With a grant from DOE, the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE) is equipping a truck to be a mobile clinic. The truck will travel to each of the gaseous diffusion plants in order to facilitate health screening of workers and former workers. (Frank Munger, News-Sentinel, 6/28/00)

TCSA Incinerator

A meeting was held June 27 to discuss implementation of new emission standards at the Department of Energy's (DOE) Toxic Substances and Control Act (TCSA) incinerator. The new standards drawn up by the Environmental Protection Agency (EPA) set lower emission concentrations for mercury, lead and various other pollutants, and require concentration-based standards for furans and dioxins. DOE must submit a notification of intent to comply with the new standards by October 2. (G. Alan Sieve, The Oak Ridger, 6/1/00 and Paul Parson, The Oak Ridger, 6/28/00)

Beryllium Testing (a clarification of the June newsletter)

Workers who have retired from the K-25 Plant are not being tested for beryllium disease or sensitivity under the Oak Ridge Associated Universities program. They are, however, being tested in the Former Worker Medical Surveillance Program underway at the gaseous diffusion plants. Results have not yet been released, but some retired workers have tested positive. (Susan Wells, Former Worker Medical Surveillance Program, Personal Communication)

USEC health physicists, working for DOE, have found apparent discrepancies in radiation doses recorded on a computer tape. The tape has 6382 records of doses received by workers between 1976 and 1987. The records suggest that the workers may have received more radiation than has previously been reported. USEC called DOE's attention to the problem, and DOE is reviewing the tape. (James Malone, Courier Journal, 6/10/00)

June 23 workers began removal of "Drum Mountain," a 35-foot-high pile of rusty, crushed drums. The drums will be flattened, bailed, and enclosed in sealed containers for storage at Envirocare in Utah. They are believed to have held depleted uranium tetrafluoride. However, in order to get the job done DOE is proceeding with the removal on the basis of limited data, Don Seaborg, DOE site manager says. As the drums are crushed, workers take samples, which are tested for radioactivity. Initial testing showed a level of 0.2% uranium 235 in the residual uranium tetrafluoride in the drums. DOE expects bailing to be finished by the end of September, and all the metal to have been shipped to Utah by the end of the year. The waste will travel by rail. Removal of the "mountain" is a priority for DOE because it and a "possible burial ground beneath it, make up one of the big sources of groundwater contamination." (Bill Bartleman, Paducah Sun, 6/15 and 24/00)

Hearing on cleanup

June 27 the Senate Energy and Natural Resources Committee's Energy Research, Development, Production, and Regulation Subcommittee held a hearing on the General Accounting Office's report on DOE's cleanup program for the Paducah plant (see June UEN). Carolyn Huntoon, DOE's Assistant Secretary For Environmental Management, and William Magwood, Director of DOE's Office of Nuclear Energy, Science and Technology, said they are working together on a comprehensive cleanup plan for Paducah, scheduled to be released in the fall. The plan will include work that the General Accounting Office identified as missing from DOE's original plan and revised cost estimates. Senator Jim Bunning (R-KY) was not impressed. (See also Depleted Uranium below.) (James R. Carroll, Courier Journal, 6/28/00)

In June The Courier Journal published a three-day series of articles on the Paducah plant with multiple articles each day. They pulled together much needed information and, as the result of investigations by the authors James R. Carroll and James Malone, raised new issues.

June 25 Carroll and Malone told the human story: the changing views of the plant in the local community, the contamination of workers, the efforts of workers to obtain compensation…. Malone detailed, for example, the fears of past plant managers that workers might be harmed by radiation, the attempts of supervisors to find out the truth through animal experiments, and their determination to hide the facts from workers. A timeline, which stretches from August 1950 to June 23, pinpoints key events in the plant's history.

June 26 the spotlight was on the environment. Examining thousands of pages of records, The Courier Journal learned that "contamination reaches into nearly every organism near the Paducah plant that has been tested," and radionuclides are not the only contaminants. The plant has spread heavy metals, PCB's, dioxin, and other toxins beyond the fence. Gaps in monitoring of air, water, soil, and vegetation allow contamination to go undetected, and contamination even when measured may be under-reported because of the use of questionable background radiation levels. Cleanup cannot be thorough until the plant closes, and until it does so workers may not even be able "to reach the source of contaminants leaking into the ground water. That source is believed to be under a building still in use."

