NRC Ruling in New Mexico Moves

!±8± NRC Ruling in New Mexico Moves

"The judge's decision was wrong," yelped environmental activist Chris Shuey into his cell phone, during a chat with StockInterview.com this past Friday. "It sets a horrible example for other mining companies." Shuey, whose Southwest Research and Information Center is based in Albuquerque, New Mexico, clearly didn't like the recent federal ruling in favor of Texas-based Uranium Resources' (OTC BB: URIX) subsidiary, Hydro Resources Inc. (HRI). For nearly two decades, Southwest Research and Information Center (SRIC) and Chris Shuey have clung to a fanatical position: Uranium mining is bad. Federal and local government regulatory panels disagree, having voted SRIC and Mr. Shuey down every step of the way.

A January 6th ruling by a three-judge panel of the Atomic Safety and Licensing Board in Rockville, Maryland shot down Shuey's challenges of radiological air emissions. "The NRC (Nuclear Regulatory Commission) and the judge continue to support mining," Shuey lectured into his mobile phone. "We continue to legally challenge." For more than eight years since the NRC granted HRI a materials license to perform ISL mining at four sites in McKinley County, SRIC has engaged in what the licensing board calls "protracted litigation" to stop HRI from supplying much-needed uranium for U.S. utilities. The recent federal ruling stated, "HRI's operations will not be inimical to public health and safety."

Other uranium companies in the area rejoiced on the ASLB ruling. According to an historic geological report, authored by McLemore and Chenoweth in 2003, suggested about 588 million pounds of uranium remains after the area produced 348 million pounds through year 2001. An asset valued at greater than billion, and growing more valuable each month, is certainly worth celebrating. The recent ruling may help accelerate the permitting and development of uranium assets in New Mexico.

"It helps that the regulatory community shed light on the inaccuracies, and on the disingenuous approaches the anti-nuclear contingent brings to the argument," explained Juan Velasquez, Vice President of Environmental and Regulatory Affairs for Strathmore Minerals (TSX: STM; Other OTC: STHJF) in a telephone interview from Strathmore's permitting office in Santa Fe, New Mexico. "Anything that moves those properties closer to production is a good thing for Strathmore, for the environment and for the country as a whole, as we move forward and look toward energy independence." William Sheriff, Director of Corporate Development for Energy Metals (TSX: EMC), agreed, "I think the rulings by the NRC (on URI, and HRI's applications, are very positive. It's just another step toward production." Dallas-based Sheriff is considered one of the leading prospect developers in the United States. Energy Metals Corp also plans to develop properties in New Mexico's Grants Uranium Belt over the next decade. Velasquez, who was now more optimistic Strathmore's Church Rock project would move forward to production, added, "The decision gives some faith to those of us that are regulated that the NRC does use common sense in coming to its decisions."

StockInterview.com solicited an opinion from a Santa Fe attorney not involved in the recent case, but who was familiar with the ruling. While asking that he not be named in this article, the lawyer stated, "It was a very reasonable decision, and what one might expect. The decision was scientifically sound." Chris Pugsley, HRI's attorney at the Washington, DC-based law firm Thompson and Simmons, which defended the case, echoed that attorney's sentiments, saying, "It was a decision based upon sound technology and extensive industry experience. The ruling was an endorsement that ISL mining is environmentally safe and will be the future of the domestic uranium mining industry." Pugsley added, "This was sound science and the proper interpretation of the Nuclear Regulatory Commission's regulations and requirements." John DeJoia, Strathmore's Vice President of Technical Services, concluded, "It makes me feel very optimistic about the production of uranium, domestically and especially in the Gallup (New Mexico) area. It validates the original determination by the NRC."

These weren't the first legal setbacks for SRIC. In November, New Mexico's McKinley County Water Board denounced SRIC's allegations of groundwater contamination, a cause the environmental group championed for a decade. The Water Board criticized the group, writing, "What we find however, are unsupportable propositions. The expert witness from the Southwest Research and Information Center provides lots of speculation, theories that could never be proved or disproved and headlines of gory consequences. This is not science. Science asks that we look at the data and come to a conclusion based on the evidence presented." They concluded, "The mining operation as proposed by HRI and approved by the Nuclear Regulatory Commission is safe and effectively protects our groundwater sources."

