CITIZENS EDUCATION PROJECT STATEMENT ON INITIATIVE 1

The Citizens Education Project and its staff have a strong record as long-standing critics of radioactive waste dumping in general, and of Envirocare in particular. CEP has consistently opposed Envirocare’s proposal to accept Class B & C radioactive wastes, and will continue to do so.

Initiative 1 would ban disposal of Class B & C wastes in Utah, and if that were all it did, CEP would enthusiastically support voter approval of the Initiative. Utah should ban B & C wastes. Unfortunately, one can’t pick and choose among the many provisions Initiative 1 proposes. It’s a tough call, but overall, in our estimation, the negative and problematic provisions outweigh those that are worthwhile. Therefore, CEP opposes Initiative 1.

Under current law, the Utah Legislature and the Governor must approve any application to dispose of Class B & C wastes. Proponents of Initiative 1 argue that neither can be trusted to reject Envirocare’s permit to receive those wastes, so the voters should do it. Yet proponents also argue that the State of Utah should receive substantially more tax revenue for radioactive wastes disposed of here, and the Initiative imposes a tax levy on much less “hot” Class A wastes akin to the taxes other states charge for disposal of B & C wastes. It is estimated that Initiative 1 taxes would raise hundreds of millions of dollars for public education and services for the homeless.

We don’t presume to know what would be a “fair” or appropriate tax levy on the current types of Class A and mixed wastes allowed into Utah. That was the subject of heated debate in the 2001 Legislature, which did increase waste taxes and fees moderately. There seems to be some uncertainty just how much revenue the increase has or will generate. It’s definitely nowhere near the amount of money Initiative 1 would raise. Whether those taxes should be hiked again, and how taxes should be structured for different types of Class A waste, is certainly worth examining, and that can be done without an initiative process. The debates over Initiative 1 have shed more heat than light over a complex tax and revenue issue.

Envirocare argues that the Initiative taxes, applied to less radioactive Class A wastes, will drive them out of business. That may or may not be true, but there is no question that the proposed taxes will put Envirocare in a much less competitive position in the “A” market.

Would the huge new revenues for schools and the homeless materialize, or would the new taxes force Envirocare to close, meaning no radioactive waste would come to Utah in the future? Initiative proponents say either result is fine by them, but they can’t have it both ways.

If the voters pass the Initiative on November 5, it will make it more politically difficult for the Legislature to override Initiative 1 taxes or even approve disposal of B & C wastes, but the fact remains that they have the power to do so. Given the propensity of the Legislature to seek means to enhance revenues, if lawmakers believe that big new dollars can be made taxing radioactive wastes more heavily, they may choose to do just that. Getting the state “hooked” on a radioactive waste revenue stream, even excluding B & C wastes, is not a pretty prospect.

If Initiative 1 taxes forced Envirocare to close, what would happen? Aside from lost jobs and state and local revenues, the state would assume responsibility for the abandoned dump site. There is a serious concern that there are insufficient funds set aside to safely close and adequately monitor the site for 100 years before the title to the land would pass to the federal government. Insufficient closure funds was one of the reasons the Legislature passed new, increased radioactive waste taxes in its 2001 Session.

And if Envirocare closed down, would there be no more low level radioactive wastes imported into Utah? No. Why not? Because Initiative 1 exempts from taxes Canadian-chartered International Uranium Corporation, which operates a mill south of Blanding, Utah. IUC receives radioactive materials from sites around the country for processing to recover small amounts of salable uranium under a special license with the Nuclear Regulatory Commission, which defines these contaminated and radioactive soils as “alternate feed material”.

Our biggest problem with Initiative 1 is this exemption from taxes for IUC, and it could hardly have been an oversight by the Initiative drafters. IUC’s alternate feeds operation has been highly controversial, opposed by the White Mesa Ute Tribe, the Utah Navajo Commission, the Glen Canyon Group of the Utah Sierra Club, Downwinders, and others.

The state has taken legal steps, unsuccessfully, to block IUC’s receipt of these materials, and has labeled the operation “sham reprocessing”. Most of IUC's revenues derive from reprocessing fees, not from sales of recovered uranium, and IUC has received "hotter" materials than the state ever licensed (the Cotter Concentrates). The state Division of Radiation Control is pursuing primacy over these materials (Agreement State Status) to obtain some control over IUC’s operation. The Legislature specifically targeted IUC in the 2001 radioactive waste tax bill, charging a ten cent per cubic foot fee for “reprocessing” materials.

Initiative 1 exempts IUC from taxes before they have paid a single dime to state coffers under the 2001 law. Their current production run of the Tonowanda, New York materials (Ashland 1 and Linde materials) will not be taxed because it was “grandfathered in” by that legislation, which exempted pre-existing contracts. The Initiative will “grandfather out” taxes on any new contracts. Initiative proponents claim they want radioactive waste taxes to be more equitable with those in other states, but the Initiative would make those taxes more inequitable within this state. Since Envirocare and IUC compete for some contracts (with other out of state operations as well), IUC would receive a clear competitive advantage in this segment of the waste market. Ironically, this flaw in the Initiative could increase import of radioactive wastes to Utah, a potential we find unacceptable.

Initiative 1 could have other unintended consequences, including influencing the decision whether to move or cap the Atlas Mill Tailings on the Colorado River in Moab. If the U.S. Department of Energy were to contract with a private corporation to move and dispose of those tailings, the taxes imposed by the Initiative might apply. But the taxes would drive the cost of removal beyond what the federal government would be willing to pay, making it more likely that the tailings would be capped in place, thwarting the will of the majority of area residents and their elected representatives, and endangering the health of the river for generations to come. That question, like the entirety of Initiative 1, will be subject to litigation.

The most critical question that needs to be asked of Initiative 1 is who benefits? CEP believes that, whether intended by the sponsors or not, the biggest beneficiaries would be Envirocare’s competitors – International Uranium Corporation (in Utah), Waste Control Specialists (Texas), Envirosafe (Idaho), Cotter Corporation (Colorado), U.S. Ecology (Richland, Washington) and Duratek (Barnwell, South Carolina), among others.

Some Initiative proponents have argued that Utahns shouldn’t care what happens with radioactive wastes in other states, as long as we don’t have those wastes here. CEP rejects that argument. Disposal of low level radioactive wastes is a national problem that has spawned cut-throat competitive corporate “Dump Wars”. The Dump Wars are directly due to privatization and failed national policies and politics, and are replete with powerful players, political intrigues and influence-peddling. Huge sums are at stake. Of course, Envirocare is a major player in those Dump Wars, and our opposition to the Initiative is not in any way an endorsement of their business practices. Unfortunately, in our view, Initiative 1 fuels the Dump Wars fires.

There has been much talk lately of a “Plan B”, wherein Utah could reap huge tax income by “stealing” Private Fuel Storage’s planned high level nuclear waste storage facility from the Skull Valley Band of Goshutes and putting it on state lands. While that is unlikely to happen, we suspect there is another “Plan B & C” out there, in which the biggest opportunistic players in the dump wars maneuver to garner a greater share of the waste market, with one competitor weakened by a heavy tax burden. What that plan might be and how it might affect Utah we can only speculate, but a closed-down Envirocare would make an inviting target.

Utah should reject B & C wastes, and should strengthen regulation over existing waste streams. However, our radioactive waste tax policies shouldn’t compound the national problem. A national solution, federalizing all current and future radioactive waste permanent storage and disposal operations, coupled with real, ironclad citizen oversight, is desperately needed.

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