Category Archives: Property rights

“Jac” Cales’ PPTA Monkey-Wrench

calesBy Peter Galuszka

For four decades, James A. “Jac” Cales Jr. was a fixture on the judicial halls of Hampton Roads, albeit not one to take himself too seriously.

As Portsmouth commonwealth’s attorney for a decade in the 1970s, he would lean back in his chair, his hands folded over his stomach and nod vigorously when a defendant in a drug case admitted something incriminating. He later served for three decades as a General District and Circuit Court judge, retiring officially in December.

So, it may be fitting that on May 1, while filling in temporarily, Cales issued what could be the most important decision of his long legal career. It is a decision that is turning Virginia’s transportation funding on its head.

Cales decided that a plan to have a private developer toll users for $2.1 billion in tunnel upgrades in crowded Hampton Roads is unconstitutional. Only the state has the power to tax and that’s what tolls really are, Cales ruled.

If his ruling holds, a number of critically important highways that involve privately operated facilities, such as parts of Interstate 495 in Northern Virginia, Route 895 near Richmond and a proposed $1.3 billion toll road from Petersburg to Suffolk, could be affected. State contracts for all of them could be voided.

If so, it would be a huge defeat for Gov. Robert F. McDonnell and earlier governors who have made good use of the Public-Private Transportation Act of 1995 to push ahead with highways that the tax-averse state otherwise was too short of money to build.

Cales’s case involved legal challenges to using the private toll road concept to pay for upgrades at the Downtown and Midtown Tunnels underneath the Elizabeth River connecting Norfolk and Portsmouth.

The key issues are electronic tolls that are supposed to kick in next February. Off-hour tolls for cars are $1.59 and go up to $1.84 during rush hour. Trucks would have to pay $7.36 during peak times. Business officials and commuters, many working in blue-collar jobs, are angry about the new expense. The tunnels used to be toll affairs years ago and the fees were much lower.

The pressure is on to void Cales’s ruling, lest it result in massive scrambling of road plans. Transportation Secretary Sean Connaughton, a big fan of the PPTA, warned of serious possible repercussions when he met with lawmakers Monday. “This is not consistent with almost 240 years of building toll facilities in the commonwealth of Virginia, Connaughton told the House Appropriations Committee, according to the Richmond Times Dispatch.

Cales’s ruling is due to be appealed to the State Supreme Court, but in the interim, he has refused to stay his decision. One possible outcome is that the state would be stuck with a lot of expenses that have already been paid, such as $706 million for the Elizabeth River tunnels. In all, the state could be on the hook for $3.5 billion.

The General Assembly would also be forced to perform a heavy-duty rethink of how it funds roads.

But that may be a good thing. The PPTA, heralded as a rare pioneering effort for Virginia, has been used far beyond its intended purpose. It was supposed to be a way to supplement traditional road funding. Instead, skin-flint legislators who hate “taxes” have used the PPTA as a way to fund roads through tolls instead with private companies assuming much of the risk. Democrats and Republicans alike liked this scheme of having your cake and eating it too.

The outcomes have not always been good. A relatively short toll road southeast of Richmond, the Route 895 Pocahontas Parkway, has been so underused and underfunded that it was sold off to Australia’s Transurban firm, which recently announced it was selling it to a consortium of European banks because it wasn’t making money.

Granny Flats Making a Come Back — Hoorah!

Two-story laneway in Vancouver. Photo credit: Wall Street Journal.

Two-story laneway in Vancouver. Photo credit: Wall Street Journal.

by James A. Bacon

Cities across The United States and Canada are liberalizing their zoning codes to allow more “accessory units” like basement apartments, granny flats and even tiny houses in the back yard, reports the Wall Street Journal. The trend is especially evident in regions with housing shortages and high real estate prices like Vancouver, Seattle, San Jose and Washington, D.C.

In Vancouver, a cottage industry (so to speak) has grown up around building “laneway” houses, free-standing buildings under 750 square feet. Moreover, a third of the city’s new single-family homes now are built with a rental suite in the home, up from 5% in 2000.

Predictably, some neighbors are complaining. The accessory units contribute to overcrowding, they say. Renters will take up scarce parking space, add to traffic congestion, make more noise, block the sun in their backyards or otherwise reduce neighborhood real estate values.

Such complaints need to be addressed forthrightly because accessory units are an important part of the policy mix needed to create more compact, fiscally sustainable settlement patterns while avoiding housing shortages that price out the poor, the young and the elderly. From the perspective of a smart growth conservative, five points are worth making.

