Unlocking Southside Virginia’s geologic treasure

Published on August 9th, 2010

Traveling through Southside Virginia it is hard to imagine that this was once a bustling hub of industry. This region once boasted one of the highest per capita incomes in the entire country. Unfortunately, battered by decades of factory closings and declines in the once robust tobacco-driven agricultural economy the region has fallen on hard times.

It is impossible to escape signs of economic distress that have descended on the region. Abandoned, decaying factories abound; shuttered store fronts dominate the empty shells of the once prosperous town and city centers; blighted neighborhoods and deserted shopping centers have become the signature marks of suburban life here.

The list of plant closings is long over the last three decades – Dan River Mills, Corning, TECHMA, Stanley Furniture, to name a few.
Danville, the region’s city-center, has been hit the hardest by the collapse of the textile and furniture manufacturing industries.

Nearly one in every six adults in Danville is out of work. Danville’s unemployment rate – 14% in May – is twice as high as Virginia’s 7% overall rate. Surrounding Danville, Pittsylvania County’s unemployment rate stands slightly better at 11%. In Henry County to the west, more than 14% of workers are unemployed, and in Halifax County to the east, 12% are out of a job.

To make matters worse, those who are employed continue to earn chronically low salaries and wages. The average Pittsylvania County worker earns just slightly more than half the average income earned by workers in the rest of the state.

Decades of economic decline have left an indelible imprint on nearly every facet of life here. Funding for public schools declined with the disappearance of the industrial tax base. Property taxes increase year after year to close the gap, adding a further burden to struggling farmers and unemployed homeowners. Residents often bemoan the “brain drain” that is depriving the region of its most talented, highly skilled, college-educated natives who have been forced to leave Southside in search of a viable economic future elsewhere.

Amidst all this economic turmoil there is a glimmer of hope that could help the resurgence of the region. The convergence of a global nuclear energy renaissance; the movement for American energy independence and a geologic treasure have put Southside on the doorstep of economic revitalization.

Geologic Treasure: The Coles Hill Uranium Deposit

In one of the most improbable, yet fortuitous geologic discoveries of modern times, a geologist traveling through Pittsylvania County in 1979 stumbled upon the largest undeveloped uranium deposit in the United States and the seventh largest such deposit in the world.

The deposit was found at the peak of the nuclear boom of the 1970s. Yet in an unexpected turn of events, its discovery preceded the Three Mile Island accident that precipitated the scale down of the nuclear industry in the United States during the mid 1980’s. In the aftermath of Three Mile Island, demand for new nuclear reactors and thus uranium in the U.S. plummeted, and development of the Coles Hill deposit was deferred.

In 1982 the Virginia General Assembly placed a de facto moratorium on uranium mining until the necessary regulations and permitting were developed. Subsequent studies were undertaken of the uranium issue, and in 1984 a study by the Virginia Coal and Energy Commission’s Uranium Administrative Group determined that the deposit could be mined safely without adversely impacting the local environment or public health. However, seeing no economic benefit from mining Coles Hill after the fall of uranium prices, their recommendations were never promulgated into law.

The original company that first discovered the deposit allowed its leases on the land to expire, and the promise of this mother lode of nuclear energy was all but forgotten. That is until a worldwide nuclear energy renaissance unfolded over the past few years, renewing hopes of tapping into its enormous reservoir of uranium–the foundation source of clean nuclear energy.

In 2007, the Coles and Bowen families – the owners of the land on which the deposit is found – along with a few dozen local investors formed the company Virginia Uranium Inc. to mine and mill the Coles Hill deposit.

With interest in the development of Coles Hill renewed and its economic viability restored, the Uranium Mining Subcommittee of the Virginia Coal and Energy Commission has initiated two studies to assess the socioeconomic impact and the impact on public health and the environment. The National Academy of Sciences, the nation’s most respected institution for scientific and technological research, is conducting the health and environmental study and will issue its final report and recommendations to the General Assembly in December 2011. The socioeconomic study has yet to begin; however, the Uranium Mining Subcommittee is close to selecting an independent research institution to perform the study. The final report of the socioeconomic study is also expected by December 2011.

Once the results of both studies come in, the General Assembly will consider whether to lift the moratorium and promulgate the necessary regulations to allow the development of Coles Hill.

The Coles Hill deposit spans across 200 acres of the 3,000-acre Coles Hill cattle farm and reaches depths of 1,500 feet. The deposit contains roughly 119 million pounds of uranium, enough to fuel Virginia’s current nuclear energy demand for more than 65 years or America’s total nuclear demand for more than 2 years. The entire deposit is estimated to be worth between $7 – $10 billion and promises a desperately needed economic boom for the entire region – in terms of jobs, local tax revenue and large-scale economic development. Many residents and public officials believe it could be the catalyst for a long-awaited economic turnaround of Southside.

