Witnesses 
Panel 1 
Mitch McConnell (R-KY)
Senate Minority Leader

 

Panel 2
Gene Aloise
Director of Natural Resources and Environment, Government Accountability Office 
Daniel Poneman
Deputy Secretary of Energy, U.S. Department of Energy

 

Panel 3
Jim Key
Vice President, United Steelworkers Local 550
Herman Potter
President, United Steelworkers Local 689

 

Committee Members Present
Ed Whitfield (R-KY), Chairman
Bobby Rush (D-IL), Ranking Member
Greg Walden (R-OR)
David McKinley (R-WV)

 

Full Committee Members Present
Henry Waxman (D-CA), Ranking Member of Full Committee

 

The House Committee on Energy and Commerce Subcommittee on Energy and Power held a hearing on June 13, 2011 to discuss the Energy and Revenue Enrichment Act of 2011 (H.R. 2054). A pilot program is proposed in this act to reenrich the canisters of DUF6 (depleted uranium hexafluoride). Furthermore, the sales of the reenrichment canisters, commonly known as “tails,” will provide revenue to the Uranium Decontamination and Decommissioning (D&D) Fund for environmental cleanup.

 

In Chairman Ed Whitfield’s (R-KY) opening statement, he introduced his bill H.R. 2054 which initiates this two-year pilot program. He stated that there are 40,000 14-ton canisters in Paducah, Kentucky and 20,000 in Piketon, Ohio. He feels this pilot program once initiated will give the Department of Energy (DOE) the time it needs to assess the situation at these two locations. Whitfield later directed attention to an image depicting uranium tail canisters. He explained that the earliest canisters have been at Paducah for 60 years and cleaning up the material in the safest way possible has long been an issue for the state.

 

Ranking Member Bobby Rush (D-IL) said in his opening statement that he expects this bill to pass through the committee in a bipartisan manner. He stated that this hearing is in response to a letter written in March asking DOE to update its report from 2008 on their options for dealing with these tails.

 

In his opening statement, Ranking Member of the Full Committee Henry Waxman (D-CA) expressed his concerns about DOE’s potential to enter into a “sole source contract” with the United States Enrichment Corporation (USEC). DOE has the authority to do so, but Waxman was not convinced that “this action is best drafted to yield the best deal for the American taxpayer.”

 

Senator Mitch McConnell (R-KY) began his testimony by stating that the Paducah plant has supplied America’s defense and commercial nuclear reactors for 60 years and is the only domestic plant enriching uranium today. He further stated that DOE has “shortchanged cleanup efforts at this site” for many years. In 2007, the House inquired about DOE’s plans for depleted uranium and McConnell pointed out that DOE still does not have a plan that includes Paducah. McConnell is especially concerned because the 60,000 tails are exposed to many weather conditions that could potentially cause health, safety, and environmental risks. McConnell is troubled by the potential closure of the Paducah plant eliminating 1,200 jobs at this site and adversely impacting the economy of western Kentucky.

 

Gene Aloise, the Director of Natural Resources and Environment at the Government Accountability Office (GAO), started the second panel of witnesses with his testimony. Aloise stated that GAO estimates DOE’s tails to be at a value of $4.2 billion, but pointed out this estimate is very sensitive to changing uranium prices. Aloise commented that the government has the potential to obtain money from these tails, which were once considered a liability. Daniel Poneman, Deputy Secretary of Energy, explained in his opening remarks that the funding needed to reenrich the tails is currently not supported by the President’s budget. DOE is concerned that the bill will complicate its mission of maintaining sufficient uranium inventories at all times to meet the missions of the department. Poneman commented that much has been invested in this resource and stated that DOE is willing to optimize the interests set forth by both parties. Rush asked if the bill were to go forward what would be the benefits for the taxpayer. Poneman answered that the optimal taxpayer value would come from a competitive bid.

 

Greg Walden (R-OR) asked whether DOE has the authority to move forward on the GAO report. Poneman answered that there are different views on the GAO report and there is some conflict in authority. Aloise responded that GAO thinks DOE does not have the authority to sell the tails “as is” while DOE thinks they do. Poneman and Aloise agreed this would be an easy fix in legislation and that Whitfield’s bill does not fix this issue.

 

Waxman posed many questions as to whether DOE is given the discretion or is mandated to enter into a contract proposed by this bill. He feels that forcing DOE to enter into this contract without much leverage to negotiate does not hold the best interest of the American taxpayers. Poneman agrees with Waxman that there is discrepancy in the bill on this subject.

 

Representative David McKinley (R-WV) was very interested in DOE’s “concrete plans” in dealing with the issues at Paducah. Poneman responded that DOE has requirements and obligations to the nation’s security and to the D&D fund at Portsmouth, OH. DOE is willing to work with the committee in order to optimize the value of the tails for taxpayers, Poneman told McKinley. Poneman reiterated that DOE is not fully supportive of the bill; however, he told the committee the department is in support of assisting the taxpayers while also protecting the environment.

 

In the third panel, Jim Key and Herman Potter expressed support for the legislation in their testimonies. Key in his testimony  said that this bill is the best opportunity to extend jobs when employment around the country is low. Potter voiced in his testimony the many concerns the United Steelworkers Local 689 had. The major concern is the return on revenues to complete the “funding of the retirement and health benefits [for the employees] at the Paducah and Piketon sites” while also supporting the D&D fund.

 

When both individuals were asked about the possibility of legislation opening up the tails for competitive bid, Key suggested the possibility of an outside company doing the business when the Paducah employees could do it, and Potter expressed that the funds may not be funneled back to the company. The two men agreed that if criteria restricting USEC were agreed upon beforehand, then USEC would live up to their obligations if the legislation were to go forward.

 

Written testimonies from the chair and witnesses, a webcast, and other information can be found at the House Committee on Energy and Commerce web page.