On May 18, 2011, Senator Mitch McConnell exercised the privilege of being the senate minority leader to visit the Senate Appropriations Committee Subcommittee on Energy and Water while the committee was holding a hearing on the fiscal year 2012 budget for the Department of Energy. He asked Secretary Chu a number of pointed questions about a proposed project to “re-enrich” some of the depleted uranium tails stored at the Paducah Gaseous Diffusion Plant. According to Senator McConnell, the project would generate revenue for the government and would save 1200 jobs in his home state. He also claimed that Kentucky is not only a “coal state” but also a “nuclear state.”
There are several problems with his assumptions and his proposed solution.
The Paducah facility has been enriching uranium for 60 years using gaseous diffusion, a technology that was developed during WWII. That technology is reliable and effective, but it consumes approximately 20 times as much electricity for each separative work unit (SWU) of output when compared to modern centrifuges. For about 50 years, the US owned and operated two large gaseous diffusion facilities, but the other US gaseous diffusion plant in Portsmouth, Ohio was shut down almost exactly a decade ago.
France hosts the only other operating gaseous diffusion plant in the world, but the replacement for that facility – Georges Besse II, is nearly complete. When it reaches its full capacity, it will consume about 55 MW of electricity to produce as much enriched uranium as the current gaseous diffusion plant does using 2700 MW of electricity. The gaseous diffusion facility will be shut down due to obsolescence.
A new enrichment plant was recently started up in Eunice, New Mexico using centrifuge technology imported from Europe. Two additional enrichment plants are being planned, one called Eagle Rock in Idaho and one on the site of the decommissioned Portsmouth Gaseous Diffusion Plant. The Eagle Rock facility will use the same centrifuge technology as the Georges Besse II plant, while the one at the Portsmouth site in Piketon, Ohio is planning to use the improved American Centrifuge.
In Wilmington, North Carolina, GE-Hitachi is developing an even less energy intensive enrichment method using lasers that has demonstrated strong potential. An engineering demonstration program is underway and GEH has submitted a license application for a commercial facility.
In other words, the writing has been on the wall for the Paducah plant for a number of years. It uses energy intensive, obsolete technology. Its replacement are well underway and it is no longer needed.
Senator McConnell also does not understand that admittedly confusing nature of the uranium industry. Unlike most fuels, uranium is thinly traded and not listed on any widely available commercial exchanges. There are a small number of customers and suppliers that negotiate each deal. In most cases, the customers have the ability to be patient and wait for better prices. Since February 2011, uranium prices as reported by the UxC consulting firm have fallen from $75 to $55 per pound as some purchasers delay decisions and as some customers have permanently left the market.
Because of the fragile nature of the market, any new supplies can have a dramatic effect on prices and can cause previously profitable mining operations to suddenly face a situation where the market price is lower than their production cost. The operators would be forced to curtail production and lay off workers since they cannot afford to sell at a loss and most have little excess capital after several years of investment to expand their capacity. Since about 2000, US uranium mining has been slowly recovering from a decade long period when uranium prices were so low that all US production ceased.
The Department of Energy has a vast inventory of material that could have the effect of completely shutting down the market. In order to preserve indigenous capability, it has made agreements with domestic suppliers to be careful about releasing its inventory into the market. That agreement is not just for the benefit of the domestic industry – the revenue that the DOE can obtain is also badly affected if the price per unit sold falls precipitously.
The bottom line is that using an old, obsolete, energy intensive facility like Paducah to re-enrich currently stored tails to be immediately marketed for revenue is a bad business decision. It would be a “make-work” effort that may delay the loss of a few existing plant operator jobs in one location while destroying uranium mining jobs in multiple, less politically connected locations. It would increase energy consumption and CO2 emissions compared to a shutdown decision since the Paducah plant is in an area where nearly all of the electricity is produced by burning coal.
If Senator McConnell really wanted to consider his home to be a “nuclear state” and wanted to contribute to creating excellent jobs with multi-generational career potential, he has a better option. He should work with his home state legislators to lift the state’s 27 year old moratorium on building new nuclear power plants. Bills aimed at doing exactly that have been proposed since at least 2009, but the moratorium remains in effect after this year’s attempt stalled in the Kentucky House Tourism Development and Energy Committee.
Each new nuclear energy facility construction project would create 4,000-5,000 jobs during the construction phase and 500-700 permanent operation, maintenance, engineering and security jobs after the construction is complete. Those jobs would last for another sixty years and be far more useful for his state than attempting to extend the life of an obsolete facility that produces enrichment services at a cost that cannot compete without government assistance.
That would be the kind of far seeing leadership that Americans need from their elected representatives.