Feds pull plug on Kentucky uranium plant and 1,000 jobs

By Roger Alford

Associated Press

Published: Friday, May 24 2013 5:40 p.m. MDT

FRANKFORT, Ky. — The operator of a Cold War-era plant in western Kentucky that supplies enriched uranium to nuclear power plants said Friday it planned to cease production after federal energy officials decided to end its work, putting more than 1,000 workers out of high-paying jobs with benefits.

The Paducah Gaseous Diffusion Plant is the only government-owned and operated uranium enrichment facility in the country. It's operated by USEC Inc. under a lease deal with the U.S. Department of Energy.

USEC executive Robert Van Namen said the company pursued potential opportunities to continue the enrichment work, but DOE concluded "there were not sufficient benefits to the taxpayers to extend enrichment."

"I am extremely disappointed to say we must now begin to take steps to cease enrichment," USEC's senior vice president and chief operating officer said.

Department officials said they looked at possibly keeping the Paducah plant operating longer, but couldn't reach an agreement that was "viable for us as responsible stewards for the taxpayers."

Last May, the plant faced closure until officials reached a deal that gave it a reprieve for another year. Under that deal, the plant enriched depleted uranium for Tennessee Valley Authority and Energy Northwest, a utility in Washington state.

The plant opened in 1952 to develop enriched uranium for military reactors and to produce nuclear weapons. The plant began selling uranium for commercial reactors in the 1960s, and has been operated since the late 1990s by Bethesda, Md.,-based USEC.

Local union officials criticized the Energy Department's decision.

"It's kind of shocking because there was profit to be made," said Mike Myers, a nearly 23-year plant worker and a vice president with a steelworkers union local representing about 580 plant employees.

"It looks to me like DOE is throwing us all under the bus," he said.

Soft demand for enriched uranium, stemming partly from the disaster in Japan when a tsunami crippled a nuclear plant, coupled with steep production costs triggered the decision, USEC spokesman Jeremy Derryberry said. Production will be phased out in the next month.

"We've been telegraphing for a long time that the plant had a limited lifetime," Derryberry said. "That was only accelerated by what happened in Japan."

Japan was an important market for the Paducah plant's enriched uranium, but nearly all of Japan's workable reactors have been offline since the March 2011 earthquake and tsunami triggered multiple meltdowns at the Fukushima Dai-ichi plant.

"What that essentially does is take a huge chunk of demand out of the market, at least in the near term," Derryberry said. "With no demand, there's an excess of supply. Prices go down. We just haven't been able to find additional customers for the plant's capacity."

Employees were notified of the decision in a meeting about 6:30 a.m. Friday, ending years of uncertainty about their jobs.

"It was sort of anticlimactic in the sense that you knew it was coming," said electrical supervisor Barry Miller, 58, who started work at the plant in 1977. "There was almost a sense of relief in a very strange sense. I think that was true of a lot of employees, where they just wanted to know. ... It's not a joyful relief. You can imagine what it's doing to people who have families and literally don't know what they're going to do."

Miller, whose daughter-in-law also will lose her job at the plant, said Paducah doesn't have another plant with high-paying jobs to absorb the furloughed workers.

"There's going to be a whole lot of people debating leaving town and trying to go someplace else," he said. "That's what I worry about more than anything. I certainly don't want my son and his wife to move."

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