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Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part I, Part II, Part III and Part IV of this series]

The Commonwealth of Kentucky may sue the federal government to compel cleanup of the now-closing uranium enrichment site at Paducah, according to the governor and the state attorney general. The quasi-privatized operator of the facility, USEC Inc., filed suit against the Department of Energy (DOE) in May. Shareholders and/or bondholders of USEC may sue the company for a third or fourth time over its current financial collapse, and the feds may have to sue USEC if it defaults on its obligation to properly restore the Paducah plant to safe status before it departs.

Whistleblowers allied with the Natural Resources Defense Council have filed suit against Paducah contractors over past fraud and legal violations in waste handling at the site, a new round of litigation after fraud claims joined by the federal government about a decade ago. Paducah workers will likely sue to recover their vanishing pension benefits, and heck, if you don’t sue somebody, then you’re just not a member of the Paducah nuclear club.

It’s a litigious self-sustaining chain reaction, a post-atomic parody of the old Tom Lehrer A-Bomb song “Who’s Next?” Yesterday I visited “Future City,” an empty developer’s dream town adjacent to the hulking Paducah Gaseous Diffusion Plant, and I saw the Paducah mural wall along the lovely Ohio River, which includes one depicting the incoming traffic of the “A-Boom” of 1952. But there’s an ominous empty mural space after it, ripe for depiction of the rear-ends of automobiles in the A-Bust of 2013, and it’s clear that Future City belongs now only to the lawyers.

The Week the USEC World Ended

USEC, the company whose bust-up operations and the cessation thereof included no serious planning for impacts on the community, is only midway through a nuclear week of woe.

On Monday, June 24, a special joint session of the Paducah City Council and the McCracken County Fiscal Court, chaired by mayor Gayle Kaler, was called to respond to the crisis of USEC’s precipitous departure, resulting in a joint resolution demanding federal insurance of safe power-down and recognizing united community opposition to a planned on-site 100-acre waste cell following plant demolition. 

Representatives of Neighbors for an Ohio Valley Alternative (NOVA) attended, presented comments, and announced the launch of a nationwide petition-drive to transfer responsibility for nuclear cleanup from the Department of Energy to the U.S. Environmental Protection Agency. The NOVA petition also calls for a transfer of federal funds from USEC’s failed “American Centrifuge” program to urgent safety and cleanup work at the Paducah and Piketon, Ohio, sites. Media attention has focused on my revelation at the Monday meeting that for years USEC has been moving contaminated equipment from the Piketon site to Paducah, under the rubric of “spare parts,” but with many outstanding questions as to why contaminated spare parts would be required for a facility scheduled to be shut down.

On Tuesday, June 25, Kentucky Governor Steve Beshear came to Paducah for meetings with Mayor Kaler and other officials mobilizing community response, after which the governor announced that the state is contemplating a lawsuit against DOE. Such a suit would be modeled on the massive successful litigation brought by the states of Washington and Oregon against DOE, to increase the funding and alter the action plan for cleanup of the Hanford nuclear reservation, near the border of those two states.

At issue in the potential Kentucky case would be DOE’s failure to plan for and fund safe power-down at Paducah. Instead, DOE relied on a weak lease provision that requires USEC to accomplish that work, but DOE apparently failed to take cognizance of USEC’s financial collapse, rendering the company incapable of incurring additional expenses without pushing itself into bankruptcy. That eventuality would bring a raft of other problems of unanticipated consequence, including the potential disappearance of worker pension benefits at the same time workers lose the remaining value of their USEC stock holdings.

Enron All Under Again

USEC stock value has flat-lined at about 30 cents per share, creating a radioactive penny-stock, making a mockery of USEC’s “Stock Up” program of partial employee compensation. It’s Enron all under again, with economic impact highly concentrated in the communities of Paducah and Piketon, far less capable of absorbing the impacts than was Houston.

Also on Tuesday, Edward Markey was elected to the U.S. Senate in a special election in Massachusetts. Markey has been USEC’s arch-foe in the House, dubbing it “the United States Earmark Corporation,” a jab at the House Committee chairmen from Kentucky, Hal Rogers and Ed Whitfield, who claimed credit for the Republican “No Earmark Rule” even as they shoveled new federal subsidies to USEC. In its carefree days, the company would dutifully kick back some of those subsidies in the form of campaign contributions, with Rogers and Whitfield near the top of that list. They, along with Paducah point man Mitch McConnell, will have to explain to constituents, if not the Justice Department, why USEC took the federal money and ran.

This would be a propitious time to review just one of Congressman Markey’s prophetic anti-USEC rants in House committee deliberations, this one in opposition to USEC’s eligibility for a federal loan guarantee.

Now, Congressman Markey will move to the U.S. Senate, where he will caucus with the majority, just as USEC is preparing to submit a third revision of its loan guarantee application, or so the company says.

Quadruple Back-Flip Split?

But the week is far from over. On Thursday, June 27, USEC shareholders are meeting at the company’s beltway-bandit hideout in Bethesda, Maryland. They will stare straight into the double-barrels of doomsday de-listing warnings from the New York Stock Exchange (NYSE), one because USEC’s stock price has failed to meet the one-buck minimum for over a year, and another because the company’s total market capitalization is only 75% of the $50 million minimum NYSE requirement. If USEC is de-listed for either or both reasons, half a billion dollars of bond debt becomes immediately due.

To ward off that Apocalypse, USEC shareholders will vote on a no-choice proposal for a reverse stock split, whereby current shares will be traded in for new ones at a ratio of between ten-to-one and thirty-to-one. It’s a Wikipedia understatement that “a reverse stock split is often an indication that a company is in financial trouble,” even when the swap ratio is lower than double-digits. But USEC has a number of additional problems. While the reverse split will likely cure the share price deficiency at least temporarily, it will also likely worsen the market capitalization deficiency, which USEC suggests in a disclosure statement. That’s not just because reverse splits have the stench of dead flesh, but because odd shares that cannot be swapped at the selected ratio must be cashed out. (If the swap ratio is thirty-to-one but you only own twenty-nine shares, the company has to buy your shares.)

NYSE just was not cut out for micro-cap companies that make a meager living by extorting illegal subsidy payments from corrupt politicians. Maybe USEC needs a quadruple back-flip split on the balance beam as its final substitution for a legal business plan?

And it gets worse for USEC. The company needed to cut its losses at Paducah, after paying about half a billion dollars each year just in power costs to TVA. However, the company banked on being able to pack-up and leave Paducah cost-free. It had intended to shut out the lights, and “de-lease” the facility, using any threat of nuclear safety calamity from a rapid power-down as a way to extract yet more federal payments for subsidized “extension.”

When the Department of Energy said no to that plan in May, according to reliable sources, it also informed USEC that it would hold the company to a lease provision that the plant be returned in “safe condition.” The possibility of federal aid for that project is negated by USEC’s own scheming that Paducah power-down costs not be included in the 2013 federal budget (even in theory, such funds will not be available until October at the earliest).

There is ongoing wrangling between the litigants even now as to what exactly “safe condition” means. USEC is meeting a minimal standard of its own determination, simply blowing air through the system as diffusion cells are powered down, but leaving substantial residues of solidified uranium and transuranic crap inside the pipes and compressors. That will be a costly nightmare for future cleanup workers. (Workers report about two inches of residue coating the insides of all process equipment). Imagine a gigantic sixty-year-old sewerage installation that’s never been Roto-Rooted.

That leaves a horrid legacy for future cleanup workers, as Terra Hays testified at Monday night’s governmental meeting. She is the wife of a Paducah worker who became seriously ill after only 23 months of removing and packaging contaminated materials at Paducah, and Ms. Hays cited the statistic that there are now 19,128 active claims for work-related illness compensation at Paducah.

DOE was able to compel USEC to take minimal safety precautions at Paducah because USEC’s continuing investment scam is to say that it will apply for and receive a $2 billion loan guarantee from DOE, a loan guarantee that is inexplicably supposed to enable USEC to build a new centrifuge plant with undemonstrated technology that will cost a minimum of $5 billion. Thus, USEC did not terminate its TVA power contract at the end of May as threatened, and to date has shut down about 60 percent of the Paducah cascade, with the remainder to be shut down over the next month or two. Power consumption has been reduced from about 1500 MW per year to about 350 MW or lower.

With USEC’s financial situation, however, that creates a whole separate set of issues. USEC did not anticipate having to pay the costs of that work, and so did not disclose those costs to its investors or the SEC. In a Form 8-K filed with the SEC on May 31, USEC says only that “USEC is in discussions with DOE regarding the timing of USEC’s de-lease of the Paducah GDP and is seeking to minimize its transition costs, which could be substantial.” By my estimation, the unanticipated power costs alone will total in the tens of millions of dollars.

And that raises the question of whether USEC has been forthcoming with its investors and federal regulators headed into its shareholders meeting on June 27. A cornucopia of new potential lawsuits!

Scores of World War II ammunition bunkers cluster around the Paducah plant. I think they may find a new use sooner than the gaseous diffusion plant, warehousing the litigation files about to be generated in a case of uncontrolled nuclear proliferation. As for the massively contaminated plant site itself, how could we do better than a new federal penitentiary for the white-collar perpetrators of these hazmat-orange crimes?

The security fences and guard stations are already in place for the nuclear chain gang, and the plant was prophetically organized by cell-block. Consider the government cost savings on convict transportation alone.

Visit EcoWatch’s ENERGY and NUCLEAR pages for more related news on this topic.

——–

Click here to tell Congress to Expedite Renewable Energy.

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Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part I, Part II, Part III and Part IV of this series]

Southern California Edison (SCE) has abandoned plans to restart its two nuclear reactors at San Onofre. The announcement this morning comes exactly one week after termination of operations at the Paducah, Kentucky, uranium enrichment plant, which for decades had provided the fuel for San Onofre. It drops the number of operating nuclear reactors in the U.S. below one hundred for the first time since the early 1980s.

The San Onofre decision ends 18 months of wrangling between the utility and environmental opponents, after serious leaks were detected in a steam generator that had been newly installed. The news release by SCE has a detectable tone of relief that the company will no longer have to defend the indefensible. Similar tones have emanated from the Washington headquarters of the Department of Energy (DOE) around the Paducah decision, sending a message that the era of illegalities involving USEC privatization may be nearing an end.

The San Onofre Nuclear Generating Station on the Pacific coast of California, in the northwestern corner of San Diego County, south of San Clemente.

The Paducah and San Onofre shutdowns have a number of important connections beyond that the former facility provided the latter with fuel, and that the two sites are located in earthquake red zones. In both cases, the Nuclear Regulatory Commission (NRC) proved itself incompetent and incapable, unable to take the most basic actions to insure nuclear safety. NRC should have flatly denied the San Onofre reactors permission to restart, and NRC should have revoked USEC’s operating license at Paducah after the company clearly could not meet financial capacity requirements. But the NRC failed in both cases, locked up in a kind of containment cell of quantum indeterminacy. Schrodinger’s cat, dead or alive, could do a better job of regulating the nuclear industry than the NRC as now constituted.

The news in both the California and Kentucky cases also goes to show that the Attorney Age has banished the Atomic Age. The most important line in the SCE news release is the last one: “SCE intends to pursue recovery of damages from Mitsubishi Heavy Industries, the supplier of the replacement steam generators … ” Likewise, USEC filed suit against the Department of Energy on May 30. Nuclear energy, once billed as providing unlimited power, is fulfilling its promise—the power of lawyers. “Don’t radiate: Litigate!” may be coming soon to a button or bumper-sticker near you.

And then there is the future marketing linkage. USEC has long been in financial decline, but its fortunes took a precipitous plunge after its star customer, TEPCO—the utility that had headlined demand for new nuclear fuel services—had that little mishap in Japan, a mishap that might have been worsened, by the way, by contaminants in the USEC-supplied uranium fuel. With Japanese customers gone down the uranium drain, USEC fell back on the booming American market. Booming in a virtual-reality gaming way, that is. The San Onofre decision lowers the boom on demand for future sources of enriched uranium, just when USEC says it will apply for a new $2 billion federal loan guarantee to build a new enrichment plant.

Good luck with that.

Visit EcoWatch’s ENERGY and NUCLEAR pages for more related news on this topic.

——–

Click here to tell Congress to Expedite Renewable Energy.

