Colorado Citizens Against ToxicWaste (CCAT) filed a lawsuit last year trying to get the state to compel Cotter Corp. to establish an aggressive cleanup plan at the EPA Superfund site and provide twice as much in financial assurance to back the project.

The Colorado Department of Public Health and Environment (CDPHE) and Cotter both asked the court to dismiss the case, questioning CCAT’s legal standing. On Friday, District Court Judge Robert Hyatt rejected that motion.

“After considering all of Plaintiffs allegations in the complaint to be true this Court finds a sufficient showing that the Plaintiff is entitled to relief and the Motion to Dismiss under Rule 12(b)(5) is DENIED,” District Court Judge Robert Hyatt wrote.

“Instead of telling us that we don’t have an interest in the radioactive contamination of our water and air, the department ought to be working with the public to protect our environment and health. It is regrettable that CDPHE has taken Cotter’s side to keep Colorado citizens out of the decision process,” said Sharyn Cunningham, a CCAT co-chair whose own well water was contaminated by the Cotter Mill.

Cunningham went on to say she’s glad CCAT’s case will finally be heard by a judge. The lawsuit alleges the state first estimated Cotter’s financial assurance to be more than $43 million but later accepted less than half that amount after closed-door meetings. It also claims the state needs to update its decommissioning and reclamation plan since Cotter is shutting down the mill.

Last month, a different district judge made a similar ruling on a legal challenge by the Sheep Mountain Alliance against the proposed Piñon Ridge Mill in the Paradox Valley of western Montrose County. The state and the company proposing the first new uranium mill in the United States in nearly three decades both argued the court lacked standing.

A Telluride-based environmental group claims state regulators violated various state and federal laws last month when they issued a radioactive materials license to the proposed Piñon Ridge Uranium Mill on Colorado’s Western Slope.

In a legal challenge filed in Denver District Court last week, the Sheep Mountain Alliance alleges the Colorado Department of Public Health and Environment (CDPHE) violated both the federal Atomic Energy Act and the Colorado Radiation Control Act when it issued a license for Toronto-based Energy Fuels to build the first new uranium processing mill in the United States in more than three decades.

The Piñon Ridge project hopes to capitalize on a resurgent interest in the nation’s nuclear power industry as a means of reducing the greenhouse gas emissions more prevalent with coal and gas-fired power plants. But environmentalists insist nuclear power is still too costly, consumes too much water and leaves a legacy of toxic waste from spent fuel rods and uranium mining operations.

The mill would be built in far western Montrose County, near the old uranium industry company town of Uravan – an EPA Superfund cleanup site. Many residents of rural and economically depressed Montrose County favor the mill, while the strongest opposition comes from neighboring San Miguel County – home to the famous ski town of Telluride and a more vibrant tourism, outdoor recreation and real estate economy.

The Sheep Mountain Alliance lawsuit alleges the state didn’t allow the public to ask regulators or Energy Fuels’ officials direct technical questions about the mill, which violates the Atomic Energy Act.

“Sheep Mountain Alliance exhausted all remedies before we decided to file this lawsuit,” Linda Miller, a member of Sheep Mountain Alliance board of directors, said in a release. “We participated in the approval process but our concerns were not addressed. We’re disappointed that the state did not issue a decision that would have protected the public interest and we must now rely on the district court to uphold the law.”

A spokeswoman for the Colorado Department of Public Health and Environment’s Radiation Management Unit did not return a call requesting comment.

Energy Fuels President and CEO Stephen Antony told The Colorado Independent that environmental groups and the members of the public had ample opportunity to ask any and all technical questions.

“They could have addressed questions orally or they could have put them in writing, and to our knowledge, the CDPHE said they addressed all questions,” Antony said. “They had something like 435 questions that they responded to.”

The lawsuit accuses the CDPHE of violating state laws designed to keep Colorado taxpayers from having to shoulder the costs of cleaning up uranium mills, which the suit claims have contaminated groundwater everywhere they’ve been built in the state.

