CHEYENNE, Wyo. (AP) — The uranium industry and Wyoming's congresswoman are questioning a determination by Energy Secretary Steven Chuthat releasing and enriching up to 9,200 tons of depleted uranium from a federal stockpile won't roil the uranium market and undermine prices.
The measure endorsed by Senate Minority Leader Mitch McConnellis intended to keep open a Kentucky uranium enrichment facility and preserve 1,200 jobs.
Three such planned releases of federal uranium inventories could undermine uranium prices and cost jobs in their industry, the group Uranium Producers of America says.
"We're happy to compete on a global basis with other producers and other countries around the world. But when you add an element of government dumping inventories, uranium inventories, into the market, it really is a distortion on market conditions and, obviously, market price," Scott Melbye, a vice president for Toronto-based Uranium One, Inc., said Friday.
The result could put at risk many of the 1,200 people currently employed by uranium mining in states including Wyoming, Nebraska and Texas, he said, and threaten prospective uranium projects in states such as Arizona, Colorado and Utah.
Under the plan announced Tuesday, the U.S. Department of Energy will provide depleted uranium to Energy Northwest. The Washington state utility will contract with USEC Inc.to have the depleted uranium enriched at its Paducah Gaseous Diffusion Plant in Kentucky.
Some of the uranium then will be sold to the Tennessee Valley Authority. Also, an agreement between the TVA and National Nuclear Security Administrationwould be extended to provide tritium for nuclear weapons for up to 15 years.
Secretary Chu signed a formal determination Tuesday saying the released uranium won't harm the uranium mining, conversion or enrichment industries. He based that on a consultant's market analysis of the proposal for the U.S. Department of Energy.
"By taking a comprehensive view of any potential uranium transfers and sales over multiple years, the U.S. uranium industries now have additional certainty regarding the market over the next 20 years," department spokeswoman Jen Stutsman said by email.
Long a sensitive topic for the uranium industry is how Department of Energy affects the domestic market through the periodic release of government uranium inventories.
The department announced in 2008 that it would manage inventories to support and maintain a strong domestic nuclear industry. Releasing no more than 10 percent of the total annual fuel requirements of all licensed nuclear power plants into the domestic market should not harm the industry, according to the policy statement.
McConnell said he was glad that the deal involving the Paducah enrichment plant provided some certainty for the workers there. Tuesday's announcement stirred concern among the uranium mining industry and its advocates, however.
Uranium prices have been averaging around $50 a pound since spiking above $130 in 2007. Rep. Cynthia Lummis, R-Wyo. — whose state has more estimated uranium reserves than any other by far, according to the U.S. Energy Information Administration— questioned the department's view of market certainty in the years ahead.
"The Obama Administration's claim that this massive government intrusion into the market will not have an adverse material impact on domestic mining or conversion simply does not pass the straight-face test," Lummis said in a statement.
All Wyoming uranium nowadays comes out of "in-situ" mines which inject chemicals into uranium-bearing formations to yield a uranium-bearing solution that is pumped to the surface.
Market uncertainty could impede further investment in developing and expanding in-situ projects, said Marion Loomis, executive director of the Wyoming Mining Association.
"Maybe they figure they're going to kill the domestic industry so it won't have any impact," Loomis said. "They're not making new investment in new properties and new development. They're just dumping their surplus."
Up to 9,182 metric tons of depleted uranium — a byproduct of uranium enrichment for nuclear reactors — will be processed into the equivalent of 482 metric tons of low enriched uranium. Also the Department of Energy plans to release up to 2,800 metric tons of uranium per year as part of other projects including cleanup at the Paducah enrichment facility and one in Portsmouth, Ohio.
The projects together threaten to exceed the 10 percent threshold, Melbye said, into the range of 15 to 16 percent of the annual amount needed for power plants.
"The U.S. industry is presently in an expansion mode. There are new mines being licensed in Wyoming and Texas, in Utah and Colorado, that are real jobs, real development," he said. "But they're at a stage here where careless release of DOE inventories could really put a stop to that."
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