STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS (Senate - July 15, 1998)

UNITED STATES ENRICHMENT CORPORATION PRIVATIZATION

Mr. McCONNELL. Mr. President, I rise today to introduce a must-pass piece of legislation to ensure that the Department of Energy is not stuck with a massive unfunded mandate as a result of privatizing the United States Enrichment Corporation. I am pleased to be joined by Senator DeWine who is an original cosponsor of this legislation.

Last month, the administration, the Department of Energy, and the USEC Board came to a decision on how they intend to privatize the USEC. This deal, which was struck in secret, is a complicated and confusing matter that I am only just beginning to understand. The facts, I have discovered, are not welcome news to the communities of Paducah, Kentucky, and Portsmouth, Ohio, where the two USEC gaseous diffusion plants are located. These facilities employ approximately 4,000 people, making them the largest employers in those regions.

The most discouraging aspect of this privatization proposal is the impact this deal will have on jobs. The administration has tried to put a positive spin on things by claiming that only 600 jobs would be lost over the next 2 years. Unfortunately, this may be the tip of the iceberg, because after the first 2 years, the administration has made no guarantees on the number of jobs that might be lost. In fact, after reading the fine print of this agreement, union and community leaders feel that closure of one of the two plants is a very real possibility. This could result in the loss of nearly 2,000 jobs. Without some efforts to mitigate the job losses, these communities will be economically devastated.

The second item of concern is that the Department of Energy--and taxpayers--will be stuck with an unfunded environmental liability. As you may know, under the terms of the USEC Privatization Act of 1996, the responsibility for the treatment and disposal of the uranium waste will be transferred from USEC to the Department of Energy. To prepare for this reality, USEC has collected nearly $385 million from its customers for the specific purpose of cleaning up their

environmental liability. Unfortunately, the administration's proposal only provides $50 million of that total to be used to address this problem, while the remaining $335 million is due to be deposited into the General Treasury.

Mr. President, there are two problems with this scenario. First, I fail to see the logic behind the decision to use only one-eighth of the money which has been collected for the purpose of addressing the nuclear waste at the USEC plants. Second, the administration's plan calls for the $50 million to be given to USEC, Inc: the private corporation. Why should we, as legislators, allow the government to give a $50 million handout to a private corporation to clean up a Federal entity's mess when $385 million is already available for environmental clean up? What is worse, the administration's plan will add to the tens of thousands of canisters of depleted uranium hexafluoride already stored at the plants, further expanding the environmental problems of the plants and the cost to clean up this site for the Department of Energy.

Mr. President, I am not one to look a gift horse in the mouth, but this deal is not good for Kentucky and is an abrogation of the Federal Government's responsibility to clean up this nuclear mess. We need to ensure that the taxpayers and the workers at these facilities get a better deal than what is being offered. That is why I have introduced this legislation to ensure that all the funds raised and earmarked for the clean up of USEC's environmental legacy will remain available for that purpsoe--and that purpose only. This bill mandates that the administration hold these earmarked funds until the Secretary of Energy submits a plan and legislation to implement and operate a facility to cleanup the nuclear waste at Paducah and Portsmouth. Once this plan is submitted, then the funding can flow to clean up this environmental nightmare.

This bill will ensure that taxpayers aren't stuck with an unfunded mandate and makes a commitment to the communities that this toxic hazard will be disposed of in a timely manner. Unlike the administration's plan to simply store additional uranium waste, my bill will create many more jobs to construct and operate this facility. The new facility will convert the depleted uranium from an unstable and toxic hexaflouride form to a stable and non-threatening oxide. During this process many useful commercial by-products can also be recovered and sold.

Mr. President, I have here a letter from the Governors of Kentucky, Ohio, and Tennessee urging Secretary Pen˙AE6a to take immediate steps to convert the toxic uranium hexafluoride into a more stable, non-threatening oxide form. The Governors urge the Secretary to seek the necessary funding to begin this process and they specifically identified the funding I have identified in my amendment. I ask unanimous consent that the letter signed by Governors Patton, Sunquist, and Voinovich be printed in the Record.

There being no objection, the letter was ordered to be printed in the Record, as follows:
April 27, 1998.

Hon. Federico Pen˙AE6a,
Secretary, Department of Energy, Washington, DC.

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Re `Draft PEIS for Alternative Strategies for the Long-Term Management and Use of Depleted Uranium Hexafluoride,' DOE/EIS-0269 dated December 1997.