Past facilities such as the Cotter Mill near Cañon City – also an EPA Superfund site – have cost anywhere from $50 million to $500 million to clean up and reclaim, the lawsuit claims, arguing the $11 million surety bond required of Energy Fuels for Piñon Ridge is woefully inadequate.

“If state regulators ignore basic federal and state law to permit this mill, how can we ever trust them to monitor the mill once it’s in production?” Miller said.

Antony counters that the bond is “$12 million roughly,” and that it comes from a fact-based formula.

“That’s calculated based on the state regulations and is sufficient to cover all the requirements of reclamation, and it’s calculated on actual contractor-estimated costs – in today’s dollars, of course,” Antony said. “It’s adjusted every five years when you renew [the permit]. They look at the inflation index and adjust the amount for inflation and any other factors.”

Opponents of the Piñon Ridge Mill have long assailed what they consider shaky financing should things go bad at the proposed mill, saying Energy Fuels can barely afford startup, let alone cleanup. The size of the surety bond has long been a sticking point.

By comparison, state regulators originally set a price tag of nearly $44 million to finish cleaning up the Cotter Mill, then settled on just over $20 million. That prompted a lawsuit last fall from a grassroots activist group in the Cañon City area, Colorado Citizens Against Toxic Waste (CCATW).

Antony said there’s no merit to any of the Sheep Mountain Alliance claims and that his company expects to prevail and proceed with the mill.

“Of course it’s contingent on raising the capital in the market to fund the mill,” he said. “We’ve always said that; that’s no different either. [Uranium] is $73 a pound and forecasted to still moderately increase. We don’t know where it’s going to end. All that does is increase our chances for funding.”

The Sheep Mountain lawsuit, he added, doesn’t affect the timetable for the proposed mill. Energy Fuels built six months into its schedule for anticipated legal challenges.

“It’s all subject to how that process winds its way through the judicial system, but we added about six months in the schedule, so that puts us breaking ground in the fourth quarter of this year and commissioning [a working mill] a year later in the third quarter of 2012,” Antony said.

Union Carbide's toxic Uravan mill

Energy Fuels Inc., a Toronto, Ontario-based company seeking state approval for the Piñon Ridge Mill in far western Colorado, admits in its own financial filings that “there is a significant doubt as to whether the company will be able to continue as a going concern and realize its assets and pay its liabilities as they fall due.”

In a consolidated financial statement for the six months ending March 31, Energy Fuels states: “The company’s cash balances have reached a point where they can support current operations only through early calendar year 2011 without additional financing.”

That lack of cash is a serious concern, say environmentalists and state public health officials. Set against the backdrop of the British Petroleum Gulf oil spill and its astronomical environmental and business costs, they say any company looking to mill uranium in Colorado has to be prepared to pay the enormous costs of catastrophe clean up and reclamation.

Environmentalists and residents of both Montrose and neighboring San Miguel counties bitterly opposed the proposed milling project during special-use permit hearings last fall. News of the thin cash reserves of the company behind the proposal is fueling further opposition.

Frank Filas, Energy Fuels environmental manager, downplayed concerns in an interview with the Colorado Independent:

“So far this company has been able to raise $45 million. A lot of that went into investing in mine properties. A lot has also gone into investing in the mill property and the permitting associated with it,” Filas said.

“So yeah, our cash resources are much smaller than they were, so we’ll be financing this project in phases, and basically the next phase will be to get investments to carry us through the permitting and the final design phase of the project.”

Put up or shut down

Documents obtained by the Independent indicate Energy Fuels is spending between $250,000 and $285,000 a month and had cash reserves of a little more than $2.6 million as of March 31 – or about enough to last through January of 2011, which is when the state must wrap up its permit process for the Piñon Ridge Mill.

Proposed for an 880-acre site in the Paradox Valley about 12 miles west of Naturita, the mill would produce about 770,000 pounds of uranium a year by processing 500 tons of ore each day from surrounding mines in the Uravan Mineral Belt.

