey, for instance, has a tough RPS and already has 900 megawatts from solar sources. That’s the power generated by a middle-sized coal or nuclear plant.

Virginia is one of the few states where the RPS is “voluntary.” The lack of results are predictable. “Virginia is one of only nine states where there is no utility-based wind or solar,” says Dawone Robinson, Virginia Policy Coordinator of the Chesapeake Climate Action Network. Maryland and North Carolina have mandatory RPS goals, leaving Dominion in the peculiar position of having “voluntary” renewable goals in the Old Dominion but facing mandatory ones in northeastern North Carolina where it also provides power.

The complex world of setting goals also leads to what some say are abuses. Atty. Gen. Kenneth Cuccinelli, who is running for governor, issued a scathing report last November charging that Appalachian Power received $15 million and Dominion got $76 million in incentives charged against ratepayers for supposedly using renewable energy sources. In one case, Cuccinelli said, these involved counting an 80-year-old dam that produced hydroelectric power as a “renewable.”

The green community praised Cuccinelli then damned him when he announced a deal with the two utilities to do way with the incentives. Cuccinelli’s office says the goals to promote renewable energy sources remain in place. But the system remains voluntary and ”if you repeal incentives in a voluntary program, why would utilities participate,” asks Robinson.

Meanwhile, the power companies’ firms, along with other sources such as chemical plants and landfills across the state, still pump out carbon dioxide. Some of the sources such as some of Dominion’s power plants in Chesapeake and Yorktown, are due to be shut down because they are decades old and are too expensive to upgrade. “Dominion has a reputation of being pretty constructive,” Roy says.

But unless something serious happens at the federal level, attrition of old and polluting power stations and factories will be the only protection against greenhouse gas emissions.

 Note: Portions of this posting appeared in Style Weekly article.

“Jeopardy” for Budding World Statesmen

By Peter Galuszka

At Richmond’s Hotel Jefferson, 10 teams of earnest-looking high school students, some in shirt sleeves, pore over notepads as they consider the questions put to them on a big screen, Jeopardy-style, in the Grand Ballroom.

“What percentage of oil used by the United States actually comes from these Persian Gulf countries?” Other questions ask what the problems are in pushing from STEM (Science, Technology Engineering and Math) courses in school and what types of nuclear weapons did the Soviet Union place in Cuba in 1962 and what impact would they have on the U.S. and where?

It’s is the third  session of Academic WorldQuest held by some 40 World Affairs clubs around the country. Winning teams move on to the national contest at Washington’s Georgetown University on April 27. Participants have a chance to compete for college scholarships and iPads and meet with embassy officials from other countries.

This event was sponsored by the World Affairs Council of Greater Richmond (full disclosure, I have been a member for about 10 years) and is repeated by some of the 40 similar, non-profit World Affairs groups across the country. Another session was held by a club in Hampton Roads and their winning team is on its way to nationals in DC as well.

The competitions are a way to keep high school kids on their toes when it comes to understanding global politics, economics and cultures — incredibly important areas that they will face as they begin their careers. It’s tougher than ever for them to keep up thanks to spending cuts in education. The media isn’t helping as it chops away at foreign news bureaus due to costs.

High schools set up teams, pay their entry fee and bone up for three months on materials sent by the World Affairs Councils. These aren’t exactly Dick and Jane tomes. They are copies of actual testimony regarding world issues from the United Nations, Congressional committees, the World Economic Forum in Davos, Switzerland and various government agencies and independent think tanks.

The most recent contest drew teams from Collegiate School, the Douglas Freeman High School, Meadowbrook, Manchester,  Hermitage and Henrico High Schools along with the Maggie Walker Governor’s School. A series of questions are posed before the teams for about one minute. Maggie Walker won in a tiebreaker against Henrico.

Funding came from Richmond-based packaging giant MeadWestvaco and Henrico-based Data Concepts. With all the gloomy talk about sequestration and other budget cutting, it’s good to see that someone’s doing something to keep young people aware of the larger world.

Is Virginia Uranium Quickly Running Out of Money?

By Peter Galuszka

Just how financially viable is Virginia Uranium, which appears to be losing its battle to lift a 31-year-old ban on uranium mining in Virginia?

Corporate documents filed with Canadian securities regulators state that as of last September, Virginia Energy Resources Inc., Vancouver, British Columbia-based parent of Virginia Uranium that wants to mine a 119-million pound deposit of uranium near Chatham, was having serious problems with financial losses and cash flow.

According to documents obtained through Canada’s System for Electronic Document Analysis and Retrieval (SEDAR): “For the period ended September 30, 2012, the Company incurred an operating loss of $5,354,146, and has an accumulated deficit of $17,109,894, limited resources, no source of operating cash flow and no assurances that sufficient funding will continue to be available.”