June 27 the subject was regulation. The facts that Malone and Carroll uncovered are summarized in the titles of their articles: " Kentucky regulations have gone easy on uranium plant," " Tennessee, Ohio push U.S. harder to obey the rules," "Maze of agencies leads to confusion, conflict," "Quest for records can be frustrating," State, U.S. Agencies clashed repeatedly on environmental issues." Sidebars list environmental violations, ways of obtaining records, and entities active at the plant. As on the other two days, interviews with workers and residents frame the pages. (www.courier_journal.com/cjextra/uranium/index.html)

Plant upgrade

(See USEC below)

The DOE has released the Environmental Assessment (EA ) on the Disposition of Surplus Hanford Site Uranium, Hanford Site, Richland, Washington (DOE/EA_1319 ), with a Finding of No Significant Impact. However, DOE has scaled back the quantity of uranium that it will ship to Portsmouth for storage. The Draft EA proposed shipping some 1800 metric tons of uranium (MTU) to Portsmouth. The EA evaluates the shipment of approximately 900 MTU, composed of uranium metal billets (235 MTU) low-enriched uranium trioxide powder (approximately 670 MTU), and uranium dioxide and depleted uranium in various forms (approximately 4 MTU). DOE characterizes the material to be shipped to Portsmouth as "readily saleable." According to the EA, DOE decided, after holding a uranium analysis workshop, in January, that it would keep 825 MTU of finished and unfinished fuel at Hanford because of a lack of "foreseeable demand" for it. At a January meeting in Portsmouth, members of the public questioned the promised salability of the uranium proposed for transfer (See February UEN). An article by John Stang in the Tri-City Herald June 14 stated that DOE planned to begin shipments of uranium to Portsmouth in June and to ship "about 125 to 250 truckloads" this year. This number of truckloads corresponds to the entire 900 MTU. The uranium is to be stored at Portsmouth in transportation-ready containers.

Car-truck accident

June 9 a car hit a truck hauling two 10-ton uranium containers through Chillicothe, Ohio, a few miles north of the Portsmouth plant. The containers were not breached, and the driver of the car received only minor injuries. A USEC spokesperson said that the cylinders belonged to the Canadian company Cameco, had been emptied at the Portsmouth plant, and contained only residual amounts of natural uranium. It is not clear whether the natural uranium was in the form of uranium hexafluoride. (Columbus Dispatch State Service, 6/10/00)

Plant closure

(See USEC below)

The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing June 22 on cleanup contracts at DOE faculties. The hearing stemmed from a General Accounting Office (GAO) report that found that DOE's privatization of cleanup through fixed price contracts has not helped save money, maintain work schedules or improve contractor performance at three projects examined by the GAO. BNFL's contract to clean up Oak Ridge was not among the three projects, but it was to be discussed at the hearing. (Nancy Zuckerbrod, Associated Press, 6/22/00)

June 8 the US Senate, by voice vote, added an amendment to the Defense Authorization Bill (S2549) that would compensate weapons plant workers who suffer from silicosis, beryllium sensitivity, or radiation-caused cancer. The workers could choose between a tax-free $200,000 payment plus health benefits, and an alternative package of benefits, including lost wages, that could total more than the lump sum. Claims would be administered through the Department of Labor.

The amendment does not cover chemical exposure. It also does not assist local residents who have not been employed by DOE but have been made ill by contaminants from weapons plants. Workers with other illnesses would still have to go through state workman's compensation programs.

The House has passed a defense authorization bill without the amendment. Therefore whether the amendment becomes law depends on the outcome of negotiations between Senate and House representatives in conference committee. The Clinton administration has indicated that it would sign the legislation. Congress would have to appropriate money to pay compensation as described in any final bill before individuals could receive checks.

Six members of the House of Representatives, including Ed Whitfield (R-Ky) and Ted Strickland (D-Ohio), sent a letter June 12 to the chairs of the Armed Services, Education and the Workforce and Judiciary committees in which they asked for hearings on HR4398. This bill, introduced by Ed Whitfield (D-Ky) would compensate workers ill because of chemical exposures as well as those covered in the Senate amendment.

Appropriations

Congress has granted DOE the supplemental funding that the agency requested for medical screening of workers and for acceleration of cleanup at Paducah and Portsmouth for the current fiscal year (FY). The legislation allots $10 million for medical screening and $16 for cleanup without specifying how much is to go to each of the sites. DOE had requested $3.3 million for medical screening for each of the three gaseous diffusion plants, but Oak Ridge is not mentioned in the bill (see February UEN). The funding was part of a military construction appropriations bill.