The area once supplied yellowcake for Cold War-era weapons but left a toxic legacy that lingers to this day. Still, there is a considerable push for a nuclear-power renaissance to replace carbon-spewing, fossil-fuel-fed power plants. Energy Fuels is banking on that resurgence, first abroad and then domestically.

“Once the permits are approved, that’s going to allow us to go after and get the financing we need for the mill, which we don’t know what exact dollar amount that is, but it’s in the neighborhood of about $150 million if you include the bond with the state also,” Filas said, referring to the company’s proposed $12 million surety bond in the event of a worst-case cleanup scenario.

“That’ll be a big chunk of change that we’ll need to come up with, but we think we’re in pretty good position to do that, and obviously some of it depends on things that are currently outside of our control like the current long-term price of uranium and those types of things.”

The true cost of a uranium disaster

Travis Stills, managing attorney with the Durango-based Energy Minerals Law Center, which is suing Montrose County over the Piñon Ridge special-use permit, said: “$12 million to clean up a $150 million project seems out of line, and with the existing cleanups – the Cotter Mill – the most recent numbers are coming in around $43 million.”

Currently the state’s only uranium mill, Cotter Corp’s Cotter Mill near Cañon City, is an EPA Superfund Cleanup site with its own contamination issues from the 1950s and ’60s. In an April Site Reclamation Plan filed with the state, Cotter put the cleanup price at $23.2 million and the Colorado Department of Public Health and Environment (CDPHE) countered with $43.7 million.

Besides imploring the state to demand a much higher surety bond from Energy Fuels, Stills generally questioned the strategy of using county and state permit approvals as a basis for rounding up more investors.

“[Energy Fuels] suggested that they would be able to raise a lot more money and capital to work with once they got the county permit, and if I’m correct, the stock price has dropped by more than half in that amount of time, so their ability to raise money just by announcing a permit, if that’s what it is, that’s a pretty questionable goal,” Stills said.

Energy Fuels’ stock was trading at 16 cents a share on Tuesday, down from 40 cents a share a year ago.

“It wouldn’t be the first operation that made all of their money by mining investors instead of mining the resource,” Stills added.

Taxpayers on the hook for industry catastrophes

CDPHE spokesman Warren Smith said the state will thoroughly review the Energy Fuels’ bonding proposal and make its own recommendation at the appropriate time.

“The worst case scenario would be, say, the company goes out of business and walks away and the state has to clean it up,” Smith said. “They have to have enough financial assurance that the state wouldn’t have to bring money to the table to do that.”

Smith also said there is precedent for the state rejecting an application on socio-economic grounds.

“Several years ago Cotter Corp. had an application for a radioactive materials license where they wanted to accept out-of-state waste to put into their impoundment, and we rejected that application due to the information that we had about the potential socio-economic impacts on the town,” Smith said. “Yeah, we can do that, and we have done that.”

Again, Energy Fuels’ Filas downplayed the financial concerns.

“It’s a moot point actually,” he said. “The bottom line is that, assuming the state approves our license, they are not going to give us the go-ahead until we place that bond money in their hands. It’s not like they have to worry about it too much; it’s just not going to happen without a reclamation bond in place for whatever amount that they think is necessary.”

A series of meetings on the project will be held in southwestern Colorado in June, starting with a CDPHE public-input session from 6 to 9 p.m., Tuesday, June 8, at the Montrose Pavilion in Montrose and followed by a special session of the San Miguel County board of commissioners from 4 to 7 p.m., Wednesday, June 9, at the Telluride Firehouse in Telluride.

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Uranium pollution revealed to be more than 13 times state standards was contaminating Ralston Creek, and the state rejected a cleanup plan proposed by Cotter, which owns the Cotter Mill uranium processing facility near Canon City and several uranium mines around the state.

The mining division required Cotter to begin water treatment at its Schwartzwalder uranium mine west of Arvada by July 31.

