I. Oak Ridge I. OAK RIDGE February 16 DOE officials presented at a public meeting their cleanup plans for Oak Ridge through 2002. Major projects for 2000 itself include excavating several large areas where waste is buried at the K-25 site and beginning to demolish the K-25 and K-27 process buildings. (Oak Ridger, 2/16/00) US District Judge James Jarvis dismissed seven lawsuits against the United States and removed the United States as a defendant in five other lawsuits brought by workers who state that they have chronic beryllium disease. The seven lawsuits against the United States alone were brought by former workers at Oak Ridge’s Y-12 and K-25 plants. The Judge ruled that the US government is shielded from injury claims by the "discretionary function exception," which allows it to set workplace standards based on its discretion. (Randy Kenner, News-Sentinel, 2/17/00)
British Nuclear Fuels Limited (BNFL), which has a contract to clean out the K-29, K-31, and K-33 process buildings at Oak Ridge’s K-25 site, has shipped the last barrels of sludge stored in the buildings to the commercial Envirocare Mixed Waste Disposal Facility in Utah. In the past year BNFL has sent to Envirocare 17,316 drums containing 22 million pounds of sludge at a cost of $12.7 milion. The waste had been removed from two wastewater ponds at K-25 in the eighties. More than half of the waste was at that time mixed with cement and stored in drums outdoors on a pad. The drums eventually leaked, and in 1991 the state required DOE to repackage the waste and store it indoors. Some 10.5 million pounds of raw sludge stored at K-25 must still be treated and disposed of. This work will be carried out by Bechtel Jacobs, which expects to complete it by 2002. (Larissa Brass, Oak Ridger, 2/23/00; The Tennessean, 2/24/00)
II. PADUCAH II.A. DOE Investigative Report Thursday, February 10, DOE released its report on Phase II of its investigation of Paducah in response to charges of environmental contamination and worker health and safety problems. Phase I addressed activities at the plant from 1990 to the present; Phase II focused on operations from the 1950s to 1990. The Phase II report states that between 1952 and 1990 workers were exposed to higher levels of radioactivity and toxic chemicals than would be allowed today. Officials learned as early as 1957 that workers were at increased risk because of the use of uranium from irradiated fuel at the plant. However, workers were not always told of the dangers they faced, and "protection programs were not always conservative or consistent." Workers were allowed to wear clothes at work that they wore at home for instance, and they carried contamination on their clothing to their families. Some human experimentation with uranium ingestion and inhalation was conducted. DOE cannot confirm that all the people who participated knew that that they were being experimented on. Stack emissions were not monitored before 1975, but between 1952 and 1983 an estimated 60,000 kg of uranium were released into the atmosphere. The soil and water were heavily polluted, in part as the result of the atmospheric releases. The report can be found at tis.eh.doe.gov/oversight/paducah/p2htm/ . A draft of the report, dated January 2000, had been obtained by the Courier-Journal, which published a summary of the draft, replete with shocking details, February 6. The presentation included a description of the "extreme conditions" in the plant’s feed mill where the radiation a foot from the feed plant ash was commonly 10 to 20 rem per hour and as high as 105 rem. Since 1958, the maximum "acceptable" dose for workers has been 5 rem. (James R. Carroll and James Malone, Courier Journal, 2/6/00) The findings of the final report were quickly overshadowed, moreover, by two other releases of information: a DOE fact sheet and a whistleblower disclosure statement. The fact sheet was handed out to workers, and the statement was filed with the Nuclear Regulatory Commision and reported in the Washington Post February 11, the day after the release of the investigative report. II. B. DOE Fact Sheet The fact sheet that DOE distributed to workers stated that --Tritium was found in five of eight drainage flows tested in 1991. The memo did not give the amount, the location of the flows, or whether the tritium appeared in later tests. --A machine shop made nuclear weapons parts that may have been coated with beryllium. --DOE shipped assembled weapons without the nuclear package to Paducah for reclamation of gold, silver, and other precious metals. The weapons were usually broken down and melted, but some "whole weapons minus the nuclear package, were buried at the plant. "Tritium reservoirs could have been smelted and/or buried." --Paducah may have also coated materials with beryllium for other agencies. --In December DOE sent to Oak Ridge (the location of the DOE office that oversees the Paducah and Portsmouth plants) "potentially classified" negatives found at Paducah. --Also in December DOE started a special investigation of defense-related work at Paducah. The fact sheet was mistakenly circulated as a draft but Walter Perry, DOE spokesperson, said that DOE headquarters approved it and it is accurate. (Joe Walker, The Paducah Sun, 2/16/00) II.C. Whistleblower Raymond Carroll, a senior manager of health and safety programs for USEC filed the whistleblower disclosure statement with the US Nuclear Regulatory Commission (NRC) and other agencies. He based his statement on a conversation