An economic scoping study released by Lyntek Inc. in June spelled out just how significant the economic impact could be on the region. The project will create 250-350 temporary jobs during the first twelve month construction phase and sustain 300-350 permanent jobs through the 35-year duration of the operation. The average worker would bring in an annual income somewhere between $50,000 and $70,000, significantly higher than the median income of Pittsylvania County workers today.

Developing Coles Hill will also contribute millions of dollars to overstrained Pittsylvania County coffers and help relieve the tax burden on local property owners. The Lyntek scoping study forecasts an annual $20-$30 million direct windfall for the local economy from the purchase of goods and services from local companies such as heavy equipment and machine parts suppliers. And, through the multiplier effect that invariably accompanies major industrial development, Coles Hill would stimulate an additional $120-$180 million in economic activity each year.

Today, renewed hopes for the development of Coles Hill are propelled by the nuclear revival sweeping across the U.S. and the rest of the globe.

Nuclear Renaissance

Growing concerns over climate change and actions by governments to curtail carbon emissions have given rise to a nuclear renaissance across the globe. While the renaissance is still in its early stages and will take decades to fully materialize, there is no mistaking that the U.S. and the rest of the world stand on the cusp of a vast expansion of nuclear energy as a source of electricity.

Like wind or solar energy, nuclear energy produces virtually zero carbon emissions. Yet, it is significantly less expensive, far more efficient and far less land-use intensive than these often touted renewable sources. In terms of fuel efficiency, nuclear far outstrips its main base-load competitors, coal and natural gas. One ounce of refined uranium generates as much electricity as one ton of coal or 17,000 thousand cubic feet of natural gas.

The U.S. Department of Energy predicts that nuclear generation will increase by 20% over the next two decades, while the International Energy Agency forecasts a 300% increase worldwide over the next 40 years.

The world is expected to build 180 new reactors in the next decade, including 35 in China. Great Britain recently announced plans to double its nuclear output and generate 35-40% of its electricity from nuclear by 2030. India, Japan and South Korea are all undertaking similar expansions of nuclear generation and technology in their countries.

This vast increase of nuclear energy will require a commensurate increase in the global demand for uranium. Experts already predict at least a fourfold increase in demand for uranium over the next 30 years. The major producers of the world – Russia, Kazakhstan, Namibia, Canada, Niger, China and Australia – are ramping up production to seize their share of the new market. With America’s expansion of nuclear energy on the horizon, if the U.S. does not bolster our domestic production of uranium, we will become increasingly dependent on these dominant foreign producers.

Energy Independence

The Achilles heel of America’s nuclear renaissance and the reason why Coles Hill could play such a vital role is America’s current overwhelming reliance on foreign sources of uranium.

The U.S. currently imports 86% of our uranium from foreign countries, including one-third from Russia. For two decades, America’s reliance on Russia has served an altruistic and strategic purpose – U.S. utilities purchase civilian nuclear fuel down-blended from decommissioned Soviet-era nuclear weapons. However, beginning in 2013 when the so-called Megatons-to-Megawatts treaty expires, American utilities will purchase our entire Russian supply from Russia’s state-run uranium mining company Techsnabexport.

America’s reliance on foreign state-owned energy companies poses a serious risk to the stability and security of America’s energy supply. In the past, Russia has used its control of vital energy resources as leverage to pursue Russian strategic interests. Most recently, the Russian state-run natural gas export company shut off gas supply lines to Eastern Europe in the middle of the harsh winter of 2008, leaving millions of Eastern Europeans without heat or electricity for nearly a month.

The OPEC oil embargo of the 1970s also comes to mind as a cautionary tale against overreliance on imports from state-run energy producers.

Recent moves by the Russian government to expand its uranium holdings in foreign countries such as Kazakhstan, Namibia, China and Canada, as well as efforts to ramp up their own domestic production, give added urgency for the need to reduce our dependence on foreign supplies.

There is no doubt that Russia is undertaking an aggressive expansion of its global uranium holdings to strengthen its influence around the globe in pursuing its strategic interests.

Over the last six months, the Kremlin – through its state-owned nuclear company Rosatom – has been busy consolidating its control of uranium operations in many countries from which the U.S. purchases our supply. In February, Russian security officials muscled out the head of Kazakhstan’s state-run nuclear company to clear the way for Russian control of several uranium development projects in that country. The U.S. imports roughly 7% of our uranium from Kazakhstan.

Then, in late May, the Russians strong-armed the Namibian President into abrogating agreements with an Australian uranium company for the rights to mine several major uranium deposits there. Rosatom quickly signed agreements with the Namibian government to wrest control over these deposits and announced plans to invest more than $1 billion into their expansion. The U.S. imports another 7% of our uranium from Namibia.

