A Wyoming company with international clout that’s bolstered the state’s energy industries for decades is jumping into the nuclear business.
Gillette-based L&H Industrial Inc., a 60-year-old stalwart industrial machinery company in the coal-rich Powder River Basin, has partnered with nuclear technology innovator BWX Technologies Inc. (BWXT) as part of a blockbuster deal to launch a multibillion-dollar industry in the micro nuclear reactor field.
The partnership was disclosed Wednesday by L&H CEO Mike Wandler and Marcio Paes Barreto, managing director of a new L&H business unit, Evercore Energy, in an interview with Cowboy State Daily.
The plan is to build a one-stop shop in Wyoming for everything from manufacturing reactor vessels, specialized fences and electrical control panels to piping, wires and pouring concrete needed to build a containment building.
The partnership also has plans to provide consulting services, operate and lease energy generated from the micro-nuclear reactors.
“I decided a couple of years ago that my life’s purpose was to innovate energy, and that everything I’ve done up to this point has kind of been me practicing to help the world do this,” Wandler said. “And it’s important for national security.”
BWXT Advanced Technologies is a Virginia-based company developing micro nuclear reactors that produce carbon-free energy.
While BWXT has its own industrial base to build the reactors, Wandler said his $111 million in annual revenue business wants to take on some of the vendor business from the larger BWXT, which boasts a market capitalization of $8.6 billion.
“I’ve got plants all over the U.S. and in other countries, and it’s really hard to recreate the culture in Wyoming for manufacturing and repair elsewhere,” Wandler said.
Wyoming Culture
“We’ve got this culture that we still want to do this stuff,” said Wandler of Wyoming’s vendor network. “Other places don’t want to do this anymore. They don’t want it in their backyard, and that’s fine. So, let’s do it in Wyoming.”
BWXT has already established a beachhead in Wyoming.
In addition to the partnership with L&H, BWXT is participating with the Wyoming Energy Authority to understand the state’s “supply chain” of nuclear technology businesses.
Some of the urgency to get the business going is growing momentum in the state for a budding nuclear industry sparked by Bill Gates-backed TerraPower to build a nuclear demonstration plant in Kemmerer, and billionaire friend Warren Buffet’s electric utility giant PacifiCorp looking to add reactors for his Rocky Mountain Power utility in Wyoming.
BWXT is at the center of TerraPower’s work and is helping in the engineering design of the 345-megawatt reactor being built across from the Naughton coal-fired plant in Kemmerer.
The L&H and BWXT partnership is pursuing a different approach with its reactor that probably wouldn’t hit the market until 2030 at the earliest, said Wandler.
L&H and BWXT are considering potential customers such as energy-starved industrial factories, or even super-sized data centers in the Cheyenne area that pull from a grid, or others located in other parts of the United States.
Laramie, home of the University of Wyoming with a newly created nuclear program, and Wyoming’s capital city Cheyenne, which is about 100 miles north of Denver International Airport, are on a short list to become the corporate headquarters and spot to build a factory to assemble components for this emerging business, said Wandler.
Elon Musk-like
The partnership will provide a commercialized variant of a reactor based off a transportable one that BWXT is developing for the military, called Project Pele. That reactor is under development and getting tested at the federal government’s Idaho National Laboratory (INL) later this year.
The commercial reactors — called BWXT Advanced Nuclear Reactor (BANR) — would produce roughly 50 megawatts of electricity, enough to power and heat several mining operations in Wyoming’s trona patch in southwestern Wyoming or mineral mines elsewhere in the world.
In the interview with Wandler, the executive likened what Wyoming is doing with building a nuclear infrastructure to that of what billionaire Elon Musk did with the launch of his SpaceX company in 2002 to manufacture and launch advanced rockets and spacecraft.
“That is a process that we need to get through,” Wandler said.
“We’re a little bit early, but we did that on purpose, because this is almost like the space race” in the early 2000s to privatize the rocket launch industry, he said.
“I looked at that and said, ‘That’s never going to happen.” That’s crazy, right?” he said. “But Elon Musk got the lead position.”
INL is building close ties with Wyoming and other states for aggressive research and deployment of advanced nuclear plants.
The effort has coalesced around a push that the Department of Energy nuclear lab in Idaho Falls calls the Frontiers Initiative, an effort designed to help the United States stay competitive with low-emission industrial activity through leading-edge nuclear technology.
To date, stakeholders in Wyoming, Alaska, Idaho, Louisiana, North Dakota, South Carolina and Utah have joined this initiative focused on “nuclear energy first mover states,” said Steven Aumeier, senior adviser to strategic programs with the Idaho National Laboratory.
“Frontiers is what lit up talk of all of this,” Barreto said.
INL is one of the nation’s national laboratories that performs nuclear energy research for commercial and military applications.
Nearly two years ago, WEA signed a memorandum of understanding agreeing to collaborate on the research, development, demonstration and deployment of nuclear energy technologies with INL.
The initiative is touching all corners of Wyoming.
The partnership announced by L&H and BWXT is one of the first tangible signs that Wyoming is getting a leg up on the race to build micro nuclear reactors.
Global Opportunities
The emerging market of leasing to global customers who want to reduce pollutants in their emissions is valued at billions of dollars over the next decade, Wandler told Cowboy State Daily.
“We are not looking to build up and sell this business,” he said. “This is a matter of national security. We are behind Russia and China.”
Wandler has a vision of making Wyoming the “energy capital of the world,” thanks in part to the edge given to his business through L&H’s newly formed nuclear reactor business.
The Gillette headquarters of L&H already is at the center of the world’s coal industry, where the lion’s share of thermal coal gets mined and shipped to public utilities to burn in coal-fired plants throughout the nation.
At the core of the L&H business, given a name of Evercore Energy last fall, is becoming a distributor to global customers who want to lease the reactors.
Probably after the commercial reactor market is operational in the next several years, Wandler wants to raise $1 billion a year to get the cash flow for building the reactors from private investors.
L&H wants to raise equity with outside investors to “derisk” the business and shield parent L&H from any downturns in the future, said Wandler, adding that he personally owns roughly half of the privately held L&H.
It’s Evolving
The Evercore business model is still in the early stages of development.
One idea is to build it like a practice used by large commercial aircraft leasing companies whereby they acquire jet aircraft from plane manufacturers and then lease them to airlines.
Leasing allows airlines to optimize their fleet size, respond to market demands quickly and avoid the risks of aircraft ownership. It also provides leasing companies with a steady revenue stream and the ability to manage their asset portfolio effectively.
“We’ll run the micro nuclear plant for them,” said Wandler of global customers.
One of the first things Wandler did last fall after setting up Evercore Energy was appoint Barreto as managing director to build up the nuclear services business from scratch.
Barreto was formerly a director of industrial development with the WEA and Wyoming Business Council.
Even the mayor of Gillette is interested in the L&H foray.
In February, Gillette Mayor Shay Lundvall said that he wanted to bring a components manufacturer and assembly factory for very tiny nuclear power plants to the Powder River Basin.
He said that discussions have begun about bringing a small nuclear plant factory to the city’s still-to-be developed Pronghorn Industrial Park, located near its sprawling 1,000-acre Cam-plex complex.
Wandler anticipates that much of the reactor inventory will be paid by private investors, with other funding sources coming from the military and Energy Department.
“We know reactors are five years away, but most of my customers can’t wait,” Wandler said.
Pat Maio can be reached at pat@cowboystatedaily.com.
