JUNE 2001

I Oak Ridge

II Paducah

III Portsmouth

IV US Department of Energy

V US Nuclear Regulatory Commission

VI United States Enrichment Corporation (USEC)

VII Depleted uranium

VIII Scrap metal

IX National energy policy

I. OAK RIDGE

Scrap metal recycling

Manufacturing Sciences Corp (MSC), a subsidiary of British Nuclear Fuels Ltd. (BNFL), has decided to "indefinitely suspend" the receipt of radioactively contaminated metals for recycling, as of June 1. The company plans to stop recycling activities July 13 after the materials on hand have been processed. For the foreseeable future, it will concentrate on its instrument manufacturing operations. BNFL spokesperson Norman Hammitt said that a DOE moratorium on recycling contaminated metal, and economic factors, including "a sharp drop in disposal prices available to the radioactive waste market," led to the decision. MSC has recycled contaminated materials for use within the DOE weapons complex, but BNFL is now compacting contaminated metals and sending them to Envirocare in Utah for disposal. Cleanup of the recycling facility is expected to take approximately a year, beginning in November (Larisa Brass, News Sentinel, 5/18/01; Weapons Complex Monitor, 5/18/01).

Land use

An investigation by DOE’s Inspector General has found that an independent property assessor recommended a fair-market value of $200 an acre for the 182 acres in the Clinch River floodplain that DOE sold to a developer in February of this year. Oak Ridge’s real estate manager Katy Kates, on her own initiative, reduced the price to the $54 an acre that DOE actually charged. The Oak Ridge Operations manager only recently found out about the price change. The Inspector General has also determined that, although DOE officials had the legal authority to sell the property to a private developer, they used this authority inappropriately.

Dev Joslin of Advocates for the Oak Ridge Reservation, one of the groups that complained about the land sale, said that it is time to stop dwelling on this particular episode and "to do some cooperative planning with DOE and the city." Ed Cumesty, acting manager of Oak Ridge, is not certain that there will be an Environmental Impact Statement on the Oak Ridge Reservation but he wants to make sure that the public has an opportunity to express opinions (Weapons Complex Monitor, 5/21/01).

Incinerator tests

The Toxic Substances and Control Act incinerator began two weeks of trial burns for environmental regulators May 14. For the first four days the incinerator was to burn metals regulated under the Resource Conservation and Recovery Act; for a second four days, solid and liquid wastes contaminated with PCBs, and for the last four days, organic wastes and PCBs. (Weapons Complex Monitor, 5/21/01)

II. PADUCAH

Discussion of health report

May 1, at the public meeting on the Agency for Toxic Substance and Disease Registry (ATSDR)’s report on the impact of the Paducah plant on the health of area residents, Dr. Mark Evans, environmental geologist for the agency, explained that the report was based on data compiled by other agencies throughout the period of the plant’s operation. ATSDR did no sampling itself. Mark Donham, chairman of the plant’s citizen advisory board, and others questioned the validity of this method. They also noted that the report does not address the effects of multiple contaminants. (Joe Walker, Paducah Sun, 5/1/01, Bill Bartleman, Paducah Sun, 5/2/01)

Visit from Timbers

William Timbers, CEO of USEC, visited the Paducah plant May 14 to congratulate employees on achieving stand-alone status, that is modifying the plant to enable it to enrich uranium to reactor grade. The upgrading took eighteen months. (Joe Walker, Paducah Sun, 5/15/01)

Nuclear Regulatory Commission (NRC) meetings

The NRC held a meeting in regard to the performance of the Honeywell conversion plant May 16 in Metropolis, Illinois, and a meeting on the performance of the Paducah enrichment plant May 17 in Paducah. NRC officials said that the Paducah plant "continues to conduct its activities safely and continues to safeguard nuclear material" but that it needs to improve in several areas, including paying attention to detail in implementing procedures, and documenting and determining criticality controls. In another meeting, held May 16 in Paducah, an NRC official reviewed proposed revisions to the agency’s oversight program for nuclear fuel facilities, including the Paducah plant. The proposed revisions are described in NRC documents SECY-99-188 and SECY-00-0222, on the Web at www.nrc.gov/NRC/COMMISSION/SECYS/index.html . An overview of the proposed revisions is at www.nrc.gov/NMSS/FCSS/FCOB/INSP/REVISED/Fcindex.htm (NRC Press Release, 5/10/01)

