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News: Analysis & Commentary: THE ENVIRONMENT
NUCLEAR WASTE WITH NOWHERE TO GO
One company's troubles cast doubt on national policy
It's a problem that could drive any self-respecting governor batty. Since he was elected in 1990, California Governor Pete Wilson has been trying to build the Ward Valley nuclear dump. Today, five years after the waste facility was to have been completed on a pristine expanse of Mojave Desert, it looks as if the dump may never get dug.
The latest problem: The company licensed to build the dump, American Ecology Corp. of Boise, Idaho, seems to be in deep financial trouble. The company's annual report, filed nearly two months late, on May 20, shows a $49.8 million loss on $67.9 million in revenues for 1995. The report also includes a warning from auditors that American Ecology's problems "raise substantial doubt about the company's ability to continue as a going concern."
American Ecology Vice-President Richard F. Paton says that "bankruptcy is highly unlikely" and adds that "we are confident we will rebuild the company to its full strength and potential" after digesting two acquisitions. But within the past year, according to the company's June, 1995 quarterly earnings report, American Ecology's lender, Texas Commerce Bank, "informed the company that...[it] was in default." American Ecology says that it is now in compliance with the bank's terms.
American Ecology's financial woes cast doubt on the future of a nationwide policy to bury low-level radioactive waste. California has been trying to implement a 1985 federal law requiring states to dispose of nuke waste through 11 multistate pacts, and it licensed American Ecology to do so. If the company fails, state officials say they won't waste another decade trying to open the dump.
Dump supporters insist the facility is essential for California's economic health because it will handle waste for key industries in the region. Critics, though, charge that American Ecology isn't capable of handling the waste. "American Ecology's record is horrible," says Senator Barbara Boxer (D-Calif.).
SUPERFUND WOES. Indeed, the company has long been dogged with problems. In Kentucky, American Ecology's Maxey Flats dump was put on the Environmental Protection Agency's Superfund list in 1986. Illinois filed a suit against the company in 1978, seeking $97 million in damages after radioactivity polluted a lake near American Ecology's Sheffield dump. More recently, in October, 1995, U.S. Geological Survey (USGS) data surfaced showing that radioactive waste had long been leaking from the company's site in Beatty, Nev.
American Ecology says the Beatty leakage occurred when workers improperly dumped liquid wastes in the facility, and they were immediately dismissed. Paton says the Maxey Flats dump was listed after American Ecology was taken off the project. As for Sheffield, Paton says American Ecology paid an $8 million fine and is cleaning up the problems.
Still, the USGS findings couldn't have come at a worse moment. Critics now worry that the company's current plan to dig unlined trenches at Ward Valley could result in contamination of the nearby Colorado River. American Ecology insists the design is safe because the waste would be placed in sealed containers before burial.
PRESIDENTIAL POLITICS? Now, the new project, which was to generate $50 million in annual cash flow, is being held up for further review by the U.S. Interior Dept., which must give title to the land to California before construction can begin. And Washington seems skeptical. The company is "using 1950s technology for a facility that will have to operate well into the 21st century," says Deputy Interior Secretary John R. Garamendi. Paton calls Garamendi's statement "inflammatory." He says the company's earlier problems stemmed from unclear regulatory requirements in an infant industry. Moreover, he contends that President Clinton is holding up the land transfer in a ploy to secure campaign support in California.
The company's board has brought in new management, headed by Chief Executive Jack K. Lemley, the former construction chief on the Eurotunnel under the English Channel. Still, that may not be enough. The company has yet to reschedule its canceled May 22 annual meeting. And its shares have fallen from a high of 18 in 1992 to 1 3/4 on May 29. At this rate, American Ecology may not be around long enough to prove its critics wrong.By Eric Schine in Los Angeles