Wyoming legislators aired a draft bill Thursday that would transfer oversight of the local uranium industry to state regulators.
The move is the first in a years-long process to obtain what is known as "agreement state status." The Nuclear Regulatory Commission regulates uranium mining but will transfer oversight to states that seek the responsibility.
In exchange, states must agree to follow federal standards and prove they have the capability to regulate the industry.
The push for state oversight comes from Wyoming's uranium producers. They argue that federal regulations are redundant and delay permitting, increasing costs and preventing new mines from benefiting from periods of high prices.
Uranium prices are in a slump, with yellowcake U-308 selling for $35.50 per pound.
"Industry is on the ropes," said Bob Tarantola, a lawyer representing the industry. "We saw an opportunity to cut costs and get permits done faster."
The state also benefits, he said, in the form of higher tax revenue and employment associated with increased production.
The proposal floated Thursday would kick off what promises to be a long process. The bill discussed would give the governor, through the Wyoming Department of Environmental Quality, authority to negotiate with the Nuclear Regulatory Commission over industry oversight.
It would also appropriate $1.2 million for the hiring of seven additional employees, who would oversee the industry. Three additional employees from within the DEQ would also be designated to oversee the sector.
State officials said they expect that it would take six years to establish Wyoming's program, though they noted that it might take less. But the DEQ needs to establish its uranium oversight program before the NRC will agree to transfer responsibility to Wyoming, said DEQ land quality division Director Nancy Nuttbrock.
Total startup costs associated with the program are estimated to be about $4 million.
Much of the debate among lawmakers Thursday centered on funding for the state regulatory program. The program's estimated $1.6 million in annual cost would be paid by the industry.
But the $4 million to establish the program would be paid out of the general fund.
Lawmakers adopted an amendment by Sen. Chris Rothfuss, D-Laramie, aimed at recouping that $4 million through fees levied on industry after the state program is established.
"If we can sell this as cost-neutral rather than a cost (to the state), I think it will be an easier sell to the Legislature," Rothfuss said, noting that he is a strong supporter of Wyoming assuming oversight of the industry.
Wyoming's uranium producers are split over the idea of paying for the startup costs, industry representatives said. Some feel that the measure would result in companies paying twice for their permits. Others see it as a worthwhile cost toward obtaining agreement state status.
Permitting under the NRC generally costs about $3.3 million. Under state oversight, that figure is projected to fall to about $1.2 million.
But overall they expressed pleasure with the committee's work.
"We strongly support moving toward an agreement state," said Ralph Knode, CEO of the uranium miner Strata Energy Inc. "The federal regulatory burden is overwhelming."
The committee agreed to finalize a draft at its next meeting. The draft will be presented to the full Legislature in January. Once it is approved, the governor will have authority to begin negotiations with the NRC.
Reach energy reporter Benjamin Storrow at 307-335-5344 or firstname.lastname@example.org. Follow him on Twitter @bstorrow