that he had about health and safety concerns with USEC radiation protection manager Orville Cypret. Cypret had told Carroll and others about a meeting with DOE's acting Paducah site manager Dale Jackson, and an investigator for the DOE. On that occasion Cypret had learned that up to 1600 tons of nuclear weapons components may be stored at the plant. Some are buried but others are disbursed in storage areas, Carroll reported. More transuranic material was brought into the plant than has been acknowledged and not only in irradiated uranium. Tritium may also have been used there. Carroll said he was filing the complaint because of concerns about worker health and safety. Caroll said that a team to investigate the weapons question at the plant would not voluntarily share the information gathered with civilians running the plant and that any records found would be taken the night of the discovery to DOE’s office in Tennessee. Cypret later stated to the press that he is having his security clearance upgraded so that he can become part of the high-security-level team investigating the history of the plant if USEC so wishes. That team involves officials from the US Departments of Defense, Energy, and Justice. Joe Egan, the Washington lawyer who filed the suit brought by three workers, charging that Lockheed Martin and Martin Marietta had falsified records on environmental problems at the plant, helped prepare and file the five-page statement. (Bill Bartleman, The Paducah Sun, 15/2/00)
Continuation of investigations. DOE "reviewed" an underground storage site after Carroll reported that 1600 tons of weapons components may be stored at the Paducah plant. ( www.nytimes.com accessed 2/ll/00) Also officials from DOE’s inspector general’s office copied the hard drives and took copies of backup tapes of thirty computers at the Paducah plant. The computers are used by Bechtel Jacobs. Bill Campbell who is leading a Justice Department inquiry into whether the department should join a whistleblower lawsuit said that the seized data may include information on employees who had worked for Lockheed Martin, a defendant in the suit. (James Malone, Courier-Journal, 2/17/00)
Tritium. The DOE’s Walter Perry told the Paducah Sun that the amount of tritium in the drainages was up to 3800 picocuries per liter, less than one fifth of the drinking water standard. One of the outfalls where tritium was discovered is near a classified burial yard containing weapons components. Tritium sampling, which began because of a discovery of tritium at Portsmouth, has continued. Bechtel Jacobs, which does the sampling today, has not discovered any tritium, a Bechtel Jacobs spokesperson said. (Joe Walker, Paducah Sun, 2/17/00)
Beryllium. DOE acknowledged February 23 that tests conducted for the agency since 1998 have found beryllium at higher than natural levels in soil, surface water, and groundwater. One soil sample contained beryllium at 155 times the natural level. Such high readings could only have come from plant operations, John Tillson, a geologist who works at the plant, stated. DOE said that it cannot explain the presence of the beryllium and does not know whether workers were exposed to beryllium dust. . In July when the Clinton administration proposed compensation for DOE workers with chronic beryllium disease, officials said that there was no evidence that beryllium had been used at Paducah. (James Malone, Courier-Journal, 2/23/00)
Public meeting . February 23, DOE held a community meeting to answer questions about its Phase II investigative report. Approximately 120 people attended. Some made new allegations. A former employee of Kentucky Fish and Wildlife told how co-workers scavenged material from landfills without suspecting it was radioactive. Dale Jackson, DOE’s acting Paducah site manager requested information from anyone who worked with weapons at the plant. He can be contacted by calling 441-6800. (James Malone, Courier-Journal, 2/24/00)
III. PORTSMOUTH III.A. Waste Transportation At a public meeting at Portsmouth in late January, DOE revealed that Portsmouth had received in 1999 for storage, 2.2 metric tons of aluminum-clad metal slugs with uranium enriched to 0.947% from Seattle University and 2.5 metric tons of aluminum-clad metal slugs with "normal" uranium from the University of Nebraska. It is in the midst of receiving about 3800 tons of uranium from Fernald for storage. ("Uranium Management Center," Portsmouth Site, DOE Public Meeting, 1/27/00) The Portsmouth Plant shipped more than 4.6 million pounds of waste off-site in FY 1999. Envirocare in Utah received 384 boxes of sludge (1,900,000 pounds) from containment ponds; 214 boxes (1,260,000 pounds) of soil from an old incinerator, and 560 drums (919,000 pounds) of soil from the digging of a diversion trench. (Portsmouth Environmental Bulletin, January 2000) III.B. Health Issues Documents obtained by the Columbus Dispatch show that in 1976 a woman who worked at the Portsmouth plant inhaled tritium which resulted in a dose of 800 milligrams to the thyroid of her fetus. The pregnancy was in the first trimester. DOE officials, questioned by the Dispatch, were unfamiliar with the accident, and refused to comment on DOE’s ongoing investigation into health and safety issues at the plant. The report on their findings is due in May. (Jonathan Riskind, Columbus Dispatch, 2/11/00)
