City Council OKs $777 million bond, $10 million in expansion incentives in bid for nuclear fusion site

Imagine a source of energy several times stronger than a nuclear power plant, but without the long-lasting radioactive byproducts.

That process is called nuclear fusion and scientists hope to make it a reality by the decade’s end. And many want to make it happen here — in Albuquerque.

On Monday, City Council unanimously voted to approve tax exemptions and reimbursements for Pacific Fusion, hoping to convince the California-based energy company to build its research center in Albuquerque as it eyes other locations in its home state.

“New Mexico is the place where great ideas are born and are drawn someplace else to be made,” Mark Roper, the director of the state’s Economic Development Department, told councilors Monday. “This is an opportunity to change that.”

Pacific Fusion’s board of directors met Tuesday to discuss where to build the 225,000-square-foot research center, though the company won’t announce whether Albuquerque made the cut until late September. Albuquerque is competing with Livermore and Alameda — both cities in California — for the planned development.

The center would bring a $1 billion investment to Albuquerque and more than 200 high-paying jobs on top of construction and maintenance roles, said Carrie von Muench, Pacific Fusion cofounder and chief operating officer.

The planned research center would be located in Mesa del Sol’s Innovation Park, behind Kirtland Air Force Base. The area will have a small reactor for demonstration and research, but would not be a power plant, von Muench said.

Nuclear science began in New Mexico in Los Alamos, von Muench said, and the legacy of research and development continues at the state’s national labs today.

A third of the company’s current staff are from the state’s national labs, and von Muench said she views the area as a strong talent base with its history and universities.

“In many ways, Albuquerque feels like a natural home for this project,” von Muench said.

If chosen, the city and state will pay $10 million in Local Economic Development Act funding to Pacific Fusion to reimburse land acquisition and construction of the facility. The vast majority of the funding is from the state, though the city itself will contribute $1 million to the offer.

The city also issued $776.6 million in industrial revenue bonds, or IRBs, which effectively grants the company tax exemption for 20 years. In New Mexico, IRBs, which in this case were issued by the council, work similarly to a loan, with a lender purchasing the bond and the developer paying off the debt with revenue from the company.

No taxpayer money is used when IRBs are issued.

How it works

Unlike nuclear fission, the source of the atom bomb’s destructive force and a power plant’s energy, nuclear fusion has the potential to create several times as much power without the highly radioactive byproducts. That is — if it can be done.

At the moment, scientists are stuck trying to figure out how to make the process generate more energy than is consumed, a milestone called “net facility gain.” Rather than splitting the atom, during the fusion process, scientists force two nuclei to join together in a single, heavier nucleus, releasing large amounts of energy as a result.

The sun and stars are powered by the fusion process.

Pacific Fusion uses what it calls “pulsed magnetic inertial technology” for the process and hopes to achieve net facility gain by the end of the decade, von Muench said.

The process differs from nuclear fission, which splits nuclei and is already used at nuclear power plants to generate electricity.

“Just as nuclear research fueled Albuquerque’s growth in the 1950s, fusion research could define our next chapter, making the city a global hub for clean, luminous energy,” said Tom Jenkins, a board member with the Greater Albuquerque Chamber of Commerce.

Fusion is considered to be a clean energy source as it emits no carbon, according to the International Atomic Energy Agency. It relies on hydrogen, lithium and tritium as fuel.

The agency said that there is no possibility of a nuclear accident, because the process doesn’t rely on a chain reaction like fission. For example, the infamous Chernobyl disaster in Pripyat, Ukraine, was caused by a runaway chain reaction.

The only radioactive material produced stays within the system and, should a reactor be deactivated, is significantly less long-lasting compared to elements used in power plants today, according to the agency.

Tritium has a half-life of 12.3 years, while uranium can have a half-life of up to 4.5 billion years, according to the U.S. Nuclear Regulatory Commission.

The competition

Both of Albuquerque’s competitors are located in California’s Tri-Valley near San Francisco.

In a bid for Pacific Fusion’s favor, Livermore and Alameda have respectively passed tax incentive packages and negotiated purchase agreements. Both incentives, however, are smaller than those approved by Albuquerque’s City Council on Monday.

Last week, city officials in Livermore unanimously approved Pacific Fusion’s plans to build the facility on a 14-acre plot along West Jack London Boulevard, according to The Independent.

The Livermore council also approved a financial incentives package, which includes an 80% rebate on the city’s share of unsecured property taxes for the next 10 years, a reduction or elimination of its one-time industrial construction tax and the creation of a community facilities district.

Albuquerque offered a 20-year tax abatement on Monday.

In June, city officials from Alameda approved a purchase option agreement from Pacific Fusion for a 13-acre site on Alameda Point, according to the Alameda Post.

Under the agreement terms, the company will meet the purchase price of $28.9 million by delivering an infrastructure package of roadway improvements and connections to existing sewer, stormwater and electrical infrastructure around the project site.

However, the planned site in Alameda is behind on its petroleum remediation plan, which may put it out of the running, the Post reported in August. The area used to be a Chevron oil refinery and has petroleum buildup that the company has yet to clean up.

After Chevron missed its deadline in July, the New Mexico Economic Development Department and Pacific Fusion put out a joint statement officially announcing its intent to consider Albuquerque.

Journal Staff Writer Hannah Garcia contributed to this report.