Area development

Jim Martin hopes to turn 1000 acres of undeveloped land in Graves County into a regional industrial park that will create jobs for former enrichment workers when the Paducah plant eventually closes down. To do so he is obtaining the help of PACRO, the Paducah Area Community Reuse Organization, which is funded by DOE. PACRO has already provided $2.87 million in grants and $2 million in low-interest loans for creation of industrial parks with spec buildings, in McCracken, Graves, Marshall, and Ballard Counties, Kentucky, and Massac County, Illinois. PACRO was formed only about two years ago and has received to date more than $8 million in federal money to help the area try to offset job losses at the enrichment plant. It works directly with displaced individuals as well as with development projects. (Joe Walker, Paducah Sun, 5/14/01)

University of Kentucky

Officials from the University of Kentucky met with William Timbers in May to discuss the University of Kentucky’s becoming involved in research at the Paducah plant. President elect Lee Todd and the dean of the College of Engineering, Tom Lester, expressed an interest in research on new uranium enrichment technology and in the marketing of recycled materials. They also spoke of the possibility of providing continuing education to plant workers. (Bill Bartleman, Paducah Sun, 5/25/01)

Paducah’s future

Senators Mitch McConnell and Jim Bunning and Representative Ed Whitfield, all Kentucky Republicans, sent the Bush administration a letter May 1 in which they asked how the administration intends to ensure that the Paducah plant keeps operating, although Russia is currently supplying USEC with approximately half the separative work units (SWU) that USEC sells each year. The legislators did not mention USEC by name. (NuclearFuel, 5/7/01)

III. PORTSMOUTH

End of enrichment

Enrichment ceased at the Portsmouth Gaseous Diffusion Plant May 11 when USEC took the last of the production cells off line. The company will, however, continue to ship enriched uranium hexafluoride from Paducah to transfer and shipping facilities at Portsmouth for several more years. (USEC, Press Release, 5/18/01)

More about the Inco plant

Articles in the Huntington Herald-Dispatch in May contained additional details about the nickel plant buried at Portsmouth. The plant, officially known as the Reduction Pilot Plant (RPP) was owned by the federal government and built on about four acres of federal land, surrounded by facilities owned and operated by International Nickel Co., now known as Inco Ltd. International Nickel operated the plant from 1951 to 1963. When, in the 1970s, DOE decided to demolish the plant, Huntington Alloys Inc. supervised the demolition and Cleveland Wrecking Co. carried out the work. DOE hired Huntington Alloys to supervise the demolition of the four-story processing building, which Cleveland Wrecking Co. carried out. Four rail-car loads and 59 trucklands of scrap were buried in the X-749A landfill at the Portsmouth plant. (Jim Ross, Herald-Dispatch, 5/3/01)

Pollution from electricity suppliers

The Ohio Valley Electric Corp. (OVEC) and its subsidiary Indiana-Kentucky Electric Co. (IKEC) will begin work in mid-June on a project to cut by more than 80% the emission of nitrogen oxide from their Kyger Creek and Clifty Creek power plants. The plants, located in Cheshire, Ohio, and Madison, Indiana respectively, are fueled by coal. The companies were organized in 1952 to provide power to the Portsmouth gaseous diffusion plant and have been doing so since 1955. The new emission levels will meet the standard set by the Environmental Protection Agency in 1999. (PR Newswire, 5/30/01)

USEC contract for cold standby

John Dingell (D-Mich) sent a letter from the Democrats on the House Committee on Energy and Commerce to Energy Secretary Spencer Abraham May 1, stating that DOE’s granting of a "sole-source" contract to USEC for carrying out the cold standby program at Portsmouth may violate federal law. He requested justifying documents. Dingell indicated that he "understand[s] and support[s] the need for a short-term transitional sole source arrangement" but that "two years strikes us as long" and that "there are expected to be options to extend the contract beyond the initial term." He also noted that there are "other issues involved, including who will ultimately own the $1 million in SWU removed from the cascades and the $30 million in freon remaining on the site."