IV. USEC IV.A. Financial Report In its 10Q filing with the Securities and Exchange Commission for the second quarter of its FY 2000 (Oct.-Dec. 1999), USEC reported earnings for the second quarter of $32.6 million, $.36 per share, compared to $32.1 million or $.32 per share for the same period in the previous fiscal year. Per share earnings rose by 13% because the company had repurchased approximately $10 million worth of shares. Total revenue for the second quarter totaled $447.6 million, compared to $422.4 million for that quarter in FY 1999. For the last half of calendar 1999, revenue was $678.5 million compared to $730.3 million in the last half of 1998. USEC increased sales from its stock of natural uranium in order to help to gain revenue. Revenue from sales of natural uranium, primarily uranium hexafluoride, amounted to $15.8 million and $41.5 million in the last three and last six months of 1999 respectively. In the last six months of 1998 USEC had obtained only $8.8 million from uranium sales. Uranium prices were lower in the last half of 1999 than they were in the last half of 1998, but USEC expects to continue "to generate cash flow" by selling off its uranium stocks. USEC continues to expect that net income for the entire FY 2000 will be $110 to $115 million. However, because of such factors as global overcapacity for uranium enrichment, aggressive pricing by competitors, the resultant lower prices in USEC’s new contracts, and the need to purchase Russian uranium, USEC expects FY 2001 income to be between $35 million and $45 million. Even these figures depend on negotiating savings in electricity costs and cutting the workforce by 850 production workers. The Board of Directors reduced by half the dividend paid on common shares, declaring a quarterly dividend of 13.75 cents per share on USEC’s common stock, payable March 15. It also announced that USEC will buy back an additional 20 million shares by June 2001. IV.B. Fallout from USEC’s financial report The price of USEC stock fell during February to around $4.00 a share February 4 Standard & Poor’s lowered USEC Inc’s corporate debt rating, the senior secured debt, and the bank loan rating from BBB to BB+; the short-term rating to B from A-2, the senior unsecured debt to BB+ from BBB; and the rating for commercial paper to B from A-2. February 23, Moody’s Investors Service downgraded USEC Inc’s senior unsecured guaranteed bank credit facility to Baa3 from Baa1, senior unsecured debentures to Ba1 from Baa1, and the short term debt rating to P-3 from P-2. The outlook it says is "negative," and ratings will continue to be under pressure. This means that one of the conditions that would allow USEC to close either the Portsmouth or the Paducah plant prior to 2005, under USEC’s pre-privatization agreement with the US Treasury Department, has been realized—USEC’s corporate credit rating has fallen "below investor grade." ( www.nuke-energy.com downloaded 2/16/00) IV.C. NRC investigation As a result of Standard & Poor’s downgrading of USEC’s corporate credit rating to below investment grade and other signs of a deteriorating financial condition, the US Nuclear Regulatory Commission (NRC) will examine the question of whether the company has the financial wherewithal to operate the plants safely. It may also look at the related question of whether the staff cuts planned by USEC will jeopardize safety. The Atomic Energy Act as amended by the Energy Policy Act of 1992 requires the NRC to report annually to Congress "on the status of health, environmental and safety conditions at the plants." This USEC did last fall. The pending review is a special review. The USEC Privatization Act of 1996 authorizes the NRC to review a license or certificate of compliance as needed to protect "the common defense and security of the United States or the maintenance of a reliable and economical source of enrichment services." Rep. Ted Stirckland (D-Ohio) has reminded the NRC of this responsibility, which gives the review a particularly serious dimension. An NRC spokesperson told Jonathan Riskind that for the review the agency may follow procedures set forth in NUREG –1671, designed to guide the agency in considering applications for enrichment service certification. They include looking into whether there is proof that the applicant will remain financially viable for five years; considering the impact of the Russian HEU agreement on financial viability, and consulting with the Enrichment Oversight Committee in regard to the applicant’s performance in implementing the US—Russian HEU Agreement. One of the questions that NRC may force USEC to face is the fact that USEC is running out of its supply of the coolant freon, which can no longer be purchased due to environmental regulations. (Jonathan Riskind, Columbus Dispatch, 2/25/00; www.nuke-energy.com , the Web Site of the Washington Nuclear Corporation, downloaded 2/25/00) IV.D. Jobs Immediately following USEC’s announcement that it will reduce its production workforce, DOE released a "Draft Workforce Restructuring Plan for Portsmouth Plant, Ohio and Paducah Plant, Kentucky." The plan estimates the number of new jobs that DOE will help to create at the plants and discusses benefits for severed workers. The FY 2000 Supplemental and FY 2001 budget requests for cleanup at the plants may create as many as 600 new positions. Projects of the Paducah Area Community Reuse Organization (PACRO) and the Southern Ohio Diversification Initiative (SODI), which receive DOE funding, are expected to create additional positions. Up until now, DOE has funded enhanced benefits amounting to $25,000 for each worker