Photo by Zbynek Burival on Unsplash

If you live in an apartment without its own roof or if you're a business owner renting a commercial space, a community solar project may help you save on electric bills. Community solar power is a great option for individuals and businesses who can't install their own solar panels.

You can join a community solar project by purchasing a share or by paying a subscription. Then, the electricity production that corresponds to your ownership percentage or subscription will be measured and subtracted from your power bills. This is possible even if the community solar panel installation isn't located in your neighborhood — by investing in the project, your share of the solar generation is simply subtracted from your bill.

In this article, we'll outline the pros and cons of community solar subscriptions and help you decide whether to invest in your local program.

What is Community Solar?

Community solar is a term used to describe photovoltaic systems that are shared by many consumers, including homeowners, renters, businesses, nonprofit organizations and more. Electricity savings and other benefits from the solar project are split among its shareholders and subscribers at a rate based on the level of investment.

When starting a community solar project, developers will establish the geographic area from which consumers are eligible to join. Some programs have installed multiple solar power systems in the same area, allowing a larger number of shareholders and solar subscribers.

Community solar power is possible thanks to virtual net metering. Through this process, a percentage of the electricity produced by the community solar panels is subtracted from the total amount of power you use in your home even though the panels aren't located on your property. Here are a few key things to note:

  • The kilowatt-hours produced by a community solar project are measured for each billing period and are divided based on ownership shares.
  • If a community solar array produces 10,000 kWh of electricity and you own 5% of the project, you get 500 kWh for that billing period.
  • The value of those 500 kWh will be subtracted from your power bill, so if you use, for example, 750 kWh of electricity in your home, you'd only pay your utility company for 250 kWh.

Benefits of Community Solar

The main benefit of community solar is saving on power bills, especially in places with high electricity prices and abundant sunshine. However, the concept of sharing a solar array brings many other benefits, both technical and economic. These include:

  • Community solar can be used by homeowners or renters who can't install rooftop or ground-mounted solar panels. Some roof structures are not suitable for solar panels, and others are too shaded from surrounding buildings or objects to be effective. Community solar may also be an option if you live in an apartment without its own roof or if you simply don't like the appearance of rooftop solar panels.
  • You can easily take your solar savings to another home or apartment. If you install solar panels and decide to move in a few years, you must either sell them or take them with you. On the other hand, when joining a community solar project, you can simply assign the savings to your new address.
  • You can sometimes sell or donate your community solar share (depending on program conditions). This is useful if you move to a location that is not covered by the community solar program or if you decide to install your own solar panels in the future.
  • Community solar supports a more diverse customer base. To install your own solar panels, you must have the cash for an upfront payment or qualify for a loan. This financial barrier is eliminated with community solar — consumers can pay a monthly subscription or can purchase a small share according to their budget.
  • With community solar, you can forget about maintenance and part replacements. Solar panels need regular cleaning to stay productive, and components like inverters and solar batteries must usually be replaced after about 10 years. However, you don't have to worry about maintenance with community solar, as there is a project developer in charge.
  • Community solar shareholders are eligible for the federal solar tax credit. When purchasing a share of a community solar project, you can deduct 26% of your investment on your next tax declaration. Just keep in mind that this benefit is not available when joining as a subscriber, since technically you don't own a part of the community solar farm.

Community solar is an easier alternative to installing your own solar power system. The project developer is responsible for financing, installation, operation and maintenance, and you can reduce your electricity bills by simply buying a share of the project or subscribing.

However, installing your own solar power system also brings many benefits. You save the full economic value of the electricity generated, for example. Onsite solar power also increases the value of homes and commercial buildings, and many incentive programs are only available when you buy solar panels directly.

If you're weighing each option, it can be helpful to get a free quote for a home solar installation. Fill out the form below to get connected with a top solar company near you.

How Does Community Solar Work?

In a few words, community solar lets you save on power bills with a shared photovoltaic array, instead of having your own system. However, not all community solar projects are alike, and they can be classified into several types:

  • On-site vs. off-site
  • Ownership vs. subscription

Community solar should not be confused with group purchasing, which happens when many homeowners or businesses purchase individual solar systems at bulk prices. This does not count as community solar, since the project is split into many private installations.

On-Site Vs. Off-Site Community Solar

Many real estate developers use on-site community solar projects in their residential, commercial or mixed-use projects. The electricity generated by solar panels reaches consumers through a private power system, without depending on the local electric grid. On the other hand, off-site community solar is supplied via the grid.

Here are the main benefits and drawbacks of each type of community solar project:

On-Site Community Solar Off-Site Community Solar
Pros On-site community solar systems often achieve higher savings — because they don't use the local electric grid, they don't pay transmission and distribution fees to a utility company. Off-site community solar projects can serve a larger number of customers. You can also keep your ownership share or subscription when moving to another address, as long as you stay within the project's service area.
Cons On-site community solar is only available for local property owners and tenants of communities that have installed these energy projects. Depending on limitations with your local power grid, you may not yield as high of savings with off-site community solar.

Ownership Vs. Subscription Model

Community solar projects offer ownership shares and subscriptions. Some projects only have one option available, while others let you choose. You can save on power bills with both options, but understanding the differences between them is important:

  • When you purchase an ownership share in a community solar project, the corresponding percentage of power generation is yours for the entire service life of the project. Also, since you're a partial owner of the system, you can claim 26% of your investment as a federal tax deduction. However, owning part of a community solar project means you must have the capital to pay upfront.
  • When you subscribe to a community solar project, there is no upfront investment. Instead, you pay a monthly fee. This means there is an ongoing cost, but the corresponding power bill savings are higher than the subscription fee. Keep in mind that subscription costs may increase over time, while an ownership share represents a single upfront payment.

Each option has pros and cons — you will generally save more when you become a shareholder in a community solar project, but a subscription comes with zero upfront cost. Also, consider that you must sell your share if you move to a location not covered by a community solar project, while a subscription can be easily canceled.

Is Community Solar Available Near You?

Community solar offers many benefits, but it is not available nationwide. To scale these types of projects, state governments must first enable this business model by law. Also, developers are more likely to invest in community solar projects if market conditions are favorable. Generally, the best states for solar power are those with incentive programs, abundant sunshine and/or high electricity prices.

There are currently 40 states with at least one community solar project in operation, and the Solar Energy Industries Association (SEIA) reported that 3.1 GW of community solar were online and operational by the end of Q1 2021. There is an optimistic outlook for community solar, and the SEIA has forecast a growth of 4 GW over the next five years. Each gigawatt of solar power can cover the electricity needs of around 186,000 American homes.

If you're interested in community solar power, you can check local government and utility websites — there could be several projects available near you.

FAQs: Community Solar

Is community solar legit?

Like all power generation projects, community solar systems are subject to laws and regulations. If you look for a developer that uses high-quality solar components and qualified installers, community solar is a reliable option to save on power bills for many years.

Is community solar a good deal?

To join a community solar project, you must become a shareholder with an upfront investment or pay an ongoing subscription. The power bill savings achieved will be higher than your monthly utility payments in both cases, but depending on the pricing model of your community's program, one option may present a better deal than the other.

What is community solar, and how does it work?

Community solar is an alternative to installing your own solar panels: You participate in a shared solar project as a shareholder or subscriber, and you get part of the electricity produced. This is a great option for individuals or companies who can't install their own solar panel systems due to lack of space or other limitations.

How does community solar make money?

Based on your ownership share or subscription type, you get part of the electricity produced by a community solar array. The kilowatt-hours generated are subtracted from your power bill — just like when you own solar panels directly.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, fast food, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part I, Part II and Part III of this series]

The United States Enrichment Corporation, the contracting subsidiary of USEC Inc.—the company that now produces nothing—has filed a lawsuit in the Court of Federal Claims seeking $38 million in back-bill payment from the U.S. Department of Energy (DOE). The complaint was filed on May 30 with no publicity, as it reveals that the entities running uranium enrichment projects at the Paducah, KY, and Piketon, OH, federal sites are more antagonists than partners.

The filing came exactly one week after DOE rejected USEC’s $13 million demand for extended payments at Paducah, and one day before USEC ceased enriching uranium at Paducah, making good on a long-time extortion threat. The legal action heralds the end of the “American Centrifuge” project at Piketon and of the uranium enrichment privatization experiment.

For this litigation, USEC has retained McKenna, Long & Aldridge, the leading firm specializing in government contracts that counts all of the top five U.S. defense contractors as clients.

A congressional staffer who has followed USEC dealings closely commented on the news: “It is outrageous.” USEC is displaying more chutzpah than its old mouthpiece, former Congresswoman from Ohio Jean Schmidt, when she called for making flag desecration a felony while draped in a Captain America suit.

Lawyer Enrichment

This official transition from the Atomic Age to the Attorney Age makes obvious what has long been known to industry observers: The USEC Privatization Act of 1996 created a very stormy marriage between USEC and DOE. That marriage led the parties to commit unnatural acts at Paducah and Piketon, but without clear markers of mattress territory, and with irreconcilable differences between governmental and proprietary predilections. Virtual screaming matches between USEC and DOE at closed-door sessions have become something of a scandal unto themselves.

The Privatization Act created USEC as a non-governmental company with unprecedented (and unconstitutional) control over federal assets at two prime industrial production sites. The condition was that USEC shut down the existing antiquated power-hungry facilities and replace them with technology of its own development, free of political interference (insert laugh-track here). But the Privatization Act gave USEC no financial incentive to do the R&D, so the company didn’t, becoming a nagging ward of the bureaucracy from which it was supposed to be liberated. Before he won the Nobel Prize in Economics, Joseph Stiglitz opposed the privatization as chairman of the Council of Economic Advisors, and in an op-ed piece in The Wall Street Journal, he quoted a Republican Senator calling privatized USEC “a threat to national security.”

Now fifteen years into the marriage of inconvenience, the divorce will not be easy or amicable. As I wrote on May 28, the “negotiations” between DOE and USEC, advertized as concerning extended Paducah operations, were in fact about “timing, bill payment and where the political blame for job loss could be cast.”

To keep up public appearances, the squabbling spouses intentionally failed to make preparations or secure the congressional funding for clean plant power-down, because as every divorce lawyer knows, the chief strategic objective is to get the other side to blink. Each party had to show that it was ready to split the child of nuclear safety down the middle, attempting to win spiteful custody of whatever treasure remained. And in the real world of the nuclear complex, there was no King Solomon. They don’t call it a complex for nothing.

Legal considerations did come into play, however. Attempts by USEC to ditch the competitive uranium enrichment business in favor of lucrative no-bid nuclear cleanup contracts were partially thwarted by decisions of the DOE General Counsel that such contracts at either Piketon or Paducah are barred by federal conflict-of-interest rules. The absence of preparations for power-down at Paducah was in part an attempt by USEC to force DOE to waive those rules, since no other company besides USEC would be ready on the spot when power-down occurred. According to reporting in the Lexington Herald-Leader, DOE has now reasserted that conflict-of-interest rules will bar USEC from cleanup at Paducah.

The Government Accountability Office (GAO) determined in September of 2011 that DOE “discretionary” payments and uranium “barters” with USEC, to the tune of some $194 million, were in violation of federal fiscal laws. The $13 million additional gift of uranium from the national stockpile that USEC demanded as payment for a non-performing Paducah extension would have violated these same laws after the illegality had been identified by federal investigators, and would have been the most explicit nullification of the USEC Privatization Act yet on record. That act aimed at closure of the gaseous diffusion plants, and relegated the necessary shutdowns to USEC “business decisions” removed from political influence. Government payment to USEC for alteration of that decision would have defeated the main aim of the statute.

Duking It Out at Paducah

Other federal agencies aren’t done with their scrutiny of the strange transactions between DOE and USEC. Last week, GAO investigators quizzed both DOE and USEC about the apparent absence of plans for clean power-down at Paducah, despite intense negotiations between the parties that have reportedly been underway for more than a year. The results are some of the first public indications of how the Paducah shutdown will transpire, though correct interpretation of the responses relies on our ability to invert the given answers to get at the real truth, the way readers in the former Soviet Union learned to read the party newspaper Pravda.