Winterization

May 15 in Piketon, DOE held a public meeting on Winterization/Heating Activities for Cold Standby. Dennis Boggs of DOE explained that cold standy means maintaining the plant’s ability to go back into operation within eighteen to twenty-four months and to achieve three million separative work units of enrichment per year. He then went on to present key information from DOE’s draft "Environmental Assessment: Winterization Activities in Preparation for Cold Standby at the Portsmouth Gaseous Diffusion Plant" (DOE/EA-1392), released in May.

The proposed winterization alternative involves installing and operating a hot water heating facility with associated recirculating water pumps tied to an existing hot water distribution system. The hot water boilers would be located in the GCEP (Gas Centrifuge Enrichment Plant) X-3002 process building. Initially they would operate on #2 fuel oil, but they would likely be converted to natural gas. Conversion to natural gas would require constructing a five-mile-long natural gas pipeline to the site. The proposed alternative would also entail the sealing of openings/vents in the three main process buildings (X-326, X-330, X-333) and installation and operation of a total of approximately nine hundred 480-volt electric space heaters in these buildings. Construction costs for the proposed action total $31.0 million; operation and maintenance costs, $15.8 million per year.

Reasons for winterizing the plant include "substantial and costly damage from freezing of fire protection systems;" the freezing of waste that would result in noncompliance with Resource Conservation and Recovery Act (RCRA) permits; and "possible concerns with facilities containing highly enriched uranium." The latter reason was referred to as "maintain nuclear criticality safety," in a DOE handout for the public meeting.

DOE limited the public comment period to May 11-May 25, because of the need to start work in time for cold weather. The final environmental assessment is to be issued in June 2001. Meanwhile, subcontracts have been awarded to purchase and install equipment. The draft assessment is available at www.oakridge.doe.gov/Foia/NEW.htm

Reindustrialization

DOE released "Environmental Assessment: Reindustrialization Program at the Portsmouth Gaseous Diffusion Plant" (DOE/EA-1346) in May. The document states that DOE proposes to transfer real property via a reindustrialization program to "a community reuse organization, to other federal agencies, or to other interested persons and entities" judged suitable. It may also transfer personal property. DOE "has a programmatic need to reuse underutilized or excess facilities in order to accelerate environmental cleanup and reduce operational and maintenance costs." To "accelerate environmental cleanup" means that, as at the K-25 site in Oak Ridge, private companies may lease contaminated facilities that they agree to decontaminate. Written comments should be sent to Mike Dabbert, US Department of Energy, PO Box 700, Piketon, OH 45661 by the close of business June 11. The report is available on the Web at www.oakridge.doe.gov/foia/NEW.htm .

IV. US DEPARTMENT OF ENERGY (DOE)

Compensation for sick workers

May 25 the US Department of Labor published in the Federal Register the final draft of proposed regulations for implementing the Energy Employees Occupational Illness Compensation Program Act. Interested parties have ninety days in which to comment on the regulations. However, the Labor department will begin "to process claims when the statute becomes effective on July 31, 2001," Labor Secretary Elaine Chao promised.

The department announced that, starting May 31, affected workers can call 1-866-888-3322 to ask questions and obtain application forms. The department is posting updated information on its Web site: www.dol.gov, and is holding community meetings at which workers can ask questions. DOE and the Labor Department will together open nine resource centers that will help people get claims ready for review elsewhere. The nine locations include Oak Ridge, Paducah, and Portsmouth (US Department of Labor, Press Release, 5/25/01; Richard Powelson, News-Sentinel, 5/4/01; Bill Bartleman, Paducah Sun, 5/20/01).

