NUCLEAR CANCELLED

USEC Denied Loan Guarantees; CEO Assails Obama After Energy Dept. Says Project Is Unready
Steven Mufson, July 29, 2009 (Washington Post)

"…USEC… accused President Obama of reneging on a campaign pledge after the Energy Department turned down the company's request for $2 billion in loan guarantees for a new uranium enrichment project in Piketon, Ohio.

"USEC, which operates the nation's only uranium enrichment facility, said it would "demobilize" the new project, which it said could not obtain private financing without the federal loan guarantee. The company has already spent $1.5 billion on what it calls the American Centrifuge Plant, but USEC says the final price tag could reach $3.5 billion, 1 1/2 times as much as it estimated two years ago…The company's stock yesterday plunged $2.14, or 35 percent…erasing $240 million of market value."

From Amory Lovins. (click to enlarge)

"The Energy Department said that the proposed plant…was not ready for commercial production and therefore ineligible for the loan guarantees. The department said that if USEC withdraws its application, it will receive $45 million over the next 18 months to conduct further research…In a nod to the state, however, the Energy Department said it would expand cleanup efforts at the now-closed Portsmouth enrichment site in Piketon… spend $118 million of stimulus funds and an additional $150 million to $200 million a year on decontamination over the next four years…[and] create over 1,000 jobs, more than twice as many as would be lost at USEC's centrifuge project…

"While campaigning in southern Ohio last August, Obama praised the USEC project…White House spokesman Benjamin LaBolt said…the USEC technology "is not commercially viable today, according to an independent engineering review, and therefore not eligible for DOE's loan guarantee program at this time." He said the administration thinks the technology "holds promise." …USEC said that the technology was developed by the Energy Department during the 1970s and 1980s and…it has improved the technology and tested it over "235,000 machine hours." … Matt Rogers, who oversees grants and loan guarantees at the Energy Department, said that USEC finalized designs only three months ago and that the company had tested only 38 centrifuges while 11,000 would be needed to run the plant…"

From Amory Lovins. (click to enlarge)

"A loan guarantee would carry a risk of default, other government sources said. USEC, a federal agency privatized in 1998, in May had a B-minus rating from Standard & Poor's and a B3 rating from Moody's…USEC is also facing pressure because half the enriched uranium it sells comes from decommissioned Russian nuclear warheads…The program will end in 2013.

"The 2005 Energy Policy Act gave the Energy Department $2 billion for loan guarantees for uranium enrichment projects. The only other applicant is Areva, a firm partly owned by the French government…General Electric is also researching uranium enrichment…"