February 28, 2008 in Business

Uranium fever: Companies rush to fuel power plants

John Miller Associated Press
 
File photos Associated Press photo

USEC employees are shown at work in Building 300 at the Paducah, Ky., plant in this Jan. 15 photo. Associated Press
(Full-size photo)

BOISE – Companies are racing to provide radioactive fuel for America’s nuclear renaissance, and are powering debate along the way.

Even as the government continues to oppose Iran’s efforts to enrich uranium for power plants, projects to do just that are under way in this country. General Electric Co. and USEC Inc., along with European rivals Urenco Ltd. and Areva Inc., are pushing billions worth of new U.S. enrichment plants or technology so they don’t miss the new uranium boom.

Opponents including the Union of Concerned Scientists fear that sends the wrong message to countries like Iran. The group argues it’s unclear the U.S. really needs new facilities, when it could just import nuclear fuel from elsewhere.

Still, shipments from Russia, which now supplies about 40 percent of enriched uranium for U.S. commercial reactors, are due to be cut roughly in half by 2013. And an aging U.S. enrichment facility in Paducah, Ky., is due to be shuttered. That means power plants here will have to fill the vacuum, including from new domestic suppliers.

“Even if the nuclear renaissance didn’t happen, the U.S. will need more enrichment services to respond to their existing domestic needs,” said Laurence Pernot, a spokeswoman for Areva in Bethesda, Md.

Promoters tout nuclear power as an antidote to coal-fired plants that contribute to global warming. The Nuclear Regulatory Commission took applications to build seven new nuclear reactors in 2007, with 25 more licensing requests expected through 2009.

Officials from French-owned Areva have been tromping around eastern Idaho’s lava and sagebrush steppe since last year near the 850-square-mile Idaho National Laboratory site, where U.S. scientists have done nuclear research since 1949. Now, the company is trying to coax the state Legislature into giving it tax breaks to make building in Idaho more attractive.

If it doesn’t get them, Areva says it could build elsewhere.

Meanwhile, General Electric is working on a laser process for enriching uranium at a test facility in North Carolina and has indicated its intent to apply for a full-scale project, according to the Nuclear Regulatory Commission.

Urenco, with enrichment operations in Germany, the United Kingdom and the Netherlands, is part of a consortium whose $1.5 billion enrichment facility has spawned a boomtown in southeastern New Mexico. The plant is due to open next year.

And Maryland-based USEC is building its American Centrifuge plant in the Ohio river town of Piketon and expects to enrich enough uranium there by 2012 to supply a quarter of existing U.S. demand.

“Multiple enrichment facilities provide customers with diversity of supply and competition,” said Jeremy Derryberry, a USEC spokesman. “We believe the market can support all current planned enrichment capacity.”

Yellowcake uranium is mined and milled at 20 sites in the United States, according to the Nuclear Regulatory Commission, as well as in Australia, Canada and Kazakhstan. Once out of the ground, the ore is converted into uranium hexafluoride that’s shipped in metal cylinders to an enrichment plant. Uranium pellets are then taken to a fabrication plant where they’re put into fuel rods. Those rods fire reactors at nuclear power plants.

The United States’ 104 nuclear power plants get about 85 percent of their uranium from other countries, including Russia’s “Megatons for Megawatts,” a 15-year-old program in which warheads are converted in that country to nuclear fuel and then shipped to U.S. commercial reactors.

That program is due to end in 2013. A replacement agreement would bring in only about half the enriched uranium of the existing deal.

What’s more, once USEC’s new Ohio plant is completed, it plans to close its aging facility in Paducah, Ky., which is now the only operating enrichment plant in the United States.

“We do not have adequate enrichment capacity for the existing demand that there is,” said Felix Killar, the senior director for fuel supply for the Nuclear Energy Institute lobbying group in Washington, D.C. “It’s going to be a tight market for some period of time.”

As enrichment fever grows, however, the Union of Concerned Scientists in Washington, D.C., is watching with unease, on grounds this activity undermines U.S. credibility with Iran. The U.S. and some of its allies oppose Iran’s expansion of its enrichment facilities, saying it could lead to the development of nuclear weapons.

“The U.S. has said Iran doesn’t need nuclear power because of its oil and natural gas reserves,” said Edwin Lyman, a senior scientist. “Iran turns around and says, ‘We want to mitigate greenhouse gas emissions, just like you do.’ There’s this kind of doubletalk.”

Lyman said it’s also unclear if the U.S. really needs new enrichment facilities, when it could instead lift import restrictions from other countries.

“There’s a kind of heady gold rush going on,” Lyman said. “But it will be a long time before it’s really clear what’s realistically justified.”

The Snake River Alliance, an Idaho anti-nuclear group, argues enrichment plants are accompanied by health and environmental hazards. USEC’s Paducah facility, for instance, has been targeted by federal lawsuits because of chemicals that contaminate groundwater there after a half-century of operations.

The Idaho group also criticizes Areva’s attempt to secure tax breaks for its project.

“It’s quite apparent that Areva is looking for a good deal of financial incentive to build a plant here,” said Beatrice Brailsford, the group’s program director in Pocatello. “It’s simply a poor investment for both public money and public resources.”

Still, Idaho Falls, where the Idaho National Laboratory is the largest employer and many residents are comfortable with the idea of reactors in their backyard, wants the plant, which would employ about 250 people.

Ron Longmore, Bonneville County’s elected clerk, calculates the Areva facility would generate about $4 million annually in new property taxes, even with the proposed tax breaks.

“We already have top scientists, those people associated with the Idaho National Laboratory,” said Longmore. “It would be a clean industry that would fit right in with our environment.”

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