Kenneth Fletcher
WC Monitor
4/24/2015
Legislation could be on the table to cap the Department of Energy’s transfers of excess uranium if DOE does not limit the transfers on its own, Rep. Cynthia Lummis (R-Wyo.) said this week at a House Oversight Interior Subcommittee hearing on DOE’s uranium management program. DOE uses the transfers to help fund cleanup activities at Portsmouth and the highly enriched uranium downblend program. But DOE last year increased its transfers above a previously self-imposed guideline of 10 percent of the domestic nuclear fuel market, leading to opposition from the uranium mining industry. Lummis believes that if a cap is necessary to prevent negative market impacts, “that would be something I would be willing to consider, making that cap an absolute cap so lenders and uranium miners and the companies that employ them could be ensured that the federal government is not artificially depressing the price of domestic uranium,” she told reporters following the hearing.
Before making the transfers, DOE is required to issue a Secretarial determination that the transfers will not have an “adverse material 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 market share from a previously self-imposed limit of 10 percent. That move led to backlash at a time when uranium prices were at a low point, including an ongoing lawsuit from uranium conversion company ConverDyn. The Department is currently preparing a new secretarial determination governing the uranium transfers, expected out “fairly soon,” and is reviewing public comment on the issue, DOE Office of Nuclear Energy Principal Deputy Assistant Secretary John Kotek said at the hearing. Lummis said she hopes that DOE can address the issue on its own. “I think that this could be handled through the executive branch at the administrative level, but if it’s not I would consider legislation,” she said.
DOE Taking More Input
Industry officials have complained that they have been left out of the process in previous secretarial determinations, but DOE is trying to change that in the upcoming determination, in part, by accepting public comment, Kotek said. “I can say that going forward, we have heard the concern about a lack of transparency and a lack of opportunity for input, so we are trying something that we haven’t done before in terms of the number of opportunities provided for input,” he said. “We have been very pleased with the number of responses and the quality of responses we’ve received, those will be factored into the new determination that’s issued fairly soon.”
Industry Exec: DOE Transfers ‘Biggest Competitor’
However, Uranium Energy Corporation Executive Vice President Scott Melbye said at the hearing that the DOE transfers have become the “biggest competitor” of the U.S. uranium mining industry. He said that the industry made key decisions based on DOE’s 10 percent limit, which was believed to be a hard cap and not a guideline. “That’s critically important when financial institutions and shareholders look to invest into our companies, that they know there’s an upside to how much government can impact our markets,” he said. Kotek noted that “folks on our side view that the 10 percent number showing in the 2008 report as a guideline not a cap. We can go higher or we can go lower, but we have certainly heard a different perspective here. We’ll have to follow up.”
2014 Analysis Mum on Whether Transfers Would Impact Industry
The Department’s determinations in the past have been preceded by analyses on the domestic uranium market conducted by the firm Energy Resources International. While ERI found in analyses in 2010 and 2013 that DOE’s proposed transfers did not constitute a “material adverse impact,” in its 2014 study pegged to the elimination of the 10 percent guideline ERI said that its assessment “does not make any conclusion regarding whether or not the release of DOE inventories into the commercial markets will result in an adverse material impact.”
Lawmakers at the hearing, including Rep. Blake Farenthold (R-Texas) and Rep. Paul Gosar (R-Ariz.), expressed concern that DOE’s actions have contributed to depressed uranium prices. Lummis said that she will continue to follow the issue. “It is my hope that the Department of Energy work with the domestic industry and those involved in cleanup to develop a way to ensure that excess uranium can be used to meet cleanup needs while ensuring a strong uranium industry in America to lessen our dependence on foreign sources of energy,” she said at the hearing. “I’m sure that Congress would be interested in legislation that does so.”
