The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Saturday, August 03, 2002

State looks to entice USEC
Kentucky leaders are favoring an incentive package that would include steps to ensure an earthquake threat does not shake USEC's confidence in Paducah for a new plant.

By Joe Walker jwalker@paducahsun.com--270.575.8650

The state favors an incentive package including steps to ensure that an earthquake threat does not thwart Paducah's chances of landing a new uranium enrichment technology highly sensitive to shaking, a local labor leader says.

"We've received a positive response not only from the governor but (Executive Cabinet Secretary) Crit Luallen in that regard," said Leon Owens, president of the local atomic workers' union. "There's a lot of speculation that it's going to be what people call a showstopper, but you can have seismic activity anywhere."

Gov. Paul Patton and Economic Development Commissioner J.R. Wilhite said Friday in a visit to Paducah that the seismic issue rests with plant operator USEC Inc. When asked, they did not directly say whether the state would fund engineering studies or other measures regarding Paducah's being over the New Madrid Fault, an active earthquake zone.

"If this was a showstopper, USEC already would have taken us off the list," Patton said. "USEC is evaluating that issue."

Patton called the $1 billion gas centrifuge plant, employing 500 to 600, "the crown jewel" of all Kentucky economic development projects. Wilhite said the state will submit a preliminary incentive package to USEC by the end of August and a final proposal by the end of October. He would not reveal details pending USEC review.

USEC has signed an agreement with the Department of Energy to build a 50-job demonstration plant that would operate from 2004 until the larger, commercial plant is operational in the 2010-11 time frame. The agreement calls for building either or both of the facilities at Paducah or near Portsmouth, Ohio. Eventually, the commercial plant will replace the 1,500-employee Paducah Gaseous Diffusion Plant, whose technology is expensive and outdated.

"We want no doubt in their minds that we want both (facilities)," Wilhite said.

He said USEC, in seeking proposals for the demonstration plant, will evaluate the design and operating costs "of dealing with different seismic factors" in Paducah and Portsmouth. The Ohio community is not in an active earthquake zone and has a mothballed centrifuge complex void of machinery.

"In our meetings yesterday (Thursday), USEC made it clear that its decisions will be based on tangible factors and intangible factors," Wilhite said. "... If seismic issues are a reality, in preparing to make a business decision, USEC is going to determine what that means to them."

Patton said Paducah's advantages are "a great labor force that has a good working relationship with USEC" and a community highly supportive of atomic energy.

"I believe that Paducah is far superior in those respects than the alternate site," he said. "This will not be based on one element. It will be based on a lot of elements."

Shaking is a critical problem for centrifuge because it uses tall cylinders that spin at high speeds to separate useful and non-useful isotopes of uranium for use in nuclear fuel. The union and a local task force on which Owens serves want to know whether the seismic threat at Paducah can be overcome and, if so, at what cost.

In recent meetings with Patton's staff, Owens suggested the state help fund an independent study to provide the answers and "make up the difference" in USEC costs to build a quake-resistant plant.

"That could be part of the state incentive package to USEC, provided that the seismic concern is great enough," Owens said, adding that the Frankfort delegation spoke favorably.

Owens said he has "no idea" what the cost of an engineering study would be. Richard Miller, former Washington-based policy analyst for the union, figures the cost at roughly $50,000.

"I don't think this is rocket science," said Miller, who now works for the Government Accountability Project, a Washington watchdog group.

Miller said it would cost Paducah about $25 million more than Portsmouth for earthquake protection in building plants to convert tens of thousands of cylinders of depleted uranium into safer material. He said he bases that on talking with and reviewing plans by bidders for the conversion plants, which would not use gas centrifuge.

"Portsmouth is a much cheaper (conversion) plant to build than Paducah because of the seismic hazards," Miller said. "That's the only difference."