Harold Simmons Lieutenant: Andrews Opponents Out to “Shut Down” Nuclear Energy

Harold Simmons IMG_1946Early last year, D CEO magazine told the story of businessman Harold Simmons’ years-long campaign to open a low-level radioactive-waste facility in Andrews, Texas. While the Dallas billionaire declined to speak with us for that article, he invited us into his offices at Lincoln Center Wednesday for the Q&A interview that follows on the jump.

Besides spending time defending the controversial project, Simmons–who turned 79 the following day–told us that his public companies have roared back from the recession, and that some now are setting all-time revenue records.

Simmons turned much of the talking Wednesday over to William Lindquist, CEO of Waste Control Specialists LLC, the Simmons company that’s trying to open and run the waste dump in far West Texas. (Both are pictured here, with Simmons at right.) As the Austin American-Statesman reported the other day, a commission run by Texas and Vermont could decide soon whether the WCS site can begin accepting radioactive waste–water filters from nuclear power plants and medical waste from laboratories and hospitals–generated in as many as 36 states.


The WCS project in Andrews consists of two radioactive burial sites: one very large facility, intended to accept federal waste from Department of Energy facilities like the national laboratories in New Mexico, and a second, smaller, so-called “compact” site to accept waste generated in Texas and Vermont. (Those states joined in a legal waste-disposal compact in 1998.) Licenses have been secured for both “state-of-the-art” sites, Simmons and Lindquist said, but the facilities haven’t been built yet. Hundreds of people have commented about the project to the compact commission, which will meet in Andrews, perhaps in June, to decide whether the WCS project should be opened up to accept waste from the other states besides Texas and Vermont.

Glenn Hunter: Are you expecting a pitched battle over this issue?
William Lindquist: There’s been a lot of publicity around it. There are a couple of reasons we think waste coming into the state is important. No. 1, there’s a cost reason. The way the costing structure has been set up, it’s a volume-based structure, so the more volume that goes through the [Texas-Vermont] compact, the less price will be charged to the compact generators to dispose of their waste. … That benefits the taxpayers of Texas in the form of lower rates for utilities and lower costs for medical services.
The other reason, truthfully, is a national problem: There’s 36 states that have nowhere for this waste to go. What’s happening is, it’s affecting research laboratories and hospitals that use radioactive materials to perform different treatments, experiments, development of drugs. There have been over a couple of hundred radioactive materials that are no longer used because there’s nowhere for the waste to go. It’s a national problem that needs to be fixed, and Texans have always believed that Texans can solve the problems.

GH: How much is this project worth to WCS?
Lindquist: It depends on importation and pricing, on a lot of things. One of the things on taking just the compact waste from Texas and Vermont is, it will not be profitable. There isn’t enough waste to offset our cost structure. What we charge, how Texas has done it, it’s based on a utility system; we can only earn a rate of return based on our expenses. The fees will be fixed, based on whatever that rate of return is. We’ll go through a rate-setting process to determine that, just like the utilities do.

GH: Yes, but what will you need to break even?
Lindquist: Well, getting in the Department of Energy waste obviously will help. If the goal is for the compact facility itself to be profitable, we’re going to have to have some amount of waste brought in from other states. Texas and Vermont by itself is not enough to cash-flow the project.

GH: When do you hope to get going?
Lindquist: Our goal is to start construction in the next two to three months; the construction period is between nine and 12 months. So for the compact facility, [we hope to open] in early to mid 2011; the federal facility would probably be six to eight months after that.

GH: Why two sites? Are you planning to take more seriously radioactive materials as well?
Lindquist: All of our waste will be Class A, B and C waste–identical in terms of characteristics. Our license requires two separate facilities, because the federal government will take ownership of the federal landfill after we close and de-commission, and the state of Texas will take ownership of the state landfill. … But, under our license, we have to put up $130 million to make sure the state is protected from anything that happens on the site. We’ll operate it as a for-profit business, as if it’s our business, but the law says [the state has] to have ownership, even though we put up financial assurance … So, there’s absolutely no cost to the state of Texas. And, there’s a benefit to the state. As you may know, 10 percent of our gross revenue is split between the state of Texas and Andrews County, which will be millions of dollars of revenue each year.

GH: What’s your read on the project’s opponents?
Lindquist: What’s happening is: the environmentalists that are protesting what we’re doing really are anti-nuclear-energy people. [It’s] the same group of people that are protesting when there’s a new license to expand a nuclear reactor. What they’re trying to do is shut down the waste side of the equation. And what the Nuclear Regulatory Commission has said is that when there’s a new petition for a reactor, you can make an argument that if there’s nowhere for the waste [to go], that’s a valid argument to keep that reactor from being constructed. Yucca Mountain [in Nevada–which was to take in] spent fuel rods, the high-level radioactive waste–appears to have been shut down. Then, if they can shut down what we’re trying to do on the low-level side, then you’ve got the entire back end of the waste stream shut down. And as I said, their goal is to close out nuclear energy. Unfortunately, that ship has sailed in this country. You’ve got President Obama saying nuclear energy needs to be a part of the equation, along with solar, wind, and all the alternative energies as well.