Russia’s whirlwind global uranium tour most recently landed in Canada when in early June Rosatom bought a controlling stake in one of Canada’s largest uranium companies, Uranium One. The U.S. imports roughly 18% of our uranium from Canada.

Yet despite all of the economic and energy benefits that are propelling the nuclear renaissance, the global movement still encounters some resistance and obstacles that must be overcome before it can fully come to fruition. The development of Coles Hill is certainly no exception.

Safety, the Environment and the Road Ahead

Like any heavy industrial development project, Coles Hill is confronting concerns from some local residents and public officials about the impact of uranium mining on the environment, public health, and worker safety. Most of the concern centers around worries that the development of Coles Hill will repeat the legacy of uranium mining in Navajo communities of the 1950s and 1960s, which is a black mark on an otherwise safe and environmentally sound industry.

There is no doubt that the primitive methods of uranium extraction used on Navajo lands fifty years ago left behind a regrettable legacy of environmental damage and public health risks. However, comparing the safety record of an industry from 50 years ago with modern safety standards seems like a stretch. After all, in the 1950s and 1960s, automobiles did not have seat belts, air bags, anti-lock breaks or crash-resistant frames. They also did not have catalytic converters to remove toxic emissions and yielded abysmal fuel efficiency that would make today’s worst guzzlers look good by comparison. Since the 1950s, both industries have made enormous strides that have dramatically improved safety and reduced environmental impact.

In the 1950s and 1960s, the uranium industry was largely unregulated by the federal government and operated under conditions almost equivalent to those of the Wild West of the late 19th century. Today, the industry is the most heavily regulated in the U.S. It is overseen by a veritable alphabet soup of federal regulatory agencies, including the Environmental Protection Agency (EPA), Nuclear Regulatory Commission (NRC), Occupational Health and Safety Administration (OSHA) and the Mine Safety and Health Administration (MSHA), to name a few. These agencies have a record of stringent enforcement of the most rigorous standards for worker safety and the protection of air and water from radioactive contamination.

Numerous studies conducted by John Boice Jr., scientific director of the International Epidemiology Institute, in New Mexico, Colorado and Texas found virtually no difference in the prevalence and mortality rate of cancer between residents of mining and non-mining communities.

All of the rudimentary, unsafe practices that contributed to illnesses and environmental damage among Navajo workers and communities 50 years ago have long since been prohibited and are strictly monitored by federal regulators. Miners no longer smoke cigarettes in the mines – a practice that was perhaps the number one contributor to illnesses among Navajo workers. Advanced ventilation systems – nonexistent 50 years ago – have virtually eliminated the risk of worker exposure to radioactive radon gas.

The most significant improvement in terms of reducing risks to the health of residents surrounding uranium operations has been the introduction of modern storage systems for mine tailings, the waste material leftover once uranium has been extracted from the ore. It was extremely common in Navajo communities for workers, their families and other local residents to use tailings and other waste rocks to build adobe brick homes and for other construction purposes. The tailings were also improperly stored in exposed, makeshift structures that allowed material to easily escape and contaminate local drinking water supplies. The EPA and NRC have completely eradicated these egregious practices and now monitor the storage of tailings in advanced, impenetrable containment structures built to withstand the most severe weather events – including floods, tornadoes and hurricanes.

For years the French – who lead the world in the production of nuclear energy – have mined and milled uranium deposits in areas with remarkably similar population, climate, hydrological and geographic characteristics to Pittsylvania County without any adverse impacts on public health or the environment. French operations in Bessines, Ecarpiere and Lodeve are global models for the safe extraction of uranium and the proper, environmentally responsible storage of mine tailings. They are also excellent examples of how former open pit and underground mines can be fully restored to their original environmental contours and preserve the unblemished beauty of landscapes.

The National Academy of Sciences (NAS) study will undoubtedly leave no stone unturned in its study of the environmental and public health impacts of uranium mining in Virginia. If the NAS determines that uranium can be safely mined and milled in Virginia without harming public health or the environment, then the General Assembly should heed its recommendations and allow the development of Coles Hill. The General Assembly should pay close attention to the most exemplary safety models and other best practices identified by the study in crafting Virginia’s regulatory and permitting structure. In the meantime, the residents of Virginia can continue to educate themselves on the costs and benefits of developing our uranium resources and encourage our public officials to do the same.

The economic revitalization of an entire region and the energy security of our country are at stake. We need to make decisions based on facts and analysis and not on abstract fear of obsolete practices. The results of the studies should identify these facts, and the Commonwealth leadership can act accordingly.

By Ray Ganthner
As Published in Bearing Drift Magazine
August 2010

Ray Ganthner serves as Chairman of the Virginia Energy Independence Alliance.