The appropriation for cleanup of the sites during fiscal year 2001 is part of the Energy and Water Development Appropriations Bill, the instrument each year for this appropriation. The bill for FY 2001 has passed the House but had not passed the Senate as of early July. (Alison Hiltz, staff of Senator Mitch McConnell, Personal Communication)

The US Labor Department has ruled that importation of Russian uranium is "a major factor" in the layoffs at USEC's two plants. As a result, workers at Paducah and Portsmouth who have lost or will lose their jobs during the period from April 10, 1999, through June 15, 2000, qualify for Federal Trade Adjustment Assistance. This assistance will extend unemployment benefits from the standard six months to a year, and pay retraining expenses for about two years. (Joe Walker, The Paducah Sun, 6/19/00)

USEC began laying off salaried workers June 29. The workers were informed one by one that they were being eliminated and were sent home the same day. A Portsmouth worker complained that he was notified, allowed to pick up his personal possessions, and then escorted to the gate as if he were a criminal. A USEC spokesperson at Paducah said that the laid-off workers had to leave immediately because of safety and security considerations. They will be on paid administrative leave until the layoffs are effective July 14. Layoffs of Union workers will begin in July. USEC announced earlier in the year that it would lay off a total of 850 people at the two plants but later reduced the number to 621. (Bill Bartleman, Paducah Sun, 6/30/00; Terri Fowler, Portsmouth Daily Times, 6/30/00)

USEC's decision to close the Portsmouth Plant

Preliminary moves. June 12 seven members of Congress sent a letter to President Clinton stating that financial problems at USEC threatened the nation's capacity to convert and to enrich uranium. They urged the administration to find means of ensuring the viability of the domestic nuclear fuel sector. Signing were four Republican senators Mitch Mc Connell and Jim Bunning of Kentucky and Mike DeWine and George Voinovich of Ohio, also Republican Representative Ed Whitfield of Kentucky and Democratic Representatives Ted Strickland of Ohio and David Phelps of Illinois.

June 16, William Timbers, Chairman of USEC, wrote to the Treasury Department that " As a result of market and economic considerations, the board of directors must contemplate the termination of operations at one plant." Which plant would be shut down had not been decided, he indicated. Under the terms of its creation USEC has to operate both the Paducah and the Piketon plants until 2005 unless any one of a list of "significant events" occurs. In the letter Timbers noted that USEC's credit ratings from Moody's Investor Services and Standard & Poor's Corp. had fallen below investment grade. Thus a "significant event" had occurred. (Katherine Rizzo, Associated Press 6/20/00)

June 20, Ted Strickland, Mike DeWine, and George Voinovich asked the Treasury Department to seek an injunction preventing USEC from shutting down an enrichment plant. Treasury delivered a letter to the board meeting of USEC the next day, in which the undersecretary, Gary Gensler, urged that the board "not vote to initiate a plant closing." A letter from Richardson also went to the board meeting.

The Decision. Nevertheless, at the end of the June 21 meeting, USEC announced that it will cease uranium enrichment operations at the Portsmouth plant in June 2001. USEC will continue to operate its transfer and shipping activities at the Portsmouth plant for about four or five years after enrichment has ceased, until similar facilities are available at the Paducah plant. Managing the transfer and shipping operation will require 250-300 workers.

"Key business factors in the decision to reduce operations to a single production plant include a global overcapacity of enrichment and lower demand in an increasingly competitive market. ‘With high production costs and production at only 25 percent capacity at both plants, we must consolidate our production,' said Timbers."

USEC reported that key factors in deciding which plant to close, were long-term and short-term power costs, operational performance and reliability, design and material condition of the plants, risks associated with meeting customer orders on time, and other factors relating to assay levels, financial results and new technology issues."

USEC announced that it would save $55 million in fixed production costs in fiscal year 2002 as a result of closing the Portsmouth plant. However, it will pay somewhat more for electricity because it will no longer be able to sell excess electricity from the Portsmouth plant's supplier.

USEC anticipates a net income of $30-35 million in FY 2001 and $45-50 million in FY 2000. However, the outlook depends on the timely completion of the assay upgrade project at Paducah, including approval by the Nuclear Regulatory Commission, an agreement for market-based pricing under the Russian HEU contract beginning in 2002, and negotiation of a new, long-term power contract for the Paducah plant, USEC reported.