Review of environmental management programs

The Alliance for Nuclear Accountability (ANA ) obtained an internal DOE document indicating that agency officials planned to form a small working group to conduct the review of environmental management programs (see May UEN). The working group would be composed of DOE contractors, members of site-specific advisory boards, and state and local officials. No mention was made of public meetings or of input from public interest groups. In a letter of May 15 to Abraham, ANA asked for asked for community participation and openness during the DOE review, in line with the requirements of the Federal Advisory Committee Act.

Shortly thereafater ANA obtained an internal DOE memorandum that indicates that DOE officials plan to conduct the review in two phases, for the first of which they will "solicit input from [their] managers and contractors . . ." "We have requested the Energy Facility Contractors Group (EFCOG) to solicit the advice and recommendations of its members," the memo by Chief of Staff Kyle McSlarrow states. Responding to the memo, ANA, sent a letter to Secretary Abraham May 24, claiming that "DOE’s system of contracting is a major source of the delays and cost overruns in the agency’s environmental programs" and that contractors are therefore not likely to identify the real problems with the programs. (Weapons Complex Monitor, 5/21/01; ANA, Letter to Abraham, 5/24/01)

Criticism of incentive fees

DOE’s Inspector General has issued a report criticizing DOE’s payment of incentive fees to Bechtel Jacobs Co., its environmental manager for the Oak Ridge, Paducah, and Portsmouth sites. Bechtel Jacobs received more than $34 million in incentive fees over the past two years. However, DOE did not establish clear performance objectives before each evaluation period started, and it did not require Bechtel Jacobs to meet all the objectives that it did establish. DOE management agreed with most of the recommendations for improvement, but said that Bechtel Jacobs did earn its fees and that DOE made any changes in objectives through a formal system and for such reasons as "regulator delays" or insufficient funding for the work tied to incentive fees. Another Inspector General audit has found that DOE could have saved $44 million in FY 2000 if Bechtel Jacobs had subcontracted more of the work as promised (See UEN, April 2001). (Weapons Complex Monitor, 5/21/01; Paul Parson, Oak Ridger, 5/16/01)

GAO on waste disposal

The US General Accounting Office (GAO) published in May "Nuclear Cleanup: DOE Should Reevaluate Waste Disposal Options before Building New Facilities" (GAO 01-441). According to the report DOE used now-outdated cost and risk assessments in determining whether to build on-site facilities in which to dispose of low-level waste at Oak Ridge, Fernald, and INEEL, or to ship the waste to off-site facilities. The GAO recommends that DOE update and reevaluate its original on-site and off-site cost comparisons to determine whether on-site disposal is still the best alternative when cost and risk are both taken into account. The report has implications for Paducah and Portsmouth where on-site disposal facilities are in the planning stage.

V. US NUCLEAR REGULATORY COMMISSION (NRC)

(see Paducah above)

VI. UNITED STATES ENRICHMENT CORPORATION (USEC)

US Department of Commerce ruling

May 8, the US Department of Commerce (DOC) published a preliminary ruling that Urenco and Eurodif are being unfairly subsidized by their governments. Based on the subsidies, it estimated countervailing duty rates. For Eurodif the rate is 13.94% of the value of low-enriched uranium imported into the United States. For Urenco, the rate is 3.72%. The companies will have to post a bond to cover the duties in case they are upheld in the final ruling. July 5, DOC will issue a preliminary ruling on whether the companies are dumping enriched uranium, ie selling it at unfairly low prices, in the United States. The ruling could result in additional duties. DOC expects to make its final determination on the countervailing duty and antidumping investigations late in 2001. DOC cannot impose final countervailing or antidumping duties, however, unless and until the US International Trade Commission (ITC) makes a final determination of injury.

The DOC investigation is the result of USEC’s filing dumping and countervailing duty petitions against Eurodif and Urenco with the DOC and the ITC. If duties are levied, USEC would benefit not only from the fact that the enriched uranium from Urenco and Eurodif, competitors of USEC, would presumably cost US utilities more than it did in the past, but also from the fact that, according to the terms of a new US law, the US Customs Service would give to USEC the duties that Urenco and Eurodif pay.

