Legal Fight Continues Over Use of Uranium Transfers to Help Fund Work
Mike Nartker
WC Monitor
7/18/2014
Fluor-B&W Portsmouth, LLC, officially announced this week plans to cut the workforce at the Portsmouth D&D project by approximately one-third due to budget issues. As WC Monitor first reported in late June, FBP is looking to eliminate a total of 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. The bulk of the job cuts will apply to FBP’s own workforce—505 out of a current employee count of approximately 1,400—with the rest to come from subcontractors. “The Department of Energy (DOE) has confirmed that the approved operating funded portion of the work scope for Fluor-B&W Portsmouth (FBP) is expected to be significantly reduced in FY15. … Needless to say this reduction will have a significant impact on our work and more importantly on the size and make-up of the workforce,” FBP Site Project Director Dennis Carr said in a message to employees.
The Portsmouth D&D project is funded through annual Congressional appropriations as well as by DOE providing FBP with stocks of surplus uranium, which the contractor sells, using the proceeds for work. However, the contractor has had to grapple with steadily declining uranium prices, decreasing the value of the material provided to help augment funding. In addition, DOE has announced plans to reduce the amount of excess uranium to be made available to help fund cleanup activities. While the Department had previously planned to provide up to 2,400 metric tons of material per year, DOE is now looking to provide up to 2,055 metric tons for cleanup purposes annually from 2014 through 2021. Some additional material may be available, though, if the National Nuclear Security Administration doesn’t use its full annual allotment of up to 650 metric tons per year.
In its FY 2015 budget request, DOE sought $160 million for D&D work at Portsmouth, an increase of approximately $22 million from current funding levels. However, FBP has estimated a total budget reduction in FY 2015 of approximately $110 million from this year’s funding level largely as a result of both the drop in uranium prices and the reduction in material to be made available, according to a presentation obtained by WC Monitor.
Job Cuts Represent ‘Broken Commitment,’ Senator Says
FBP expects to begin accepting applications for the planned voluntary separations program within the next week, Carr said in his message to employees. “This VSP will be open to most job categories; however, there will be a limited number of volunteers accepted for each job category. Those choosing to leave under the VSP will receive severance pay based on their years of service. Those choosing this option will begin leaving the project by Thursday, August 28, 2014,” Carr said. Once the voluntary separations program is completed, FBP will determine how many positions to reduce through involuntary layoffs, with all project departures to occur by the end of November. “While I regret these actions, they are unavoidable. I ask that each worker stay focused and safe during this period of change. This will be a difficult time for all involved but we will make it through this much like we’ve faced other challenges in the past,” Carr said.
In a statement this week, Sen. Rob Portman (R-Ohio) criticized the planned job cuts. “Today’s announcement that nearly 700 employees at the Piketon site could be laid-off by October of this year represents a broken commitment to the Piketon plant, to the workers and the thousands of others in the community who will be negatively affected, and to the taxpayers who will end up paying more for this necessary cleanup,” Portman said. “I would urge the Obama Administration to heed the advice from President Obama in 2008, when he wrote, ‘The failure to clean up this site quickly will delay future economic development opportunities and only add additional mortgage costs and pose undue environmental risks.’ I stand ready to work with the Obama Administration and its Department of Energy to avoid these cuts, to maintain the commitment made to the community, to ready the site for reindustrialization, to deal with the environmental risk, and to ultimately save taxpayer dollars by maintaining a cost effective cleanup schedule.”
ConverDyn Continues to Push for Injunction Blocking Uranium Transfers
Things could get even worse for workers at the Portsmouth D&D project, though, depending on the results of a legal challenge now underway to DOE’s transfers of excess uranium. ConverDyn, which provide uranium conversion services, filed a lawsuit against DOE last month seeking to stop the Department’s uranium transfers, which the company claims will cost it $40.5 million in lost revenue over the next two years. ConverDyn has also moved to seek a temporary injunction to block DOE from moving forward with a planned transfer set to occur at the end of this month while its lawsuit is under consideration.