“The mining division took bold and decisive action to protect our drinking water,” Jefferson County Commissioner Kathy Hartman said in a release. “I am pleased to see immediate action to protect Ralston Reservoir.”

Uranium levels at the mine itself exceeded 1,400 times Colorado water quality standards.

“Thousands of people depend on clean water from Ralston Reservoir, and we can’t afford for Cotter to drag its feet cleaning up their mess,” said Matt Garrington, program advocate with Environment Colorado and a Jefferson County resident. “The mining division deserves praise for taking strong action.”

Cotter was the focus of a tough new uranium mill processing bill this legislative session, requiring cleanup of mills before expansion is allowed.

“I subscribe to the all-of-the-above energy policy, which means nuclear should be a big part of our future, and the benefit of nuclear power is its green footprint,” freshman U.S. Rep. Jason Chaffetz said. “I recognize it comes with great risk, but if you’re serious about greenhouse gasses, then you should be a serious supporter of nuclear development.”

That sentiment echoes those of Colorado Sen. Mark Udall, a Democrat, who has introduced a bill aimed a sparking a nuclear power revival in the United States despite serious trepidation about potential accidents and waste storage nightmares among both environmentalists and the general populace.

Nuclear power currently accounts for about 20 percent of the electricity in the United States (mostly on the East Coast), but following accidents at Three Mile Island in Pennsylvania and Chernobyl in the Ukraine in the 1970s and 80s, no new nuclear plants have come online in the U.S. in decades.

Chaffetz wants to see 100 new nuclear plants built around the country in the coming years, and he’s confident technology can mitigate past contamination problems linked with mining and milling uranium – historically a big industry in far western Colorado and eastern Utah – as well as waste-storage issues associated with spent fuel rods.

Utah is currently embroiled in a storage controversy related to trainloads of depleted uranium from Cold War-era weapons production being stored at an Energy Solutions facility in Clive, Utah. And communities in Colorado have banded together to fight both a uranium mill proposal near Montrose and a uranium mine plan near Fort Collins.

New uranium claims have been filed across the West in anticipation of another nuclear power boom, as the industry finds more and more bipartisan support because of lower greenhouse gas emissions and a growing rep as an alternative to dirtier-burning coal, oil and natural gas. But opponents are concerned about impacts on national parks and other wild places and the risks of transporting yellowcake and nuclear waste across state lines.

Even though his Third Congressional District doesn’t include Green River or the historic uranium-mining hotbed of Moab, Chaffetz supports a statewide push to revive the industry. He said fears of increased mining impacting tourism in and around the state’s great national parks in southeastern Utah – a frequent recreation destination for Coloradans – are overblown.

“That’s a scare tactic that’s more rooted in hyperbole than it is reality,” he said. “The reality is we have borders for these national parks. These environmentalists argue there needs to be some big buffer zone, and I don’t buy into that. If we don’t want to be left beholden to the terrorist nations around the world, we’re going to have to get serious about nuclear development.”

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Paradox Valley, Montrose County

According to the Telluride Daily Planet, documents challenging the completeness of the Energy Fuels’ application were sent by the Sheep Mountain Alliance in time for state consideration but, according to state officials, they were never received.

The Piñon Ridge mill proposed for the Paradox Valley sparked a massive debate before the Montrose County commissioners this past fall, deeply dividing economically strapped locals and residents of nearby San Miguel County.

The area produced some of the first yellowcake enriched for nuclear weapons during World War II and the Cold War and is now being eyed to supply a potential nuclear-energy resurgence supported by Colorado Sen. Mark Udall. But uranium mining in Colorado also has a checkered environmental past.

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According to the Montrose Daily Press, commissioners Ron Henderson and Gary Ellis rejected a resolution supporting the 2010 Census because it will actually count people living in the country – information that might be generally beneficial for Uncle Sam.

(Staver: Flickr)

“I just don’t think it’s right (to count undocumented residents). I just don’t think it’s being done correctly,” Henderson told the paper. “It’s not that we’re stopping it, but our government needs to wake up. It’s not waking up.”

