Nuclear power play

The remote swath of the Paradox Valley in southwestern Colorado earned its moniker from the fact that the Dolores River cuts across it from ridge to ridge rather than running through it lengthwise.

The valley’s name was a big draw for New York transplant Marty Warner, president and executive director of West Montrose Economic and Community Development in the town of Paradox. “Paradox is one of my favorite words,” she says. “It’s always followed me around. The definition I prefer is ‘that which cannot be but is.'”

The name is just one of the lures. Natural beauty abounds in the form of plenty of blue sky, red rock and pinon forests. Then there’s the uranium.
The presence of radioactive rock has been common local knowledge for 100 years. It’s said that Madame Curie received uranium from the area in the early 1900s, and the Manhattan Project used locally mined uranium in the making of the world’s first atomic weapons. The population peaked in the Paradox Valley and vicinity as the uranium industry boomed in the 1950s at around 6,000 people, and today it’s about a quarter of that. Modern Paradox has little in the way of commercial activity.

“I had moved here with the understanding they would never restart the uranium industry again,” Warner says. “I had a seething hatred of uranium in general because I lived in New York. I put my finger on Uravan on a map once and said, ‘I am never going there.'”

But once she got to know the locals, Warner softened her stance. She even ended up working in administrative support during the cleanup of nearby Uravan, the company town turned Superfund site just around the bend.

Now she sees the uranium industry as the valley’s only economic hope.

“It’s truly a boom and bust mineral, and right now our area could be the poster child for bust. For 25 years, there has been no industry here. The infrastructure – everything needs to be repaired. The whole town is dilapidated to the bone. This is a resource for this area – it’s always been a resource for this area. It caused quite a few people to become millionaires when the mill was ‘going and blowing.'”

A Canadian company, Energy Fuels, is looking to build the first new uranium mill in the country in the last quarter-century. The Pinon Ridge Mill has Montrose County’s seal of approval and is waiting on the state’s, due Jan. 17. A lawsuit against the county filed by Telluride’s Sheep Mountain Alliance is another potential stumbling block.

Citing polls that have shown local public opinion to be about 80 percent pro-mill, Warner sees Pinon Ridge as her community’s fiscal salvation. “If the new mill starts up, there will be a boom, and all the mines will open up again. We lost two generations here. They had to leave to go find work in the mining industry. Hopefully, this will bring some of those people back. Their grandfathers are still here.”

Tourism in the Paradox Valley “has been showing a steady increase. It’s a beautiful area, and there’s lots of outdoor recreation.” But it’s still nascent: There is one lodging establishment in the valley, one gas station, and little else.

Thus, Warner sees Pinon Ridge as the only solution, for both the valley and the country. “I can relate to the fear of uranium, but I can also see where I was force-fed bad information. The truth is, it’s always been here. It just went to sleep. And it is a clean source of energy. It’s probably what’s going to save us. I don’t see how we’re going to meet our energy needs for the next 15 years without it.”

Energy Fuels CEO Stephen Anthony says he is optimistic that the Colorado Department of Public Health and the Environment will approve the mill and that the lawsuit filed against Montrose County (with Energy Fuels as a related party) will end in dismissal. (Hilary White of the Sheep Mountain Alliance begs to differ. “I feel we have a very strong case,” she says.)

Slated to open as early as the first half of 2012, the mill would have 85 full-time employees, many of them well-paid and highly skilled, and spur the creation of another 230 mining and transportation jobs in Colorado and Utah. As Energy Fuels currently employs 15 people, “The mill would represent a major expansion for us,” Anthony adds.

Budgeted at $140 million, the Pinon Ridge Mill would process a relative drop in the bucket, producing 800,000 pounds of yellowcake (processed uranium) annually, less than one-half of 1 percent of the annual worldwide market. Energy Fuels would expand the facility based on demand in coming years.