DOE has warned that the Portsmouth D&D project would be “effectively halted” if ConverDyn’s request for an injunction is granted. In a court filing earlier this month, DOE said a halt to the uranium transfers altogether would result in layoffs of up to 825 additional workers at the Portsmouth site, as well as forcing the Department to put the site in a minimum safe operations state.
In a new filing this week, ConverDyn continued to push for the injunction. “DOE, dead-set on making uranium transfers to meet contractual obligations and to fund its various programs, failed to reasonably determine that the transfers will not harm the U.S. conversion industry,” states the July 14 filing. “DOE also failed to refute the grim evidence of harm to ConverDyn identified by DOE’s own experts. Contrary to DOE’s arguments, ConverDyn will suffer serious and irreparable harm due to irreversible market impacts if DOE completes the transfers starting on July 31.” ConverDyn said the Department had not proven the harm it would suffer if the uranium transfers were halted—along with work at Portsmouth, DOE has said that NNSA programs would be impacted. “DOE has not established that funding for the two programs identified in its brief cannot be found elsewhere, either through additional appropriations or reprogramming funds, as it is legally allowed to do,” the filing states. “Nor has it explained why ConverDyn should bear the burden of funding these programs when Congress has repeatedly declined to fund them through the normal appropriations process.”
DOE took on a risk when it decided to largely fund the programs through uranium transfers, according to ConverDyn. “DOE knew that additional transfers might not occur if they would harm the U.S. conversion industry, yet it committed to transfer uranium anyway,” the filing states. “DOE should not now benefit from its poor choices by shifting that burden onto ConverDyn. Having gambled and lost, the government is ‘hoist on its own petard.’”
Lawmakers Want More Info on DOE Uranium Market Analysis
Also this week, a group of 18 Republican lawmakers called on DOE to provide additional information as to how it determined that its latest plans to transfer stocks of excess uranium for other purposes won’t have an “adverse material impact” on the domestic uranium industry. In a letter sent earlier this week to Secretary of Energy Ernest Moniz, the lawmakers questioned the basis for the Secretarial determination issued in May to allow the Department to move forward with plans to transfer a maximum of 2,705 metric tons of natural uranium equivalent material per year. In its determination, DOE said it based its analysis that the transfer would not have an “adverse” impact on the domestic uranium production industry on work done by Energy Resources International, as well as “as other information and analysis reviewed by the Department.”
In their July 14 letter, the lawmakers called on DOE to release the “other information and analysis” it used in making its latest determination. The lawmakers noted that “unlike ERI’s four prior market impact analyses, ERI’s 2014 analysis does not make a finding that DOE’s uranium transfers will not have an adverse material impact on domestic uranium industries. To the contrary, ERI’s 2014 analysis explicitly states that it ‘does not make any conclusion regarding whether or not the release of DOE inventories into the commercial markets will result in an adverse material impact.’” They went on to write, “We therefore can only assume that DOE relied exclusively on ‘other information and analysis’ to justify your finding that the 2014 transfers will not have an adverse material impact on domestic uranium industries. For that reason, we ask that you disclose, in its entirety, this other information and analysis.”
The letter was signed by Sens. John Barrasso (Wyo.), Mike Johanss (Neb.), Michael Enzi (Wyo.), Mike Lee (Utah), John Cornyn (Texas), Deb Fischer (Neb.) and Orrin Hatch (Utah), as well as by Reps. Cynthia Lummis (Wyo.), Adrian Smith (Neb.), Cory Gardner (Colo.), Michael Burgess (Texas), Doug Lamborn (Colo.), Blake Farenthold (Texas), Scott Tipton (Colo.), Paul Gosar (Ariz.), John Shimkus (Ill.), Trent Franks (Ariz.) and Steve Pearce (N.M.). In a brief written response this week, a DOE spokesperson said, “The Department received a letter from several representatives regarding uranium transfers and appreciates their interest in the matter. We are currently reviewing the letter and its contents.”
