Kenneth Fletcher
WC Monitor
9/19/2014
Uranium conversion services company ConverDyn late last week filed a motion for summary judgment in a case that aims to limit the Department of Energy’s ability to transfer stocks of excess uranium to help pay for activities such as D&D work at the Portsmouth Gaseous Diffusion Plant. ConverDyn has argued that DOE’s transfers violate requirements that the Department prevent significant impacts to the domestic uranium industry. In its motion for summary judgment, ConverDyn is asking the U.S. District Court for D.C. to vacate the May 15, 2014, DOE Secretarial determination on the sale and transfer of uranium, as well as to block any transfers that would go above the Department’s previously self-imposed cap of 10 percent of the annual domestic nuclear fuel requirement. ConverDyn’s motion would also vacate DOE’s 2013 Excess Uranium Inventory Management Plan.
CoverDyn’s latest motion comes after the Court denied in July its request for a preliminary injunction to prevent DOE from moving ahead with the transfers while the suit was pending. DOE’s recent decision to boost its uranium transfers to up to 15 percent of the domestic fuel market from a self-imposed cap of 10 percent will challenge ConverDyn’s long-term viability, according to the company, which believes that under federal law DOE is required to ensure that its uranium transfers will not have an adverse material impact on the U.S. nuclear industry. ConverDyn said its business is crucial as the only domestic supplier of uranium conversion services, which prepares mined uranium “yellowcake” into a form suitable for nuclear fuel.
ConverDyn: DOE Transfers Damage Industry
Earlier this year, ConverDyn filed a lawsuit claiming that its business will suffer “irreparable harm” if transfers go forward. “The USEC Privatization Act (the “Act”) bars DOE from selling or transferring uranium if the sales or transfers would materially harm the domestic uranium mining, conversion, or enrichment industries,” states last week’s motion. “Yet, contrary to the Act, DOE has authorized and is making uranium transfers that are damaging the already-fragile domestic conversion market by displacing sales, depressing prices, increasing costs, and eliminating jobs.”
UPA Supporting ConverDyn Motion
The Uranium Producers of America, which represents uranium miners, has also weighed in support of ConverDyn’s motion for summary judgment. “By ignoring critical facts and actually worsening the uranium price decline, the Secretarial Determination violated DOE’s statutory duty to protect the domestic industry from an ‘adverse material impact,’” the UPA wrote in a brief of amicus curiae filed Sept. 12 in the Court. The UPA said DOE’s Secretarial Determination is “arbitrary and capricious” in determining that the transfers won’t negatively impact the industry because it contradicts evidence, such as a study DOE commissioned by the firm Energy Resources International. “This evidence includes the ERI’s 2014 economic study on the impacts of DOE’s proposed transfers, input provided by UPA and other industry stakeholders, and past pronouncements from the Department itself,” the UPA brief states.
DOE: Case Would Effectively Halt Portsmouth, HEU Work
DOE has previously said that if the transfers were halted there would be a big impact on cleanup work at Portsmouth and nonproliferation work such as the Highly Enriched Uranium downblend program, which are funded in part by the transfers. “Plaintiff has not provided sufficient financial information for the court to make an informed determination of whether ConverDyn’s lost profits are a significant injury in light of its total revenue,” DOE said in a July 7 filing. “By contrast, the injury to DOE’s programs, will be immediate and severe.” Both the Portsmouth and HEU work would “effectively come to a halt” if the transfers were stopped, DOE said.
In the May Secretarial Determination, DOE said its transfer plans would not have a material impact on the domestic uranium industry—a position the Department has continued to stand by. “Plaintiff has not offered any reason to question the reasonableness of that conclusion or the analysis that informed it,” DOE said in its July 7 filing. “The relatively small size of DOE’s proposed transfer compared to global uranium supply was an important element of DOE’s ultimate conclusion that the transfers would not have a ‘material’ impact.”