According to informed sources who wish to remain anonymous, both USEC and DOE told GAO that USEC will return the Paducah plant site to DOE control in parcels gradually, with only the initial phase of “de-leasing” accomplished by the spring or summer of 2014. Similar gradual transfer of the Piketon site delayed cleanup substantially, provided endless opportunities for USEC to extort new payments from DOE, and generated hoax “redevelopment” projects with no more than PR value, such as the phony-baloney media event in 2009 at which USEC claimed it would build a nuclear reactor on a site with no body of cooling water. For these prerogatives, USEC paid no fees of any kind for retention of “leased” facilities, and was subject to no financial penalties for contractual violations. Kind of a sweet “leasing” deal you might want to ask John Boehner and Mitch McConnell to write into legislation on your behalf.

USEC’s exercise of its lease option to retain control of parts of the Piketon or Paducah sites indefinitely and without explanation or payment warrant against the wishful-nonsense proposal now being hawked by Paducah local media.

That proposal, spearheaded by former Paducah manager Jim Thomas, mischaracterizes USEC’s occupancy as DOE contract work for which there should be a successor, when in reality USEC was given control of the site by statute, and it may use that control to knock enrichment competitors out of the box, as it did when USEC slammed the door on competitor AREVA’s interest in building a centrifuge plant at Piketon. (AREVA subsequently went to a private site in Idaho). Briefly put, the Thomas proposal to continue government enrichment at Paducah, even if technically possible, would require repeal of the USEC Privatization Act, which will happen when pigs fly over a national monument honoring Julian Assange.

Whistle-blower Joe Carson addresses a meeting of sick Paducah workers and whistle-blowers. Meeting and
video arranged by Commonwealth Environmental Services of Paducah.

DOE and USEC reportedly also told GAO that the reason there is no federal budget line for purging of the diffusion cells at Paducah is that USEC will perform that work itself, before it cedes control of the site. That is utter lunacy. First, that is work barred to USEC under the conflict-of-interest rule. Second, USEC did not perform that service at Piketon, though it had nine years to do it, even though USEC was being paid hundreds of millions of dollars by DOE to do precisely that. 

In fact, that constitutes much of the contract work for which USEC now claims it is owed back over-budget reimbursement in its new lawsuit. And though DOE has not yet commented on the lawsuit, the reason that DOE did not pay those over-charges when billed is that USEC failed to accomplish the assignment. Only now are the cells at Piketon being purged, with many problems encountered, under a $2.2 billion contract to Fluor-B&W.

Moreover, USEC is now in such financial distress, with $500 million each owed to bondholders and to pension obligations, with stock exchange delisting warnings in effect, that the company need not worry about being around long enough to make good on cleanup commitments at Paducah. The company’s total market valuation is down to $43 million. USEC might just as well represent to federal investigators that it will pay the billion-dollar cleanup costs at Paducah, since it’s never paid a penalty for making false promises, and covering for DOE corruption might help settle the current lawsuit and collect on fraudulent bills.

The date at which USEC and DOE represent they will finish the first stage of de-leasing at Paducah—between April and July of 2014—is quite coincidental, as is everything in this business. June of 2014 is the contractual date at which USEC must decide go or no go on the commercial scale version of its “American Centrifuge Project” at Piketon. That would be the project currently estimated as costing a minimum of $5 billion, more than a hundred times USEC’s current market valuation, and for which there is no financing plan that doesn’t read exactly like the investment-fraud plot device of The Producers.

Financially, USEC must ditch the centrifuge project by end of summer in 2014, because on Oct. 1 of that year, assuming it’s still around, half a billion dollars of bond debt becomes due.

In other words, “truther” gibberish aside, the twin towers of USEC operations at Piketon and Paducah are programmed for self-demolition in the summer of 2014, after maximum extraction of illegal payments from the government, but before USEC is required to pay off its investors. USEC will say “no go” on its long-suffering centrifuge runaround, and simultaneously surrender its site control at Paducah, leaving nothing of the company but chemtrails in the sky and in the water and on the ground. That is how the USEC Privatization Act will be repealed, without Congress needing to lift or point a finger. Only all the little people will get screwed.

Today, June 4, the Secretary and Deputy Secretary of Energy traveled to Capitol Hill to meet with members of Kentucky’s congressional delegation about the future of the Paducah site. USEC was conspicuously uninvited to those meetings.

The Leaser of Evils

One might wonder who the nutcases were who negotiated the USEC privatization agreement, who authored the screwy single USEC “lease” for Piketon and Paducah that requires no leasing fee and that levies no penalties for any order of malfeasance, who “negotiated” with USEC on behalf of the government when hundreds of millions of dollars were transferred to the private company in exchange for nothing at all (and that was called “barter”).

Well, some of the mid-level people who sat around the negotiating table and witnessed these atrocities also wondered, and some of them did some research, which they shared with me. Turns out it was pretty much all one guy. William A. Murphie, manager of the “Porstmouth/Paducah Project Office” of DOE, was the principal author of the USEC no-fee, no-penalties “lease.” Then he was also the guy who complained that his hands were tied by lease provisions when DOE could not get USEC to relinquish control of the Piketon site for cleanup, and now Murphie is the guy who intentionally failed to secure a budget line to pay for clean power-down at Paducah, on the empty assertion that USEC itself will pay for it.

The Department of Energy should open an interest office in Khabarovsk, as a place to which Murphie can be transferred; on the off chance he is not incarcerated.

Some will claim that the new litigation is routine and nothing but another bump on the road of USEC triumphalism. But consider that USEC has claimed that its fortunes depend entirely on winning a $2 billion federal loan guarantee, an award which has already twice been denied, the application for which has not yet been submitted. Consider that USEC has less than 1 percent of the equity required for the project for which it seeks the loan guarantee.

Now if you were approaching a mortgage lender with less than 1 percent of equity in your portfolio and a record of defaults and explicit threats against the lender, would you, just before you submit your application, try to swing the deal by filing a federal lawsuit against the lender on old claims that have already been denied?

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Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part I, Part II and Part IV of this series]

USEC Inc. has confirmed that today, May 31, is the last day of uranium enrichment at the Paducah Gaseous Diffusion Plant in Kentucky, marking the end of sixty-one years of operation. The monstrous facility was opened in 1952 as a last hurrah of the Truman Administration, representing one of the most egregious acts of political favoritism in American history. The plant was located in Paducah because that city was the hometown of Alben Barkley, who represented Kentucky’s First District in Congress and then became Truman’s vice president.

(Concurrently, the Piketon, Ohio, plant was located as a concession to Ohio Senator and presidential candidate Robert Taft. Barkley and Taft each boasted about how they had won these megaliths for their states—plants that produced modest employment for half a century along with site contamination that will last for thousands of years.)

Cessation of enrichment today comes as something of a predictable surprise, following the breakdown of extension talks between the U.S. Department of Energy (DOE), which owns the plant, and the privatized USEC Inc., which has leased the operation under the strange accord that has required no leasing fee, nor any continuing legal liability for the mess that USEC has made.

One of four massive switchyards at the Paducah plant that will soon go cold. Photo credit: U.S. Department of Energy

The news is cause for celebration by environmentalists, because the Paducah plant has been powered by three gigawatts of dirty coal in the Ohio Valley. According to the Times Free Press of Tennessee, the Paducah plant was by far the largest buyer of TVA electricity, accounting for $600 million in sales or 5 percent of TVA power last year. And sadly, USEC’s gigantic Freon coolers won’t qualify for TVA’s old-appliance scrap rebate program, because they are radioactive.

The Paducah plant has reputedly emitted more chlorofluorocarbons (CFCs), the worst ozone-depleting and global warming gasses, than all other global sources of CFCs combined in recent years. The plant had been granted a “national security” exemption from the ban on Freon, even though the enriched uranium USEC produced is not used to make nuclear weapons.

Today’s end of operations also has some profound consequences for USEC as it struggles to maintain minimum listing requirements on the New York Stock Exchange. USEC can no longer claim to be the only “American-owned uranium enrichment company,” a claim of dubious veracity anyway since Toshiba became a principal holder of USEC equity, and since federal regulations define a “domestic” producer as one located in the U.S., not according to ownership. URENCO, the European enrichment company, has been enriching uranium at its centrifuge plant in New Mexico since 2010, effectively edging USEC out of the market for centrifuge enrichment in the U.S.

Tomorrow, USEC will be just a broker for uranium obtained from other suppliers, which technically places the company in statutory violation of the USEC Privatization Act of 1996, which made many federal subsidies and concessions available to the company, only on condition that it meets its obligation to enrich uranium. Whether the federal government will demand repayment of the funds transferred to USEC under false pretenses remains to be seen. But don’t hold your breath.

In today’s announcement USEC also says it is issuing WARN Act termination notices to all 1,034 of its Paducah employees, expecting the first round of layoffs to affect about 160 workers between Aug. 5 and Aug. 19. That’s just in time to commemorate the anniversaries of the bombings at Hiroshima and Nagasaki, which fall on Aug. 6 and Aug. 9.

Layoffs are staggered because USEC had attempted to cajole the government into making an additional $13 million payment in material to extend operations and make it look like the plant was doing something. Preparations for property transfer to DOE were therefore delayed. USEC has also utilized Paducah facilities for managing an inventory of Russian uranium, under a separate U.S. government concession called the Megatons to Megawatts Program. That program, however, terminates in December of this year.

The complicated process of transferring leased facilities back to DOE control, and out of regulation by the Nuclear Regulatory Commission, is known as “de-leasing.” In all ways it is comparable to delousing, only the hosts and parasites are smellier.

Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part I, Part III and Part IV of this series]

Last week on EcoWatch, I predicted that negotiations between USEC Inc. and the Department of Energy (DOE) over extension of operations at the Paducah uranium enrichment plant would fail, and that principal power-down would happen as scheduled around May 31. Bowing to my prophetic powers, those negotiations in fact broke down irreparably just one day later, and on Friday both DOE and USEC announced that the plant will close imminently.

Inconsistent statements about the exact timing of the shutdown are due to confusion among the major players, because closure of a gaseous diffusion plant is a costly and complicated business, and neither USEC nor DOE has the resources or the plan to know exactly how this inevitability is going to happen. According to USEC, “the company will begin ceasing uranium enrichment at the end of May.”

Paducah Gaseous Diffusion Plant. Photo credit: USEC/U.S. Department of Energy

The scandal of the situation is that, despite a very long lead-up to the inevitable plant closure (termination notices to employees were sent in December of 2011), no party moved to make detailed plans for the power-down, as DOE and the privatized USEC Inc. engaged in mutual extortion ploys over timing, bill payment and where the political blame for job loss could be cast. In the stalemate, DOE funding for the major work of powering down the enormous facility was put off until the 2014 fiscal year, at least five months after the power-down will actually occur. This insures a dirty procedure with the diffusion cells not evacuated of process gas.

On May 26, after the link to my article was widely circulated and the failure of an extension made headlines, a flurry of email communications among west Kentucky community leaders transpired, which included a terse statement by Paducah mayor Gayle Kaler: “Our priority as a community is first and foremost demanding clean up dollars. We cannot accept a dirty shut down.”

An honorable sentiment, but a dirty shutdown it shall be, not only because of the five month funding gap, but because all DOE discretionary dollars were pumped into saving USEC from immediate financial collapse—up to half a billion dollars in the past few years alone. And that money is mostly gone from the corporate coffers in the form of Gigantor salaries for USEC upper management. As his company sunk in the nuclear muck, CEO John Welch pulled down a cool $6.5 million salary in 2011 alone. If nothing else of energy consequence has come from privatized USEC, the super-speed siphon of funds from the U.S. Treasury to the private accounts of USEC corporate agents truly has been atomic-powered.

The Power-Down Gap

Even if the five month gap were bridged by some ungodly miracle of Mitch McConnell, it would not avert a dirty power-down at Paducah. That’s because William A. Murphie, manager of DOE’s Portsmouth/Paducah Project Office, did not want to hasten USEC’s demise by suggesting in federal budget dealings that the closure of Paducah was anything more than “potential.”

It was as if failing to allocate funds for the closure would force the government into making extortion payments to USEC that would keep up the appearance that the plant was producing something of value, mainly by churning uranium waste to build nuclear fuel stockpiles of dubious future value, with gargantuan releases of CFC ozone-depleting gasses as the main result. (According to David Manuta, former science director at the gaseous diffusion plant near Piketon, Ohio, these plants were “the largest industrial users of Freon,” the largest emitters of CFC gasses, and the stock of special Freon needed to keep Paducah in operation is already gone or nearly so.)