Dear Secretary Pen˙AE6a: More than forty years ago the U.S. Department of Energy began the uranium enhancement initiative that created a common link between Ohio, Kentucky, and Tennessee. This commonality includes the U.S. Department of Energy's legacy of waste, a significant portion of which is made up of depleted uranium hexafluoride. Today, our three states are working together in order to recommend the selection of an appropriate and lawful alternative for the long-term management and use of depleted uranium hexafluoride. We believe that such an alternative must minimize impacts on human health and the environment, as well as benefit the overall mission of our states and the U.S. Department of Energy (`DOE').

Ohio, Kentucky, and Tennessee have the following significant concerns regarding the above-referenced document:

DOE should consider the immediate conversion of all depleted uranium hexafluoride (DUF6) to the less hazardous uranium oxide (U308) and provide above ground storage of the U308. We do not believe that waiting for possible market demands for the DUF6 is justification for delaying this project. It is incumbent upon DOE to immediately begin seeking funds from Congress for this conversion. We urge DOE to complete conversion by the year 2018 or earlier and reduce the mortgage of maintaining the cylinders.

A long-term strategy for DUF6 must include DOE's entire cylinder inventory, including heel and small cylinders. The 10,000+ cylinders of DUF6 generated by the United States Enrichment Corporation (USEC), which will revert to DOE ownership upon privatization of USEC, must also be considered in any plans.

An estimated $480 million has been accrued by USEC since 1993 in order to offset the cost of the future conversion of DUF6 generated by USEC. DOE should work with Congress now to ensure this fund is not diverted into the federal treasury for an unrelated use. In addition, DOE might consider partnering with the future owner of USEC in a long-term strategy for managing and converting DUF6, in order to avoid redundancy of efforts. Any partnering effort, however, must not slow progress toward conversion.

Natural phenomena events or accidents may not have been adequately considered in the PEIS. DOE must identify the `worse-case' cylinder conditions and explicitly use this information in the hazard modeling descriptions.

In order for states to effectively evaluate the potential impact of the preferred alternative DOE must provide information on the location of the sites where conversion would occur and how wastes generated from this process will be managed. In order to avoid the undue risk of transporting deteriorating cylinders, we recommend that DOE evaluate the feasibility of on-site conversion plants.

DOE must ensure that funding for safe storage and maintenance of DUF6 cylinders and storage yards is at an adequate level to protect human health and the environment.

The States welcome the opportunity to work closely with the Department of Energy in addressing these complex issues and moving rapidly toward an alternative that will well serve the public and the environment. In addition we urge DOE to carefully consider the more detailed comments being submitted by each of our states environmental regulatory agencies.

Sincerely,

GOVERNOR PAUL E. PATTON,

GOVERNOR GEORGE V. VOINOVICH,

GOVERNOR DON SUNDQUIS.

Mr. McCONNELL. Mr. President, I also have a letter from the Oil, Chemical and Atomic Workers Union, which represents 2,200 hourly workers at the Paducah and Portsmouth uranium enrichment facilities. They have also advocated for the use of those funds to begin the clean up of this toxic material. I ask unanimous consent that this letter also be printed in the record.

There being no objection, the letter was ordered to be printed in the Record, as follows:

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL, UNION, AFL-CIO,
Lakewood, CO,
July 14, 1998.

Senator Mitch McConnell,
U.S. Senate,
Washington, DC.

Dear Senator McConnell: On June 29, 1998 the Administration announced that it will soon privatize the United States Enrichment Corporation (USEC), which operates the two uranium enrichment plants owned by the Department of Energy in Portsmouth, Ohio and Paducah, Kentucky. Coinciding with this announcement, USEC declared that:

(1) `to the extent commercially practicable' it will eliminate no more than 600 jobs during over the next two years, consistent with an undisclosed USEC `Strategic Plan', and

(2) it will transfer thousands of canisters of its depleted uranium hexaflouride waste to the Department of Energy who will inherit the disposition responsibility for wastes that were created by USEC between July 1, 1993 and the date of privatization. USEC has accrued approximately $400 million on its balance sheet to cover the disposition costs of this waste.

Approximately $1.2 billion is presently in a revolving fund account in USEC's name at the Treasury Department--a fund which was created pursuant to Section 1308 of the Energy Policy Act of 1992. Of that amount, $400 million represents the funds collected from utility customers for enrichment services to cover the costs for disposition of these wastes. The Administration has advised us that, absent legislation, these funds will be swept out of this revolving fund immediately after privatization.