Paducah is authorized to enrich uranium to a maximum of 2.75% uranium 235. To be allowed to enrich to 5% at Paducah, USEC must modify the physical plant, train workers, and provide the Nuclear Regulatory Commission (NRC) with in-depth documentation concerning safety. It must also complete a seismic upgrade. If USEC can deliver key documents to the NRC by September it may be able to receive approval in March, but PACE has pointed out that accomplishment of an assay increase at Paducah is not a foregone conclusion.

For the outlook on the Russian HEU agreement, see Russia below. As to electricity, USEC hopes to reduce costs at Paducah by obtaining a long-term contract on favorable terms with the Tennessee Valley Authority (TVA). According to an article by Joe Walker, USEC and TVA seem to have reached an oral agreement before USEC decided to close the Portsmouth plant.

A concern at Paducah not mentioned in USEC's press release is the company's supply of the coolant Freon, which can no longer be produced because of environmental regulations. USEC's manager at the Paducah plant, Howard Pulley, told Joe Walker of The Paducah Sun that a substitute has been field tested and could be in use in less than two years. USEC has on hand more Freon than is needed for that time span, Walker reports. (USEC press releases, 6/21/00; Jonathan Riskind, Columbus Dispatch, 6/22/00; Joe Walker, The Paducah Sun, 6/23/00)

Reactions. The reaction in Paducah to USEC's choice was somewhat subdued. Workers wondered whether, given USEC's financial situation- stock was selling for around $4.50 a share in June and bonds were at junk level- the company may not also close the Paducah plant in a few years. Ohio residents were appalled by USEC's decision, which will eliminate some 1400 jobs from an area with few large employers. Governor Bob Taft wrote to President Clinton, " I would ask the Department of Energy to determine if electric rates offered to the Paducah facility by the federally subsidized Tennessee Valley Authority created an unfair competitive disadvantage for the Piketon plant" and Congressman Strickland said that he will introduce legislation requiring the government to buy back USEC (Nancy Zuckerbrod, Associated Press, 6/24/00; Dana Hedgepeth, Washington Post, 6/22/00).

The joy was not great in the Clinton administration either. Gary Gensler wrote to Timbers June 27: "We urge that this unfortunate decision be rescinded. In addition, we remain committed to ensuring that USEC abides by the contractual commitments it made in connection with privatization." Richardson said in a statement that he was " extremely disappointed" by USEC's decision, and he has threatened to remove USEC as executive agent for the Russian HEU agreement. (www.nuke_energy.com/data/other/usec_portsmouth.html).

Congressman Strickland has reported that Vice President Gore told him during a meeting in Columbus June 28 that he has asked the Treasury Department to find out if there are legal grounds on which to try to stop the plant closure. Strickland and Senators Voinovich and DeWine are asking whether USEC did not deliberately precipitate the low credit rating and if so whether that invalidates the " significant event" that allows USEC to close a plant. (Jonathan Riskind, Columbus Dispatch, 6/30/00)

USEC announced June 27 that it has signed a joint marketing agreement with Enron North America Corp., a nationwide electric power trading network. Customers will be given the option of delivering electric power instead of making cash payments for fuel enrichment services or products. Under the agreement, customers will be able to pay Enron in electricity. Enron will pay USEC the contracted price for its services or products and then sell the electricity. The program will initially be limited to the United States but may later be expanded to international markets. (USEC press release, 6/27/00)

USEC has petitioned the US Department of Commerce for exclusive permission to import from Russia for up to two years one million separative work units ( SWU ) per year of commercial enriched uranium. One million SWU would equal about 15% of USEC's annual sales. The imports would be part of an arrangement with the Russian agent Techsnabexport (Tenex), according to which, from 2002 through 2013, Tenex would lower the price it charges USEC for uranium that has been down blended from nuclear weapons. Today USEC pays a fixed price of approximately $88 per SWU, although the spot price is about $80 per SWU. The current price agreement expires in 2002. Reportedly the new agreement would allow USEC to purchase blended-down uranium in the low sixties per SWU, and commercial Russian SWU at $60 per SWU. The National Security Council and the State Department support USEC's request because they think that it would strengthen the US-Russian HEU agreement. Representatives of uranium mining and conversion companies and some members of Congress strenuously oppose the arrangement. Also opposed to the agreement is Energy Secretary Richardson. DOE has refused to approve the draft agreements. (Nancy Dunne, Financial Times 5/27/00; Michael Knapik, Nuclear Fuel, 5/29/00; Nancy Dunne and Matthew Jones, Financial Times, 6/3/00; www.nuke_energy.com/data/other/usec_portsmouth.html).

