WASHINGTON — As the 113th Congress gets under way and President Barack Obama begins a second term, some possible shifts in federal energy policy could ripple down to affect the American Centrifuge Plant in Piketon, Ohio.
For starters, Energy Secretary Steven Chu announced Friday that he was stepping down. And there have been rumors that some of his deputies, who have championed the project, might also be leaving the Department of Energy. At the same time, the president has emphasized in his new term a desire to reduce greenhouse gas emissions, which boosters of nuclear power say could be a boon to uranium-enrichment initiatives like the one in Piketon.
But those big-picture changes will not be make-or-break for USEC, the company that owns the plant. Supporters and foes alike say that right now, the ACP’s short-term prospects are good, but its long-term fate remains uncertain. And USEC’s future will probably hinge more on its internal financial troubles and the commercial market for its technology than on any new political reality.
Let’s start with the short term: USEC has said it will run out of money to keep the project afloat at the end of February. But Congress is likely to approve one last batch of federal funds for USEC in the coming months – at least $50 million, and possibly more, will be needed to complete a current research, development and demonstration program aimed at proving that USEC’s uranium-enrichment technology is viable.
“I think the commitment is deep from the White House and is deep in Congress and is ongoing,” said Sen. Sherrod Brown, D-Ohio, who along with Sen. Rob Portman, R-Ohio, has championed the project in Southern Ohio’s Pike County.
Portman questioned the president’s support for the project, saying it might have had more to do with its location, in the critical battleground state of Ohio, than with Obama’s dedication to the technology.
Still, Portman said, fears he had that the White House might kill the project have faded.
“I’m feeling relieved that we still have a lifeline,” he said.
On the House side, the Piketon site has a new booster in freshman Rep. Brad Wenstrup, R-Columbia Tusculum.
“I would really like to see this project move forward,” Wenstrup said in an interview last week. “It’s something that needs to be done as a matter of national defense.”
If successful, USEC officials say the plant will eventually produce enough fuel to power dozens of nuclear power plants around the country. In addition, supporters say it will bolster national security by ensuring the U.S. has a domestic source of enriched uranium.
The strong support in Congress for additional federal dollars doesn’t mean opponents have given up. The real fight, say critics of the centrifuge project, will come at the end of the year.
That’s when the research program – part of a cooperative agreement between USEC and the Department of Energy – will end. And USEC will renew its bid for a $2 billion federal loan guarantee, an application DOE officials put on hold in 2011 after glitches at the Piketon site raised concerns inside the energy agency about the viability of USEC’s uranium-enrichment technology.
Autumn Hanna, senior program director at Taxpayers for Common Sense, a fiscal watchdog group, said USEC’s renewed bid for a loan guarantee will ignite a fresh skepticism about the project, particularly since it’s such a large amount of money. Hanna and other critics note USEC’s common stock is currently trading below $1, and the energy company could be delisted from the New York Stock Exchange if it doesn’t rectify that.
“Taxpayers shouldn’t be putting more money into USEC,” she said. “DOE just can’t be the lifeline.”
Rep. Edward Markey, D-Mass., who has led efforts to nix funding for USEC, echoed that argument and signaled he would press hard against the loan guarantee.
“The value of the entire company is just over $70 million, it is still rated at below junk bond status, and it is in danger of being delisted from the stock exchange and becoming a penny stock,” Markey said. “To continue to subsidize this failing company would be irresponsible.”
A DOE spokeswoman, Niketa Kumar, said in a statement that the Obama administration would advocate for more money to finish the research program, but hinted the loan guarantee was no sure thing. She said the research phase was critical to addressing the “technical and financial risks associated with the ACP project.”
The energy department’s agreement requires USEC to meet “a series of detailed technical milestones and performance metrics that provide significant taxpayer protections,” Kumar noted.
USEC officials said they would address such concerns in a strengthened loan application come December.
The research and development program “will be successful ... (and) will address any remaining technical issues about the technology,” said Paul Jacobson, a spokesman for USEC. “We’ve been indicating as well ... that we’re working to strengthen our balance sheet.”
“We would want to put in a strong application, both from a technical and financial perspective,” he added.
USEC’s most vocal supporters in Congress said they were hopeful the political and fiscal obstacles to the loan guarantee could be overcome. But they conceded they could not predict how the next phase would play out.
“I think this is going to work for the public and ... for taxpayers,” said Brown. But “there are hurdles they have to jump over ... (and) I can’t evaluate eight months from now and know where we’re going” to end up.
Portman expressed concern that the Obama administration might be reluctant to “pull the trigger” on the loan guarantee.
“It requires leadership from the administration that has been lacking,” he said. “The arguments are compelling, and I’m optimistic that they will, in the end, make the right decision. But as folks in Piketon will remind you, time’s a wasting.”
Written by: Deirdre Shesgreen
Original Publication URL: http://news.cincinnati.com/article/20130204/BIZ/302040085/Ohio-nuclear-centrifuge-project-uncertain?nclick_check=1
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