First, while accessory units may increase the population density of a neighborhood by today’s standards, they reverse a decades-long trend of de-densification. As the Journal notes:

Single-family neighborhoods have become less dense over the years—a function of an aging population and falling household sizes, says Robert Bruegmann, a professor emeritus of architecture and urban planning at the University of Illinois at Chicago. As children leave for college and jobs, many seniors find themselves in homes too big for their needs. The generation behind them, meantime, continues to have fewer children—reducing its need for space

In other words, increasing numbers of accessory units allow urban neighborhoods to return to population densities for which they were originally designed. Why would cities support regulations to halt a healthy evolution?

Second, allowing homeowners to convert idle space (in the case of basement and garage apartments) or add new space (in the case of laneway houses) creates a revenue stream from the property. That revenue stream should increase the property owner’s ability to maintain the property — a real consideration for elderly families on fixed incomes. Better-maintained houses and yards lift property values for neighbors, too.

Third, accessory units provide an alternative to institutionalizing the elderly in extended living facilities and nursing homes. When Grandpa and Grandma live semi-independently in their flat out back, they can watch the kids after school, and family members in turn can look out for them. Anyone who supports strong families should embrace this arrangement.

Fourth, there is a question of property rights. Conservatives believe in an expanded definition of property rights. As long as accessory units don’t interfere with the public health or safety, and as long as they don’t pose a nuisance to neighbors, property owners should be allowed to do what they please on their own property.

Fifth, accessory units are fiscally efficient. They embed new housing in an existing urban fabric of streets, sidewalks, water, sewer and utilities. They pose no added cost to public services. And given the fact that most such units are occupied by individuals, not families with school-aged children, they don’t even burden local schools. Best of all, they create affordable housing without public subsidies. Conservatives should celebrate free-market policy alternatives to affordable housing.

Battle for the Battlefield

Manassas Battlefield Park Superintendent Ed Clark stands by a federal cannon with a statute of Stonewall Jackson in the background.

Manassas Battlefield Park Superintendent Ed Clark stands by a federal cannon with a statute of Stonewall Jackson in the background.

The Manassas Battlefield has become the scene of yet another irreconcilable conflict: this one between VDOT’s road-building plans, park service preservation goals and local residents protecting their way of life.

by James A. Bacon

As superintendent of the Manassas National Battlefield Park, Ed Clark enjoys regaling visitors with stories about the colorful characters who took part in two of the most important battles of the Civil War. But the administrative aspects of his job require most of his attention. Clark oversees the restoration of historical structures in the park and the updating of exhibits. He directs the plan for restoring the landscape to its 1862 form, which means cutting down some of the woods that have grown up since then, replacing invasive trees with native species, and doing something about those confounded deer. He keeps careful tabs on the private property inside the park and on its periphery. He would love to buy out the handful of property owners who still live within the official park boundaries, and he dreams of acquiring select properties outside the boundaries.

But Clark’s biggest preoccupation these days is traffic… rush hour traffic. The theme that animates his thoughts is how to improve the experience of the roughly 600,000 people who visit the park each year. And traffic congestion, he says, is ruining that experience.

About 24,000 vehicles per day use two two-lane roads — U.S. 29 (Lee Highway) and Rt. 234 (Sudley Road) — that intersect in the heart of the battlefield park. The two roads are direct descendants of the old Warrenton Turnpike and a local dirt road that played key roles during the battles. Clark knows they can’t be restored to their primitive, 19th-century condition but he’s not happy with the way they have been co-opted as regional transportation arteries serving the development sprouting all around in western Prince William County.

For three to four hours each morning and then each evening, traffic stacks up at the intersection near the old Stone House, one of the most visible battlefield landmarks. The driving tour, which many people take because the distances are too far flung to walk within the seven-square-mile park, requires crossing that intersection eight times. “The traffic detracts from the visitor experience,” says Clark. “Basically, it shuts down the park to visitors.”

The superintendent now finds himself embroiled in a political slugfest worthy of the artillery duel where General Thomas J. Jackson was said to stand as steadfast as a stone wall. But the 21st-century conflict is more complex and more drawn out. Manassas Battlefield sits athwart the route of a four- to six-lane highway that the McDonnell administration wants to run from the City of Manassas past Dulles airport. Local landowners, smart growth groups and even many local Republican legislators don’t want to see this rural corner of Northern Virginia developed.

