Kenneth Fletcher
WC Monitor
2/7/2014
A group of 12 lawmakers this week expressed concern about the impact on the uranium mining industry of the Department of Energy’s Excess Uranium Inventory Management Plan.“We are very concerned about the impact of DOE’s recent and planned uranium sales and transfers on the domestic industry. While we recognize the DOE’s actions are not completely responsible for the current depressed market prices or recent job losses, we believe it is disingenuous for DOE to claim its actions are not having an adverse impact on the industry,” states the Feb. 4 letter to Energy Secretary Ernest Moniz signed by Reps. Cynthia Lummis (R-Wyo.), Steve Pearce (R-N.M.), Michael Burgess (R-Texas), Blake Farenthold (R-Texas), Joe Barton (R-Texas), Scott Tipton (R-Colo.), Ruben Hinojosa (D-Texas), Jim Matheson (D-Utah), Gene Green (D-Texas), Adrian Smith (R-Neb.), Cory Gardner (R-Colo.), and Doug Lamborn (R-Colo.).
The Department last July released its latest update to the uranium management plan, which outlines the Department’s policy for uranium transfers that in recent years have been used to help fund missions including cleanup work (WC Monitor, Vol. 24 No. 29). With uranium prices falling, the plan garnered sharp criticism at that time from the uranium mining industry due to its decision to do away with a self-imposed limit of transferring no more than 10 percent of annual U.S. uranium demand. Uranium spot prices have continued to stay low, now standing around $35 per pound, compared to a high of more than $70 in early 2011. DOE’s recent plan and uranium transfers are “particularly concerning at a time when uranium prices are at seven-year lows and domestic producers are struggling to survive,” this week’s letter states.
The lawmakers said they “are not opposed to DOE’s disposition of the federal uranium stockpile, but the disposition should be orderly, predictable, and designed to limit the effect on domestic producers.” The letter notes that a determination by a DOE secretary in May 2012, which among other transfers authorized the transfer of up to 2,400 metric tons per year of natural uranium to DOE contractors to help pay for cleanup activities at the Portsmouth and Paducah sites, “allows the Department to sell or transfer more than two times the total amount of uranium that is produced by the domestic industry in a given year.”
The lawmakers asked DOE to explain “how DOE’s uranium sales and transfers are not having an adverse material impact on the domestic uranium mining, conversion, or enrichment industries.” They also asked if the May 2012 determination considered current market conditions and the production costs of domestic producers. Additionally, the letter asks DOE: “How is DOE ensuring taxpayers receive fair value for the disposition fo the federal uranium inventory? What percent is sold in the spot market as opposed to using long-term contracts?” The lawmakers “urge the DOE to ensure that any future transfers do not adversely impact the domestic production and conversion industries. We encourage DOE to reconsider its recent management pan and look forward to a timely response to our requests.”
DOE Notes It Conducts Market Analyses
The Department has received the lawmakers’ letter and is reviewing it, DOE spokeswoman Niketa Kumar said this week. “The Energy Department conducts extensive market analysis of the domestic uranium market to ensure that any transfers will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry,” according to a DOE statement. “A variety of supply and demand factors and events worldwide are considered when analyzing the potential market impacts prior to the Secretary making a determination every two years that covered sales or transfers of natural or enriched uranium will not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry.”
