Kenneth Fletcher
WC Monitor
6/20/2014
Uranium conversion company Converdyn has filed a lawsuit against the Department of Energy in an effort to stop the Department’s uranium transfers, which the company claims will cost it $40.5 million in lost revenue over the next two years. In May, a DOE Secretarial Determination declared that its ongoing uranium transfers would have no negative impact on the domestic uranium market, though a recent market impact study commissioned by DOE found that the transfers would have an immediate and ongoing negative impact, noted Converdyn’s June 13 court filing in the U.S. District Court for D.C. “The Secretary’s Determination is arbitrary and capricious, and otherwise not in accordance with law. The Determination is unsupported by the administrative record before the agency, ignores and is contrary to evidence in the record, is not supported by adequate reasoning or explanation, and does not consider or ignores comments from the domestic uranium mining, conversion, and enrichment industries,” Converdyn’s filing states.
DOE has transferred portions of its excess uranium stockpile to both help fund environmental cleanup work and support USEC’s American Centrifuge Plant, actions that have been opposed by Converdyn, the uranium mining industry and industry supporters in Congress. DOE is planning several upcoming uranium transfers in July, August and September, and the Converdyn complaint has asked the court to halt those transfers. It also seeks to strike DOE’s recent decision to eliminate previous guidance to limit uranium transfers to 10 percent of the domestic fuel requirement. DOE did not respond to requests for comment this week.
Converdyn: Transfers Would Cost Company $40.5 Million
Converdyn runs the sole U.S. uranium conversion plant, which converts “yellowcake” uranium oxide into uranium hexafluoride gas in preparation for the enrichment process. The company expects the DOE transfers planned in the coming months to result in a loss of $40.5 million in revenue for Converdyn between 2014 and 2016 by displacing conversion sales and depressing the market price for conversion services. The DOE transfers increase the conversion supply available to the market without any corresponding change in demand, the company’s filing states. It adds: “ConverDyn brings this action to stop the Department of Energy from unlawfully transferring large quantities of uranium currently in the government’s possession in various forms. The transfers would have an immediate and ongoing impact on the market for uranium conversion services, would harm the United States’ domestic conversion industry, and threaten the United States’ energy security and energy independence.”
Suit Follows GAO Report That Raised Legal Questions Over Transfers
The suit comes after the Government Accountability Office released a report last week that raised several legal questions with four DOE transfers that took place in 2012 and 2013 in support of USEC’s American Centrifuge Plant, claiming that they did not meet all requirements under the USEC Privatization Act and the Atomic Energy Act. DOE also has major inconsistencies in how it assessed the value of depleted uranium tails, sometimes treating them as waste and sometimes giving them great value, according to the GAO. The Converdyn filing cites the GAO’s findings. “DOE has also violated legal requirements by authorizing transfers of conversion and enrichment services, which are not permitted under the USEC Privatization Act, and by receiving less than the fair market value for the material transferred or sold,” the filing states.