May 5 Russia's minister of atomic energy informed US Energy Secretary Richardson that it would stop shipping down-blended uranium to the United States, because Russia feared that payment for the uranium would be seized as a result of litigation by the Swiss trading company Noga. Noga has filed suits in Paducah and in New York to recover a more than $64 million international arbitration award against Russia, stemming from debts unrelated to uranium. June 22 President Clinton issued an executive order declaring that the holdup of Russian uranium shipments posed an " unusual and extraordinary" proliferation threat and created a "national emergency." He declared that Russian assets directly relating to implementation of the US-Russian HEU agreement cannot be attached. The order allows Russia to resume uranium shipments. However, as Joe Walker of the Paducah Sun observes, it could lead to "a court battle between the executive and the judicial branches of the US government." (Text of Executive Order, US Newswire, 6/22/00; Associated Press, 6/22/00, printed in the Las Vegas Sun; Joe Walker, The Paducah Sun 6/24/00)

June 8 the Energy and Power Subcommittee of the House Commerce Committee held a hearing on the future of nuclear energy. Dr. William D. Magwood IV, Director of DOE's Office of Nuclear Energy, Science, and Technology reported that "1999 was a banner year for nuclear power in the United States." Jim Graham, president and CEO of Conver Dyn presented a darker picture. ConverDyn is the only US uranium converter. Its factory, at Metropolis, Illinois, transforms the uranium oxide from uranium mines into uranium hexafluoride for enrichment by USEC. Graham charged that "the domestic nuclear fuel cycle is on the brink of collapse" because of actions by the US government including the privatization of USEC and the Russian HEU agreement. Sales of natural uranium by USEC and the influx of enriched Russian uranium have severely impacted the market for U308 and conversion.

VIII. DEPLETED URANIUM

DOE's William Magwood told a Senate Subcommittee on Energy Research, Development, Production, and Regulation, June 27, that DOE will seek bids from contractors for a depleted uranium hexafluoride conversion plant for Paducah this fall. He indicated that DOE's analysis of the uranium hexafluoride had found " no significant" contamination by radionuclides found in irradiated fuel. Presumably Portsmouth will also receive a plant. (Jonathan Riskind, Columbus Dispatch, 6/30/00)

Following the announcement of an Agreement of Cooperation between the United States and Australia in regard to Silex Technology , USEC has paid Silex Systems Ltd. of Australia the second half of a $5 million milestone payment. The $5 million will support further research on a laser-based technology that may prove feasible for enriching uranium. (Silex Systems Ltd. press release)

Centrifuges

Nuclear Fuel reported at the end of May that a decision on the sale of Urenco shares may not be made until the end of 2000 or early 2001. USEC and France's Cogéma have both made offers to buy the shares that are owned by the Dutch government and German utilities. The Almelo Treaty gives BNFL, already owner of one third of the shares, veto rights in any planned sale to third parties; and Cogéma and USEC know that they will have to come to an arrangement with BNFL if they are to purchase shares. BNFL wants to own at least 51% of Urenco shares itself, as this would allow it to control Urenco's enrichment technology. BNFL may not be able to purchase Urenco shares until the British government, which owns the company, determines its financial viability. During recent months, BNFL has experienced a series of widely-publicized problems. (Mark Hibbs, Nuclear Fuel, 5/29/00)

The board of directors of USEC has approved a plan to try out gas centrifuge enrichment technology. USEC would like to build a 20-unit pilot plant at Oak Ridge, Tennessee. If the pilot proves to be successful, it would then build an industrial plant in a building at the Portsmouth Gaseous Diffusion site that was originally intended to be the home of a DOE centrifuge facility. DOE cancelled the centrifuge project in the mid eighties.

USEC is negotiating with DOE for the rights to DOE's still classified centrifuge technology and would base its pilot on this technology, although European and Russian technology could also be incorporated, according to Elizabeth Stuckle of USEC. USEC is also negotiating a lease on buildings in Oak Ridge for the pilot plant. The pilot plant could be in operation by the fall of 2001, testing could take two or more years, and construction of an industrial plant, three to five years.

However, the price to US taxpayers would be high. USEC has requested from DOE $50 million to build the pilot plant and a $1.2 billion loan guarantee for the industrial plant. The use of the Portsmouth building would cost DOE $150 million in transfer expenses.