Friday, January 11, 2013

The Ugly Battle Over Virginia’s Uranium / Virginia uranium backers / On uranium mining, a fiscal conservative might well keep the ban /

The Ugly Battle Over Virginia’s Uranium. Secret tapes, murky finances, and free trips to Paris.

By |Posted Thursday, Jan. 10, 2013, at 2:40 PM ET
For all the turmoil it is stirring, the mining company Virginia Uranium operates from a headquarters that is remarkably plain: a beige, corrugated-steel building next to a cattle farm at the edge of the small town of Chatham, Va. You wouldn’t guess the firm is heading a highly controversial effort to build the first uranium mining and milling operation east of the Mississippi River.

geological maps to the office of Patrick Wales, the youthful-looking project manager. He is scowling at three computers screens on his desk.
“I can’t talk to you today,” Wales says anxiously. “The lieutenant governor has just announced his opposition to the project.”
Wales, who never did respond to requests for an interview, has good reason to be apprehensive. Virginia Uranium’s plan to develop a 119-million-pound site of underground uranium ore—one of the largest deposits in the United States—is finally coming down to the wire.
The Virginia General Assembly will decide during this winter’s session, which was called to order this week, whether or not to lift a 30-year-old moratorium on uranium mining. The denouement is coming after several years of intense lobbying by proponents and opponents, hundreds of thousands of dollars in studies, and trips paid for by the mining firm to send legislators to Paris. It is pitting neighbor against neighbor, splitting the state Republican Party, and sparking late-night political intrigues in an area that seems better suited for Andy Griffith and Aunt Bea.
If Virginia dumps the mining ban, it will be taking a big step into uncharted territory. The state has no experience regulating uranium mining or milling, although a recent government panel did make up a list of what must be done to regulate the industry. The chore would take several years and involve hiring 30 new professionals to monitor drinking water, groundwater, labor conditions, and air pollution.
The mining project could make money—some claim up to $7 billion, depending on the fickle global prices for uranium. Investors include a number of mysterious Canadians and a local family headed by a retired U.S. Foreign Service officer named Walter Coles. The family owns the heirloom Coles Hill Farm that dates back to the War of 1812. Areas underneath the farm’s rolling pastures, as well as more than 2,000 acres of leased land, could be ripped up to reach the radioactive ore. Economic studies say that 1,000 jobs may be created in a region wracked by the loss of thousands of textile, furniture, and tobacco jobs. The unemployment rate in Danville, the largest nearby city, is 9.3 percent, among the worst in the state.
The risks of pushing on with uranium mining are immense. The National Academy of Sciences warned in a 2011 study that “there are many unknowns” and that “steep hurdles” needed to be surmounted if mining goes forward. Much of the concern lies with Virginia’s dearth of experience regulating ore production, but dangers also arise because of the mining area’s climate, watershed, and nearby cities.
The United States is actually a small player in uranium production, representing only about 4 percent of the world total. Most mining has been done in remote, minimally populated, desert areas in Western states such as Arizona or Utah in the 1940s and ’50s—often with disastrous results.
As late as 2007, the Environmental Protection Agency was still dealing with the 1979 breach of a dam on the Puerco River near Gallup, N.M. that held back radioactive waste from a uranium mine closed years before. The breach, of a dam operated by United Nuclear Corporation near Navajo land, released more radioactive material than did the accident at Three Mile Island. The EPA ordered acres of tainted land and vegetation dug up.
The Virginia tract poses much different problems. Chatham has a rainy climate, so any radioactive leaks would travel farther and faster. It is also within 130 miles of three major urban areas—Richmond, Raleigh-Durham, and Hampton Roads, a thirsty metropolis surrounded by salt water that gets up to 40 percent of its drinking water from Lake Gaston, a mere 20 miles downstream of Coles Hill Farm.
Adding to concerns, Virginia Uranium plans on storing radioactive tailings from its milling operations at the farm. The underground storage areas would not be far from groundwater, and the creeks and streams in the area flow into a lake complex on the Virginia-North Carolina border that is used for drinking water. Some local residents fear what uranium-tainted dust or smoke might do to their homes. Others have placed green signs on their land stating: “I dig uranium. It’s about jobs.”
