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Privatization Issues

Enriched Uranium for Sale

In the largest sale of its kind, the federal enterprise that supplies the bulk of uranium fuel to nuclear power plants in the United States will be sold to private investors in early 1998 -- if the government can get a good price. Unlike nuclear power plants, the United States Enrichment Corporation is highly profitable, earning $250 million on revenues of $1.578 billion in the fiscal year ended June 30, 1997. The USEC is worth an estimated $1.5 billion to $3 billion, and revenues from the sale are included in the 1998 federal budget. But analysts say that the USEC is profitable only because it has low-cost contracts for electrical power due to expire in 2005. The gas diffusion process USEC uses to separate U-235 from its nonfissionable isotopes was developed in the 1950s and uses as much electricity as a large city; European and Russian enrichment plants use a more recently developed, less energy-intensive centrifugal separation process. However USEC owns the rights to exploit atomic vapor laser isotope separation, a technology developed at Lawrence Livermore Laboratory that uses just 5 percent as much electricity as gas diffusion. If USEC is able to build facilities using this new technology, observers say it could become a "cash cow." Source: Peter Passell, "The Sticky Side of Privatization: Sale of U.S. Nuclear Fuel Plants Raises Host of Conflicts," New York Times, August 30, 1997.

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