Will Virginia Allow the First Uranium Mine East of the Mississippi?

The future of fusion and fission.
Jan. 10 2013 2:40 PM

The Ugly Battle Over Virginia’s Uranium

Secret tapes, murky finances, and free trips to Paris.

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Elected in 2009, 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.

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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.

Correction, Jan. 14, 2013: This article originally misstated the year in which Virginia Gov. Robert F. McDonnell was elected. (Return to the corrected sentence.)

Peter Galuszka is the author of Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal. A former Moscow bureau chief for Businessweek, he has been covering coal and other energy issues for nearly four decades.