Clark says he is doing his best to reconcile the park service’s preservation goals with McDonnell administration transportation policy, all the while respecting the rights of local landowners. He is negotiating a “programmatic agreement” with the Virginia Department of Transportation that would allow the state to run a major north-south highway past the western edge of the park, sharing alignment with a portion of a planned battlefield bypass that will loop around the northern periphery. In exchange, the park service would get to close the north-south segment of Rt. 234 inside the park and, when the bypass is complete sometime in the indefinite future, close the east-west segment of Rt. 29.

“We’re at the end game of a lot of conversations,” he says. Now the negotiations have boiled down to minimizing the footprint of the highway and mitigating its noise and visual impact.

But Clark may not be as close to the end game as he thinks. Only recently have citizens gotten wind of the details of the draft programmatic agreement, and they’re fired up.

“We feel like sacrificial lambs. Our way of life, our quality of life, our ability to live here” are all threatened,” says Page Snyder, daughter of the legendary Annie Snyder, who successfully spear-headed resistance to a regional mega-mall next to the battlefield park in 1988 and a Disney theme park five years later.

Snyder is one of roughly 100 property owners along Pageland Lane who will be directly affected by the agreement. But neither she nor they act like lambs being led to slaughter. Local foes of the proposed plan have packed public gatherings by the hundreds, joined forces with Smart Growth groups, recruited six Republican General Assembly members and Rep. Frank Wolf, R-10th, to their side, extracted a promise from the Commonwealth Transportation Board (CTB) to delay accepting a Master Plan for the proposed North-South Corridor of Statewide Significance, and persuaded the Prince William board to delay a vote affirming its support for the Bi-County Parkway, the linchpin of the North-South Corridor.

The outcome appears very much up in the air. Read more.

Rob Hodge, Civil War re-enactor and documentary film maker, says the rush hour traffic at the intersection of U.S. 29 and Rt. 234 harms the visitor experience at the Manassas Battlefield.

Rob Hodge, Civil War re-enactor and documentary film maker, says the rush hour traffic at the intersection of U.S. 29 and Rt. 234 harms the visitor experience at the Manassas Battlefield.

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.

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)

In Defense of Proffers

by James A. Bacon

A new business-backed group in Chesterfield County has sprung up to fight the county’s cash proffer system for new houses, arguing that the fees make new houses more expensive, hinder development and hurt jobs. The group has hired Capital Results, a government affairs firm, and launched a website, Citizens Against Proffer Taxes.

As Bacon’s Rebellion readers know, I am a staunch believer in low taxes. But that does not make me a believer in zero taxes. As long as we live in a world in which local governments pay for infrastructure such as schools, roads, libraries, parks and public safety buildings, then we need to find a way to allocate equitably and efficiently the cost of building and maintaining that infrastructure.

According to Louis Llovio with the Times-Dispatch, Chesterfield sets the maximum cash proffer at $18,966 per house, the highest levy in the region. Thomas Winfree, CEO of Village Bank, blames the proffers for major losses to the bank over the past couple of years. The bank has had to foreclose on properties and take losses on loans because developers are unable to complete projects “in part due to proffers.”

I hate to sound unsympathetic, but whose fault is that? It’s not as if Chesterfield had imposed the proffers after the fact, adding a burden that the developer and bank had not anticipated when they decided to move forward with a development. They embarked upon the project knowing full well what the proffers would cost but misjudged market conditions. Things didn’t work out. I’m sorry. I feel bad for you. I wish you’d made a lot of money. If you had, I would not have castigated you as a greedy rich person or advocated raising your income tax rates. But your business losses are your problem, not the taxpayers’ problem.

Rare among local government reporters, Llovio made an astute observation. “Citizens Against Proffer Taxes,” he writes, “does not recommend how the county should replace the lost revenue.”

That gets to the philosophical nub of the issue. The money must come from somewhere. The question is, who pays? Mr. Winfree apparently believes that the taxpayers of Chesterfield County should pay. And where would that money come from? Presumably from property taxes, which are the main source of revenue for local governments in Virginia. Thus, under Mr. Winfree’s logic, people who previously purchased houses whose prices incorporate the costs of proffers now should help pay a second time for the infrastructure that Mr. Winfree doesn’t want his developer clients to pay for.

Here’s the underlying philosophical principle that every local government should hew to: People should pay the location-variable infrastructure costs associated with the purchase of a new house. Failure to do so imposes an obligation upon someone else to pay instead. It also amounts to a subsidy that encourages developers to build houses in locations that are costly to serve.

Yes, proffers might add 5% to 10% to the cost of a new housing unit — a cost that can be amortized over the 30-year life of a mortgage. Proffers might mean that people have to satisfy themselves with marginally smaller, cheaper houses, or houses on marginally smaller, cheaper lots. Is that a cruel, insensitive thing for me to say? Then what do you say to the people who have to pay a higher property tax for a benefit they never receive?

