USEC

USEC’s board of directors announced February 3 that USEC will reduce its production workforce by 850, a cut of 20%, starting in July 2000. The reductions will be divided evenly between the Paducah and Portsmouth plants. USEC will try to make the cuts on a voluntary basis, but if that proves insufficient will initiate an involuntary program.

The reduction, which USEC expects will save $39 million annually in production costs, are an effort to stem the company’s deteriorating financial position. When USEC was privatized, its stock sold for $14.25 a share; by the end of January it was $5.75 a share. Along with its announcement of job cuts, USEC stated that it is reducing by half the divided paid on common shares. The divided paid in March will be 13.75 cents per share. Also the company warned that it expects “substantially lower net income” for fiscal year 2001 and beyond. (USEC press releases, 2/3/00)

That USEC is in financial difficulty is no secret. The company stated as much when it asked the administration last November for a bail out to enable it to continue to buy blended down highly enriched Russian uranium. Speculation that USEC might announce a plant closure or layoffs has been rife. February 2 Merrill Lynch analyst Steve Fleishman cut his earnings estimate for USEC and lowered its intermediate-term rating from accumulate to neutral and its dividend rating from same/higher to same/lower.

USEC blames its lowered expectations on a glutted uranium market, which translates into low prices for uranium and enrichment services, a lower than anticipated sales volume for the next fiscal year, and high unit production costs that stem from its obligation to import Russian enriched uranium to fulfill the Russian-US Highly Enriched Uranium Agreement.

USEC has signed a contract with the Tennessee Valley Authority (TVA) to supply enriched uranium to TVA's Watts Bar I and Sequoyah I and 2 reactors. The contract, which will cover 100 percent of the needs of the reactors, will go into effect in 2001 and last for 10 years. Estimated value is $725 million.

The contract may involve USEC in helping to maintain the nation's nuclear weapons arsenal. DOE has chosen the Watts Bar plant, at Spring City, Tennessee, to produce tritium for nuclear weapons on an as needed basis starting in 2003; and TVA's board of directors has voted to accept the role. The Sequoyah plants will serve as backups to the Watts Bar plant. A reactor can produce tritium at the same time as it generates electricity, if it is equipped with targets.

A TVA spokesperson said that, under current international treaties, DOE will not need to replace the tritium in its nuclear arsenal until 2005. If the Russian Duma ratifies the Start II nuclear arms reduction treaty, tritium will not be needed until 2011. Other treaties may be negotiated and the need for tritium further delayed. Moreover, Congress may yet change DOE’s plans, as the use of civilian reactors to produce weapons material is highly controversial.

The contract with TVA will help to give USEC stability over the long term, but does not improve USEC's current financial situation. (USEC news release, 1/4/00; Tom Harrison, NuclearFuel,12/13/99)

USEC announced in January that the SILEX enrichment process (Separation of Isotopes by Laser Excitation) has successfully passed its first milestone. As a result USEC is to pay the Australian company developing the process, Silex Systems Limited, $2.5 million in February and another $2.5 million in May after a cooperation agreement that allows transfer of technology between the United States and Australia goes into effect. SILEX, like AVLIS, which USEC stopped trying to develop, should drastically reduce the cost of enrichment if it can be successfully industrialized. Unlike AVLIS but like gaseous diffusion and centrifuge technology, it enriches uranium in the form of uranium hexafluoride. The phase of development just completed was the Pilot Module Test Program. The next phase, expected to last two years, will center on building and testing a prototype. The following phase would focus on construction of a pilot plant. USEC has exclusive rights to the commercial application of SILEX to enrich uranium. In the future, any development of the technology to enrich uranium will be funded by USEC, which will also pay royalties if it eventually adopts the process. (Tina Davis, Energy Daily, 2/1/00; Anthony Huges, www.smh.com downloaded 1/28/00; Silex Systems press release, 29/10/99)

USEC is simultaneously exploring possibilities for using centrifuge enrichment technology, perhaps in partnership with DOE. The attractiveness of this existing technology is underscored by the fact that the French fuel cycle giant Cogéma is competing with BNFL to buy the portion of Urenco owned by German utilities. Urenco operates only centrifuges. Cogéma operates and co-owns the Eurodif gaseous diffusion plant. (Uranium Institute News Briefing, 1/26-2/1/00; Nuclear Fuel 1/24/00). DOE developed a centrifuge capacity at the Portsmouth plant, but abandoned the program in 1985 after running the centrifuges only long enough to demonstrate that they worked. It ran the centrifuges only long enough to show that they worked. The buildings that housed the program are now used for storage of hazardous waste and for offices among other things.

