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Posted: 5:33 PM- WASHINGTON - In a move that may mean the death of Private Fuel Storage's plan to store nuclear waste in Utah, the Interior Department today rejected the lease to build the facility.

"We just wanted to put a spike right through the heart of this project and this does it," said Sen. Orrin Hatch today after being notified of the agency action.

In a pair of decisions, spanning 47 pages, the department rejected the Private Fuel Storage plans for transporting waste to the site and, based on that decision, disapproved the PFS lease.

"Upon weighing the benefits to the band against the significant uncertainties and other factors discussed below, we conclude that it is not consistent with the conduct expected of a prudent trustee to approve a proposed lease that promotes storing [spent nuclear fuel] on the reservation," James Cason, associate deputy secretary of Interior, wrote.

The Nuclear Regulatory Commission had issued a license to PFS, a consortium of electric utilities, to store 44,000 tons of spent nuclear fuel on the Skull Valley Goshute Indian Reservation, contingent upon the Interior Department's approval of a plan to transport the waste to the site.

Sue Martin, spokeswoman for PFS, said it may be premature to declare the project dead.

"We do need to see the record of decision and look at it in some detail before we get a good feel for what our options are. I believe Senator Hatch would lead you to believe we have no options and I'm not sure that's true," Martin said. "We'll have to see. Stay tuned." A rail line had been identified as the best way to deliver waste to the Skull Valley site in a 2001 environmental impact statement that took three years to complete. But in December, at Hatch's urging, the agency backtracked, agreeing that enough had changed since the rail line was reviewed to warrant reconsideration.

Today, the Bureau of Land Management rejected the rail line and an alternate plan to transfer the waste from rail cars to trucks and drive it to the Skull Valley reservation.

Without a way to get the waste to the reservation, the Bureau of Indian Affairs, which is required to approve the lease, refused to give its approval to build the PFS facility, essentially invalidating the lease.

"This is the best news I think our state has seen in recent years," Gov. Jon Huntsman Jr. declared. "And it's one that people have fought very hard for and we're there. We can finally put a period at the end of the sentence." Huntsman says PFS officials may say the project is still breathing, but, "This makes it a done deal. It's over." PFS applied for its NRC license in 1997. The decision by Interior could mark the culmination of nearly a decade of resistance by Utah leaders, although the Interior Department decision could be challenged in court.

"We need to sort through the ashes and put out a few embers maybe, but other than that it's stone cold dead," Hatch said. "It couldn't happen to nicer people." Since the NRC voted to approve the PFS license in September, Utah's congressional delegation pushed through legislation creating the Cedar Mountain Wilderness Area adjacent to the Skull Valley reservation, blocking the rail access to the site. Several of the main financial backers of the PFS plan have said they will not help fund construction.

And efforts are underway in Congress to create at least one and possibly several government-run interim storage facilities, potentially making private storage unnecessary.

In May, Hatch and Sen. Bob Bennett wrote to the BLM, arguing the wilderness designation made it impossible for PFS to build the rail line to the reservation, and that an alternate plan - to build a station to move the nuclear material from trains to trucks and drive it to the reservation - was full of holes.

There was no security plan for the proposed transfer facility, it would violate the land management plan for the area, would hurt Air Force training on the nearby Utah Test and Training Range and would be a terrorist target, the senators argued.

The BLM received more than 4,500 letters, mostly from Utahns opposed to the nuclear waste site.

"These are the largest nails in the coffin, but we know the nuclear industry is desperate to transfer the risks and liabilities away from their own users and to other states," said Vanessa Pierce, director of the Healthy Environment Alliance of Utah. "It just goes to show that when citizens speak up loud and clear, they have more power than they imagine." Rep. Chris Cannon said he expected the Interior Department to reject the PFS plan.

"PFS has never made sense," Cannon said. "We should be very pleased that Interior has done what we asked them to do." Rep. Rob Bishop, R-Utah, said the decision was a huge win for Utah and especially for the military and its test and training range, which would have abutted the proposed nuclear waste storage site. "They were looking for good reasons and I think we gave them good reasons and I applaud the Interior for their decision," Bishop said.

"I wish it would have been resolved sooner," said Rep. Jim Matheson, D-Utah. "I don't know anyone in America who wants nuclear waste thrown in their backyard."

-- Tribune reporters Thomas Burr and Judy Fahys contributed to this report.