Todd Jacobson
NS&D Monitor
7/18/2014
Babcock & Wilcox has entered the fray in ConverDyn’s lawsuit against the Department of Energy’s uranium transfers, arguing that stopping transfers scheduled to occur this month would cause significant harm to its downblending business as well as U.S. national security and nonproliferation goals. B&W subsidiary Nuclear Fuel Services is the sole source of highly enriched uranium downblending for the government, and it outlined its concerns in an amicus curiae brief it told a U.S. District Court for the District of Columbia this week that it wanted to file in the case.
ConverDyn is seeking a preliminary injunction to stop DOE from continuing its uranium transfers this month because the transfers will cause it “serious and irreparable harm due to irreversible market impacts. ConverDyn objected to B&W’s filing, saying it would not have time to respond by the end of the month. In an order granted late this week, though, the court gave B&W permission to file its brief.
B&W: Injunction Would Cost Millions
NFS also produces nuclear fuel for the Navy, and B&W said if that work was halted, cost-sharing between the company’s downblending and fuel manufacturing work would end, increasing the costs for its fuel manufacturing work by millions of dollars. “The cost-sharing provisions of Nuclear Fuel Services’ contracts with the U.S. Government that allocate indirect or ‘support’ costs between the downblending contract and the fuel manufacturing contract would no longer result in cost sharing between these two contracts that are performed at Nuclear Fuel Services’ Erwin [Tenn.] site,” B&W said in a July 15 court filing. “If the Plaintiff’s Motion for a Preliminary Injunction is granted, the costs to both Nuclear Fuel Services and the fuel manufacturing program would thus increase by millions of dollars.”
The cost to national security and nonproliferation interests would also be high, B&W said. “In light of the crucial role of the U.S. HEU Disposition Program in advancing U.S. nonproliferation and national security policies, any disruption of the Program would undermine these goals,” B&W said.
Workforce Cuts Would Accompany Slowdown
B&W also said that NFS would have to cut its workforce if the downblending work was halted or slowed. Downblending accounts for about 35 percent of the work conducted by NFS at its Erwin, Tenn., plant. “Should the down-blending program be slowed or halted altogether, Nuclear Fuel Services will be forced to eliminate a substantial number of jobs,” B&W said. “A reduction in force by Nuclear Fuel Services will not only directly harm the employees and their families whose jobs are eliminated, but will also negatively impact the community in and around Nuclear Fuel Services’ facility, whose economy is highly dependent on the jobs and revenues supplied by Nuclear Fuel Services.”
Converdyn Continues to Push for Injunction
In its lawsuit filed last month against DOE, ConverDyn said the Department’s uranium transfers would cost $40.5 million in lost revenue over the next two years. Along with NNSA programs, the transfers help fund the Office of Environmental Management’s Portsmouth D&D project, and DOE said the project would be “effectively halted” if ConverDyn’s request for an injunction is granted. In a court filing earlier this month, DOE said a halt to the uranium transfers altogether would result in layoffs of up to 825 additional workers at the Portsmouth site, as well as forcing the Department to put the site in a minimum safe operations state.
In a new filing this week, ConverDyn continued to push for the injunction. “DOE, dead-set on making uranium transfers to meet contractual obligations and to fund its various programs, failed to reasonably determine that the transfers will not harm the U.S. conversion industry,” states the July 14 filing. “DOE also failed to refute the grim evidence of harm to ConverDyn identified by DOE’s own experts. Contrary to DOE’s arguments, ConverDyn will suffer serious and irreparable harm due to irreversible market impacts if DOE completes the transfers starting on July 31.”
ConverDyn: DOE Can Look Elsewhere for Funding
ConverDyn said the Department had not proven the harm it would suffer if the uranium transfers were halted. “DOE has not established that funding for the two programs identified in its brief cannot be found elsewhere, either through additional appropriations or reprogramming funds, as it is legally allowed to do,” the filing states. “Nor has it explained why ConverDyn should bear the burden of funding these programs when Congress has repeatedly declined to fund them through the normal appropriations process.”
DOE took on a risk when it decided to largely fund the programs through uranium transfer, according to ConverDyn. “DOE knew that additional transfers might not occur if they would harm the U.S. conversion industry, yet it committed to transfer uranium anyway,” the filing states. “DOE should not now benefit from its poor choices by shifting that burden onto ConverDyn. Having gambled and lost, the government is ‘hoist on its own petard.’”