“We’re focused on this facility. In the long term, we would expand the facility based on demand,” Anthony says. “At its peak, the area had six mills in the 1970s. It’s all-market driven. What would increase is the number of mines.”

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U.S. reactors require about 50 million pounds of uranium annually, roughly 85 percent to 90 percent of which is brought in from overseas. “Our dependence on foreign uranium is even greater than our dependence on foreign oil,” says Gary Steele, senior vice president of corporate marketing at Energy Fuels. “The U.S. probably won’t attain self-sufficiency in uranium production.”

Regardless, the price of a pound of processed uranium has fallen off a cliff since a 2007 peak of $138, and currently stands at about $50. The spot price is higher, about $60 a pound. “We think we’re marginally profitable at these prices,” Steele says. It’s a much different story at the $10 per pound price that held though much of the 1990s.

Suzanne Phelps, senior project manager for fuel supply at the pro-nuclear Nuclear Energy Institute in Washington, D.C., says Pinon Ridge is a small but necessary step. “We’re going to be looking at global shortages by 2020,” she adds. “We have the capacity to create a great deal more domestically, but we’ve been living off of an oversupply of inventory for the last 30 years. We’re back to a price where it’s feasible in the U.S.”

Canada and Australia produce more than 40 percent of the uranium used by U.S. reactors, and another 23 percent is sourced from decommissioned nuclear weapons from the former U.S.S.R. The latter “will drop off in 2013,” Phelps says. “The gap that will be created will definitely need to be filled, especially as we start adding reactors.”

Calling environmental sustainability and accountability “a business reality,” Phelps says she believes the 21st-century uranium industry to be an entirely different animal than its 20th-century predecessor, and that such calamities as Chernobyl and Three Mile Island – not to mention Uravan – would not repeat during any future booms. “Since Three Mile Island, the industry credo has been, ‘An accident anywhere is an accident everywhere,'” she says. “It’s definitely in our interest to be self-policing.”

Paul Robinson, research director at Southwest Research and Information Center, an Albuquerque-based nonprofit focused on communities affected by resource development, is much more dubious of both the proposed mill and the industry’s future.

“The property is a small mill, and it’s proposed by a small company with no operating experience or cash to build the mill,” he says. “It’s a very speculative venture. (The locals) are following a hope of the speculators, but it’s not a sustainable economy.”

Current sources are “more than adequate to fill the country’s needs,” Robinson adds. “All those predictions have flattened out over the past few years. There are no new reactors to replace the aging fleet.” Robinson argues that secondary material repurposed from tailings and weapons and expansion at international sites can provide more than enough uranium for the industry, and says that boosting domestic production is a bit of a folly. “I’m not going to speculate on what they may or may not have been smoking.

“The first boom in Utah and Colorado had the U.S. government as a guaranteed buyer at a set price,” says Robinson, describing the region as picked-over with only “small deposits” remaining. Citing much larger expansions in the works in Canada, Australia and Kazakhstan, Robinson says increased production in the Four Corners area “is not a crest of a wave of any scale compared to these other countries.

“Nuclear power remains the most expensive way to boil water, and it keeps getting more expensive,” Robinson says, citing the sky-high cost of the reactor as the most outsized expense. Utilities “are building renewable portfolios instead of nuclear portfolios,” arguing that power generators are more apt to repurpose former mines into wind and solar facilities than look to them for more uranium. “It’s a creative re-use,” Robinson says.

He has a similar perspective on domestic uranium production. “The world and the country are better off using previously mined uranium to meet the reactors’ needs.” About three-quarters of the annual worldwide supply (130 million pounds) is sourced from mines and the remainder (40 million pounds) comes from previously mined inventory, including decommissioned nuclear weapons.
Robinson says conservation and efficiency are far more viable than continuing to build power plants of any kind.

“That’s where you get the best return on investment,” he says. “Controlling consumption is as important as meeting demand. Nuclear reactors are going to stay in the mix, but I don’t see it as a growth sector.”

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