NEWS FROM OAK RIDGE

DOE has reduced funding for the Community Reuse Organization of East Tennessee (CROET), a move that may eventually slow "reindustrialisation" of the K-25 site at Oak Ridge. CROET is a nonprofit, economic development organization to which DOE leases "underutilized" land and buildings. CROET in turn leases them to private companies.

In 1998 Secretary of Energy Bill Richardson promised CROET $8.75 million over a 2-year period. Croat received the first year's funding in full, but DOE has cut funding for the second year by 28 percent. The cuts will slow improvements such as relighting and repainting at the K.-25 site (home to the former K-25 enrichment plant), improvements that were designed to hold and attract tenants.

Some of the buildings at the K-25 site that CROET leases are contaminated. Companies may agree to clean and decontaminate them in return for a low-rent. Since the companies are often not experienced in working with radioactive materials, the practice raises serious questions in regard to the health of workers and the public and to protection of the environment.

The cut in the second-year budget is not expected to impact ED-1, a new industrial park being developed by CROET (on 1000 acres of vacant land. (Larissa Brass, The Oak Ridger, 1/26/00)

The results of two studies of the effects of the Oak Ridge plants on health were announced on separate occasions in January at the American Museum of Science and Energy. Eula Bingham from the University of Cincinnati spoke January 26 on preliminary results of a study examining the health of Oak Ridge construction workers classified by DOE as temporary. January 15 Paul Voilleque, chairman of the Oak Ridge Health Agreement Steering Panel, presented the results of an almost-10-year study of the impact of releases from the Oak Ridge facilities on area residents.

The construction workers study is being conducted by a consortium of universities and companies plus the Knoxville Building and Construction Trades Council. DOE is financing this and nine other pilot projects as part of the settlement of a lawsuit concerning the Fernald Feed Materials Center in Ohio. DOE kept no medical records on the construction workers, although some actually passed most of their working lives at Oak Ridge facilities.

The results of the screening of workers who responded to a letter from the local union indicate that working at Oak Ridge was dangerous to health. As of the presentation, 200 workers had had medical examinations and around 266 had been tested for signs of beryllium exposure. Six of the 266 were found to have health problems relating to beryllium. Twenty percent of the workers who received x-rays had lung abnormalities. The study is continuing.

The other study, a dose reconstruction study, was coordinated by the Oak Ridge Health Agreement Steering Panel as the result of an agreement signed by the state of Tennessee and DOE in 1991. The researchers first tried to determine what toxic and radioactive substances were released from the plant and in what volumes; then studied in detail radioactive iodine, mercury, polychlorinated biphenyls, radionuclides from reprocessing at ORNL, and uranium. Of these, they found iodine and mercury to have been the most harmful. They determined that up to a eighty people probably got thyroid cancer because of iodine releases in the late '40s and early '50s. About a hundred fetuses were probably exposed to dangerous mercury levels because their mothers ate contaminated fish. Some of those would have developed brain damage. The panel made a series of recommendations for further study and action. The study has been criticized as being based on DOE data, which is known to have been flawed. (Larissa Brass, Oak Ridger, 1/27/00 and 1/14/00)

Energy Secretary Bill Richardson announced January 28 that the administration will ask Congress for an additional $3.3 million for Oak Ridge in the current fiscal year. The money would be used “to fund expanded medical monitoring of workers and the ongoing environment, safety and health investigation” at the plant. As a result of the increased funding, the number of workers screened could go from the present 400 to 1000. The administration is asking $3.3 million each for Paducah and Portsmouth for these purposes but also is seeking additional funding for those sites (see below). (Ron Bridgeman, Oak Ridger, 1/31/00)