The uranium in the ground near Chatham was discovered in the 1950s, when government prospectors scoured the countryside for nuclear weapons material. Local residents weren’t surprised. One was Claudia Emerson, a Pulitzer Prize-winning poet and former state poet laureate who grew up in Chatham. “On our street,” she says, “every other house seemed to have a case of cancer in it. It could have been that people smoked a lot more, but there seems to have been something else.”
Uranium mining remained dormant locally until the late 1970s, when a Canadian firm named Marline Uranium Corp. began surveying for uranium. In 1982, it announced it had found 30 million pounds of uranium oxide near the Coles Hill site as well as some farther north in the horse-country counties of Fauquier, Madison, Orange, and Madison. It began leasing thousands of acres, joined with its partner Union Carbide, the chemical giant.
The plan touched off a flurry of protests, but it was doomed anyway. The partial meltdown of the Three Mile Island nuclear power station in Pennsylvania in 1979 caused uranium prices to tank. Union Carbide bolted, and Marline eventually shut down.
Uranium came up again in 2007 with some curious similarities to the efforts 30 years earlier. For one, Norman W. Reynolds, who had headed Marline, was the new president and chief executive of Virginia Uranium. He is working with the Coles family, which wanted to develop the reserves on its farm after Walter Coles, a two-tour veteran of the Vietnam War, retired a decade ago from U.S. diplomatic service in Egypt, Russia, and Jordan.
The investors behind the Virginia effort aren’t easy to track down. Documents and a company website describing the Virginia Uranium venture show links to the Canadian mining industry based in Vancouver. (Canada is the world’s second-largest uranium producer after Kazakhstan.) Virginia Uranium is shown as subordinate to an entity called Virginia Energy Resources that appears to also control a British Columbia firm called Otish. The name apparently refers to a uranium mining region in Quebec, and a search turned up a firm named Otish Energy. When I called the number listed, a recording of an operator from “Tangent Management” sent the call to voice mail.
One thing that isn’t murky, however, is how much influence Virginia Uranium has been trying to buy. It stirred up a scandal in 2011 when it took a dozen legislators on an expenses-paid trip to France to tour abandoned uranium mine sites, with a side trip to Paris.
In the past year, according to the Virginia Public Access Project, the company has spread $160,000 around to state political campaigns, about 70 percent of it going to Republicans. The firm has contributed $12,500 to the Republican Party and $10,000 to a political action committee backing Gov. Robert F. McDonnell.
Elected in 2010, the popular and telegenic McDonnell wants to turn Virginia into the “energy capital of the East Coast” by pushing offshore oil drilling, coal, nuclear power, and alternative energy. He says he has not taken a stand on lifting the moratorium but did set up a study group to explore what the state would need to do to handle uranium mining.
While McDonnell sidesteps the issue, his lieutenants are active players. One of his biggest allies placed a late-night call to Pittsylvania County Supervisor Jerry A. Hagerman last summer just before the board was to consider a resolution on whether to support the ban.
Stanley did not know that Hagerman, a retired police investigator who opposes mining, was tape-recording the telephone call. Stanley can be heard saying: “You guys don’t need to vote now. It can save you big personally and politically and you have control of your conscience.” Stanley later said he misspoke. “I’m hoping legislators don’t lift the ban,” Hagerman says.
Just how touchy the topic is came to light in December when Lt. Gov. Bill Bolling, who had been groomed as McDonnell’s replacement, came out publicly against mining. He joins a host of other opponents, including the cities of Norfolk and Virginia Beach, the Virginia Farm Bureau, the Danville Chamber of Commerce, a group of African-American pastors from southwestern Virginia, and, possibly, the North Carolina legislature, which is considering a draft resolution opposing mining just across its northern border. In support are a small business group called Organizers of People for Economic Prosperity and influential Republicans, such as state Sen. John Watkins, who says the project is a “unique opportunity” to create jobs.
