Mike Nartker
WC Monitor
3/20/2015
As the Department of Energy works on a new Secretarial determination to govern future transfers of excess uranium to help fund cleanup work, among other activities, DOE appears to be considering a potential decrease in the amount of material to be provided, according to information the Department released this week. An analysis prepared this year by Energy Resources International found that lowering DOE’s annual transfers of excess uranium to 1,855 metric tons per year—from the current authorized annual limit of 2,705 metric tons—would result in a $0.90 increase in uranium prices, DOE said. Eliminating altogether the transfers, which have long come under criticism from the uranium industry, would be expected to result in a $2.70 increase in the price of uranium, the Department said. “DOE believes it will be possible to identify a rate of transfers that will not have an adverse material impact on domestic uranium industries,” the Department said in a notice published in the Federal Register.
In recent years, DOE has used its stocks of excess uranium materials to help fund cleanup activities at the Portsmouth Gaseous Diffusion Plant and some National Nuclear Security Administration programs. Before making the transfers, DOE is required to issue a Secretarial determination that they will not have an “adverse” impact on the domestic uranium industry. DOE’s most recent determination, issued last May, boosted the uranium transfers to up to 15 percent of the domestic nuclear fuel market from a previously self-imposed cap of 10 percent, resulting in complaints from uranium industry supporters who claim the move could contribute to depressed uranium prices. It also sparked a still-unresolved lawsuit from the uranium conversion company ConverDyn.
DOE is now seeking public comment on a proposed list of factors identified for analysis of the impacts DOE transfers could have on the uranium mining, conversion, and enrichment industries for the new determination. The Department “believes that whether the effects of a given transfer constitute an ‘adverse material impact’ should not depend on a quantitative bright-line test, but rather should be based on an evaluation of potential impacts by examining a number of factors,” DOE said in its notice. Such proposed factors include market prices; realized prices of current operators; production at existing facilities; employment levels in the industry; changes in capital improvement plans and development of future facilities ; and long-term viability and health of the industry. DOE is accepting public comment through April 6.
Transfers Should be ‘Predictable’ and ‘Transparent,’ Uranium Producers Say
In a set of public comments also released by DOE this week, the Uranium Producers of America called on the Department to be more “predictable” and “transparent” in its future transfers. “In summary, UPA encourages the Department to reinstate a cap on annual transfers in line with market conditions and production costs; ensure future Secretarial Determinations look at the effect of transfers on the domestic industry–not the relative impact compared to other market factors; reform how the material enters the market; and take additional steps to ensure the Secretarial Determination process is transparent and open for public input,” the UPA said.
The Nuclear Energy Institute, the main lobbying group for the U.S. nuclear industry, also is calling for a more “predictable” approach. “The manner in which new material is introduced into the market can either mitigate or exacerbate the real or perceived impact on the domestic industry. The industry believes that establishing the annual amounts to be transferred, adhering to the established quantities and, where possible, entering into long-term contracts will help DOE to fulfill its commitment,” NEI said in comments submitted to DOE.
