The US Department of Energy (DOE) has announced that it will engage in the following activities during its investigation of the K-25 site, which started in March: review current cleanup operations; look into the leasing of buildings at the site to private firms (reindustrialization); sample the water, soil, and sediments; conduct selected radiological surveys; and study past records and interview workers to learn the history of operations at the site. David Stadler, who is managing the investigation, said that DOE visited K-25 two years ago to look into current operations at the plant, but has not previously investigated the plant’s history. The week of April 3 DOE ran ads in newspapers in the Oak Ridge area, asking current and former workers at the K-25 site willing to talk of their experiences to come forward. (Larisa Brass, Oak Ridger, 4/3/00)

Site Specific Advisory Board. Craig Rhodes, chairman of the Paducah Site Specific Advisory Board, has openly expressed the Board’s dissatisfaction with DOE and its cleanup contractor Bechtel Jacobs. Bruce Gardner, a public relations subcontractor employed by Bechtel Jacobs to assist the Advisory Board, changed wording regarding the Vortec vitrification plant (known also as the Vortec incinerator) that Rhodes had prepared for minutes of the Board. Bechtel Jacobs maintains that Gardner’s job includes reviewing and writing summaries of meetings, but the company has refused to give Rhodes a copy of Gardner’s job description or contract. Bechtel Jacobs has also refused to let the Board see the contract of Steve Kay, "an outside parliamentarian/moderator" whom Bechtel Jacobs employs to moderate the monthly board meetings. The contracts are a part of the board’s $205,000 budget, which is funded by the federal government. (Associated Press, printed in the Lexington Herald-Leader, 4/23/00)

Vortec. The Regional Association of Concerned Environmentalists (RACE) filed suit against DOE April 17 in Federal District Court in Paducah. RACE is seeking an injunction that would stop work on the Vortec plant until the government has met the requirements of environmental regulations. Allegations in the suit include a lack of consideration of alternatives to Vortec, failure to study Vortec’s cumulative effect on the environment, and an attempt to prevent the public from influencing the decision making. Heating toxic heavy metals, uranium, plutonium, and other toxic materials to high temperatures could create and release harmful new compounds, the suit claims.

The week of April 10 DOE officials said that they are scaling back the amount of waste that will be treated in Vortec but still intend to build it to its original size and configuration. (James Malone, Courier-Journal, 4/28/00).

Holes in cylinders. During a routine inspection of cylinders holding depleted uranium hexafluoride (UF6), Bechtel Jacobs employees found an inch-wide hole in one of the cylinders and the plug that should been inserted into the hole lying on the ground below. The following day inspectors found a small hole on either side of a valve in another cylinder. These holes had apparently been machined. Officials said that only a small portion of the contents of the first cylinder had apparently leaked--the UF6 would have reacted with air to form a plug; nothing appeared to have left the second cylinder. The holes have been patched. The first cylinder originally held 284 pounds of UF6; the second, 11 pounds. (Joe Walker, Paducah Sun, 4/30/00)

III. US DEPARTMENT OF ENERGY (DOE)

Worker compensation. In an April 12 press conference, Secretary of Energy Bill Richardson announced an Administration proposal for assisting workers with work-related illnesses throughout the nuclear weapons complex. The proposal expands on legislation introduced by Richardson in November of last year and reflects the results of research by the National Economic Council.

The new proposal would award a $100,000 lump sum or a compensation package (health care costs, lost wages, and job training) to workers diagnosed with a beryllium-related pulmonary condition, including workers for companies that manufactured beryllium for the government, and to workers diagnosed with a cancer caused by exposure to certain kinds of radiation. If adequate records on an individual are not available, the government will assume he or she was exposed to the highest amount or radiation associated with the tasks he or she performed.

The $100,000 lump sum payment will also be available to workers "with specific types of cancer" at the "department’s three former gaseous diffusion plants" and, with approval of the Secretary, certain workers at the East Tennessee Technology Park "who have illnesses an independent panel of physicians determines are caused by workplace exposures."

Richardson is establishing an Occupational Illness Compensation Office to assist other workers with occupational illness to obtain state workmen’s compensation benefits. The Office is to begin reviewing claims May 1 of this year.