To date, Treasury Department officials have been unwilling to secure these funds for the purpose of which they were reserved; to threat the massive quantities of waste left by USEC for the government to clean up. If the funds accrued on USEC's pre-privatization balance sheet were transferred into a dedicated fund at the Department of Energy, these extremely corrosive radioactive wastes would not sit untreated and approximately 240 displaced workers could be re-employed preforming waste treatment activity at Paducah and Portsmouth.

We understand that you are planning legislation which will secure the $400
million in USEC's account at Treasury for the purpose for which it was reserved: to treat waste generated by USEC. Your legislation will fence these funds until the Administration submits a waste treatment plan to Congress with its FY 2000 budget request. The plan will include the construction of two treatment plants--one in Ohio and one in Kentucky. This approach will reduce the hazards associated with the transport of radioactive wastes.

In April of this year the Governors from Kentucky, Ohio and Tennessee wrote to Secretary of Energy Federico Pena endorsing the concept of using the funds from USEC's balance sheet for the treatment and disposition of the depleted uranium hexaflouride tails.

The Oil, Chemical & Atomic Workers Union (OCAW), which represents 2,200 hourly workers at the two gaseous diffusion plants in Paducah and Portsmouth, applauds your efforts to pass legislation which will fence these funds prior to the privatization of USEC.

As you deliberate this legislation, we urge you to ensure that the Department of Energy will require the cleanup contractor(s) to provide a right of first refusal to displaced workers from the gaseous diffusion plants, and to require the contractor(s) to minimize the social and economic impacts by bridging health and pension benefits. Such an arrangement is consistent with the amendment you proposed to offer as part of the FY 99 Energy and Water Development Appropriations Act.

We look forward to working with you and other members to ensure swift passage of this legislation in the House and Senate prior to the privatization date.

Sincerely,

Richard Miller,
Policy Analyst.

Mr. McCONNELL. Mr. President, I have also cleared this bill with Chairman Murkowski of the Energy Committee and Senator Domenici, who is the chairman of the relevant subcommittee on the Appropriations Committee. Neither Senator has any objection to the immediate passage of this legislation. Finally, I have cleared this proposal with the Congressional Budget Office and they have scored this bill as having zero budget impact.

Mr. President, we need to ensure that the people, economies and environment of Western Kentucky and Southeastern Ohio are not sacrificed to make a quick buck off the sale of the uranium enrichment facilities, especially when funding is available. I urge my colleagues to approve this legislation and protect taxpayers from paying an additional cost for clean up.

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Mr. DeWINE. Mr. President, I rise in strong support of the legislation offered by our distinguished friend from Kentucky, Senator McConnell, to ensure that the Energy Department has the resources to address an important public health issue and is not saddled with a massive unfunded mandate in the wake of the privatization of the United States Enrichment Corporation (USEC).

This privatization will entail the purchase of nuclear material from the Russians--material which it is clearly in our national security interest to have removed from the international market. There is currently a fund within USEC which deals with the `disposition of depleted uranium hexafluoride'--and this fund contains an estimated $400 million. If no changes are made, this money will go to the U.S. Treasury when the Initial Public Offering occurs, possibly as soon as next week.

This fund was created explicitly to handle the disposition of this kind of material. But if the law isn't changed, the Department of Energy (DOE) would have to find new funding sources in order to treat the material--and it may not be able to come up with the money.

This would be a vary undesirable result. The material under discussion is highly toxic--and disposing of it is and should remain an important national security priority. That $400 million is needed to stabilize this material, and to process it so that parts of it can be recycled and other parts can be safely secured.

This bill would provide that, `the Secretary of Energy shall prepare, and the President shall include in the budget request for fiscal 2000, a plan and proposed legislation to ensure that all amounts accrued on the books of the United States Enrichment Corporation for the disposition of depleted uranium hexafluoride will be used to commence construction of, not later than January 31, 2004, and to operate, an onsite facility at each of the gaseous diffusion plants at Paducah, Kentucky, and Portsmouth, Ohio, to treat and recycle depleted uranium hexafluoride.'

The bill will address this key challenge. And it will also prevent a major economic dislocation in two communities--Portsmouth, OH (whose USEC plant has 2,400 employees) and Paducah, KY (whose USEC plant has 2,000 employees). This bill will support new decontamination and decommissioning jobs at these plants, which may experience limited job loss through the privatization.