NEWS FROM PADUCAH

J anuary 13 a fire broke out in a storage facility that houses tools used by investigators who were excavating trenches and taking soil samples just north of the Paducah plant for the U.S. Department of Justice (see below). A spokesperson for the Bureau of Alcohol, Tobacco, and Firearms said that the fire was "accidental" -- a malfunctioning heater ignited nearby storage materials. The fire destroyed tools but no samples. (Lexington Herald-Leader [from the Associated Press], 1/14)

January 14 the US Department of Justice ordered the excavation near the landfill off Ogden Landing Road to stop, while it determines the best places to dig. The halt has no connection with the fire in a storage area, officials said. On February 2 The Paducah Sun reported that Justice is waiting for the results of geophysical testing before deciding whether to recommence excavation. The department began its investigation to find out whether the ground is contaminated with radionuclides and toxic chemicals as charged in a suit filed by three workers at the plant. The Sun has heard from “various sources” that in its initial work Justice found little to support the workers’ claims. (Lexington Herald-Leader [from the Associated Press], 1/16/00; Joe Walker, The Paducah Sun, 2/2/00)

At the monthly meeting of the Paducah Site Specific Advisory Board, January 21, DOE reported several shipments that, according to Mark Donham of the Alliance for Nuclear Accountability, had not previously been brought to public attention and thus had not been the subject of public comment:

1) transfer of about 2,900 gallons of PCB/Resource Conservation and Recovery Act liquid waste to the TSCA (Toxic Substance Control Act) incinerator at Oak Ridge, August 31, 1999;

2) shipment of about 120 cubic meters of uranium precipitate to Envirocare, a commercial disposal site, in Utah Sept. 28 and 29. Donham reports that the precipitate was contaminated with transuranics and technetium 99;

3) dispatch of 26 containers of mixed waste to a company in Texas in September for "stabilization treatment."

Energy Secretary Richardson announced in a brief visit to Paducah January 28 that the administration will ask Congress for an increase in funding for DOE’s enrichment sites when it submits its budget to Congress in February. For Paducah it will seek $109.2 million for the next fiscal year, which begins October 1. The current cleanup budget for the fiscal year now underway is $54.2 million. The $109.2 million would provide $78 million for cleanup; $4.3 million “for environmental health and safety studies and health monitoring”; .3illion for activities to help laid off workers; and $23.9 million “for the uranium hexafluoride conversion and cylinder management programs.” The Courier Journal explains the last as $12 million to maintain the cylinders of depleted uranium hexafluoride now at the site and $12 million to plan a conceptual model of a conversion plant for the depleted product. The last is less than many connected with the plant had hoped and lobbied for.

The administration will also seek from Congress an additional $11 million plus for the current fiscal year, $3.3 million for health and safety and $8 million for cleanup activities.

(DOE press release, 1/28/00; James Malone, The Courier Journal, 1/29/00)

Richardson announced January 28 that he has appointed Don Seaborg, project manager of DOE’s Plutonium Finishing Plant at the agency’s Hanford site in Richland, Washington, to be DOE’s new site manager at Paducah. Seaborg has been overseeing stabilization and deactivation of the chemical processing plant. He will replace Jimmie Hodges, who resigned suddenly last fall.

NEWS FROM PORTSMOUTH

January 5, at a pair of meetings called by Bechtel Jacobs, Bechtel Jacobs management reportedly told workers to discuss with DOE investigators only matters that they knew first hand or could document. They also told workers that after they have been interviewed they should fill out forms for Bechtel Jacobs, reporting the questions that investigators ask them. DOE investigators were scheduled to arrive at the plant January 10. At least some of the employees who attended the meetings felt that Bechtel Jacobs was telling workers to keep to themselves any information that they might have.

The perceived attitude of Bechtel Jacobs to the investigation did not go unnoticed outside the plant. Energy Secretary Bill Richardson wrote to the president of Bechtel Jacobs, Joseph Nemec, January 10 to express his "deep concern that.Bechtel Jacobs management may have discouraged workers' full and free participation in an investigation by the department's oversight team." G. Leah Dever, who oversees the plant for DOE, sent a memo to employees asking them to cooperate with the investigation and also wrote to Nemec and to Jim King, Portsmouth site manager, to say that any attempt to interfere with DOE's interviews of employees would not be tolerated. January 13 Senator George Voinovich complained to Nemec, and January 17 the Columbus Dispatch editorialized "Tsk, tsk Piketon workers suspicious and rightly so."