Except for the Compensation Office, the program will not go into effect unless passed by Congress. Members of Congress whose districts include DOE facilities are likely to try to broaden the coverage. In fact, Rep. Ted Strickland (D-Lucasville) and Senator George Voinovich (R-Ohio) have announced that they are drafting a bill with lump sum payments to $200,000. (Jonathan Riskind, Columbus Dispatch, 4/13/00)

Severance pay. Senator Mitch McConnell (D-KY) failed in an attempt to persuade Congress to provide approximately $4.5 million for enhanced severance benefits for workers that USEC will lay off this summer as part of a planned reduction in force. Furthermore, Majority Leader Trent Lott has refused to bring to the floor a supplemental appropriations bill that would provide DOE with an additional $8 million in cleanup funds for Paducah and $8 milliion for Portsmouth plus extra funds for health screening. The accelerated cleanup program had been expected to provide jobs for some of the laid-off workers. (See the February newsletter on DOE’s supplemental request)

According to the Paducah Sun, DOE will announce a plan the week of May 1 to provide enhanced benefits for workers laid off by USEC. The DOE official who is putting together the package said that it would cost DOE $20 million to give workers laid off at both plants this year the benefits received by workers laid off last year (Katherine Rizzo, Associated Press, 4/20/00)

The layoff of up to 850 workers is scheduled to take place July 14. USEC has apparently postponed seeking volunteers until after DOE has made its announcement. (Bill Bartleman, Paducah Sun, 4/20/00)

Cleanup at DOE sites. April 14, DOE released an update to its Paths to Closure, a long-range plan for cleaning up DOE’s nuclear weapons complex. The update, which is based on information collected in 1999, foresees the "overall completion dates" for environmental management work as: 2014, the entire Oak Ridge Reservation; 2012, the Paducah Gaseous Diffusion Plant; and 2013, the Portsmouth Gaseous Diffusion Plant. However, these final dates do not apparently correspond to the end of actual remediation work. At Portsmouth, actual remediation would, it appears, conclude in 2004; waste management would then stretch out over the last ten years of the environmental management period. The sum of the cleanup costs for all sites under the Oak Ridge Operations Office is $8.9 billion in constant 1999 dollars, but this figure includes the entire Oak Ridge Reservation and a site in Missouri.

Apparent USEC violations. NRC staff and officials of USEC will meet May 3 to discuss apparent violations of agency regulations that NRC identified during its review of USEC’s annual update to its certificate documentation for the Paducah and Portsmouth plants. The apparent violations are in USEC’s implementation of its program for making changes at the two facilities. Certain changes should have been approved by NRC before USEC implemented them. NRC will make a decision on the apparent violations at some point after the conference. The meeting can be observed by the public. (NRC News, 4/27/00)

Financial analysis. Analyst Richard Rossi, writing for Bank of New York Capital Markets, foresees that USEC will have to close either its Paducah or its Portsmouth Plant by July 2001 to save $65 million annually in costs of electricity and labor. Rossi does not state which plant is likely to close, but says that the plant that will stay open will be the plant for which USEC signs a multiyear electricity contract. BNY Capital rates USEC bonds as a good investment provided USEC shuts a plant, completes its announced job cuts, obtains better electricity contracts, and renegotiates the arrangements under which it obtains enriched uranium from Russia. In the unlikely event that USEC should go bankrupt, the "government would be ‘highly motivated’ to intervene because of national security, job and uranium-supply issues." (Associated Press, 4/11/00)

Quarterly Report. USEC reported earnings for the third quarter, which ended March 31, of $22.6 million or $.25 a share. Earnings in the same period last year were only $16.2 million or $.16 a share. For the nine month period ending March 31, USEC earned $71.3 million or $.77 a share as opposed to $56.9 million or $.57 a share, excluding a special tax benefit, in the same nine months in FY 1999. Results for the past quarter were in part due to higher revenue from one-time replacement sales of enrichment services (measured in Separative Work Units or SWU) to Japan.

Revenue for the past nine months was $960.3 million compared to $990.7 for the same nine months in FY 1999. The drop reflected a decrease of 5% in the average SWU price over the past nine months. USEC earned $44.9 million from the sale of natural uranium in the past nine months as opposed to $19.4 million in the earlier period. SWU from Russia (in blended-down highly enriched uranium) amounted to 41% of USEC’s supply mix in the past nine months; 28% in the corresponding nine months in FY 99.

House hearing. April 13 the House Commerce Committee’s Oversight and Investigation Subcommittee held a hearing on the results of the privatization of USEC. The committee is chaired by Rep. Tom Billey (R-Va), long a critic of the "manner of privatization chosen by the Clinton-Gore administration." Other members of Congress, nuclear industry representatives, and analysts present attacked both the privatization itself and management of USEC.

Ted Strickland (D-OH) and Richard Miller, testifying on behalf of the PACE union of workers, charged USEC, with deliberately precipitating low credit ratings by its aggressive stock buy back program. USEC’s aim, they said, was to create one of the "significant events" that would allow the company, according to terms of an agreement with the Treasury Department, to close a plant.

