Platts - Wednesday, March 23, 2005 http://www.platts.com ------------ House panel to look into Yucca Mt. allegations Washington (Platts)--22Mar2005 A House panel will probe allegations that some documents were falsified on the DOE repository project at Yucca Mountain, Nev. A House Government Reform subcommittee chaired by Rep. Jon Porter (R-Nev.), who opposes the disposal facility, will hold the 10 a.m. hearing April 5 in room 2247 of the Rayburn House Office Building. Last week, DOE and the U.S. Geological Survey disclosed that some USGS e-mails between 1989 and 2000 indicated that some documents associated with water infiltration and climate studies may have been falsified. ------------ Markey wants NRC IG to probe security information restriction Washington (Platts)--21Mar2005 Rep. Edward Markey has asked NRC's Inspector General (IG) to investigate whether the commission is withholding "important information" from lawmakers and the public under the guise of protecting national security. Markey (D-Mass.) cited several incidents to support his concern, which he outlined in a letter sent today to IG Hubert Bell. Markey gave as an example the fact that NRC was resisting the release of a National Academy of Sciences (NAS) study on the safety and security of spent fuel at nuclear power reactors. The congressman said he reviewed the NAS safeguards report and believes NRC is preventing a redacted version from being made available because it disagrees with the report's conclusions, not because of "any legitimate safety concerns." Markey asserted in a prepared statement that he does not want any information that could aid a terrorist to be released, but he also does not want information to be unnecessarily restricted. ------------ NuclearFuel 03/14/2005 Cogema, AHUG register big win in SWU case The US Court of Appeals for the Federal Circuit (CAFC) ruled decisively in favor of Cogema-Eurodif and a coalition of US utilities this month, declaring in a unanimous decision that SWU exports to the US are not subject to US import duties. The Mar 3 decision was a blow to USEC Inc., which, in a December 2000 petition, had asked the US government to impose antidumping and countervailing duties on foreign SWU. The crux of the CAFC case was whether enrichment is a good, as USEC and the US government argued, or a service, as Cogema and the Ad Hoc Utilities Group (AHUG) maintained. Under US law, import duties can be applied to goods but not services. If the CAFC decision survives further challenges—or is not contested—it could have significant implications for the SWU market, in part because it opens up the possibility that Russian commercial enrichment services might no longer be blocked by the existing Russian suspension agreement, which is enforced by the US Department of Commerce. But most analysts saw the decision as having little immediate impact on SWU prices, although one analyst predicted lower prices later this year. The decision may lead some utilities to wait to enter the longer-term market until the supply picture is clearer, said another analyst. One knowledgeable trade lawyer who was not a participant in this case said that while the CAFC decision, if it stands, "opens up more options" for suppliers to consider, "it remains to be seen how many of those options are practical." He added that Commerce import officials have often been "very creative in interpreting court decisions that have gone against them," leaving winning parties sometimes "stuck in the morass" of Commerce's trade bureaucracy. AHUG's lead attorney Nancy Fischer of Shaw Pittman LLP, said the CAFC decision is "very broad" in stating that enrichment is not subject to antidumping duties. The ruling therefore could be considered "precedent-setting," but, she said, "how that plays out" is "still to be decided." The ruling "certainly opens up opportunities for our clients," she said. She specifically cited the Russian suspension agreement, which she said was "basically hanging on by a thread at this point." But she declined to say if AHUG would challenge that agreement, which is up for a sunset review this July. She said only, "We're looking at all our options." Cogema wins on goods-versus-services issue The largest part of the CAFC's discussion deals with the goods-versus-services question in connection with antidumping duties. A key question was the relevance of a 2002 case, Florida Power & Light Co. v. United States, in which another CAFC panel had deemed enrichment a service. USEC argued that the earlier case did not serve as a precedent, in part because it dealt with SWU contracts in the context of the Contract Disputes Act rather than the antidumping statute. The CAFC acknowledged that the "statutory schemes" in the two cases were different and that Florida Power therefore did not set a binding precedent. But the differences "do not change the essential nature of the transaction involved in this case," the court said. The relevant SWU contract terms in the two cases are "identical," the court said. The CAFC continued, "The persuasive power of Florida Power might be mitigated if [USEC and] the government were capable of showing that the contract in that case differed in relevant part from the contracts in this case. No such showing has been made." USEC had also pointed to the fact that the Florida Power court had said SWU contracts do not "fall neatly" into the category of either goods or services. The CAFC acknowledged the point but said that its opinion in the earlier case "definitively held" that that the SWU contract was for services. The CAFC added, "Holdings of this court are no less decisive because they may have been difficult to develop." Another key part of USEC's argument rested on its claim that under SWU contracts, title to the unenriched uranium is transferred from the utility to the enricher. But the court said, "The utility's title to that uranium is only extinguished upon the receipt of title in the LEU [low-enriched uranium] for which it contracted. Therefore, the SWU contracts in this case do not evidence any intention by the parties to vest the enrichers with ownership rights in the delivered unenriched uranium or the finished LEU." On countervailing duties, the court also found USEC's arguments unconvincing. The transaction at issue in the case arose from a SWU contract under which, USEC claimed, Electricite de France overpaid Eurodif. The court pointed to the language of the countervailing-duty statute, which lists four forms of "financial contribution" that a subsidy from an arm of a foreign government to a manufacturer can take if the subsidy is to trigger the duties. The third and fourth items in the list are "providing goods or services, other than general infrastructure" and "purchasing goods." The court said the construction of the statute "clearly shows that Congress was aware of the distinction between contracts for services and contracts for goods" and therefore "could easily have included" the purchase of services if it had intended to do so. "Because it did not, we must assume the omission was intentional," the court said. ------------