The main problem I have with the proffer system is that it charges a flat fee that applies to every house, no matter how location-efficient its location. Virginians should adopt a practice that is common in Canada of varying the development fee, depending upon how expensive it is to serve. Thus, if a developer builds houses in an area where schools and roads are under-utilized, they should pay a smaller fee. Virginia’s proffer system definitely needs work, but it would be folly — and unjust — to do away with it entirely.

Hens and Self Sufficiency

Sheena and Valerie, activists with the Chickunz urban-chicken movement. Photo credit: Chickunz RVa Facebook page.

In a victory for urban chicken lovers everywhere, Richmond City Council adopted yesterday the final set of regulations that will make it permissible to own up to four hens in residential areas. In a setback for gender equality, however, the ban on roosters still applies. (See the Times-Dispatch article.)

Just kidding about the gender-equality thing. Roosters are a nuisance. Nobody wants to be woken at daybreak by a cock crowing next door. In all seriousness, lifting the ban on urban chickens marks a big step forward for the locally grown food movement, which is gaining momentum across Virginia.

There are a couple of layers to the issue worth examining. The first is the matter of individual rights. Why shouldn’t people be allowed to raise chickens in their back yards if it doesn’t pose a nuisance or health hazard to neighbors? What business is it of local government to restrict the practice? The City of Richmond will charge a $60-a-year permit to offset the cost of subjecting chicken coop owners to inspections by the Department of Animal Control and Care. That’s a reasonable concession to ensure that sanitary conditions are maintained.

The second issue is aiding and expediting the growth of the locally grown food movement. If Virginians increasingly have a taste for chicken and/or eggs that aren’t raised under the conditions of industrial agriculture, with all the hormones that are fed to the chickens and all the chicken waste that is produced, then public policy should encourage them to raise their own hens.

Furthermore, in a time of chronic economic hardship, when thousands of Virginians are short on cash and long on spare time, food self-sufficiency strikes me as a good thing. Poor people, in particular, should be coaxed into supplementing their food stamps with eggs, chicken and garden produce they raise themselves. We all know the old saying, “Give a man a fish and feed him for a day; teach a man to fish and feed him for a lifetime.” Substitute “chicken” for “fish.” Self-sufficiency — now, that’s real social change!

– JAB

Smart Growth for Everyone

by James A. Bacon

I’m back from the New Partners for Smart Growth conference in Kansas City, where I learned a lot, met some really bright people and, oh, by the way, gave a speech to the biggest audience of my career. As a bonus, I experienced a first — my speech was live-tweeted!

You can tell if a movement is vibrant or dying by attending conferences like these. If you see a lot of creative new thinking, you know a movement is gaining momentum. If you see a recitation of the same, worn nostrums, you know it’s slipping into senility. Let me tell you, there was no paucity of fresh thinking at the New Partners event. I talked to people who designed “parklets” (micro-sized public spaces shoe-horned into small urban spaces), adapted golf courses for wildlife habitat, used remote sensing technology to map urban tree canopies, conducted walking audits to measure a community’s walkability, and pushed the envelope of urban design to spur economic innovation.

Another sign of vitality is the organizers’ openness to different viewpoints. While smart growth tends to be a liberal or greenie preoccupation, the organizers invited me to deliver a speech, “Smart Growth for Conservatives,” an earlier version of which I had published on this blog. Also participating in the plenary session was Michael Lewyn, a libertarian law school professor at the Touro Law Center. Following the speeches, we engaged in a discussion moderated by Smart Growth America CEO Geoffrey Anderson.

My broad conclusion: There is roughly 80% overlap between liberals and conservatives on goals and objectives… Let’s work together to execute the smart growth elements we can agree upon and haggle over the details later.

During the conference, the Smart Growth Network released a compendium of smart-growth articles, entitled “The National Conversation on the Nature of Our Communities.” Among the highlights:

Smart Growth for Everyone,” written by yours truly. Pull-out quote: “Are planners so omnipotent that they can accurately predict the market demand for housing and business space in a dynamic economy for years in the future? Not bloody likely. Governments should unleash entrepreneurs by giving them more freedom. Let the marketplace, not comprehensive plans, decide what gets built and where.”

Also, “A Libertarian Smart Growth Agenda,” authored by Mike Lewyn, the libertarian law school professor. Pull-out quote: “If ‘smart growth’ means support for more walkable, less vehicle-dependent communities, smart growth supporters and libertarian-minded property rights supporters should have much in common.”

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.