Thorough Watkins’ leadership, the Virginia Coal and Energy Commission, a study group, voted 11 to 0 on Jan. 7 to recommend ending the ban. But in a shrewd political ploy, mining would be allowed only in Pittsylvania County, where Virginia Uranium has an interest. The recommendation would not apply to areas including Culpeper, Madison, Orange, and Fauquier Counties—outer bedroom communities for Washington, D.C. that have a number of horse farms and a large population of wealthy people.
The ultimate question that may determine the fate of mining in Virginia is whether there is a strong and sustainable market for uranium. In the 1980s, a drop in prices killed the Marline project. When Virginia Uranium got started in 2007, uranium was selling for about $140 a pound. It later dropped to about $70 a pound. After the Fukushima disaster in Japan in March 2011, prices sank to $40 per pound level and remain there.
Although the Virginia Uranium website advertises “Energy for America,” it’s hardly certain its products will be used in this country. A new commercial power plant hasn’t been built in the United States since the 1970s, although four units are being built in South Carolina and Georgia. A new Energy Information Agency study says that growth in electricity demand for the use of nuclear fuel will be less than 1 percent for the next 20 years, far less than earlier predictions, raising more questions about future demand for uranium.
Most of the 60 or more reactors now under construction are in Asia, so it is not likely that Virginia uranium will be of much benefit to this country. In exchange for about 1,000 jobs and some tax money, the state would be stuck with any ill effects from the project for years.

Virginia uranium backers take their message to Capitol

January 10, 2013 | 3:38 pm
Steve Szkotak
RICHMOND, Va. (AP) -- Dozens of Southside Virginia proponents of uranium mining arrived by bus at the Capitol on Thursday as lawmakers provided more details on proposed legislation that would end a 1980s state moratorium on mining the ore used in nuclear power reactors.
The elected officials stressed that the legislation would create a robust, highly regulated environment for uranium mining, which has never been done at full scale on the East Coast, and provide jobs and revenue for Southside Virginia. About 70 mining supporters stood behind them and nodded in agreement.
"I respect the concerns that opponents of uranium mining have expressed," Sen. John Watkins said. "My bill is a sincere attempt to address those concerns."
Watkins, a Powhatan Republican, introduced two other allies of uranium mining: Sen. Richard Saslaw, D-Fairfax, and Delegate Jackson Miller, R-Manassas, who said he will introduce similar legislation in the House of Delegates.
Watkins said his bill is still being drafted but he presented a list of its key elements. One would effectively limit the mining to Virginia Uranium Inc. and the 119-million-pound deposit it wants to mine in Pittsylvania County, about 20 miles from the North Carolina line. The so-called Coles Hill deposit is the largest known uranium deposit in the U.S. and among the largest in the world.
The bill would make the State Corporation Commission the lead licensing agency as various other state departments -- mining, environmental and public health -- develop uranium mining regulations. It also would require Virginia Uranium to store waste, called tailings, in below-grade containment centers.
Katie Preston of Keep the Ban, a coalition of groups opposed to mining, said she was grateful to get more details on the proposed regulations but her concerns were not assuaged by the details released Thursday.
"One of the greatest concerns of the Keep the Ban coalition has been the potential impact on water supplies, not only for Virginians in the Hampton Roads region but also our neighbors in North Carolina, who don't have a voice in the General Assembly and need someone to speak on their behalf," Preston said.
The city of Virginia Beach, which draws its water from Lake Gaston in southern Virginia and is the state's largest city, has been a leading municipal opponent to mining.
One mining supporter, former Hurt Mayor Lillian Gillespie, said she was satisfied with various studies on uranium mining.
"It's my opinion that the scientists have spoken that it can be done safely," Gillespie said after the news briefing. She guessed that the 1,206 residents of Hurt, which is in Pittsylvania County, are evenly divided on the issue.
Miller said limiting mining to Southside Virginia was not a critical factor in his decision to support mining legislation, and he stressed that the final decision will not be before the General Assembly.
"I've been criticized by some people from Southside, and some people from my own district, quite frankly -- how could you force something down the throat of someone at the opposite end of the state?" Miller said. "Well, we are not doing that." (He's right. They are simply putting a large funnel down Southsides throat to slide the shit in easier.)
Pittsylvania County ultimately would have to decide whether to issue a special permit to allow mining, Miller said.