In a July 20th ruling, the ASLB used stronger language, labeling much of SRIC's arguments of possible contamination of Crownpoint water wells by HRI's operations as "insubstantial" and "disingenuous." In a separate January 6th ruling, the ASLB described a key SRIC claim as a "groundless assertion." It has been one defeat after another for SRIC and their lead attorney, Eric Jantz. His law firm, New Mexico Environmental Law Center, had recently hosted "A Special Evening with Ted Turner," the maverick billionaire, as a fund raiser to help stop uranium mining. On January 11th, five commissioners comprising the full commission of the NRC rejected SRIC's appeal. They refused an SRIC petition to review the groundwater case. Strathmore's Velasquez said of the recent legal decisions nullifying SRIC's challenges, "If you are an environmentalist, it has to make you wonder at what point you are going to stop being taken seriously." As the spot price of uranium continues its march to /pound and higher, the SRIC voice may need to find a new audience or a new cause.

ISL Mining and "Pristine" Groundwater

According to the World Nuclear Association (WNA), "ISL mining means that removal of the uranium minerals is accomplished without any major ground disturbance. The WNA explains ISL, or In Situ Leaching. as follows, "Weakly acidified or alkaline groundwater with a lot of oxygen injected into it is circulated through an enclosed underground aquifer which holds the uranium ore in loose sands. The leaching solution with dissolved uranium is then pumped to the surface treatment plant." According to the WNA, over 20 percent of the world's uranium is mined using the ISL method. At least four uranium companies plan to develop ISL operations in New Mexico: Uranium Resources (URI), Strathmore Minerals, Energy Metals and Max Resources (TSX: MXR). URI, Strathmore Minerals and Energy Metals specifically plan for the development of operations in the Churchrock or Crownpoint areas. None of the properties are located on the Navajo reservation.

One of the anti-nuclear movement's arguments about ISL mining is that the injected water can not be contained. In the SRIC house organ, Voices from the Earth, Mitchell Capitan, a Navajo activist, is given top billing in the Spring 2005 edition. Pumped up as a former Mobil Oil lab technician, SRIC has mysteriously made Capitan an expert on ISL mining. In his interview, Capitan said, "Mobil was doing a pilot project with the in situ leach mining west of Crownpoint. I worked in the lab with the engineers. And no matter how hard we tried we could never get all the uranium out of the water, so Mobil gave up. We closed the project."

Craig Bartels, president of Hydro Resources whose parent company Uranium Resources helped pioneer ISL mining in the United States, differs with Capitan's assessment of the Mobil Oil closure. "It is incorrect for someone to say Mobil shut down ISL because they could not contain it. It's also incorrect to say that Mobil shut down because they could not restore, or clean up, the water." Bartels explains what did happen, "They ran a pilot plant, including restoration, in the early 1980s. When the price (of uranium) dropped dramatically, they plugged that well field and got out of the business." Bartels believes Mobil "would be out there today, if the price had stayed up."

Nonetheless, SRIC and Capitan's grass roots Navajo group, ENDAUM (Eastern Navajo Dine Against Uranium Mining) continue arguing that ISL mining would contaminate the ground water and that ISL process is flawed or dangerous. Dr. John Fogarty, Chief of Staff for the Indian Health Service Hospital in Crownpoint, New Mexico, argued as the ad hoc medical expert, "The mining company intends to inject chemicals down into the aquifer, next to the community water supply. Those chemicals will leach, or strip the uranium off of the rock into the aquifer creating basically, a toxic soup."

Unfortunately, Dr. Fogarty failed to describe the "chemicals" used in ISL mining. The lixiviant solution commonly used in the United States is sodium bicarbonate, or as known in the kitchen, baking soda. The U.S. Environmental Protection Agency (EPA) describes this process, "The extraction of Uranium using injection wells is the most prevalent mining technique for this mineral. An injection well is drilled to the formation containing the mineral salt." The EPA describes the steps of the ISL method:

"The process used for the extraction of the uranium salts includes:

o Injection of a leaching solution, called lixiviant, into the mineral containing formation;

o Allowing for adequate contact of the lixiviant in the mineral zone;

o Extraction of the nearly saturated lixiviant to the surface;

o Separation of the uranium salts from the lixiviant."

In an interview with world-renown nuclear physicist Dr. Fred Begay, who is also Navajo and resides in the Los Alamos (New Mexico) area, he described to StockInterview.com the chemicals used in ISL mining, "What you pump down in there is baking soda." We asked Dr. Begay, "That's it?" He compared it to working in the kitchen and the procedure was as safe as baking bread. What about water contamination? Begay responded, "The uranium is already there." And because the uranium is already there, the groundwater has an a priori contamination.