Neither the 2014 budget request of the Obama Administration nor any proposal by the Kentucky Republicans who control congressional appropriations includes funds to evacuate the diffusion cells at Paducah. The pending 2014 funds are only enough to place the facility into what Murphie has termed “cold storage” —mafia-speak for a factory on ice. The term implies a dirty power-down, because if the complex work of cell evacuation were undertaken, the facility would not be in “storage” at all. Bipartisan budget proposals do, however, include more wasted financial bailout money for USEC, which will be long gone from Paducah by the time the loot is pocketed.

Slow-Cookers Galore

Closure of the Paducah plant isn’t a disaster waiting to happen. The observable disaster has been cooking slowly for fifteen years, since privatization of the former “U.S. Enrichment Corporation” in 1998. It has reached a frothing boil right now, and it will continue to burn the residents of western Kentucky for many decades to come.

Of greatest safety concern in a dirty power-down is the “slow-cooker” phenomenon, so-called by engineers, though the term itself is considered classified, and workers at the gaseous diffusion sites in Tennessee, Ohio and Kentucky have been ordered not to utter it. As a nuclear engineer for the Navy in the early 1950s, Jimmy Carter was assigned to work on gaseous diffusion design and may have contributed to invention of the term.

Consider the physical slow-cooker as metaphor for the privatization debacle or vice versa as you please.

Gaseous diffusion plants are unique creatures in the world of industry. The principal designer was the brilliant Manhattan-Project scientist Harold Urey, who was so horrified by his creation that he quit government employ to warn of nuclear and ecological dangers. (Urey’s wife Frieda spearheaded the first antinuclear referendum drive in California.) Urey’s gaseous diffusion cascade is an enormous integrated system, on the explicit analogy of a living organism—its “cells” so interconnected by gaseous and liquid arteries that once sparked to life in a Frankensteinian manner, the monster has to be juiced with power and product continuously. By design, a dead gaseous diffusion plant cannot be revived, because the gaseous uranium hexafluoride hardens in its veins.

A “slow cooker” is a critical mass of uranium and transuranic elements that forms inside the process equipment of a gaseous diffusion plant due to injudicious operation or a loss of power that causes process gas to crystallize. An undisclosed number of slow-cookers has occurred at the gaseous diffusion plants, mostly at the X-326 high-assay building at Piketon, Ohio, where the Criticality Accident Alarm Safety System (CASS) activated on May 22, causing building evacuation during cleanup, according to reliable informants. Ironically, that was the same day that my post about Paducah closure appeared.

The phenomenon was first theorized by the physicist Edward Teller, father of the American H-Bomb, when he visited Oak Ridge during the Manhattan Project. Though the piping in diffusion plants has been designed to prevent any normal critical mass of uranium, as in an atomic bomb, from forming, Teller worried that the combined neutron flux from bringing many hundreds of tons of uranium into relative proximity could yield unanticipated criticality effects.

That possibility has been magnified at Paducah because, in the 1960s and 1970s, recycled uranium containing significant amounts of plutonium, americium and neptunium, was fed into the Paducah diffusion cascade, resulting in worker and environmental exposures that made headlines in the 1980s. Plutonium and other transuranic elements intensify the possibility of critical mass formation, in ways that cannot be entirely predicted because no gaseous diffusion plant contaminated with transuranics has ever been powered down dirty before.

Yes, this is a big science experiment. But hey, kids, don’t try this at home!

The unpredictability is magnified by the fact that USEC, which has operated the facility since the 1990s, followed its proprietary interest and did little maintenance required to keep equipment operable past the date when USEC knew it would depart the premises with no continuing legal liabilities. According to Paducah workers who prefer to not be identified, seals on the thousands of miles of piping are leaking, transuranic contamination is widespread and imported radioactive waste has been packed into the process buildings that are about to be shuttered.

Follow the Moniz

Media coverage of the closure news that was long predictable is getting the story multiply wrong. The venerable New York Times suggests that Paducah closure “could pose a problem for the American nuclear weapons arsenal over time,” which is poppycock, because enriched uranium has not been used in U.S. nuclear weapons since the early 1960s.

Politico leads with the strange observation that USEC is not quite omnipotent, when in fact the company has been struggling just to stay out of liquidation. Some news outlets are reporting that the Obama Administration “rejected a proposal” to keep the plant open, with “1,000 jobs lost” when the truth is that there was no such proposal. USEC has run the plant to a condition of inoperability, and the negotiations that did take place were only about the timing, procedure and payments for the shutdown.

What DOE in fact rejected, according to the Capitol Hill rumor, was the idea that it should give USEC another gift of $13 million dollars’ worth of free uranium, for the service of USEC defaulting on every major promise it’s made. TV and radio in Kentucky are somehow shocked, shocked over a closure overdue by years, as lead-in to the desired editorial position that this, too, should be blamed on President Obama. 

That reaction was seeded in USEC’s ridiculous posture of demanding continued government payments for an enterprise that was privatized by statute in 1998. The billions of dollars in federal slush funds already diverted to USEC by the powerful Ohio and Kentucky congressional delegations have been in explicit violation of the USEC Privatization Act. And if anything in my writing contributed to the final decision to cut the cord, it was that I pointed out what the law clearly states—that discretionary payments to USEC by government officials are criminal acts given terms of the Privatization Act as now on the books, and Congress had to amend or repeal the Act if they wanted to make such payments legal.

Kentucky and Ohio Republicans are suddenly huffy-puffy about Paducah closure, which is pretty ludicrous since they control the key levers of legislative power that could have amended the Privatization Act or passed appropriations to pay for safe shutdown of the facility, but they didn’t. Not only do Kentucky’s Mitch McConnell and Ohio’s John Boehner head the Republican caucuses in both chambers of Congress, but Kentucky’s Hal Rogers chairs the House Appropriations Committee and takes personal credit for the “no-earmarks rule”—that would be the rule that prohibits special appropriations for pet private companies like USEC.

Meanwhile, the Republican congressman from the district that includes Paducah is Ed Whitfield, chairman of the House Committee on Energy and Commerce—that would be the committee that should have initiated 2013 funding for safe shutdown of the Paducah plant but failed to do so. These men assailing the Obama Administration for funding deficiencies at Paducah is like Geoffrey the Giraffe lecturing: “Don’t stick your neck out!”

The reason for the shunning campaign against Paducah funding by Bluegrass State politicians is quite apparent. USEC has longed for the closure of Paducah to avoid the huge power bill, and has advertised the closure to investors as a necessary boost to profitability. At the same time, USEC has been a major campaign contributor to the GOP congressional delegation from Kentucky, recycling the federal dollars it receives in a feint to eco-awareness.

If the certainty of Paducah closure had served as the basis for congressional hearings or a federal budget line, it would have undercut USEC's corporate strategy of extorting federal payments on the possibility of indefinite extension of operations. USEC has consistently demanded DOE “discretionary” funding and extra-legal gifts of uranium by threatening to abandon Paducah before DOE had attained the necessary closure funding, precipitating a nuclear crisis. What DOE headquarters in Washington has finally done is to call USEC’s bluff.

It is probably also true that Ernest Moniz, just confirmed as the new Secretary of Energy by the U.S. Senate on May 17, likely did not want his first major act as Secretary to be an illegal giveaway to USEC. Moniz can be called an architect of the USEC catastrophe. He helped design the disastrous USEC privatization for the Clinton Administration in the 1990s, he defended that privatization in testimony to Congress in 2000, he served as a “strategic advisor” to USEC starting in 2002, when USEC undertook its “diversification” away from uranium enrichment, and his ties to USEC were one stumbling block in his confirmation as Energy Secretary. 

New Secretary of Energy Ernest Moniz during his days planning the USEC privatization for the Clinton Administration. Photo credit: U.S. Department of Energy

USEC executives bubbled over with glee that their man was appointed to be the new Secretary of Energy. But if only Richard Nixon could have reached out to Communist China, then only Ernest Moniz may have the cred to tell USEC to shove it.

Unfortunately, USEC shoving it means that the workers and community of Paducah will continue to get reamed.

Neighbors for an Ohio Valley Alternative will be announcing educational and organizing events in Paducah shortly.

Neighbors for an Ohio Valley Alternative

By Geoffrey Sea

[Read Part II, Part III and Part IV of this series]

Disaster is about to strike in western Kentucky, a full-blown nuclear catastrophe involving hundreds of tons of enriched uranium tainted with plutonium, technetium, arsenic, beryllium and a toxic chemical brew. But this nuke calamity will be no fluke. It’s been foreseen, planned, even programmed, the result of an atomic extortion game played out between the U.S. Department of Energy (DOE) and the most failed American experiment in privatization, the company that has run the Paducah plant into the poisoned ground, USEC Inc.

As now scheduled, main power to the gargantuan gaseous diffusion uranium plant at Paducah, Kentucky, will be cut at midnight on May 31, just nine days from now—cut because USEC has terminated its power contract with TVA as of that time [“USEC Ceases Buying Power,” Paducah Sun, April 19, page 1] and because DOE can’t pick up the bill.

DOE is five months away from the start of 2014 spending authority, needed to fund clean power-down at Paducah. Meanwhile, USEC’s total market capitalization has declined to about $45 million, not enough to meet minimum listing requirements for the New York Stock Exchange, pay off the company’s staggering debts or retain its operating licenses under financial capacity requirements of the Nuclear Regulatory Commission.

The Paducah plant cannot legally stay open, and it can’t safely be shut down—a lovely metaphor for the end of the Atomic Age and a perfect nightmare for the people of Kentucky.

Dirty Power-Down

If the main power to the diffusion cascade is cut as now may be unavoidable, the uranium hexafluoride gas inside thousands of miles of piping and process equipment will crystallize, creating a very costly gigantic hunk of junk as a bequest to future generations, delaying site cleanup for many decades and risking nuclear criticality problems that remain unstudied. Unlike gaseous uranium that can be flushed from pipes with relative ease, crystallized uranium may need to be chiseled out manually, adding greatly to occupational hazards.

The gaseous diffusion plant at Oak Ridge, TN, was powered-down dirty in 1985, in a safer situation because the Oak Ridge plant did not have near the level of transuranic contaminants found at Paducah. The Oak Ridge catastrophe left a poisonous site that still awaits cleanup a quarter-century later, and an echo chamber of political promises that such a stupid move would never be made again. But that was before the privatization of USEC.

Could a dirty power-down at Paducah—where recycled and reprocessed uranium contaminated with plutonium and other transuranic elements was added in massive quantities—result in “slow-cooker” critical mass formations inside the process equipment?

No one really knows.

Everybody does know that the Paducah plant is about to close. Its technology is Jurassic, requiring about ten times the energy of competing uranium enrichment methods around the world. The Paducah plant has been the largest single-meter consumer of electric power on the planet, requiring two TVA coal plants just to keep it operating, and it’s the largest single-source emitter of the very worst atmospheric gasses—chlorofluorocarbons (CFCs).

The plant narrowly escaped the selection process that shuttered its sister plants in Tennessee and Ohio long ago. A 2012 apocalypse for Paducah workers was averted only by a last-second, five-party raid on the U.S. Treasury involving four federal entities pitching together to bail out USEC financially, a deal so arcane that knowledge of Mayan astrological codices would be required to grasp its basic principles. The plot would make for a great super-crime Hollywood movie in which Kentucky’s own George Clooney and Ashley Judd could star, if only the crafting lawyers and bureaucrats had made the Code of Federal Regulations as easy to decipher as bible code, or half as interesting.

“The deal” that saved Paducah operations for a year, past one crucial election non-coincidentally, probably consumed more net energy than it produced by stupidly paying USEC to run depleted uranium waste back through the inefficient Paducah plant—like a massive government program paying citizens to drink their own pee as a way to cut sewerage costs and keep medics employed prior to a Presidential contest. The deal never would have passed muster if it had been subjected to environmental or economic reviews of any kind, but it wasn’t. The “jobs” mantra was chanted, and all applicable laws from local noise-control ordinances to the Geneva Conventions were waived.

But the deal expires on May 31, in nine days. USEC and DOE have both said that discussions for a new extension deal continue, but rumors of a new deal were dashed on May 7, sending USEC stock into a flip-flop, when in an investor conference call, the company announced that no extension had been agreed, with very pessimistic notes about even a “short-term” postponement. That accompanied news that USEC had suffered a $2 million loss in the first quarter of 2013, largely attributable to the power bill at Paducah, which USEC says it’s under no obligation to keep paying.

