The Department of Energy wants to spend $80 million to rebuild an aged uranium plant in Ohio whose biggest customer, a nuclear-bomb plant, has gone out of business.

The expenditure proposed in President Reagan's fiscal 1989 budget would come on top of $130 million spent in the last three years to modernize the Fernald Feed Materials Production Center, a foundry near Cincinnati, even though there apparently is no longer much demand for its product.

Since the mid-1970s, much of Fernald's production of uranium ingots has been sent to the Hanford Nuclear Reservation near Richland, Wash., which fabricates them into fuel assemblies for the N reactor. The Energy Department recently announced that it intends to mothball the N reactor because its output of plutonium is no longer essential. The fuel-fabrication plant at Hanford was closed last month.

DOE's spending request has raised questions about Fernald's role in the complex production chain that arms America's nuclear forces. The foundry, a relatively low-technology operation, has operated since the 1950s, producing the raw materials for plutonium production. The plant is old and much of its equipment has deteriorated badly.

But its primary mission is fading as well. Plutonium production has been scaled back sharply in recent years because of what the government calls a "restructuring of its nuclear programs."

In other words, the demand for new plutonium is dropping as a result of arms control treaties and growing stockpiles. In addition, the Energy Department is moving forward with newer technologies that are designed to recover plutonium from "residue material" such as spent atomic submarine fuel.

Critics contend that the Fernald facility has become a relic, like the N reactor, and question the need to keep it open. "It's an obsolete facility," said Robert Alvarez of the Environmental Policy Institute. "The department is going to have to close down some of these old plants."

The foundry processes uranium oxides into metallic ingots of low-activity or "depleted" uranium, which are shipped elsewhere for fabrication into fuel assemblies. The depleted uranium acts as both fuel and "target" for the plutonium reactors, which irradiate it to produce highly radioactive plutonium and other weapons-grade materials. (By contrast, commercial reactors use high-activity or "enriched" uranium, which produces more heat for electricity production.)

The Department of Energy says that the Fernald plant is vital to the national defense and must be rejuvenated.

In addition to supplying a second plutonium reactor at the Savannah River Plant in South Carolina, Fernald sends lesser amounts of uranium to the Rocky Flats arsenal in Colorado and the Oak Ridge Reservation in Tennessee. Rocky Flats uses the metal to fashion bomb components. DOE officials declined to discuss the Oak Ridge operation, but said that the Fernald plant is the only source of uranium for it.

But sources familiar with the government's bomb production complex say that the government has adequate stockpiles of uranium to supply those programs and that the N reactor decision essentially pulled the rug out from under Fernald.

"There is no reason for Fernald to be operated," said one source, who said that DOE's remaining needs for uranium of the type produced there could be met elsewhere, including the Navy's reactor-fuels plant in Tennessee and the Sequoyah Fuels Corp. plant in Oklahoma, a private company.

John Ford, DOE's director of defense programs, disagrees. Ford said the department needs its own supplier because of its special requirements for uranium purity and because "it is the policy of the defense program to have government control" of materials production.

Ford said the N reactor shutdown will have an impact on Fernald, but he disputed estimates from other sources that the Hanford plant accounted for up to 85 percent of the foundry's output. "It's a significant portion, but less than 50 percent," Ford said.

At the heart of the debate is the department's need for plutonium.

In a House hearing last November, DOE Undersecretary Joseph F. Salgado conceded that a two-year moratorium on plutonium production "would not have a negative impact" on national defense. In its most recent budget submission, the department said that most nuclear materials needed for new bombs are obtained by recycling old ones. With a half-life of more than 24,000 years, plutonium essentially lasts forever.

Nonetheless, the department is reluctant to close the door on any of its plants, in part because it fears they might never reopen. One factor, Salgado told House members, is that the department might lose "operating expertise" if facilities were shut for extended periods. Another is that state officials and conservation groups have taken an increasing interest in seeing that health and environmental impacts are dealt with first.

As a result, the DOE intends to complete more than $70 million in safety modifications on the N reactor and call its shutdown a "cold standby," even though some DOE officials concede they do not believe the reactor will ever be restarted.

For similar reasons, the DOE has lavished money in recent years on the Fernald plant.

Fernald employs about 1,600 people, 400 of those added in the last two years, and the plant's operating and construction budget has jumped from $110.3 million in fiscal 1986 to $169 million in the fiscal 1989 request, an increase of more than 50 percent. The most recent request would cut operating costs by about 10 percent from last year, but construction funds would go up more than 40 percent.

The foundry has operated at nearly top speed in the last few years, although the N reactor was shut down for repairs more than a year before it was finally mothballed and the Savannah River reactor has been operating at half-power or less for nearly a year.

As a result, the department has what Ford called a "sizable backlog" of raw material on hand for plutonium production. Other sources estimated the supply as enough to run the Savannah River reactor for three years or more.

Ford said the budget increases are needed to modernize Fernald, which was allowed to deteriorate in the 1970s when the government was contemplating shutting it down. "It has not been as well-maintained as we would hope," he said.

But it was not until 1985, when local residents and state officials learned that the aging foundry had leaked hundreds of thousands of pounds of radioactive uranium dust, that the money began flowing.

Environmental auditors and state experts who investigated the plant were horrified at what they saw there, including layers of uranium dust and chemicals covering equipment and floors, open pits used for disposal of radioactive waste, and pollution alarms that had been deliberately disabled because they sounded too often.

Sen. John H. Glenn (D-Ohio) has made the antiquated plant a prime example in his efforts to increase environmental oversight of DOE defense facilities.

Rep. Thomas A. Luken (D-Ohio), who represents the area, has called it "a dump." However, neither member of Congress has expressed much interest in shutting the plant and suffering the loss of jobs that would entail. Some critics of the plant say they are concerned that a decision to close Fernald would bring an end to the cleanup that the department has belatedly begun there.

Meanwhile, the impact of reduced demand for the foundry's wares has begun to be felt.

Westinghouse, which operates Fernald, said last week that about 70 workers will be laid off because of "decreased production requirements for the federal government."