Mike Nartker
WC Monitor
8/1/2014

A federal judge this week denied a request from the uranium conversion services ConverDyn for a preliminary injunction to prevent the Department of Energy from moving forward with planned transfers of excess uranium while a lawsuit the company has filed against DOE is pending. ConverDyn was unable to show that it would suffer “irreparable harm” if the transfers went forward, according to an order from U.S. District Court Judge Reggie Walton. The order also states, “The Court recognizes, however, that expediting these proceedings to the extent practicable will minimize the plaintiff’s economic losses and provide certainty to the defendants regarding future transfers, and therefore the Court will endeavor to resolve this case expeditiously.” An opinion with greater detail is expected to be released in the next 30 days.

ConverDyn President Malcom Critchley told WC Monitor late this week, “While I am disappointed by the ruling, I am encouraged by the court’s clear recognition of ConverDyn’s predicament and its commitment to resolve our case expeditiously. We continue to believe that the DOE violated the USEC Privatization Act when it failed to follow its own secretarial determination process for analyzing whether the transfers would have adverse impacts on the domestic nuclear industry.” Critchley added, “I want to again stress that ConverDyn is seeking to protect and preserve its long-term viability as the sole U.S. supplier of conversion services, at a time when all participants in the uranium sector, including Utilities, face unprecedented market realities over the next few years.”

Transfers Help Fund Cleanup, NNSA Programs

DOE uses its stocks of excess uranium to help fund various programs, including D&D efforts at the Portsmouth Gaseous Diffusion Plant. The material is provided to site cleanup contractor Fluor-B&W Portsmouth, LLC, which then sells it and uses the proceeds to help fund work. DOE’s uranium transfer policy has been opposed, though, by uranium producers and some lawmakers over concerns about the impact on the domestic uranium industry. In June, ConverDyn sued DOE, claiming the Department’s transfer policy would result in millions of dollars of lost revenue and asking for the court to block DOE from moving forward with the transfers.

With DOE having been scheduled to conduct its next transfer at the end of July, ConverDyn had sought the injunction while its suit was under consideration. DOE had argued, though, that if ConverDyn’s request for an injunction were to be granted, cleanup activities at the Portsmouth site would come to a near-halt. The Department also warned that nonproliferation efforts would have been impacted if ConverDyn’s request had been granted.

Ruling ‘Very Welcome News,’ FBP Chief Says

Fluor-B&W Portsmouth has already been facing funding issues heading into Fiscal Year 2015 due to a significant drop in uranium prices and DOE’s decision to reduce the amount of material to be provided. As a result, FBP is looking to eliminate this fall as many as 675 positions out of the Portsmouth D&D project’s current workforce of approximately 1,900 employees through a mix of voluntary separations and involuntary layoffs. In a message to employees this week, FBP Site Project Director Dennis Carr welcomed Walton’s ruling denying ConverDyn’s request for a preliminary injunction. “This ruling is very welcome news for us and, for the time being gets us past one of the two large problems we are facing. If a preliminary injunction had been granted to stop uranium barter transactions, our operating funds would have been essentially cut to a minimum in a very short time,” Carr said.

He also noted, though, “We have to be clear on an important point. This lawsuit was a separate issue from the other major problem we face with the FY15 budget due to the falling price of uranium. With about 70 percent of our operating budget coming from uranium barter funding, next year’s budget challenges are the reason we had to issue WARN notices and why we still face substantial workforce reduction if additional funding is not secured.”

Uranium Producers Say They Are ‘Disappointed’ in Ruling

The Uranium Producers of America said late this week that it was “disappointed” in the ruling. “To fund ongoing decommissioning and clean-up work, the Department is selling uranium from the federal inventory. While are not opposed to these projects, the Department is now selling more uranium than the entire domestic industry produces in a year. This hurts our industry and violates the law,” UPA President Scott Melbye said in a statement. “As uranium prices have fallen, the Department is selling more uranium and raising less money, putting more than 700 jobs at risk at the Portsmouth Ohio decommissioning site. Lower uranium prices mean fewer jobs – fewer uranium jobs and fewer decommissioning jobs. It is in everyone’s interest to stop DOE from dumping uranium on the market,” Melbye said.