GH: The opponents warn that aquifers in the area could be impacted by the Andrews waste. Do they have a point?
Lindquist: It’s not a problem. There’s an old map, going back to after World War II, with the Ogallala aquifer that shows it coming on to our property. After all the oil and gas exploration that’s been done, as well as all the wells we’ve [drilled, we know that] the Ogallala aquifer is north of our property. We have thousands of feet of red-bed clay that come to the surface, and it creates a wall where the aquifers can’t get through the wall, and that’s why it ends before it gets to our property. So there’s a new map that the people who oppose this don’t like to see. There’s not a chance that any waste we’re going to dispose of will come into contact with any source of water.

GH: Who are the opponents, in your opinion?
Lindquist: Quite truthfully, I think the group of protesters is pretty small.
Harold Simmons: Most of them are from out-of-state, too … “foreigners.”
Lindquist: We get very few protesters from the Permian Basin. [The protesters] tend to be Austin-based. And unfortunately, they’re missing the bigger picture. This waste has to go somewhere. At the end of the day, what we’re doing really and truly is an environmental act, because this waste is currently stored in downtown Dallas, at all the major universities and major hospitals in all the metropolitan areas, in temporary storage, without any regulatory oversight. What we’re trying to do is say, let’s get it together in one central location in a very desolate part of the state where people want to create jobs and build a business.

GH: You mean it’s just sitting around in canisters now?
Lindquist: I’ve visited a couple of hospitals and laboratories, and they’re in 55-gallon drums, taking up space in closets and hallways.

GH: Mr. Simmons, it’s said that you’ve given a lot of money to Gov. Rick Perry over the years, and in return you’re getting this project OK’d. Is there anything to that?
Simmons: I think the figure they used was $600,000–I saw that somewhere–over about 11 or 12 years. That’s not that much, for a guy that gives as much money as I do. [Laughs.] I give a lot more than that to politicians. I think Rick Perry’s a good governor; he’s got the best interests of Texas in mind. I’ve always liked him. I started supporting him when he was running for land commissioner. I just always thought he was a good solid guy–that’s the reason I support him.
Lindquist: As a company we support Republican and conservative candidates across the country, Rick Perry being just one of them. At the end of the day, they try to make that correlation between what Mr. Simmons is giving and our facility, but we’re six years through the licensing process, and it’s been a difficult, diligent review by [the Texas Commission on Environmental Quality]–we haven’t shortcut anything, I can guarantee you. We’ve done everything that TCEQ has asked. We’ve drilled close to 600 wells to determine exactly where that groundwater is. …There haven’t been any shortcuts, which is what the insinuation always is.

GH: A couple of years ago, Mr. Simmons, you declined a general interview with me because you said all your businesses were “going to hell” at the time. How are your companies doing these days, and how does this WSC project fit into your overall portfolio?
Simmons: We have several other companies that dwarf this company right now. This is small potatoes to us. But in saying that, we’ve got nearly $300 million into the deal, but we’ve done it over a period of 13 years; add interest in, it’s probably $500 million. So it’s important, because we think it has a realistic future, and something the nation needs, and of course we hope to make a significant profit after all these years.
My other businesses have come back dramatically. We’re setting records now. We’re doing great. Last month we had an all-time high in our chemical business, which is our biggest business; it does about $1.5 billion a year. April was the biggest month we ever had. Titanium Metals is coming back strong. Titanium Metals is tied heavily to the new aircraft that Boeing is trying to produce, and they want to start the production at their own schedule in the fourth quarter of this year. So business is already picking up dramatically. We had a budget on the table that estimated what we’d make this year; well, we made three times that in the first quarter. So, we think it’s going to go gangbusters.

GH: WCS has the potential to produce a lot of revenue for you, doesn’t it?
Simmons: It has the potential we think to make $100 million a year, if everything works out and we get it going. But it’s a high overhead to make it work. So it could sit out there and lose money for years and year.
Lindquist: We have 150 employees out there now and, once we get constructed, we’ll add probably be another 75 or so.

GH: There was an article about the Andrews project the other day in the Austin American-Statesman that you probably saw. Do you think it was a fair story?
Lindquist: There were some misstatements. One involved the issue of transportation of the low-level waste that’s going to be coming through the towns. We looked at the 2009 incidence reports from the Department of Transportation. There were 14,000 road hazard incidents in 2009, and 18 of those 14,000 involved radioactive waste–and there were no exposures out of those 18. … The transportation of this [waste] is very, very safe. If it’s transported by rail, there’s never been an incidence of a rail issue with low-level radioactive waste.

GH: Mr. Simmons, are you heading in any new directions now with your companies?
Simmons: No, I’m just trying to run what I’ve got. I haven’t made a new acquisition in 20, 25 years, maybe 30; I don’t know, it’s been a long time. We’ve got some companies that have got great promise, some really strong companies in strong industries with great futures–particularly chemicals and titanium metals. That’s a full-time job. We’ve got enough future here, I [just want to focus on] what we’ve got, as I totter around in my old age.

GH: Are you continuing full steam with your philanthropic contributions?

Simmons: We’ve given over $400 million over the years. I still have pledges to UT Southwestern for about another $100 million, which we hope to complete in the next couple of years. We still give away a lot of money every year. The last two years we’ve cut it down, because business was bad. Now that business is getting good again, we’ll kind of pick up the pace.

One comment on “Harold Simmons Lieutenant: Andrews Opponents Out to “Shut Down” Nuclear Energy

  1. This should have been brought to a vote by the people of Texas. This only opens the door for all radioactive waste from the nation to be brought to West Texas. It is time that the Texans once again stand up and Remember the Alamo. They need to be educated as the the long term dangers of these materials.

    Simmons, Perry and Bush have no conscience only greed drives them.