Bechtel Jacobs management said that its instructions had been misunderstood, and early on rescinded the request for information about the questions that DOE asked. However, some speculated that any damage that had been done to the DOE investigation could not be easily undone. (Jonathan Riskind, Columbus Dispatch, 1/12/00; Roger K. Lowe and Jonathan Riskind, Columbus Dispatch, 1/16/00; Editorial, Columbus Dispatch, 1/17/00)

In mid-January DOE investigators interviewed former and current workers and members of their families, as scheduled. Investigators planned to return in February and again in April. Their final report is to be submitted to Energy Secretary Bill Richardson by the end of May. DOE is trying to determine whether past operations at the plant endangered workers' health and whether current cleanup operations are safe. (Jonathan Riskind, Columbus Dispatch, 1/8/00)

January 27 DOE held a public meeting in Piketon to provide an update of cleanup activities and discuss the proposed shipment of some 1800 metric tons of “surplus” uranium from Hanford in Richland, Washington, to Portsmouth for storage. Members of the public asked numerous questions relating to the cost of the program (the market value of the material is about $15 million the questioner was told; shipment to Portsmouth will cost approximately $5 million), the wisdom of possibly having to ship the material twice, radiation exposure to the public during transit, and whether the material is as saleable as DOE reports it to be, among other matters.

The draft environmental assessment on Disposition of Surplus Hanford Uranium (DOE/EA-1319) states that DOE intends to complete in 2000 an EIS “for the management of potentially reusable uranium materials at the DOE Uranium Management Center.” Potential sites for such a center include DOE’s facilities at Oak Ridge, Paducah and Portsmouth.

Richardson announced January 28 in a quick stop at the Portsmouth plant that the administration is asking Congress for federal funding totaling $113.5 million for that plant in the coming fiscal year. The cleanup budget at Portsmouth for the current fiscal year is $46.1 million. The $113.5 million would be divided as follows: $76.2 million for cleanup; $27 million for the “uranium hexafluoride conversion and cylinder management programs; “$4.3 million for health and safety, and $6 million for worker transition programs. Projects to be funded include the cleanup of contaminated groundwater plumes on the south side of the plant.

As at Paducah, DOE will also seek an additional $11 million plus for the current fiscal year: $8 million for cleanup and $3.3 million for medical monitoring and health and safety investigations.

(DOE press release, 1/28/00)

GENERAL NEWS

Secretary of Energy Bill Richardson announced January l2 that DOE is blocking the release to the open market of 6000 t of volumetrically contaminated metal from Oak Ridge’s K-25 enrichment plant and is developing a policy to prevent the resale of some 10,000 additional tons of volumetrically contaminated metal, mostly nickel, at other DOE sites. Volumetrically contaminated metal is metal with radioactivity dispersed throughout instead only on the surface. To prevent the sale of the K-25 nickel, which is worth $41 million, DOE will have to change its contract with British Nuclear Fuels Limited (BNFL), which is dismantling the K-25 building and has been given permission to sell some 126,000 t of contaminated metal.

Richardson’s decision will impact the Paducah plant, which has an estimated 9700 t of nickel ingots among its scrap metals. DOE had hoped to sell the nickel for some $37 million to help pay for the cost of clean up. Objections from citizens and state agencies to its Engineering Evaluation/Cost Analysis for Scrap Metal Removal caused it to decide in 1999 to postpone finalizing this overall plan and to concentrate on the removal of the scrap metal at Drum Mountain. The metal at Drum Mountain is not ha candidate for reuse. Any plan for handling scrap metal must be approved by the Kentucky Division of Waste Management, EPA Region 4, and the Kentucky Cabinet for Health Services. The future of contaminated scrap will also be an issue at the Portsmouth plant.