Showing no enthusiasm whatsoever, USEC CEO John Welch said on May 7:

“While we continue to pursue options for a short-term extension of enrichment at Paducah beyond May 31, we also continue to prepare to cease enrichment in early June.”

Meanwhile, the Kentucky DOE field office in charge, managed by William A. Murphie, has advertised a host of companies “expressing interest” in future use of the Paducah site, with no explanation of how the existing edifice of egregiousness will be made to disappear. “Off the record,” the Kentucky field office has floated dates like 2060 for the completion of Paducah cleanup.

That’s two generations from now and kind of a long time for the skilled workforce and other interested parties to hang around. Even the 2060 date assumes that costs can be minimized by evacuating the diffusion cells before power-down—the scenario that seems certain not to happen because no one has the funding for it. Flushing the cells of uranium hexafluoride gas is the only sensible way to power-down, but it’s costly and time-consuming. At the Piketon, Ohio, plant a semi-clean power-down has cost billions of dollars and has taken twelve years and counting to accomplish. (Murphie will have to explain why he paid USEC so much money for the extended power-down at Piketon, while simultaneously asserting that a Paducah power-down can be accomplished swiftly and cheaply). Clean power-down also requires that workers and supplies be available on demand, and in the Paducah case, there simply isn’t time.

According to reliable sources, contracts are being prepared for the work of placing the plant into what Murphie calls “cold storage”—a term of his invention. But those contracts won’t take effect until October when fiscal 2014 funds are available. “Cold storage” at that point means closing the doors, posting guards outside, and otherwise walking away.

Can there yet be an extension deal to hold over the plant until 2014 funds are available? Probably not, because USEC may not last that long, the equipment in the plant has been run to decrepitude with no attention to maintenance, there isn’t sufficient time to make the arrangements, and a second end-run around environmental compliance would likely generate lawsuits.

Captains Log: A Heck of a Long Time

As to when the site might be cleaned up for “future use” under a “cold storage” scenario, nothing has even been rumored. I think we are talking Star Trek dates. Or consider the half-life of natural uranium, which is about four and a half billion years.

Until such time, the Paducah plant will either sit like a massive metallic boil on the planet, or be demolished and scavenged for semi-precious metals like the Oak Ridge facility. But the plutonium, americium and neptunium at Paducah may nix the latter possibility. The dirty power-down arranged by Murphie would make it impossible to prevent transuranic atmospheric release during demolition.

I propose a bronze encasement for the whole fandango, with a plaque that reads:

                                                    WRECK OF THE U.S. USEC

GREATEST FAILURE OF GOVERNMENT PRIVATIZATION IN WORLD HISTORY

                                                             IN MEMORIUM

At least that would help Murphie comply with the National Historic Preservation Act. Call it a learning experience.

Interested observers are still awaiting some rabbit to be pulled from Murphie’s hat, as he produced one year ago in 2012. To gauge that possibility I sent Murphie an e-mail on May 10, asking him where he was going to get the money to pay for clean power-down with the cut-off date only weeks away as reported by USEC. Specifically, I wrote: “What’s up with that?”

And, within hours I received a reply, probably because I had copied Mitch McConnell’s chief of staff on my correspondence. Murphie wrote:

“As you are likely aware, the Paducah procurement process has begun involving the USEC facilities. I suggest you look at the DOE CBC home page regarding the proposed IDIQ business opportunities and keep an eye on it for updates. As for the funding question, the DOE did submit a request to Congress that includes language regarding the potential USEC facilities return [a fiscal year 2014 request].”

That’s a very interesting reply because, aside from the vacuous PR about fantastic “business opportunities” at a site of nuclear catastrophe (maybe a lollipop factory!), it confirms that DOE does not have some secret stash of funds to evacuate the diffusion cells at Paducah, at least until fiscal year 2014, at least five months too late. Murphie is still calling the certain closure of the Paducah monstrosity “potential,” meaning he can’t yet pay for it. I asked Murphie to resolve that dilemma in a follow-up e-mail, but alas I had used up my entitlement to one response per five years and so got none.

I admit that some pretty cool proposals for Paducah “future use” have been cooked up by Murphie and his PR people. In mid-2012, Kentucky state legislators sought an exemption from the state’s moratorium on nuclear power (a giveaway to coal interests), so that Paducah could become a research center exploring the use of nuclear explosives in fracking for oil and gas. Hot diggity!

“Discussions” between DOE and USEC about extension may indeed be ongoing. But I imagine they are like the proverbial separation negotiations between the gold-miner and the gold-digger. The gold-digger demands maintenance for the lifestyle to which she’s become accustomed, or she’ll walk. The gold-miner looks at the lump of iron pyrite he’s been left with and says: “You already got everything I had.”

DOE’s William Murphie and Daniel Poneman (second and third from left) with USEC employees at the Piketon site. Photo credit: U.S. Department of Energy

Murphie’s Law

So how did it come to this? Since the plant was originally scheduled to cease operations on May 31, 2012, why didn’t USEC and DOE have plenty of time to plan for orderly and funded clean power-down, which was precisely what the sleazy one-year extension deal was supposed to give time to accomplish.

The answer is that the entire uranium enrichment enterprise of the U.S. has become a sham operation, a sham designed to funnel U.S. Treasury funds to private companies including USEC and its partners, a sham designed to convert any problem or scandal into additional contractor award fees, a sham designed to keep the fig-leaf of a privatized USEC Inc. from blowing away and exposing all the naughty bits.

Those became the goals of the operation, not enriching uranium, developing new technology or achieving safe operations or cleanup of the sites. Murphie’s Law is that if anything can go wrong, it will boost contractor award fees, for a select group of companies hand-picked by Murphie himself. Thus, the principal “cleanup” contractors at Piketon are Fluor and Babcock & Wilcox (B&W), both of which are suppliers to USEC’s fake “American Centrifuge Project,” and B&W is a strategic partner of USEC with a large share of USEC preferred stock, poised to take over USEC’s operations if the latter goes under.

And USEC is going under, by design, leaving its bondholders, pensioners and U.S. taxpayers holding one very empty bag. USEC stock has now lost 99% of value since its bubble peak in 2007. USEC’s auditors issued a “going concern” letter in March of this year, warning that the company appears to have no viable business plan moving forward. The New York Stock Exchange issued a delisting warning to USEC in May of 2012, and a second warning on a separate deficiency in May of 2013.

If USEC is delisted, about half a billion dollars of debt to bondholders becomes due immediately, and at least $100 million in pension obligations are owed in Ohio and Kentucky each. But the entire company is only worth about a twentieth of its debts, or about 1 percent of the cost of the new commercial plant it pretends it will build. USEC’s 2013 shareholders meeting, at which the crisis might come to a precipitous conclusion, was postponed from April to June, presumably to give the company a chance to depart from Paducah without adding a nuclear crisis to its public liabilities. USEC is now an empty shell about to be shucked: the company’s dissolution and the Paducah plant’s decommissioning have been timed to coincide.

Once USEC has departed Paducah, it will no longer be in the uranium enrichment business, as it will operate no enrichment facilities. The company, which was created by statute for the sole purposes of enriching uranium and developing new technology, will be doing neither. It will only be an international uranium broker, ironically a front for Russian uranium interests. Imagine if the U.S. Postal Service decided to hoard its U.S. government subsidies, exit the mail delivery business and become only a marketing agent for Russian stamps. That analogy precisely applies to what USEC is doing, in stark violation of the USEC Privatization Act.

But USEC has had two quite powerful politicians in its service, from the states in which it has operated, men who control the Republican caucuses in both chambers of Congress—John Boehner of southern Ohio and Mitch McConnell of Kentucky. If Congress had appropriated the funds to pay for Paducah power-down in a timely fashion, for fiscal year 2013, then the USEC house of cards would have come down one year earlier. There could not have been rumors of federally-financed extension deals, or stock speculation runs premised on talk of a USEC buyout, or shipments of “spare parts” from Piketon to Paducah just to make it look like USEC is a going concern.

In short, if Bill Muphie’s office had secured the funds and let the contracts to do a clean power-down of Paducah starting June 1, then the jig would have been up for USEC months ago, the company might already be in liquidation, and hundreds of millions of dollars in continuing federal subsidies to USEC might not have been wasted. For its part, USEC has even now failed to announce a date certain for Paducah closure, although cancellation of its power contract was an effective extortion tactic for wheedling additional dollars from federal coffers.

So Murphie didn’t secure the funds and didn’t issue the contracts, and kept right on doing federally-paid PR work to falsely suggest there could be a smooth economic conversion at Paducah. Boehner and McConnell ate it all up while chanting the “jobs” mantra, for it reinforced their narrative that USEC Inc. is the best thing since sliced atoms. To keep a large campaign contributor out of bankruptcy court for a few more months, the Paducah plant was permitted to reach the current crisis state. And the people of Kentucky were sent straight to nuclear hell.

Nine days.

Geoffrey Sea

Environmentalists should be jubilant as the dinosaurian uranium enrichment plant at Paducah, Kentucky, nears expiration as soon as May. Based on antiquated gaseous diffusion technology, the facility is the largest single-meter power consumer on the planet, eating as much electricity as the city of St. Louis. It is likely the largest point-source emitter of the worst ozone-depleting greenhouse gases in the world, chlorofluorocarbons, as well. Paducah has a notorious history as a generator of occupational illness, since worker-whistleblower Joe Harding compiled lists of cancer-stricken co-workers:

It should have been shut down long ago. Yet no government agencies or environmental groups are clamoring for closure, because the event will generate as many problems as it solves.

The shutdown has been foreseeable and even scheduled for many years. Privatization of the U.S. Enrichment Corporation (now USEC Inc.) in the 1990s aimed at closing Paducah and its sister plant near Piketon, Ohio, with plausible deniability for incumbent politicians. (The pols could huff and puff about the loss of jobs, while throwing up their hands at USEC's unchallengeable "business decisions.") But now, with cessation of production imminent in the run-up to a presidential election, the dark clouds of the most precipitous failure of privatization in U.S. history are gathering into a perfect storm of policy breakdown.

The Paducah plant's closure will end all USEC production of nuclear fuel, effectively terminating the company for its established purposes, undoing years of taxpayer-subsidized PR hawking USEC as the sole domestically-owned enrichment company. (USEC may continue as what the CEO calls "a smaller company," devoted to the importation of Russian uranium and peripheral businesses.)

Neither USEC nor the Department of Energy (DOE) have the funds to keep the plant open, nor have the parties cooperated on a plan to pay for the expensive process of shutting it down, redirecting the workforce, or cleaning up the radiotoxic mess. Decades of lax or unregulated dumping and maintenance neglect have left an industrial witch's brew of asbestos, PCBs, TCE, fluorides, beryllium, nickel carbonyl, plutonium and classified materials unknown or unrevealed.

The Piketon enrichment plant closed in May of 2001, on the theory that staggered cleanup of the grossly abused sites, which remain government-owned, would be more affordable. But for all eight years of G.W. Bush's tenure at the White House, Piketon cleanup was postponed, while USEC was paid exorbitant fees, a hidden form of subsidy, to maintain Piketon in mothball status. The expensive part of Piketon decontamination and decommissioning (D&D), involving tear-down of process buildings that cover almost a hundred acres and disposal of millions of cubic yards of waste has yet to begin. But now there isn't the money to pay for that either.

D&D-Day

For decades of U.S. monopoly on the western world's supply of commercial enriched uranium, nuclear utility companies were charged a surtax on uranium fuel supplied from the gaseous diffusion plants to pay for ultimate D&D of the facilities. But with privatization and the rise of new generations of cheap centrifuge enrichment technology abroad, along with pressure from the utilities, the surtax was waived in yet another subsidy for USEC, to keep the company's product cost-competitive.

That was engineered principally by USEC's captive Ohio congressman, who became the Bush administration's trade representative and budget director, now U.S. Senator, Rob Portman. The future of the Piketon and Paducah sites for literally thousands of years to come was mortgaged to pay for a perceived transient business boost to USEC Inc. in the decade following 1998.

Make a mental note, because when Portman runs for POTUS at the end of his Senate term in 2016, the USEC catastrophe will be the most radioactive skeleton in his closet.