Ellis balked for the same reason, rejecting the Census Bureau’s notion that residency status is not relevant in the process of conducting an accurate population count, according to the paper. “Otherwise, from my perspective, we really kind of support people who are violating our laws,” he said.

Commissioner David White, who was clearly exasperated with the invasion of liberal greenies from Telluride during the uranium hearings, apparently doesn’t share Henderson and Ellis’s take on the 2010 Census. He voted in favor of the resolution.

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The EPA is reportedly giving the public until Dec. 24 to comment on Powertech’s proposed Centennial Project, which has been formally opposed by the nearby cities and towns of Fort Collins, Greeley, Nunn, Wellington, Ault and Timnath.

U.S. Rep. Betsy Markey

“There is fear that this process can jeopardize water quality and may well be inappropriate for use in an area so close to a population center of 300,000,” Markey and Bennet wrote in their letter to a regional EPA administrator. Markey and Bennet would like to see the surrounding populace involved in a possible rule making by the EPA that would provide federal oversight under the federal Safe Drinking Water Act.

Notable in his silence on the project was Sen. Mark Udall, a Democrat like Markey and Bennet, but one who has raised eyebrows of late for his outspoken support for reviving the nation’s nuclear power industry as a nearly carbon-neutral source of electricity, albeit one that produces highly toxic waste and includes upfront mining with a very checkered environmental past in the state.

Udall in the past has told the Colorado Independent that nuclear power must be part of the nation’s energy mix, and that the uranium mining that comes with it – including a proposed mill in western Montrose County — must be done using best environmental practices to avoid the pollution problems of the past. Still, there are some serious skeptics out there warning against fully embracing one of the most expensive forms of electrical generation.

Denver-based Environment Colorado Monday issued a release claiming that the EPA “has failed to consult with the public and communities and to engage in a public rulemaking on its regulatory program.” The group praised the letter from Markey and Bennet.

“The risks of the Powertech uranium mine are too great to leave citizens, physicians, and public health experts out of the decision-making process,” Dr. Cory Carroll, a past president of the Larimer County Medical Society and a practicing family physician in Fort Collins, said in the release. “This is a complicated process that needs transparency and must be conducted openly with the community.”

An editorial in the Los Angeles Times over the weekend called nuclear too costly and too time-consuming to be a reasonable solution to global climate change:

“Nuclear energy is not a reasonable solution because plants take too long to build and cost far too much … The last time there was a wave of nuclear construction in the United States, it took an average of nine years to build a plant, meaning we wouldn’t see the first one until at least 2018 — too late to play any significant role in meeting the Senate climate bill’s goal of cutting emissions 20 percent by 2020.

“Renewable power sources such as solar, wind and geothermal are getting cheaper over time, even as nuclear gets more expensive. And renewable-power plants can be built almost immediately, without the long permitting delays faced by nuclear reactors.”

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President Obama and his family will take a trip the Grand Canyon Sunday, just days ahead of a congressional junket to the site led by Obama’s GOP opponent for the White House last year, Sen. John McCain, R-Ariz.

McCain will be joined by current Colorado Sen. Mark Udall and former Colorado senator and now Interior Secretary Ken Salazar, both Democrats, in the tour next week.

Salazar recently called a timeout on new uranium mining claims on public lands near Grand Canyon National Park while the administration weighs withdrawing up to 1 million acres of national forest from potential uranium mining and Congress considers revamping the 1872 mining law to provide hard-rock mining royalties and create a fund for mine pollution cleanups.

Rekindled interest in nuclear power around the world has led to a boom in uranium mining across the West, with new claims also on the rise in Colorado.

At a hearing in Montrose County Thursday night, the county commissioners weren’t expected to make a decision on a permit application for a uranium processing mill near Nucla, but they were likely to hear a lot of public outrage, including possibly from past critic actress Daryl Hannah.

According to the Montrose Press, a final decision isn’t likely until September.

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