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| | | published Tuesday, July 28, 2009 | 1813 Views :: 0 Comments | |  |
Tuesday, July 28, 2009 3:11 AM
By Jonathan Riskind
The Columbus Dispatch
WASHINGTON
-- The Obama administration will not grant a $2 billion loan guarantee
for a planned uranium-enrichment facility in Piketon, Ohio, causing the
initiative to go into financial meltdown, the company and independent
sources confirmed last night.
The U.S. Department of Energy's
decision means "we are now forced to initiate steps to demobilize the
project," said Elizabeth Stuckle, a spokeswoman for USEC. That's the
company that is trying to build the $3.5 billion advanced-technology
plant on the same site where it ran the Cold War-era uranium-enrichment
facility that has been shuttered since 2001.
USEC had said
recently that the Ohio project faced "demobilization" beginning as soon
as August unless that federal loan guarantee was won.
But two
sources, both speaking on condition of anonymity because they were not
authorized to release the information, said last night that Ohio
officials were briefed by Energy Department officials about the loan
guarantee status.
A high-ranking department official said USEC
would not get the loan guarantee now for a variety of reasons, but
could reapply in 18 months.
But being able to reapply in a year
and a half is little comfort, because that long of a delay could mean
"financial death" for the project, a source familiar with the briefing
said.
Stuckle confirmed that the company has been advised it
won't get the loan guarantee. She said the company remains convinced
that its test enrichment facility has proved the technology, which
enriches uranium for use as commercial nuclear power plant fuel, works
and meets all the criteria for the federal loan guarantee program.
"Instead
of creating thousands of jobs across the country, we are faced with
losing them," Stuckle said, noting that President Barack Obama voiced
support for the loan guarantee when he campaigned in Ohio. "It is
unclear how DOE expects to find innovative technologies that assume
zero risk."
USEC has been indicating for months that without the
loan guarantee from the Department of Energy -- which would come from a
$38.5 billion program launched by the Bush administration to encourage
various renewable-energy and nuclear-power ventures -- the Piketon
project would be unable to secure needed final financing.
So
far, USEC has spent about $1.4 billion to build a test plant and begin
work on the full-scale commercial facility, which will make fuel for
nuclear power plants, that the company says could be operating by early
2011.
Overall, the project employs 5,700 directly or indirectly,
with jobs ranging from construction of the plant to work on the
enrichment-facility components and supplies in eight states, the
company says. In Piketon, more than 600 are working, and a fully
operating plant would employ about 400 for years to come.
Stuckle
said that USEC's older plant in Paducah, Ky., continues to turn out
enriched uranium and that the company will continue research and
development work in Oak Ridge, Tenn., on the advanced-technology
project. But it will soon begin demobilizing the work in Piketon.
This
is a separate project from the planned nuclear-power plant that a
consortium of companies, including Duke Energy, recently announced for
the Piketon site. The nuclear-power plant project could take a decade
to come to fruition.
Financially, the uranium-enrichment project had little margin for error.
USEC
said recently in a release that "even if a conditional commitment is
provided by early August, demobilization may be initiated if the terms
of such conditional commitment are not acceptable or if subsequent
progress toward achieving actual funding later this year under the loan
guarantee is not maintained," the company said.
The statement
said that if the decision was no, a demobilization plan for
significantly slowing down the project would be put into effect that
would "involve the partial or full halt of certain American Centrifuge
project activities and plant construction."
Dispatch reporter Jack Torry contributed to this story.
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