As a result of Portman's concessions to USEC, the D&D Fund languished with inadequate and non-accumulating balances, and now it has been all but shelved as a bipartisan embarrassment. In 2004, the Government Accountability Office warned that the fund is "insufficient to cover cleanup costs," but that warning was so dire and so implicitly condemnatory of rising stars in both of the major political parties (i.e. Mitch McConnell, Mr. Portman and the latter's south Ohio bedfellow rival Ted Strickland, not to mention the Clinton and Bush clans), the consensus action was to bury the report's conclusions.

Supposedly—no updated accounting is available—the fund has stood at about $4.4 billion. But in 1996, the National Academy of Sciences cited various estimates for the total costs of gaseous diffusion cleanup ranging from $8 billion to $46 billion, meaning that the D&D Fund, which has also been diverted to non-decommissioning activities, cannot now even pay for inflation adjustments on the bill.

Steps taken by the ensuing Obama administration to rectify the situation and prepare for the inevitable D&D operations remain undisclosed as if classified for national security. The Department of Energy has been wracked by paralysis born of the seriousness and magnitude of the problems, and internal divisions caused by top deputy and assistant secretary positions left in the hands of Bush administration holdovers, whose agenda has been to sabotage the current administration. Add wildly irrational antagonism from Republicans in Congress, including especially from the top two Republicans, Ohio's John Boehner and Kentucky's Mitch McConnell, who have made the inherent competition for funds between Piketon and Paducah into a kickball between the chambers of Congress, providing total assurance that nothing legislative can get done.

Until recently (too late to make a difference) all three officials at DOE with lead responsibility for the Piketon and Paducah sites were holdover Republicans: Deputy Secretary Daniel Poneman, a transfer from the neocon Scowcroft Group, whose chief prior portfolio in and outside of government had been unsuccessful attempts to persuade Australians and Mongolians to accept high-level nuclear waste from the U.S. for disposal; Assistant Secretary for Environmental Management (resigned last July amidst suspicions of misconduct) Ines Triay, who invented the illegal method of bartering uranium with USEC to fund cleanup operations; and Assistant Secretary for Nuclear Energy (replaced in 2011) Dennis Spurgeon, the former Chief Operating Officer for USEC.

The revolving door at the Department of Energy's Forrestal Building in Washington spins a whole lot more reliably than USEC uranium centrifuges.

With Triay and Spurgeon gone, the non-saboteurs at the Department of Energy had only ten months to come up with tens of billions of dollars in legal funds for cleanups at Piketon and Paducah, over the contradictory objections of congressional leaders, in an election year of Tea Party austerity.

Duck and Cover

Meanwhile, McConnell and the rest of the powerful Kentucky delegation launched a political offensive, insisting that DOE find a way to keep the Paducah environmental monstrosity open as a jobs program, although those temporarily-saved jobs would come at an exorbitant expense to U.S. taxpayers, and undo every vestigial benefit of privatization. (For the savings of closure, the government could hire many times the number of workers to sit and "watch waste," as one Piketon employee has described his second career.) Sen. McConnell even crossed territorial lines to verbally assault Secretary of Energy Steven Chu at a hearing in the House of Representatives.

In response, Chu and his subordinates followed the "Duck and Cover" guidance of their atomic agency predecessors:

And never has ducking and covering been done with more ardor and non-aplomb than by Chu's DOE. No less than three groups of senators and representatives from both parties barraged Chu with interrogatory letters in early 2012, seeking answers to basic questions about continuing stated DOE support for USEC Inc.'s fantasy-land centrifuge spin-doctoring, matched with a non-compos-mentis (not mentally competent) policy regarding real-world cleanup matters at Paducah and Piketon. Not one of the congressional inquiries has yet drawn a written response. Nobel-winner Chu is going for the gold now in Olympic ball-dropping.

The Kentucky delegation has pushed a proposal originally advocated by USEC called "re-enrichment," which would involve a sweetheart no-bid contract for USEC to run some depleted uranium "tails," now stored in thousands of cylinders at the Paducah and Piketon sites, back through the Paducah enrichment cascade, squeezing out some additional Uranium-235, staving off a total shutdown.

But all at once, this would violate the laws of economics, jurisprudence and thermodynamics. It could never be more profitable to "re-enrich" tails than it would be to enrich new natural uranium, and the latter course would employ now-underemployed uranium miners, if the objective were to save jobs. If tails were re-enriched, it would never make sense to employ the least-efficient technology on earth, rather than to send the tails to a super-efficient centrifuge plant like the one operating in New Mexico, if the objective were to make money to fund site cleanup. Current legal agreements aimed at protecting the uranium mining industry limit the amount of government uranium stockpiles that can be released in any year to ten percent of the domestic market for commercial uranium. But that allowance is already at quota, owing to the Triay caper of using uranium barters to funnel extra-legal funds to USEC for various and nefarious purposes beyond congressional scrutiny. Plus, any such legislated market intervention would explicitly contradict the USEC Privatization Act, the rationale for which, after all, was to shut Paducah down with hands-off by the politicians.

One can almost sympathize, however, with Mitch McConnell in this spring 2011 exchange with Steven Chu at a Senate Appropriations hearing:

Aside from the disingenuous posturing about the decrepit Paducah plant and the desperate re-enrichment proposal, McConnell makes a simple point:

"Let's assume we don't do that [re-enrichment], then the question is, do we have the funds in the 2012 budget to safely and securely idle the [Paducah] plant after it closes and returns to the government?...There's apparently no plan in your budget for cleanups after the operations cease."

Chu then evades the cleanup issue entirely. A bit later in the transcript:

Chu: We would have an obligation to clean up that plant

McConnell: When will we see the plan?

Chu: Well, um, we can get back to you and your staff on that.

McConnell: ...What I think I hear you saying is, you've got no plans for either contingency at the moment.

Chu never got back to McConnell or any other legislator on funding for Paducah cleanup.

The Wreck of the USS USEC

Ten months later, additional uranium transfers have been made to USEC for no purpose other than to keep the company out of bankruptcy, and with closure of Paducah only sixty days away, still no shutdown management or site cleanup plans have been disclosed by DOE. Worse, cleanup funding for the Piketon site has been slashed in the president's 2013 budget proposal, and it's become clear that DOE lacks the funds for legally-compliant cleanup of even one of the gaseous diffusion sites, much less two at one time.

The Senate exchange between Chu and McConnell does reveal what has happened. Asked about cleanup, Chu can't even train his scientific mind on the subject. Instead, he digresses to off-topic technobabble about a project he doesn't quite want to specify, intended to replace gaseous diffusion. That is a feint to USEC's own corporate PR, which, since the company's creation, justified all manner of end-runs around constitutional and statutory law for the sake of a yet-unfulfilled promise that USEC would develop an "advanced" enrichment technology, and deploy it in such a way as to replace the aged plants at Piketon and Paducah.

That proprietary pitch never worked out well for the impoverished communities of Piketon and Paducah, which were pitted against one another in USEC-incited competition. An "advanced" plant would employ relatively few people—a few hundred as opposed to a few thousand—leaving the jobs problem unaddressed. The national security dimensions of a new enrichment plant would prohibit any other form of more gainful reindustrialization at the selected site. And a new plant would not magically clean up the legacy contamination, though it might allow DOE to escape high costs by lower contamination standards through the rubric of "nuclear reuse."

And that's exactly how USEC sold its "American Centrifuge" charade to DOE budget bureaucrats. For more than a decade, DOE has funneled federal dollars to "privatized" USEC by the billions, on the ever-extended promise that by building some new kind of nuclear facility at either Piketon or Paducah or both, the major nuclear cleanup costs would be avoided, even if the political promise of saved jobs were as phony as the spin on a USEC centrifuge.

Which turned out to be pretty phony, indeed. On June 11, 2011, only weeks after Steven Chu's Senate dissembling about how a new enrichment technology might answer the cleanup question, six USEC centrifuges crashed in a covered-up accident at the Piketon test facility, where, after a decade of alleged development, USEC had managed to get only thirty-eight centrifuges running. The June 11 debacle led to a second denial of a federal loan guarantee to USEC, now under Solyndra-like scrutiny, which in turn left USEC barely able to stay out of bankruptcy court, much less build a new nuclear facility, as the company entered the cataclysmic year of 2012.

Half a Billion with a B

In its annual report filed March 14, 2012, USEC acknowledges a net loss for 2011 of $540.7 million. That's half a billion dollars, including a $127 million write-off for all of the operable centrifuges it had produced so far, a fair chunk of change. Virtually all of those lost moneys came from accrued federal subsidies, including a $50 million mystery payment to USEC from DOE in the third quarter of 2011.

Moreover, the Obama administration has proposed giving USEC an additional $300 million over the next two years for an alleged "Research, Development & Demonstration" centrifuge project—the same crashed program that USEC was contractually bound to complete with private financing by 2005 but never did. Congress has so far not consented to that appropriation, as the request lacks any hint of transparency or accounting controls.

Circumventing committee debate on the issue, Ohio's two Senators, Sherrod Brown and Rob Portman, inserted a provision for the funding as a last-minute amendment to the unrelated Transportation bill passed by the Senate, but in a rather stunning display of corporate-shill cynicism, Portman voted against the bill that contained his own USEC amendment.

The House has delayed action on the Transportation bill to at least mid-April and more likely to the ninety-day limit of a continuing bill introduced on March 22, which itself contains no bailout language for USEC. That means Congress will almost certainly miss the March 31 "deadline" set by both USEC and DOE as the last date by which the "American Centrifuge" project could be saved from termination by congressional action. USEC had less than $38 million in cash at the end of 2011, per its annual report.

USEC's bailout prospects have been further damaged by the sound defeat of incumbent congresswoman Jean Schmidt, whose district includes Piketon, in the Republican primary election on Super Tuesday. Schmidt sits on the Transportation Committee, and the T-bill strategy for accomplishing a USEC bailout had been premised on her influence.

Republicans in the congressional delegation from Kentucky may be a bailout's biggest opponents, since they are being asked to support a new unexplained payment to USEC that is cockamamie, as they may or may not say in Kentucky, just a month before the Paducah plant is scheduled for shutdown, with no management or cleanup plan revealed. That's a lot to swallow for a state that's shown no particular love for federal lawmaking.

Kentucky lawmakers are so exasperated, they have fallen back on demanding the re-enrichment scheme just to avert a catastrophic closure with no advance preparations whatsoever. But USEC has put the kibosh on that kind of talk, since the company is in no kind of shape to keep Paducah operating at a loss.

In a webcast conference call that attended release of its annual report, USEC managers emphasized that of three conditions all needed to extend operations at Paducah, none have been met, none are likely to be met by May, and one—sufficient market demand for low-enriched uranium—is virtually impossible given post-Fukushima conditions. Mandatory six-month plant closure notices were issued to Paducah employees last November.

In a concurrent filing with the SEC, USEC made plain:

"...we do not believe there is sufficient uncommitted demand for LEU [Low-Enriched Uranium] to support a Paducah extension, even with an agreement with DOE for tails re-enrichment to absorb a significant portion of the plant production capacity. Therefore, at some point in the next 18 months, we expect to cease commercial enrichment at the Paducah GDP [Gaseous Diffusion Plant] but the facility may remain operational to meet other requirements."

"Operational" means that USEC will continue non-enrichment activities at the site, to prevent its being replaced by some other managerial contractor. According to Weapons Complex Monitor, USEC has also expressed interest in obtaining the multibillion-dollar D&D contract for Paducah. But when USEC attempted to secure the equivalent contract at Piketon, it was barred from bidding by a conflict-of-interest ruling from the DOE General Counsel. There is no reason to think that the ruling would not apply equally to Paducah.

The Writing on the Wall

The Paducah plant will close in May or soon thereafter, reverting to U.S. government control through a process called deleasing (similar in all ways to delousing). USEC simply can't afford to keep Paducah open. Following pure profit motive, as it is supposed to do by virtue of the Privatization Act, USEC has calculated that the company loses money every day that Paducah remains in operation, whereas, precisely because DOE has not prepared any contingency plan for D-Day (deleasing day), DOE will be forced to retain USEC as a managerial agent for the shuttered facility. Just as it did at Piketon for a decade, USEC can then collect cushy contract fees, producing nothing, free of any risk or marketplace rough and tumble.

Exit from the internationally-competitive and shrinking (outside of China and India) uranium enrichment industry, and entry into the world of big-time contract services for the U.S. government and other companies, is exactly the corporate strategy that USEC has pursued for the last eight years, since 2004. In that year, USEC purchased NAC International, a company that provides transportation and storage services for spent nuclear fuel, on contract.

