History
Uranium and the Atomic Age
Activities
In 1938, two German physicists, Otto Hahn and Fritz Straussman, discovered that a neutron caused the nucleus of a uranium atom to split (fission). Other experiments followed that showed that the energy released in fission was about 100 million times greater than a chemical reaction. At the onset of World War II, the military implications of this discovery were readily apparent to leaders of the major powers. Uranium was destined to find new, more important applications beyond its original use as a colorant for glass and ceramics.
In the early 1940s, U.S. intelligence regarding Germany's promising nuclear research activities dramatically hastened the United States resolve to build a nuclear weapon. The Manhattan Project was established for this purpose in August 1942. At the University of Chicago in December 1942, Enrico Fermi and his team created a controlled, self-sustaining chain reaction using uranium and a crude graphite-pile reactor. This discovery accelerated nuclear research being conducted in the U.S.
Enrico Fermi
In July 1945, Manhattan Project scientists tested the first nuclear device in Alamagordo, New Mexico, using plutonium produced from a uranium and graphite-pile reactor in Richland, Washington. A month later a highly enriched uranium nuclear bomb was dropped on the Japanese city of Hiroshima, and a plutonium nuclear bomb was dropped on Nagasaki, effectively ending World War II.
As the primary raw ingredient for the first generation of atomic weapons, uranium had quickly evolved to become a resource of vital importance to U.S. national security as well as to the security of the fragile, post-war Western alliance.
At the time, only the Federal Government could produce and use enriched uranium in the United States. In August 1946, President Truman signed the Atomic Energy Act (Public Law 79-585) that established the Atomic Energy Commission as the Federal entity responsible for developing and producing nuclear weapons as well as for research on other uses for nuclear energy. President Eisenhower initiated the Atoms for Peace Program in 1953 to promote peaceful uses and commercial applications of nuclear power. In 1954, Congress approved amendments to the Atomic Energy Act (Public Law 83-703) that provided direction and support for development of commercial nuclear power. (See our pamphlet "History of Nuclear Energy" for more information regarding this topic.)
President Eisenhower
Commercial Use
The 1950s were a decade of spectacular achievement in nuclear energy: only two decades after the initial experiments with nuclear energy sources, both peaceful and defense applications were well underway. The first nuclear-powered submarine, the USS Nautilus, was launched in 1954, and in 1955, Arco, Idaho, became the first U.S. town to be powered by nuclear energy using electricity produced at the Idaho National Energy Laboratory.
The rise of commercial nuclear power plants greatly expanded the demand for uranium. Building of the world's first large-scale nuclear power plant began in Shippingport, Pennsylvania, in 1954, signaling the start of a rapidly developed first generation of commercial nuclear power plants. By 1957, this plant was operating and producing electricity in the Pittsburgh area. In 1959, the first privately funded nuclear power plant, Dresden Nuclear Power Station, began operating in Morris, Illinois.
World's First Large-Scale Nuclear Power Plant
in Shippingport, PennsylvaniaTo meet the increasing demand for enriched uranium, the Department of Energy (DOE) built two gaseous diffusion plants. These plants began operating in 1954 and 1956, respectively, and supplemented the Government's already existing uranium enrichment operation.
Throughout this period, the Federal Government continued to provide all uranium enrichment services. In 1964, a major change came about with passage of the Private Ownership of Special Nuclear Materials Act (Public Law 88-489) that amended the Atomic Energy Act of 1954 (Public Law 88-489). This amendment made it possible for utilities to purchase and own enriched uranium for use in commercial nuclear power plants. The burgeoning demand for uranium greatly contributed to the growth of the U.S. uranium mining industry. By the end of the 1970s, 70 commercial nuclear power plants were operating in the United States.
However, a slowdown started in the mid-1970s due to a slower than projected increase in the demand for electricity and more stringent regulations that greatly increased the time and cost of constructing and licensing new plants. The accident in 1979 of Unit #2 of the Three Mile Island nuclear power plant near Harrisburg, Pennsylvania, contributed to the downturn, and by the 1980s, the whole U.S. nuclear industry was faltering. In 1984 alone, 16 nuclear power plant projects in the United States were canceled.
Three Mile Island Nuclear Power Plant near Harrisburg, Pennsylvania
Uranium enrichment had remained a Government function because of its continued strategic value for defense and research purposes as well as the prohibitively high capital costs associated with building uranium enrichment plants. However, increasing international competition from European suppliers and an evolving Russian presence in the enrichment market, combined with declining military requirements for highly enriched uranium, began to threaten the Government's continued dominance of the domestic and worldwide uranium enrichment market.
These developments strengthened the call by many parties for the privatization of the Government's uranium enrichment enterprise. They argued that the private sector could provide these services in a more efficient and cost-effective manner.
United States Enrichment Corporation
To improve efficiency and the competitiveness of U.S. uranium enrichment operations, the Energy Policy Act (EPAct) of 1992 (Public Law 102-486) created the United States Enrichment Corporation (USEC) as a wholly owned Government corporation to be privatized later. This was a first step in transferring the uranium enrichment business to the private sector. USEC was designed to operate as a business concerned with making a profit.
Under EPAct, USEC was given responsibility for operating DOE's enrichment plants, and for selling enrichment services to commercial customers. The plants were leased to USEC while DOE retained ownership. DOE also remained responsible for providing critical safety upgrades, overseeing cleanup activities, the management and disposition of depleted uranium from DOE's enrichment operations, and liabilities arising from DOE operations prior to July 1, 1993.
In response to the EPAct requirement that USEC submit a privatization plan to Congress within two years, a plan was submitted to the President and Congress in June 1995. The Treasury Department and the USEC Board of Directors announced in early 1998 that USEC would pursue a dual-path privatization process: merger and acquisition by a third party or an initial public offering of common stock. The sale of USEC was completed on July 28, 1998, through an initial public offering of USEC stock. At that time, USEC officially changed its name to USEC Inc. The U.S. Government will continue to monitor USEC's activities regarding national security, regulate gaseous diffusion plant operations for nonleased facilities, and oversee USEC's role as executive agent in the U.S./Russia Highly Enriched Uranium Purchase Agreement.