For several years, Virginia Uranium has funneled cash and gifts to legislators to influence them to support ending the state’s uranium mining moratorium. The effort appeared to fall apart when State Senator John Watkins, R-Powhatan, withdrew a bill that would have ended the ban and started setting up the regulatory to allow mining. He did so before it was due before an unfriendly Senate committee that most likely would have killed it.

Lobbyists are now focusing on Republican Gov. Robert F. McDonnell to get the issue moving again before Tuesday, known as the “crossover” day or the last day in a General Assembly session that a bill in one chamber can move to the other. A bill similar to Watkins’ is in the House of Delegates but, so far, McDonnell seems to be avoiding taking a stand on uranium.

Despite having paid legislators to go on trips to France, including stopovers in Paris and Canada, to drum up support for uranium mining, there were hints that something was amiss financially. In 2011, Virginia Public Access Project records show that Virginia Uranium spent $120,000 on gifts – the most of any company in the state. This past year, that amount dropped to $107,000. With the exception of Democrat Richard Saslaw, most of the money went to Republicans.

So, big questions loom.  Would McDonnell kick start the move for Virginia Uranium as it struggles with money? Why would the General Assembly seriously consider spending millions in new expenses setting up as many as 30 new regulators to handle uranium mining?

Watkins and others have said that Virginia Uranium would pay for the cost so it won’t fall on taxpayers. But how could that happen if the firm itself seems to be running out of money?

Virginia Uranium’s Strangely Short Half-Life

Peter Galuszka

After years building up to a critical mass, Virginia’s uranium controversy never quite reached fission.

State Sen. John Watkins, a Republican and uranium backer from Powhatan, pulled the plug on his pro-mining bill Thursday as it faced certain death at a Senate committee. There are a couple of other legislative efforts out there, but it probably safe to say that the state’s now 31-year-old ban on mining uranium stays.

This year’s dramatic battle joined well-pocketed interest groups from both sides. Virginia Uranium, which wants to develop the 119 million pound deposit near Chatham, had given thousands of dollars in donations, trips and gifts to many legislators. Anti-mining advocates, including the cities of Norfolk and Virginia Beach who feared for their drinking water sources, hired their own advocacy muscle. Ordinary folks down in the gently rolling hills of Pittsylvania County organized a strikingly tightly-disciplined and effective anti-mining campaign.

At the end of the day, however, the real reason uranium failed lurks behind the scenes far from the polished floors of the State Capitol.

The fact is that the dynamics of energy pricing are undergoing a huge change in this country. A flood of natural gas, some from controversial “fracking” drilling methods, is making other forms of electricity generation, notably nuclear, financially less attractive.

Back in 2007, uranium prices were about $140 a pound. That touched off a renewed effort to mine the Coles Hill Farm tract in Pittsylvania County, one of the country’s largest uranium deposits.

As both sides of the argument poured money into lobbyists’ pockets, something happened that was beyond their control. Uranium prices set by global demand started dropping. By 2010, they had plummeted to about $70 a pound because of the global economic slowdown. After the Fukushima nuclear disaster in Japan in March 2011, they fell to the mid-$40-a-pound level, where they are now.

What that means for uranium mining in Virginia can be explained with simple arithmetic. According to Brett Arends of the Wall Street Journal, “The industry needs prices to be at $75 to $80 a pound for future mine production to be profitable.” In other words, for Virginia Uranium’s project to work, prices would likely need to rebound by about $30 a pound. I have noted this in a previous blog.

The bad news for uranium continues. According to another article in this morning’s Wall Street Journal, U.S. utilities are starting to shut down or consider dropping some of their nuclear power stations because of unexpectedly cheap natural gas. Richmond-based Dominion Resources has announced it is shutting down its Kewaunee nuclear plant in Wisconsin this summer, even though it has 20 years left on its operating license.

Dominion says it is cheaper for it to meet its sales contracts with other utilities by buying electricity on the open market. Presumably that means electricity created by gas. Industry analysts believe that other nuclear utilities that might consider shutting down or have already idled some of their nuclear operations are Exelon Corp., Entergy Corp., Edison International and Duke Energy Corp.

The invasion of natural gas also means tough times for the future of nuclear power, which just a couple of years ago seemed on the verge of a rebound. According to the Journal, fixed costs for a power stations run $15,000 per megawatt for a modern gas plant, $30,000 for a coal plant and $90,000 for a nuclear plant. The newspaper notes that nukes also have extra costs because they need more security guards and have more demanding maintenance and spent fuel storage issues. It is hard to recover the higher costs because regulators who set electricity rates in some states require utilities to go with the cheapest fuel possible.

To be sure, demand for nuclear power still looks promising in places such as India and China, but that is unlikely to result in a spike in global uranium prices for at least a few years.

This all made Virginia Uranium’s proposal look shakier than ever, despite all of the hullaballoo, battling op-ed pieces in newspapers and expenses-paid trips to Paris and Canada organized by the firm.

For now, at least, uranium is dead. Its killer was cold, hard economics.