When questioned by Strickland, Treasury Department Undersecretary Gary Gensler, noted that Treasury wrote a letter to USEC in February saying that it would need to be informed before USEC closes a plant, but Gensler failed to state for the record that "a significant event." that would allow USEC to close a plant has occurred. Miller noted that Treasury has refused to agree to a request that he made for an investigation of whether USEC "has subverted the Treasury Agreement in bad faith." [Miller p.16]

Mark Stout, president of the Uranium Producers of America, charged that USEC’s handling of the uranium inventory transferred to it by DOE has made a major contribution to the lowering of the price of natural uranium, which has brought about reduced production and even the closing of mines. James J. Graham, CEO of ConverDyn, the only US company that converts "yellowcake" into uranium hexafluoride, said that his company is unlikely to survive a continuation of USEC’s sale of its uranium hexafluoride stocks from DOE.

Shelby Brewer, an industry consultant who led the reshaping of the enrichment business during the Reagan administration, suggested that DOE or the Department of Defense take over enrichment operations; Richard Miller, setting up a government-owned corporation similar to that which came into being in 1993. Mark Stout, James Graham, and Joseph Stiglitz, former chair of the President’s Council of Economic Advisors, agreed in principle to Miller’s approach.

An NRC spokesperson testified that the NRC staff expects to forward its analysis of and recommendations on USEC’s financial situation to the Commission in early summer. The Commission, if appropriate, will then send recommendations to the Enrichment Oversight Committee and to Congress in order for Congress and the Executive Branch to determine what action, if any, to take.

Billey anticipates that his committee will hold a hearing on the national security implications of USEC’s financial situation in the fall.

Advanced technologies. Nuclear Fuel reported April 17 that William Timbers met with Uranit GmbH of Germany and Ultra-Centrifuge Nederland (UCN) to discuss buying their shares of Urenco. Doubt has, however, been expressed as to whether USEC could raise the funds to buy the shares.

Inside NRC (April 24) speculates that USEC may ask the NRC as early as October 2002 for a license to construct an "advanced technology enrichment plant." The plant would probably be a centrifuge plant. USEC, the articles says, may buy centrifuges from Urenco or build a US plant in partnership with Urenco.

Meanwhile, work on Silex continues. The NRC has licensed the export of 33.5 kilograms of uranium enriched to up to 9.9% to Australia for use in the evaluation of the Silex enrichment technology. (Michael Knapik, Nuclear Fuel, 3/6/00)

Deletion of records. In 1993 when Martin Marietta (later Lockheed Martin) was turning over to USEC management of the Paducah and Portsmouth enrichment facilities, USEC and Martin Marietta erased computer records of about one fourth of the open safety issues at the plants. In total, without clearance from DOE, they deleted 464 issues. DOE investigated the situation for three years, during which it reconstructed the erased material as best it could with the help of computer archives and paper records. DOE concluded that the deletions were not appropriate and that almost half of the items should have been fixed or referred to other agencies before they were erased. So serious were the missing items that DOE considered closing the plants, but in the end neither did so nor fined the companies involved. Furthermore, it remained silent about the deletions.

Kenneth Brooks, a facilities safety manager at Portsmouth, accuses his employer, Martin Marietta Utility Services of firing him for refusing to destroy safety records as instructed. Brooks "alleged in an interview [apparently recently, with the Courier Journal] that in addition to the computer deletions, "a lot of information was shredded. . . . It was destroyed." In 1994 he sued his employer in Federal District Court, but the judge threw out the suit on technical grounds.

DOE spokesperson Walter Perry says that all erased information was recovered by a firm hired by DOE and that "any safety-significant items were addressed when the NRC certified by plants in 1996. USEC denies wrong doing.

The Justice Department is investigating the computer erasures as part of its inquiry into whether it should join in a whistleblower suit against plant contractors. (James R. Carroll and James Malone, Courier-Journal, 4/30/00)

Lawsuit. Compagnie Noga, a Swiss trading company, filed a lawsuit Jan. 27 in US District Court in Paducah seeking to obtain a lien on USEC’s payments to the Russian Federation. The suit is the result of an international arbitration award of $61 million to NOGA, on the grounds that Russia did not complete payment for durable consumer goods furnished by NOGA. NOGA is also trying to obtain a second arbitration award of several hundred million dollars. (Case # 5:00 CV-25; James Malone, Courier Journal, 4/11/00)

New technology. Commodore Applied Technologies announced April 19 that, in laboratory-scale tests, it has succeeded in turning uranium hexafluoride (UF6) into stable uranium oxides and sodium fluoride. The usual byproduct of transforming uranium hexafluoride into uranium oxides is hydrogen fluoride, a toxic, highly corrosive compound, which may react with containers holding it to produce hydrogen. Commodore Applied’s new technology, the Solvated Electron Technology (SET) (TM), if successful at the industrial scale, would appear to be a strong candidate for treatment of the thousands of tons of depleted uranium hexafluoride stored at gaseous diffusion plants. (Commodore Applied Technologies, Press Release, 4/19/00)