So while the Department of Energy has been hawking and funding USEC's centrifuge technology as the best thing since sliced atoms, USEC has been plotting its exit from the enrichment industry altogether, which partially accounts for why its "American Centrifuge" shadow play has been such a non-starter. There is no "American Centrifuge Plant," as the signs on the highway advertise. It's an American subterfuge project, nothing but a high-tech siphon for emptying the U.S. Treasury.

Has Chu's Department of Energy been fooled by this? I don't think so. DOE has rationally concluded that as long as it can maintain the pretense of a coming "advanced" enrichment facility, it can avoid billions of dollars in otherwise mandatory cleanup costs, by setting aside all or portions of the Piketon site for "future nuclear use," with attendant lower cleanup standards.

And that's what we've seen at Piketon—a succession of hoax promised nuclear projects (spent fuel storage, nuclear reprocessing, nuclear reactors, and what not)—together with accelerated "cleanup" schedules to sweep up the site on the cheap, before the future nuclear uses are revealed as phantoms. The latest announced schedule for Piketon D&D, premised on USEC running a completed centrifuge plant on a portion of the site, calls for conclusion of an on-site waste disposal decision, opposed by an overwhelming majority of the community, before this fall, coincidentally enough.

DOE appears to have calculated that it's cheaper to keep paying USEC in $50 million under-the-table installments—to save the company from bankruptcy court and to keep up the appearance that the "American Centrifuge" project is ongoing—rather than publicly acknowledge that DOE is on the hook legally for tens of billions of dollars of post-nuclear cleanup costs at both the Piketon and Paducah sites, with not even the prospect of funding to pay for it. That logic holds at least until the November election. After that, atomic bombs might as well drop.

But both Mitch McConnell and John Boehner are on to that caper. They know there will be no deus ex machina to prevent a catastrophic closure of the Paducah plant, or a final curtain draw on the "American Centrifuge" stage act, all before Barack Obama stands before the voters in November. The Republicans are planning one helluva summer and fall offensive in the heartland Ohio Valley.

And that is why Steven Chu, winner of the Nobel Prize in Physics, in continuing to shovel federal funds to USEC Inc., while simultaneously playing possum on cleanup of the Piketon and Paducah sites, may turn out to be the highest-ranking idiot savant of all time.

Re-posted on the Southern Ohio Neighbors Group blog.

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Geoffrey Sea is a writer and historian who has studied the uranium enrichment industry for thirty years. In the early 1980s, he served as a consultant to the labor unions at both the Piketon, Ohio, and Paducah, Kentucky, plants. He now lives on the southwest fence-line of the Piketon site and is a co-founder of Southern Ohio Neighbors Group.

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Geoffrey Sea

Congressional leaders of both parties had rushed to provide an emergency bailout for the limping nuclear fuel supplier USEC Inc.  But the bailout package, now stuck in the DC-standoff muddle, is too little and too late. USEC, hemorrhaging money, appears to be jumping ship to the arms of a French-government suitor.

Both former national nuclear companies of the United States and France, USEC and AREVA, are now quasi-privatized. Together they have driven the world market in nuclear fuel, and their axis of cooperation and competition has given definition to the global nuclear industry.

They were the only applicants for the fourth, forgotten, "front-end-nuclear"category of loan guarantees from the U.S. Department of Energy (DOE)—AREVA for its Eagle Rock centrifuge project in Idaho, and USEC for its "American Centrifuge" project or ACP near Piketon, Ohio. Both companies have suffered mightily from the global downturn in nuclear prospects and especially from the sudden market saturation in nuclear fuel, caused by the lingering shutdown of 44 of Japan's 54 nuclear reactors.

Many have believed it inevitable that USEC and AREVA would overcome their rivalry, and now the inevitable is happening. AREVA announced on Dec. 13 that the Eagle Rock facility, though now delayed, may be completed by a partnership of the two. The announcement would not be possible if discussions between the companies were not already at some advanced stage.

Significantly, on the same day, an expected congressional bailout of USEC, reported to be part of the omnibus 2012 appropriations package, evaporated in the most recent standoff between Reid and Boehner. USEC stock price plunged nearly 5 percent on that news, to $1.20, one penny higher than its historic closing low, reached just days ago.

Because the USEC bailout was structured in the form of federal "Research, Development & Demonstration" assistance for ACP technology [see part 4 in the series on USEC]—a poorly-chosen cover for the needed emergency cash infusion—the funds would not be spendable if USEC is pursuing project merger with AREVA. Even if the omnibus spending bill is salvaged, and it includes up to $300 million in ACP technology assistance, that provision would be immediately mooted by even the suggestion that USEC would abandon ACP for Eagle Rock.

(And to the Appropriations leaders reading this, the provision should be removed from the omnibus package, since the cat is out of the bag that USEC is pursuing another course).

USEC has made clear since the bailout was proposed in October that technology assistance would be insufficient to save the company or the project in the absence of a conditional commitment on a $2 billion loan guarantee. Meanwhile, the DOE has made clear that USEC has no chance of qualifying for a loan guarantee before at least two years of a technology development program not yet funded or begun.

Given the incompatibility of those positions, it was only a matter of time before ACP was acknowledged as over. How over is the American Centrifuge Plant? It's over like a flipped flapjack on the back of a turtle turned upside-down. And that, my friends, is over.

Around and Around We Go

While first reports provide few details of a prospective AREVA-USEC centrifuge partnership, the necessary parameters emerge from recent history. Almost as soon as he took office in 2007, Ohio Governor Ted Strickland, a hometown boy long familiar with USEC and its woes, pursued his own inspiration for an AREVA-led bailout of USEC, hosting talks between the companies at government offices in Columbus.

Strickland's conception, of course, was to substitute an AREVA centrifuge enrichment plant for USEC's unfinanced ACP, which was already foundering. That idea ran into a host of practical and legal roadblocks, including the impossibility of transferring USEC's NRC license to a different company using different technology, the straightjacket of USEC's long-term lease at the federal site, prohibitions of foreign ownership in the USEC Privatization Act, and, not least, the absence of any profit-incentive for USEC. Ultimately, it was USEC that ended the negotiation with insistence on a $2 billion federally-backed loan for its lonesome, and that pushed AREVA to Idaho, where it found a site on private land in sparse Bonneville County.

The last gasp of the failed Strickland initiative was a hoax event at the Piketon site in June of 2009, at which USEC and AREVA jointly announced, with an entourage of political parasites, that they would build an AREVA-design nuclear reactor at Piketon. But no one would say exactly where it would be built, or how it would obtain regulatory approval, or who would pay for it. Oops!

AREVAderci USEC

So let's see. AREVA has a private construction site, a centrifuge technology already proven and profitable around the world (licensed from URENCO), an NRC construction and operating license, and a conditional commitment on a $2 billion loan guarantee awarded in 2010. Despite the current downturn in its fortunes, AREVA is a diversified global giant with operations in dozens of countries.

USEC only leases the federal site in Ohio, which comes with a raft of regulatory and legacy cleanup problems. Its technology straddles the line between outmoded, dysfunctional, and fictitious, as the belated small demonstration-scale cascade suffered a major crash last June [see part 3 in the series on USEC]. USEC is mired in debt and has no financing to speak of, denied twice for a DOE loan guarantee and delayed for a federal bailout that would be restricted to a technology demonstration that probably never will come to pass. While USEC uses the slogan "A Global Energy Company," its only production plant is in Paducah, Kentucky, scheduled to close next May. Its slogan should be: "Think Globally, Act in Paducah."

The only thing that USEC does bring to the table is the chief asset it acquired through privatization—its order book of utility customers awaiting shipments of nuclear fuel.

USEC already signaled it was looking to team with a foreign partner when it signed an agreement with Russia's TENEX last March, including a commitment to support a future TENEX centrifuge plant on U.S. soil. That agreement went over with USEC's political backers like a depleted uranium balloon. Many of those same politicians had spent their careers making Cold War justifications for additional Piketon funding on the argument that Piketon was needed to kill the Russians, not capitalize them. (Lenin's prediction that western capitalists would one day sell him the rope he would use to hang them comes to mind).

Under political pressure, USEC unceremoniously dropped its Russian Centrifuge project plans. AREVA was the last and most logical resort.

Therefore, it is clear what a USEC-AREVA partnership would look like. USEC would abandon the Piketon site and the long-running fiction of ACP, releasing the company from hefty NRC licensing fees and other expenses it can no longer afford to pay. Paducah can close on schedule or soon thereafter, and USEC's customers, those that remain, can be delivered to the AREVA-USEC joint venture in Bonneville County, Idaho. With full subscription for its product, Eagle Rock could be up and running within two years. That's just in time to cover for the expiration of the current agreement that supplies USEC customers with uranium downblended from old Soviet nuclear warheads.

The foreign ownership statutory restriction would not be violated, since USEC would retain its corporate identity. USEC would be buying into AREVA, not vice versa. And the supposed "national security" justification for ACP would fall away as the malarkey it always was. It had been said that only USEC could provide the fuel for TVA reactors that then produce tritium for U.S. nuclear weapons. The argument was simply fallacious—TVA has legally contracted for uranium fuel from both URENCO's plant in New Mexico, and from downblended U.S. weapons-grade uranium stockpiled at Savannah River, South Carolina. Both of those sources, and possibly material from Eagle Rock, would continue to be available to TVA.

ACP RIP

Though only the first suggestion of USEC-AREVA partnership has been publicly aired, the logic of the confluence is overwhelming, and as the foregoing history reveals, discussions have actually been underway since 2007. The terrain has been well explored by both companies. The partnership will almost certainly happen, and it may be what the U.S. Department of Energy had in mind, when it responded to USEC's demands for a loan guarantee with a counter-demand described only vaguely for the public as "a restructuring."

In the post-Fukushima world, two new centrifuge plants in Idaho and Ohio made no sense. Yet it was also unrealistic to think that both projects would be canceled, leaving U.S. nuclear utilities partially dependent on foreign supply of uranium fuel.

Many will be unhappy with the unfolding outcome. Ohio politicians who mercilessly shilled and shoveled U.S. Treasury funds to USEC on the promise of creating American jobs will get their wish, but the jobs will be in Idaho, for the most part. Expect "overseas in Idaho" as a phrase to enter the Buckeye State boondocks vocabulary.

Some self-styled environmentalists, of the sort who don't imagine that sites east of the Mississippi can be worth saving, had counted on the success of ACP to generate a reciprocal failure at Eagle Rock. That won't be happening, and it's a good thing, because the Piketon site is located rather specially alongside one of the most important complexes of ancient Indian earthworks in the Americas.

Now there is the opportunity for consensus on the post-USEC redevelopment of the Piketon federal site. Attention and resources should focus on getting USEC removed, so redevelopment can begin without additional delay. The southern Ohio community has waited through vacuous boosterism and raucous hucksterism enough.

AREVAderci USEC indeed.

Geoffrey Sea

In the Cold War satire The Mouse that Roared—a 1955 novel also titled The Wrath of Grapes and a 1959 film starring Peter Sellers—the potentates of the Duchy of Grand Fenwick (all played by Sellers) realize that their best chance to avert economic collapse would be to declare war on the U.S., so to become a recipient of lavish U.S. aid to the vanquished. By a series of plot twists involving the holding of Q-Bomb technology for ransom, Grand Fenwick inadvertently wins the war, but is saved by American largesse anyway, not to mention government capitulation to nuclear extortion.

USEC Inc., is a so-called nuclear company, the real product of which is perpetual threatened bankruptcy. It has remained afloat thanks to periodic huge infusions of federal assistance, despite an attitude of overt belligerence toward its governmental patrons. The Financial Times of London called USEC "the trust fund baby of the nuclear industry," and that was in 2006, before its wresting of bailouts became a racket. USEC seems to have adopted The Mouse that Roared as its corporate strategy bible.

Twice in the past three years, USEC has demanded rather than ask for a $2 billion loan guarantee from the Department of Energy (DOE), set its own "deadlines" for award of the federal assistance, been denied for said loan guarantee as unqualified, lashed out at the Obama Administration for the temerity of due diligence and then "negotiated" for lavish material aid as compensation for its troubles. Both times, in 2009 and 2011, DOE capitulated to USEC's extortion, offering aid packages worth up to $595 million, $60 million more than was lost to the U.S. Treasury from the actual award of a loan guarantee to Solyndra.