DOE’s announcement caused the Paper, Allied-Industrial, Chemical & Energy Workers International Union (PACE) to file a motion with the US Court of Appeals for the District of Columbia Circuit asking that DOE be required to produce an Environmental Impact Statement (EIS) on the nationwide release of radioactive nickel. PACE is also maintaining an appeal asking for a full EIS on the release of volumetrically and surface-contaminated metals. In 1997 PACE and others sued DOE and BNFL asking for an EIS on the release of contaminated metal from K-25. Judge Gladys Kessler found in June 1999 that “the potential for environmental harm is great,” but refused to issue an injunction because the Superfund law prevents judicial involvement that might hinder cleanup of a Superfund site.

DOE has not promised to stop BNFL from recycling the 120,000 t of surface-contaminated metal at K-25. Environmentalists do not believe that surface-contaminated metal can be completely cleaned. They also do not think that DOE can be trusted to set up an effective program to monitor for radioactivity metal that is being released for general use.

(Press releases from Public Citizen, 1/12/00 and from PACE 1/31/00; CBS News, 1/11/00; Joe Walker, Paducah Sun, 1/13/00; Matthew Wald, New York Times, 1/12/00)

A draft report from the White House National Economic Council (NEC) concludes that workers at DOE weapons plants “may be at increased risk of illness” from radiation and toxic chemicals. The government’s admission has come as the result of an order that President Clinton issued last summer to the NEC for a broad study on the effects of such exposure. For its report, the NEC reviewed recent studies by DOE contractors and other scientists rather than conducted new research. The studies reviewed analyze the experience of workers at only certain sites. Paducah is not among those sites. Portsmouth is, but the research on Portsmouth is reportedly incomplete and therefore inconclusive. Nevertheless, workers at Oak Ridge's K-25 plant, which used the same basic process as Paducah and Portsmouth, have been found to experience a higher rate of lung cancer than the general population, the report says. The individual studies reviewed differ in their conclusions; but tak en as a whole they show that there is “credible evidence” of increased risks to health from “ionizing radiation and chemical and physical hazards” at the plants. Richardson said that the report will remove “a major roadblock” to compensation for workers. (Joby Warrick, Washington Post, 1/30/00; Matthew L. Wald, New York Times, 1/29/00; Government Accountability Project analysis at www.whistleblower.org)

Transcripts of DOE's hearings on worker health at the Portsmouth enrichment plant (Oct. 30) and at the Oak Ridge enrichment plant (Dec. 8), a Keith led by DOE Assistant Secretary Michels, to are available at tis.eh.doe.gov/benefits/meetings/meetings.html .

DOE has not yet released its promised Final Request for Proposals for the depleted uranium hexafluoride conversion plants mandated by Congress. Congress appropriated $5 million last year and the administration will ask for $24 million this year (see above), but, according to Richard Miller, a Washington-based policy analyst for PACE, the project needs $60 to $80 million more to get off the ground. (Bill Bartleman, Paducah Sun, 1/27/00)

DOE announced January 31 that it has established the Central Internet Database (CID) to provide “easier access to information on radioactive waste, hazardous materials, and facilities across the DOE complex.” Information will be put on the database in stages. As yet, the sections devoted to Paducah and Portsmouth contain only one historical report each. The database was established as part of the settlement of a suit filed by the Natural Resources Defense Council and other organizations in 1998. The URL is cid.em.doe.gov .

Resources for the Future released in January “Cleaning Up the Nuclear Weapons Complex: Does Anybody Care?” by Katherine N. Probst and Adam I. Lowe. The report states that people living near and working on the sites may care, but that at the national level little attention is paid to DOE’s cleanup program. Such basic questions as whether the goals of the Office of Environmental Management and Budget are appropriate and whether the $50 billion spent on cleanup since 1989 has been well spent are not examined, although attention to DOE’s environmental management program is “long overdue.” The report recommends that DOE, Congress, and the administration: 1) clarify the mission of DOE’s Environmental Management (EM) program and separate economic transition goals from cleanup goals; 2) decide, by means of Congressional legislation, which DOE sites will (and will not) remain in operation; 3) again through Congressional legislation, require DOE to report to Congress annually on the progress of cleanup, including how funding has been spent; 4) create an independent commission to evaluate the organizational structure of the EM program and indicate any needed changes. The report is available from Resource for the Future (202-328-5000).