The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Thursday, January 17, 2002

USEC, DOE swap barbs
USEC's president has accused DOE of distorting facts and delaying talks, while a DOE official expressed concern that the plant couldn't keep up with uranium shipments.

By Joe Walker jwalker@paducahsun.com--270.575.8650
Timbers


USEC President William Timbers has accused the Department of Energy of distorting facts and delaying talks for a plan to preserve the 1,500-employee Paducah uranium enrichment plant.

Timbers made the claims in December and January letters to Undersecretary of Energy Robert Card, who meanwhile wrote Timbers that "if the outstanding issues in the negotiations are not resolved expeditiously, the United States could find itself with a nuclear power fuel shortage."

The biting dialogue started Dec. 14 when Timbers wrote Card expressing concern about the "growing gap" between USEC and DOE following two fruitful November meetings involving the two men. He said the department had raised "many new issues that neither of us had discussed" regarding USEC's Nov. 15 draft agreement immediately committing to:

Maintain the Paducah plant, leased by USEC from DOE, at an enforceable minimum annual production level of 3.5 million units of enriched uranium. That is roughly the amount sold now.

Bring on line, subject to milestones, a new plant by 2007 using existing European gas centrifuge technology or by 2009 using new USEC-developed technology. Centrifuge is much cheaper to operate than the Paducah plant's outdated gaseous diffusion process.

Allow DOE complete access to run the Paducah plant if USEC ceases operation.

Be removed as agent for imported Russian uranium if USEC should default on any of the other obligations.

In a Jan. 10 letter, Timbers described Card's Dec. 19 written proprietary response as having "several broadly drawn standards" giving Energy Secretary Spencer Abraham sole discretion to take over USEC business without compensation or appeal.

Timbers said USEC negotiators told DOE officials in a Dec. 26 conference call that "no U.S. corporation could subject itself to such unprecedented and unnecessary government authority and remain accountable to its shareholders or remain in business."

Card wrote Timbers Jan. 8, saying the domestic nuclear supply could be in jeopardy. "I am also concerned that U.S. strategic interests may be at risk if the USEC cannot ensure continuity of shipments of Russian (uranium) to the United States," Card wrote.

USEC has pinned the future of the Paducah plant on lowering prices for the cheaper Russian uranium, which helps offset the plant's high production costs from using massive amounts of electricity. USEC is middleman for sales of the Russian material, recycled from former Soviet warheads and accounting for about half the enriched uranium used by U.S. nuclear plants. About a third comes from the Paducah plant and the rest from European competitors.

Card reminded Timbers that the government would not approve any long-term agreement with Russia "until all other domestic issues have been resolved."

Timbers' letter last week called Card's fuel-shortage concern "unwarranted and disingenuous." He said USEC had met supply obligations despite Russia's having suspended shipments four times in recent years.

Timbers also said Card's characterization of the plant negotiations was just as "factually wrong" as with the Russian deal.

"Inaccurate assertions, DOE delays and unworkable intrusions into the operation of a private company, together with unsupported claims of an imminent nuclear fuel crisis directed at a negotiating strategy that unnecessarily puts the future of USEC and Paducah at risk, are not in the mutual support and cooperation" embraced in the November meetings, Timbers wrote.

The energy workers' union, which represents nearly half of Paducah's enrichment employees, supports the Russian deal but wants a USEC guarantee to keep running the plant. Phil Potter, Washington-based policy analyst for Paper, Allied-Industrial, Chemical and Energy Workers International, said he was familiar with some of the correspondence between Card and Timbers, but had not talked with DOE officials about the status of the negotiations.

"USEC certainly believes the differences (between it and DOE) are substantial, but unless somebody releases the actual proposals publicly, how do you make a comparison of your own? So I just haven't tried," Potter said. "I don't know where all this is going."