It looked like a great deal at first.
The U.S. Department of Energy, facing a massive $900 million nuclear cleanup at the Hanford facility in Washington State over the next several decades, wanted to buy $75 million worth of a specialized ceramic material used to clean up nuclear sites by converting radioactive waste into a form of glass.
So it turned to the only approved manufacturer in the world: a company in Falconer called RHI Monofrax. The relationship, which hasn’t been formally sealed with a signed contract but is all but inevitable because there’s no other source, could help ensure jobs for the nearly 250 employees at the plant, which is the largest employer in the Jamestown area.
But RHI, a subsidiary of a global publicly traded giant based in Austria, is now having buyer’s remorse. That’s because the federal government, for budgetary reasons, now plans on ordering and purchasing the glass contact material in small amounts over 25 to 35 years, not in bulk over a handful of years as RHI had expected.
That means one of the plant’s five kilns – 20 percent of its production capacity – would essentially be tied up for a quarter of a century because the nature of the work and the chemicals involved. Production itself would not take long each time, so the machine would have to either sit idle for the rest of the year until it’s needed again or be thoroughly cleaned each year before it could be used for anything else, only to be contaminated again. That’s costly.
And the amount of material it would produce each time is too little to profitably heat it to keep it continuously running as an alternative.
“It’s not allowing us to use our assets in the future,” said RHI President Daryl Clendenen. “We’re trying to change our business and do things to compete in this global economy. We just need that flexibility.”
As a result, company officials fear the long-term contract – at least the way the Energy Department is proposing – would be damaging to the company, threatening the plant’s future profitability and employment.
“The Department of Energy slow walking our contract has put RHI Monofrax in Falconer in a dangerous place,” Clendenen said.
Enter Sen. Charles E. Schumer. At a news conference at the company’s plant in the Jamestown suburb, New York’s senior U.S. senator on Monday called on the federal agency to speed up its procurement plans over a four-year period instead of stretching it out over 25.
“They currently plan on buying them in dribs and drabs over the next 25 years. This schedule must be sped up, so that RHI Monofrax can meet production demands and help with the disposal of nuclear waste across the country,” Schumer said.
He also fired off a letter to departing Energy Secretary Steven Chu, warning that the department’s decision to slow down the orders will not only harm the company’s competitiveness and put jobs at risk, but would also delay the nuclear cleanup at Hanford, and could leave the government without any supplier if the RHI plant goes out of business.
Speeding up the orders provides more stability for both the government and the company, Schumer said, and would prevent delays in DOE’s progress on other cleanup sites. Stretching out the purchases is also more costly in the long term for DOE, Schumer said, although it looks better for the annual budgets.
“I’m urging DOE to have a shorter-term contract, which will keep all 250 jobs in Jamestown, maybe allow them to expand, and save the government money in the long run,” Schumer said. “It makes sense for both the Department of Energy and for jobs in Western New York that they come to an agreement that Monofrax can live with, and that agreement would mean that they’d produce all the materials they needed over a three-, four-, or five-year period.”
RHI Monofrax is part of RHI AG, which serves more than 10,000 customers in the steel, cement, lime, glass, nonferrous metals, environmental, energy technology, chemical and petrochemical fields, making bricks, mixes, mortars and other products used in furnaces and kilns that operate at very high temperatures.
The Monofrax plant in Falconer, whose customers include Corning, was originally part of the Carborundum Co. but was sold to Cookson Group Plc’s Vesuvius Group in 1997. It became part of RHI a decade later. It has competitors in Japan, France and China that also make materials used inside furnaces to heat substances to high temperatures, but it’s the only one approved for the particular products used for nuclear waste, which it has developed over 30 years of research and testing.
At issue is a process called vitrification, in which waste and other substances are heated to extreme temperatures and then cooled rapidly until they mix into a form of glass that is more stable and can be safely stored in cylinders for a long time without the threat of exposure.
RHI Monofrax’s electric art furnaces make “fused-cast” ceramic refractory materials that line the furnaces, or melters, that DOE will use to vitrify 53 million gallons of radioactive waste at Hanford. The plant, which was built in the late 1940s, has been supplying “melters” for nuclear vitrification for decades, including for the Savannah River and West Valley projects.
“We know they’re going to need a lot more melters, and we’re the only producers in the world that can do this,” said Clendenen. “So it’s a matter of time before they place the orders, but they’re behind.”