‘Crunch time’ at troubled nuclear fuel plant

Ohio Sens. Sherrod Brown (D) and Rob Portman (R) have introduced a measure to provide USEC the first $150 million. Rep. Ed Whitfield (R-Ky.) is leading efforts on the House side. Rep. Jean Schmidt (R-Ohio) has introduced a bill that would authorize grants for companies that didn’t yet qualify for loan guarantees.

On Friday, the Energy Department and USEC agreed to an accounting maneuver that freed up $44 million to continue work on the new plant through March. The department assumed liability for part of USEC’s stockpile of radioactive waste known as “tails” in return for part of USEC’s inventory of enriched uranium.

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Markey says that Republicans in favor of helping USEC that way are guilty of hypocrisy after criticizing loan guarantees for Solyndra. Solyndra’s technology, he says, at least was proven.

“When it’s assistance for solar panels, Republicans hit the roof, but when it’s a bailout for nuclear energy, apparently the sky’s the limit,” Markey said. “USEC’s centrifuges should be pulled off life support before another taxpayer dollar is spun down the drain.”

‘Unable to sustain’

Boehner, in his Oct. 27, 2009, letter to Obama, expressed “disappointment” about the Energy Department’s “hasty decision” to deny the $2 billion loan guarantee for USEC. He said he hoped “we can . . . make this priority a reality.”

More than two years later, USEC’s reality is bleak. Its strategy for survival is to close the Kentucky plant, liquidate its valuable uranium inventories, play broker for the Russians and continue operations at a subsidiary that provides dry casks for spent nuclear reactor fuel. “We’re working as hard as we can to keep it going,” said Robert Van Namen, a senior vice president at USEC.

“While our preferred path is to deploy the American Centrifuge and extend operations at the Paducah plant, USEC is actively engaged in exploring its options and has been for some time,” USEC’s Welch said. “If the federal government is serious about enriching uranium in the U.S. with U.S. technology . . . then Congress and the administration should proceed now with the demonstration program on the American Centrifuge technology.”

While waiting for funds from Congress, USEC has scaled back work on the American Centrifuge plant and warned employees of possible layoffs. S&P issued a report in December on what would happen if USEC declared bankruptcy. “Without the ACP plant, USEC is unable to sustain its market share and remain a viable competitor,” wrote S&P analysts Michael Silverber and Maurice Austin.

That prospect might not trigger the reaction USEC seeks.

“I am deeply skeptical about the argument that there is something important for national security about having USEC as one of the enrichment programs,” Bunn said. “The reality is that the United States economy relies on foreign sources for things a lot more important to the country than uranium enrichment.”