Bartels also disagreed with Dr. Fogarty's accusation. "We hear this all the time: 'The water is pristine drinking water.' That is not at all correct. The water is already toxic." Bartels carefully explained why the water in question is already damaged goods, "Any place where there is a commercial ore body, that water is not going to be fit to drink. The ground water is already contaminated." He pointed out, "There is a huge amount of uranium all through this area, not just in this aquifer but in the overlying aquifer that they call the Dakota Sandstone." In all, about one billion pounds of uranium may have been scattered throughout the area before uranium mining began in the 1950's. In comments he made January 11th to the Gallup Independent newspaper HRI's Mark Pelizza pointed out SRIC's hypocritical stance, "It appears that fund raising is a driving force for their rhetoric... they completely ignore the health effects of that same radon gas from the uranium ore body if produced directly as drinking water - instead, they call this water 'pristine,' and do not alert people to its hazard. Why is that?"

Radon Gas and ISL Mining

What about the radon released during the mining of uranium? "If you have any commercial quantity of uranium, the radon is already there," explained Bartels. "But, we don't do anything to it. We don't mobilize it. We have no effect on it, other than we are not allowed, and we won't release it to the atmosphere."

Why did the NRC rule in favor of HRI that ISL mining would not be a danger to the public health? Bartels described the process, "We use pressured vessels. It is contained in the solution that goes around and around. Everything comes up to the surface but doesn't get into the atmosphere. There is a model that simulates and estimates how much radiation dose you are releasing to ensure that the health of the people in the surrounding area is not affected."

Velasquez was adamant about SRIC's air emission claims, "The representations they make with regards to radon are simply unsupportable and incorrect." Few realize how common radon gas is found throughout the earth. Velasquez added, "You and I release radon every time we turn over a spade of dirt in our garden. The single largest emitter of radon gas in this country is the agricultural industry because they till the soil. Nobody is upset about that." Scott Heaberlin writes in his widely read treatise, A Case for Nuclear Generated Electricity (Battelle Press, 2004), "Because uranium is essentially everywhere on the planet so is radon."

Highly respected Strathmore Minerals President David Miller, who has served as an ISL geological consultant to the International Atomic Energy Agency and is a three-term Wyoming legislator, believes ISL mining will actually reduce the radon problem for the Navajos, "Removing the uranium now and moving the uranium off the project will lower future radon gas generation in the area." He appealed on the basis of common sense that the Navajos were doing a disservice to their own health, "If the Navajos allow uranium mining on the reservation, then trillions of future radon atoms will not be formed on the reservation."

The SRIC panic concerning background radiation may be for naught. In a General Accounting Office report, entitled, Radiation Standards (June 2000), stated, "... we examined 82 studies, which generally found little or no evidence of elevated cancer risk from high natural background radiation levels... Overall the studies' results are inconclusive, but they suggest that at exposure levels of a few hundred millirem a year and below, the cancer risks from radiation may either be very small or nonexistent." To put this in perspective, by taking a chest x-ray in your doctor's office, you are exposed to between 20 and 40 millirem (mrem) of radiation. Those living in Gallup, New Mexico, the largest city near the Church Rock uranium projects, would get an annual dose of about 60 mrem. The Nuclear Regulatory Commission's annual permissible exposure to radiation is 5,000 mrem. By virtue of where they live, some on this planet continue to survive despite extraordinarily strong terrestrial sources of very high radon concentrations. A few places in Europe can give inhabitants of 5000 mrem per year. In Iran, Sudan and Brazil, one might get up to 3800 mrem annually. Some places in India can dose the locals with up 1500 mrem per year.

Radon studies have been conducted. The prestigious New England Journal of Medicine published a study entitled, "Residential Radon Exposure and Lung Cancer in Sweden" (January 20, 1994). The scientific team investigated residential radon as the principal source of exposure to ionizing radiation. The study concluded, "As a rule, the radon concentration decreases when a window is kept open. A window ajar can provide an exchange of 10 to 30 cubic meters of air per hour at a wind velocity of 3m per second. This may be two to three times the normal rate of air exchange and thus may reduce radon concentration by 50 to 70 percent."

The same principle applies to uranium mining. The industry has been using fans for several decades to vent radon gas and increase the safety of their labor force.