who has participated in USEC’s voluntary work reduction plan. The money for the enhanced benefits has come from $20million set aside from receipts from USEC’s privatization. The $20 million is insufficient to cover enhanced benefits for the 850 workers who will now lose their jobs, although through a combination of money from the fund and from "requested" funds, they may each receive a lump sum benefit, the draft says. Richard Miller, a spokesperson for the PACE union notes, however, that the administration has not yet requested money for the benefits and has not committed itself to doing so in the future. Furthermore, the union is skeptical that all the anticipated jobs will materialize. The work plan can be viewed at www.wct.doe.gov/ under "What’s New," subcategory "Recent Announcements." (Joe Walker, The Paducah Sun, 2/5/00; www.wct.doe.gov/ )
V. RUSSIAN URANIUM V.A. USEC Purchases USEC has ordered for delivery in calendar year 2000, 5.5 million SWU from Russia, which equals almost half of expected sales for that period. Purchases in calendar 2001 are expected to again be 5.5 million SWU. As a result of the purchases, USEC will reduce production at its Paducah and Piketon plants to about one fourth "of their nameplate capacity" in FY 2001. Therefore, according to USEC, it will be forced to cut the number of production employees by 20% starting in July 2000. "Based on preliminary discussions with the U.S. and Russian governments, USEC expects that prices for SWU purchased under the Russian contract will be aligned with market prices beginning in calendar year 2002." (USEC, 10Q Securities and Exchange Commission filing, 2/00) V.B. Reports on Proliferation Risk Two new reports urge the United States to play a leadership role in reducing the risk of nuclear proliferation from Russian stocks of plutonium and highly-enriched uranium (HEU). A senior policy panel that includes US Senator Sam Nunn, Graham Allison of Harvard University, and Robert Gallucci of Georgetown University’s School of Foreign Service produced "Managing the Global Nuclear Materials Threat: Policy Recommendations," for the Center for Strategic and International Studies. (The report is available at www.csis.org .) Harvard’s Project on Managing the Atom and the Carnegie Endowment for International Peace in Washington are publishing a report by Matthew G. Bunn of Harvard University’s Kennedy School. The report has been previewed in the Boston Globe and Harvard Crimson. Both reports present the grave risk that the stocks of plutonium and HEU pose for US security; both lament the lack of leadership from the US administration in dealing with this threat; both urge that large-scale efforts be made immediately to secure and reduce the Russian stocks. Among the useful steps is blending the HEU with low-enriched uranium as is now done on a relatively small scale to implement the Russian-US HEU agreement. The CISC report points out that none of the 1000 ton plus stock of Russian HEU is under international safeguards. Half is in weapons and half is scattered among 300 buildings at more than 50 sites. We should continue to purchase HEU under the existing Russian-US agreement but should "buy substantial additional quantities" rapidly and enable Russia to blend down the HEU within the next few years, the report says. (Juliet Chung, Harvard Crimson, 2/28/00; Web site www.nuke-energy.com , downloaded 2/7/00) V.C. Russian Position A spokesperson for the Russian Atomic Energy Ministry said February 24 that Russia "cannot compromise and lower [uranium] prices simply to soften the USEC’s losses." He did add, however, that he would not rule out the possibility of future negotiations. (Associated Press, 2/24/00) V.D. Russian Suspension Agreement The US Department of Commerce issued a preliminary ruling February 25 to the effect that terminating the existing Russian suspension agreement would likely lead to unfair dumping. The agreement, which limits importation of Russian uranium into the US market, suspended a 1991 anti-dumping investigation. The department will issue a final decision in June. In order for the suspension agreement to remain in effect, the US International Trade Commission must also decide that ending it would lead to a continuation or recurrence of material injury to the US uranium industry. (Portsmouth Daily Times, 2/25/00)
VI. SCRAP METAL Energy Secretary Richardson has sent out an internal memo on scrap metal recycling. The memo "directs actions to improve the management of materials which might be released from Department facilities for re-use or recycling" and states that DOE will continue its moratorium on release of volumetrically contaminated metals at least as long as the Nuclear Regulatory Commission is deciding whether to proceed with a rulemaking that would set national standards or actually going through the rulemaking process. Furthermore, it announced the establishment of a DOE Re-use and Recycling Task Force, which will be cochaired by Brian Costner and Steve Cary. According to Costner, the task force will look at all materials throughout the DOE complex, including surface contaminated materials, although the current DOE moratorium includes only ‘volumetrically contaminated metals’ involved in one specific project at Oak Ridge and also affects nickel at the Portsmouth and Paducah plants and probably copper at accelerators. (E-mails from Kathy Crandall, Alliance for Nuclear Accountability, 2/16 and 17/00) |
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