“We are shocked and disappointed by DOE’s decision. The American Centrifuge met the original intent of the loan guarantee program in that it would have used an innovative, but proven, technology, reduced greenhouse gas emissions and created thousands of immediate jobs across the United States.
The American Centrifuge is not a new idea. It was first ideated by the Department of Energy in the 1970s as a next generation enrichment facility and abandoned after a successful test in the 80s. USEC, which spun out of DOE as a private company, reactivated the project and, in its words, improved the original design using “modern materials, advanced computer-aided design, digital controls and state-of-the-art manufacturing processes.” You can read more about the project here.
And now, nothing. USEC said it will have to cease work on the facility, though it is close to finished. All fouled up.
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But is it? From DOE’s perspective, it’s situation normal. There’s no reason for USEC to be shocked and disappointed:
The Department of Energy announced today that it will further expand and accelerate cleanup efforts of cold-war era contamination at the Portsmouth site in Piketon, Ohio – an investment worth about $150 to $200 million per year for the next four years that is expected to create 800 to 1000 new jobs.
Well, that’s something. Here’s DOE Secretary Steven Chu on the centrifuge itself:
“While we believe USEC needs time to develop its technology and demonstrate that it can be deployed at a commercial scale, we’re moving forward with other investments that will create good, high-paying jobs in the community. USEC will have another chance to resubmit their application if they can overcome the technical and financial hurdles, but in the meantime we’ll put more people to work in the environmental cleanup effort.”
And there’s more. Here’s Chu again:
Therefore, the Department is offering up to $45 million over the next 18 months to support ongoing ACP research and development activities. Should USEC accept this offer, it would allow them to continue operations, maintenance, and research activities at Piketon and Oak Ridge, and give USEC additional time to strengthen the technical and financial aspects of the application should USEC decide to resubmit it.
“Should USEC accept this offer…” That sounds like a recognition that USEC might well not accept the offer.
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Back to USEC:
“With DOE’s decision, we are now forced to initiate steps to demobilize the project. We deeply regret the impact this decision will have on all those affected, but as we have stated in the past, a DOE loan guarantee was the path forward to completing financing for the project.
That’s USEC’s President, John Welch. Here’s some more from him:
Instead of creating thousands of jobs across the country, we are faced with losing them. Instead of reducing our dependence on foreign sources of energy, we are now increasing it. President Obama promised to support the loan guarantee for the American Centrifuge Plant while he campaigned in Ohio. We are disappointed that campaign commitment has not been met.’
Disappointed – and shocked – and more than a little upset. Hard words. You would think DOE killed the project outright.
So does USEC have to mothball the project? There is money for it, for more research anyway, though clearly USEC thinks it is ready to move forward now. Equally clearly, DOE does not.
It’s a bit of a snafu.
Read through the material and see what you think. You would almost think DOE and USEC haven’t said two words to each other in years and still can’t directly communicate. That’s far from the truth.
(In fairness, here’s DOE’s fact sheet called “Job Creation in Piketon, Ohio,” the home of the centrifuge site – this was posted today. It seems as though DOE really doesn’t want to catch flak from USEC over potential job losses.)
Snafu, the word, emerged during World War II as an acronym for the phrase we’ve used here, though we bowderlized it for NNN’s family trade.
Speaking of World War II, Private Snafu is a cartoon character produced by Warner Bros. and created by Theodore Geisel (a.k.a. Dr. Seuss) but only seen by soldiers. Private Snafu’s goal was didactic, to show in amusing ways how hapless young soldiers could mess things up. For example, one of the entries is based on the idea, Loose Lips Sink Ships.
With no children present, the cartoons were a bit bawdier and with bluer language than common at the time, making them unusual cultural artifacts. You can find episodes at You Tube.
Comments
Has this Administration done anything supportive of nuclear energy yet?
Snafu, indeed.
I have a few questions, some at least partly rhetorical:
Aren't there two other enrichment projects in the license application stage?
Was there expected to be a shortage of enrichment capacity, or of the availability of LEU, any time soon?
Doesn't USEC have a history of (at least) questionable corporate oversight?
Is a loan guarantee an endorsement by the federal government of its faith in an applicant, based on a rigorous screening process, or an entitlement to any large entity involved in nuclear energy?
Or perhaps as I have seen suggested elsewhere, the government is saving the guarantee for the laser enrichment process, although such a decision might struggle to be consistent with their reasons for demurral on the USEC project.
sp: bowdlerized
I just hope people remember this kind of stuff when it comes time to vote. But I have my doubts they will. Takes too much effort.
USEC would build a facility to produce a product for existing power plants. The market is there. It is certain. The solar project is to provide solar energy in a place where the weather is usually pretty gloomy, and there is this natural phenomenon called "night" that also tends to have an impact. Now, of those, which one poses less risk, a proven technology providing a product for an existing market, or a project of unproven economic feasibility in a region of the country ill-suited to it's needs?
What everyone refuses to see is the elephant in the living room. Obama's bureaucrats turn down a nuclear project in Ohio, but give the nod to a solar project in Chicago. What national political figure do we know who is from Chicago? Does that same political figure depend on votes from special-interest environmentalist groups for a significant share of his political support? Can you connect the dots?
I know the limitations of solar. I also know that the loan guarantee process itself will fail unless something gets the first guarantee. Looking around the web, I cannot actually see any report of the particular (relatively small) loan guarantee that you are getting so upset about - do you have a link? Is it a real issued loan guarantee or just the product of someone's overheated indignation?
I see no sign that a DOE loan guarantee has been issued for this plant.
As far as the Chicago solar plant goes, well, I think their chances are pretty good even if nothing is signed, yet. And it isn't because of financial assets or potential, it's because of political connections. I mean, guess where the current occupant of the WH claims to be from? We know Piketon isn't getting a loan guarantee, that's for certain, as of this writing. The Chicago solar project is still in the running. I'd guess Obama owes more to them than he does Piketon.
Issuing a loan guarantee does indeed assume risk. Loan default would mean that the DOE would have to pay off the balance to the lender. The negative DOE financial assessment, while possibly harsh, was certainly not "baseless".
And give the synthetic outrage a rest on the Chicago solar plant. The loan guarantee is not approved. Compain about it if it happens and not before.
I just get tired of the false "outrage" on this blog about so-called "subsidies" to the nuclear industry, and this loan guarantee program is another example that is misused to illustrate that (although as another post showed, the so-called "renewables" have a much larger share of the guarantee dollars and few seem to notice or express "outrage" about those). This isn't a subsidy. It isn't a bailout. It isn't even a loan in the classic sense.
And no, I won't give the Chicago Project a "rest", because they are still in the running, like AREVA, whereas the Piketon loan guarantee, something Obama promised during the campaign to support, is not (as of this writing). IOW, Obama lied. He said he'd support the project and it's loan guarantee application, then his DOE stabbed us in the back. If for no other reason than that, I won't let it go unchallenged.