Defending Urenco and Eurodif, the European Commission announced that it will engage in "further consultations with the United States with a view to having this decision reversed" and "reserves the right to take the matter up in the World Trade Organization (WTO) if the case is not resolved satisfactorily. (Associated Press, 5/1/01; Katherine Rizzo, Associated Press, 5/8/01; USEC Press Release, 5/8/01; /AFP-Extel, 5/10/01)

Diversification

USEC is taking steps to diversify. In partnership with Constellation Power Sources and Marubeni Corp., the company has submitted a bid to the Tennesse Valley Authority (TVA) to construct a 600 MW power plant that would operate year round and smaller plants that would operate in summer only. When TVA asked for bids in January, it did not specify where the plants should be located but stated that the power produced must be delivered to TVA’s seven-state region. The 600 MW facility that USEC wants to build and operate would be a gas-fired plant and would be constructed on 120 acres of DOE land northeast of the Paducah Gaseous Diffusion Plant. USEC has asked the Paducah Area Community Reuse Organization (Pacro) to act as leasing agent. TVA plans to issue a "short list" of bidders in July and to sign a contract with the winning bidder by December 14. (Joe Walker, Paducah Sun, 5/23/01)

Freon emissions

USEC’s plants at Paducah and Portsmouth emitted 818,000 tons of CFC-114 (freon) in 1999, the most recent year for which figures are available. The manufacture and importation of CFC-114, one of the chemicals that destroys the ozone layer, was banned by the Montreal Protocol and Clean Air Act amendments of 1990, but companies are allowed to use existing supplies. The CFC-114 cools equipment and uranium hexafluoride in the plants, and escapes to the atmosphere through leaks in piping. The tonnage emitted by USEC in 1999 was 88% of total CFC-114 emissions from US industrial sources; 14% of worldwide emissions. USEC has been trying to develop an alternative coolant and to plug leaks, if only because CFC-114 is in short supply and, as of now, neither plant could operate without it. (James Brugger, Courier Journal, 5/29/01)

VII. DEPLETED URANIUM

DOE has provided advance notice of its intent to prepare an Environmental Impact Statement (EIS) on the proposed construction, operation, and decontamination/decommissioning of depleted uranium hexafluroide (DUF6) conversion facilities at Portsmouth and Paducah. DOE intends to issue a formal Notice of Intent (NOI) later in the year. After the NOI is issued, DOE will conduct a public scoping process, during which it will hold meetings at Paducah, Portsmouth, and Oak Ridge.

Meanwhile, DOE is evaluating the five proposals it received from contractors in response to its Request for Proposals, and the agency expects to award a contract during the first quarter of 2002. "Since the site specific NEPA [National Environmental Policy Act] process will not be completed prior to contract award, the contract will be structured such that the NEPA process will be completed in advance of a go/no-go decision." (Federal Register, 5/7/01, Vol. 66, no. 88, pp. 23010-23013)

VIII. SCRAP METAL

(see Oak Ridge above)

IX. NATIONAL ENERGY POLICY

In regard to the nuclear fuel chain, the Bush administration’s recommendations on a National Energy Policy are remarkable for their silence. Though advocating nuclear power plants as means of meeting energy needs, the report discussed neither the uranium supply nor the uranium conversion and enrichment industries. Congressman Ted Strickland (D, Ohio) had written to Vice President Cheney, May 15, "I urge you to carefully consider the needs of the entire nuclear fuel cycle as you prepare to issue recommendations for a national energy strategy." Cheney did not follow this advice (National Energy Policy, Report of the National Energy Policy Development Group, May 2001, available at www.whitehouse.gov>/energy/). At the request of three other Democratic members of Congress, the General Accounting Office is investigating the methods of the National Energy Policy Development Group (Colin Sullivan, Greenwire, 5/22/01).