Uranium enrichment plant predicted to have $5 billion impact on E. Idaho economy

The decision by French-owned energy firm Areva Inc. last week to build a $2 billion uranium enrichment plant near Idaho Falls will provide a huge boost to the eastern Idaho economy with an estimated $5 billion worth of direct and indirect effects over a 30-year period, local economic development officials say.

The Regional Development Alliance of Idaho Falls conducted an economic impact study that estimates $3 billion in indirect and induced benefits to the regional economy through 575 indirect jobs created to service the plant and its employees; additional sales of raw materials, equipment, maintenance and transportation; and additional housing, banking and other consumer resources.
The effects will be felt not only through the 1,000 construction jobs created to build the plant over a seven-year period and the 250 permanent employees who will earn salaries starting at $68,000 per year, but also by additional jobs and sales in a wide range of industries. The sectors expected to gain the most include wholesale trade, truck transportation, industrial process supply and the food and beverage industry, according to the study.
“All of those things growing upon each other are going to help eastern Idaho as a whole,” said Linda Martin, executive director of Grow Idaho Falls. “There are about 16 different business types that would ultimately benefit from this.”
Areva announced on May 6 that the facility would be built 18 miles west of Idaho Falls, near the Idaho National Laboratory, where scientists have done research into nuclear energy since the 1940s. The plant is expected to begin enriching uranium by 2014.
The company chose Idaho over Washington, Ohio, Texas and New Mexico.
Company spokeswoman Laurence Pernot said the decision was based on a number of factors, including the availability of skilled workers, good geological conditions, land availability and an attractive package of tax incentives passed by the state Legislature this year.
Lawmakers agreed to cap the company’s property tax valuation at $400 million and to broaden a sales tax exemption for nuclear fuel production equipment.
Calculations by the Bonneville County assessor’s office for The Associated Press earlier this year indicated the plant’s tax assessment could be reduced to about $3.8 million annually under the $400 million cap. If the property’s taxable value were $2 billion, its annual payments could be around $19 million, according to those calculations.
With the sales tax exemption, if Areva buys $500 million worth of centrifuges and other production equipment, the company would save around $30 million, based on Idaho’s 6 percent sales tax.
State Senate Majority Leader Bart Davis, R-Idaho Falls, told The Associated Press that he was approached late last year about winning legislative support for the incentives.
“I was told we were competing with other states that were very aggressive in their economic incentives and this would be an important component,” Davis said. “We went after it.”
Not everyone is thrilled that state and federal officials succeeded. Andrea Shipley, executive director of the Snake River Alliance, said the immediate economic benefits of a uranium enrichment facility hide the long-term problem of what to do about nuclear waste.
“Not very many people are talking about the economic downfall of waste management,” she said. “There is no solution to nuclear waste. So cloaking nuclear waste as economic development poses a problem for the state.”
Shipley said the best way to meet energy and economic development needs in rural Idaho is to pursue renewable energy projects, such as the large wind farm now operating outside of Idaho Falls.
Areva still must get approval from local, state and national agencies, including a license from the Nuclear Regulatory Commission to construct and operate the facility. That could take three years, said Sam Shakir, general manager of Areva’s enrichment program.
Company officials stress the safety of the plant, saying Areva won’t win federal approval if regulators aren’t satisfied. Uranium at the plant will likely arrive from other states, Canada and France to be enriched, then shipped elsewhere for further fabrication before it’s sent to commercial nuclear reactors in other states. Areva plans to use separate U.S. Department of Energy facilities to dispose of the depleted uranium.