Marshall A. Ecker, chairman of the county's Board of Supervisors, has attempted in the past without success to have the board take a stand against uranium mining. He agreed the decision will likely fall to the board, after a review by planners.
He said the Legislature is saying, "We'll lift the moratorium, it's in your ballpark now. You make the decision. Go from there."
By most estimates, that wouldn't occur for another eight or so years.
Whitehead: On uranium mining, a fiscal conservative might well keep the ban
Posted: Thursday, January 10, 2013 12:00 am | Updated: 9:29 pm, Wed Jan 9, 2013. Whitehead: On uranium mining, a fiscal conservative might well keep the banBY KATIE WHITEHEADRichmond Times-Dispatch
Traditional conservative values support continuing the moratorium on uranium mining in Virginia. Moving forward with legalization of uranium mining in Virginia would be expensive for taxpayers, with no guarantee the costs would ever be recovered.The governor’s Uranium Working Group (UWG) report lists the many protective actions Virginia would need to take to regulate and monitor uranium mining and milling. Following through on all the suggested safety measures would require establishing a comprehensive uranium mining and milling regulatory program.
The only proposal worth considering — other than maintaining the moratorium — is a fully funded, fully staffed, comprehensive, state-level, statewide program that incorporates all the measures outlined by the UWG. Even then, it might be impossible to guarantee a degree of safety in operation that would be acceptable to a majority of citizens.
Dr. Paul Locke, chairman of the National Academy of Sciences study committee, recently told reporters, “Putting protective regulations into place would be a very, very, very difficult task. The UWG laid out an extensive framework — actions Virginia could take. We must do them all. If Virginia sunsets the moratorium, Virginia should oversee the uranium milling, as well as mining. To do so, Virginia would need the people, the expertise, and the coordination, in addition to both new laws and new regulations. The question in my mind is whether we, as a commonwealth, are ready to make that investment.”
The NAS report concluded, “If the Commonwealth of Virginia rescinds the existing moratorium on uranium mining, there are steep hurdles to be surmounted before mining and/or processing could be established within a regulatory environment that is appropriately protective of the health and safety of workers, the public, and the environment. …The optimum approach would be for an entirely new uranium mining, processing, and reclamation law or laws to be enacted. In addition, a new regulatory program would be required to implement this law or laws.” (p. 275-6)
The Uranium Working Group’s report shows us those steep hurdles — steep in terms of money, expert staffing and the proactive, independent diligence required to create an appropriately protective regulatory system.
The UWG estimated the resources needed. If Virginia ends the moratorium and regulates both uranium mining and milling, state agencies would need $5.388 million per year for 30 new employees and expenses. If Virginia leaves regulation of milling to the federal Nuclear Regulatory Commission, ending the moratorium would cost $4.388 million per year with 22 new employees.
The UWG recommended that the uranium industry pay the full costs of regulation, but did not propose a method to recoup the millions in startup costs. Nor is it certain that a uranium industry would operate in Virginia and pay any license fees and taxes.
Both private and public benefits of mining depend on uranium prices, which are volatile.
Price uncertainty is critical to risk-benefit analysis of whether to end the moratorium. Low prices mean lower profits, lower tax revenues, fewer jobs and lower wages. If the price is low enough, a mine and mill in Virginia would not be economically viable and would not begin operations or would shut down, in which case most or all of the benefits would cease to exist.
Virginians need to assess the immediate hurdle of investing millions to oversee uranium mining. Ending the moratorium is a high-risk financial investment for Virginia taxpayers. If things do not go well, that money is gone.
Whether to allow uranium mining is not a theoretical question; it is a multifaceted policy question that’s political, scientific, technical, financial and, above all, practical. It requires weighing uncertain benefits against substantial risks to health, the environment and the economy and heavy costs for a regulatory program.
Quite a bit of money has been spent already. And a lot more would be required — up front.
Do we, as a commonwealth, support committing the tremendous resources and diligence essential to proper oversight of uranium production in Virginia? Can we say, with a high level of certainty, that the benefits of legalizing uranium mining would outweigh the risks and serve the greater good for the long term?
A fiscal conservative might well say, “No.”