Now, documents released by DOE under the Freedom of Information Act and made publicly available for the first time here reveal that claimed investments in viable centrifuge technology and nuclear cleanup were actually designed as nothing more than USEC bailout packages.

Unlike the Solyndra debacle, which was packaged as what it was, a public investment gone sour, the USEC bailouts, perpetrated by a small group of highly-placed federal officials with discretionary control of agency funds and government material stockpiles, have constituted a fraud on Congress and the American people. Central to this group was DOE's Assistant Secretary for Environmental Management, Ines Triay, who left the government suddenly last summer in a manner that has sparked intrigue.

National security forces of Grand Fenwick (rhymes with USEC) take Q-Bomb (bottom center) from U.S. nuclear scientists for ransom in The Mouse that Roared, 1959

Nuclear Triage

With shades of the Reagan Administration's Iran-Contra Affair, let's call this one the Uranium-Triay Affair. Iran-Contra, which broke exactly a quarter century ago, centered on an inter-agency rogue outfit, with involvement of the White House and the U.S. Department of Defense, that planned to "use residuals" from the black-market sale of arms to Iran to fund the Contra guerillas battling the elected government of Nicaragua. Both the arming of Iran and support of the Contras violated the laws of the U.S.

The Uranium-Triay Affair centers on an inter-agency rogue outfit, with involvement of the White House and the U.S. Department of Energy, that has used the barter of government uranium stockpiles to fund politically-motivated programs to bail out USEC, in contravention of various U.S. laws.

By giving concessions like no-bid contracts to USEC, along with stockpiled uranium, which USEC then sells at a profit, DOE has met USEC's needs for emergency float funds, without the time-consuming hindrances of congressional appropriations, budgetary accountability or regulatory oversight.

It's in the sense of lacking those niceties of democracy that the uranium barter operation can be considered rogue. As in the Iran-Contra case, "national security" served as a false shield to keep illegal operations covert, with minimal or fraudulent disclosure to Congress and the public.

In September, the Government Accountability Office (GAO) issued a report finding this arrangement illegal and unconstitutional. According to GAO's summary:

DOE’s uranium transactions with USEC were sales authorized by the USEC Privatization Act, but they did not comply with federal fiscal law.... By not depositing an amount equal to the value of the uranium into the Treasury, DOE has inappropriately circumvented the power of the purse granted to Congress under the Constitution.

DOE's response to GAO, provided in an appendix to the report, has so far quashed investigation and law enforcement by arguing, essentially, that the funded purposes were independently authorized by Congress. Even if the funding mechanism represented a shortcut, according to DOE, it was a shortcut commonly employed by federal agencies in order to make ends meat. If arming Iran and supporting the Contras had been legal and worthy aims, in other words, then the rogue maneuvers and black-market accounting used to accomplish them would hardly have made for a scandal.

Bitter Barter

The legality and worthiness of the aims of the uranium barter, however, are now called into question by a previously non-public memo to Secretary of Energy Steven Chu, sent by then-Assistant Secretary Ines Triay. (The memo is undated but based on references in the text, it had to be issued between Aug. 4 and Aug. 12 of 2009.)

The memo reveals that the real purposes of the uranium barter were not the advertised ones of accelerating cleanup at the Superfund site near Piketon, Ohio. Rather, the purpose was to assist USEC with its proprietary personnel management problems, in the wake of DOE's denial of a $2 billion loan guarantee. The memo lists its first two "assumptions" as:

USEC could begin to lay off the expected 300-400 workers within the next month; those workers typically have a broad experience in working in the nuclear industry.

The only significant work the Department has at Portsmouth [Piketon] is the current EM [Environmental Management] work involving deactivation/shutdown and environmental cleanup of the diffusion plant and the planned decontamination and decommissioning (D&D) of the facilities, including the environmental cleanup of the site.

Triay went on to argue that this was the only "short-term" work for which the uranium could be bartered. In other words, USEC had to be given an infusion of resources immediately, and so-called cleanup was the only way to do it, even though the managerial and regulatory apparatus for the cleanup work was not in place.

This shifting of funds from one congressionally-mandated purpose to another purpose is illegal under the Antideficiency Act. DOE was acting as if it still is responsible for personnel management decisions at the Piketon site, but the point of the USEC Privatization Act had been to take that management out of the hands of government, precisely so that local politics and employment considerations would not adversely impact national interests at the two gaseous diffusion sites in Ohio and Kentucky.

The Triay memo acknowledges that the decision to deny a loan guarantee for construction of a new enrichment plant at Piketon was conveyed to USEC on July 27, 2009, and a decision to accelerate cleanup at the neighboring site of the old enrichment plant at Piketon was made on July 28, one day later.

While the goal of accelerating cleanup at a Superfund site sounds admirable, one day was hardly enough time to make that work "shovel-ready," especially given the complex procedural requirements of CERCLA, the statute governing Superfund cleanup. Indeed, the CERCLA decision-making process at Piketon is only getting in gear now at the close of 2011.

Workers reassigned or hired-on in 2009 wound up sitting idle on paid time, waiting for the necessary technical and regulatory assessments, while huge contract fees for the make-work employment accrued to USEC. Perhaps worst of all, those expenses may be counted toward the total Piketon cleanup budget, meaning that fewer funds will be available to complete the cleanup when work is most needed years from now.

Pike is indeed the county with Ohio's highest unemployment rate. But employing large numbers of temporary workers in a spurt followed by a dearth of jobs because no careful cleanup strategy is employed is hardly good for the region's revitalization. To date there has been no public assessment or accounting for USEC's slap-dash cleanup work, for fear that it would damage USEC's remaining if vanishing chances to secure a $2 billion loan guarantee.

Indeed the logic of the Triay memo was that a one or two-year acceleration of the Piketon cleanup would coincide perfectly with the coerced extension of time for review of USEC's loan guarantee application. About four hundred workers from USEC's on-again off-again centrifuge project could be retained locally, even if there was little immediate cleanup work to be done, so that they'd be ready to transfer back to the construction project, when the loan guarantee was obtained, as Triay was sure it would be.

The problem with that logic was that USEC's centrifuge project had been an empty shell all along, a vehicle for obtaining more lucrative contract service work from DOE, not an end in itself. After two more years elapsed, USEC was, by intention, no closer to demonstrating the commercial viability of its centrifuges than it had been in 2009, and certainly the company is much worse off financially. Thus, Ines Triay was helping USEC retain employees on payroll at government expense for a re-transfer that never was a possibility.

Conflicts of Interest

In addition, Triay's memo completely contradicted the earlier decision by the DOE General Counsel barring USEC from bidding on the general cleanup contract at Piketon, due to conflict of interest. While the reasoning behind the order was not released to the public, it may be inferred that USEC, as purveyor of a new enrichment plant project at the site and as a sponsor of other nuclear projects, had demonstrated interests against those of cleanup—that is, in biasing future site development toward continued nuclear use, for example by intentionally failing to remove contamination. Though it's federal land, USEC has long regarded Piketon as its own proprietary site to do with as it pleases: the Sovereign Grand Duchy of USEC in Ohio.

The general cleanup contract was subsequently given to Fluor Corporation, but the changeover from USEC to Fluor, originally scheduled for March, 2011, was extended at least through September, in yet another apparent effort to offer contract work that would keep USEC from going belly-up.

In 2009, and again in October of 2011, the DOE Loan Programs Office determined that USEC was far from meeting the performance and risk requirements of the Energy Policy Act of 2005 and its Title XVII loan guarantee regulations. A Solyndra-like loan default was thus avoided. But a group of high-level DOE and White House officials arranged to substitute two compensatory packages for USEC, funded extra-legally, principally through the uranium barter.

In short, the Loan Programs Office, with its unappreciated review requirements, turned down USEC flat, actually requesting that USEC withdraw its application in July of 2009. Immediately, an ad-hoc bipartisan group of officials scurried to ensure that USEC did not sink, even though USEC is a private company, the federal supports for which supposedly had been cut by statute in 1996—the USEC Privatization Act.

That group, in addition to Ines Triay, included Chu's Deputy Secretary of Energy Daniel Poneman, formerly of the high-powered Scowcroft Group; Obama energy adviser and Special Assistant to the President in the White House, Joseph Aldy; and Assistant Secretary for Nuclear Energy Dennis Spurgeon, who had come to DOE during the G.W. Bush Administration after serving as Executive Vice President and Chief Operating Officer of USEC, the company being extraordinarily assisted.

Deputy Secretary of Energy Daniel Poneman autographs a canister of depleted uranium, as Congresswoman Jean Schmidt and then-governor Ted Strickland (third from left) look on at the Piketon site, September, 2010. Ines Triay also attended. (Photo credit: U.S. Department of Energy)

Of that group, only Poneman remains at his post, though a letter to the White House from 2008 Obama campaign adviser Dan Carol, reported by Politico on Nov. 11 called for his ouster as early as 2009: "At a minimum, Poneman and Kelly need to leave" as they are "scaring away the talent we need," wrote Carol. The leak of this letter now, by an anonymous government source, bodes ill for Mr. Poneman.

Spurgeon was removed by President Obama at the start of 2010. Aldy left the Obama White House later in 2010, after serving for only one year.

In September of 2010, Poneman and Triay visited Piketon for a gala event with state and local politicians, in tents outside the black-glass USEC office building. Ines Triay resigned her post over the July 4, 2011, holiday, citing the proverbial "family reasons," but the timing of her unexpected departure coincided with DOE's receipt of the scathing draft GAO report, which declared her uranium barter arrangement illegal.

Apparently, Poneman and Triay worked together as a regular nuclear disaster squad—not addressing disasters but worsening them. On Nov. 22, Congressman Ed Markey (D-MA) sent a letter to Secretary Chu about the horrendous situation at Hanford, Washington, including an accusation that Poneman and Triay collaborated in suppressing Hanford whistleblowers.

I'm beginning to understand why Rick Perry might want to block the Department of Energy from his memory.

The Trouble with Triay

One of the highest-level appointments of a Hispanic woman of the incoming Obama Administration, Ines Triay was assumed by many to be a harbinger of new progressive environmental leadership. Triay was placed in charge of the multi-billion dollar program to clean up the nation's Cold War-era nuclear sites, including notorious radio-toxic messes at Hanford and Piketon.

In fact, Triay represented the most right-wing elements of American shadow government. She had come to the U.S. in 1961 at age three as a boat-person refugee from revolutionary Cuba, and achieved academic prominence within the Cuban exile community of south Florida—the same community in which support for the Nicaraguan Contras was organized in the 1980s. With a Florida PhD. in physical chemistry, she rose through the ranks at the nuclear weapons laboratory at Los Alamos, New Mexico. Her confirmation as an Assistant Secretary of Energy was marred by accusations of political influence from the right, owing to large campaign contributions she had made to the Republican Senator from New Mexico and powerful Chairman of the Senate Appropriations Subcommittee on Energy and Water, Pete Domenici.

That same subcommittee, under the chairmanship of Diane Feinstein (D-CA), is now deciding on round two of the USEC bailout package along lines originally proposed by Triay—a $300 million additional federal outlay, funded partly through the uranium barter. The Energy and Water Appropriations bill was scheduled for a Senate vote on Nov. 17, but now is delayed until after Thanksgiving.

In both the first and second rounds of the USEC bailout scheme, Secretary of Energy Chu has acted like an automaton, implementing the orders given by his inferiors. Within days of receiving the Triay memo in 2009, relayed to him through Daniel Poneman, Chu sent letters mimicking the memo, informing Congress of his determination to bail out USEC through the uranium barter, but failing to ask for congressional authority or an appropriation to do so.

He also failed to tell Congress that the cleanup work being funded was premature in the regulatory process, or that the centrifuge technology in development had already been pegged as lacking commercial potential.

Likewise, when the loan office turned down USEC for the second time in October of 2011, the company's agents at the second-rung of the Department of Energy struck a deal for a second infusion of funding that need not be paid back like a loan. Once again, Chu relayed the package as negotiated to Congress—half to be funded through the uranium barter already found to be illegal, and half through a new congressional appropriation, requested on an emergency basis to make 2012 budget deadlines.

At the end of October, when USEC announced a new deal with DOE, including $150 million to come from mysterious "existing funds" at the agency—existing funds that DOE refused to identify—the reference was to the uranium barter, claimed as outside the realm of congressional appropriations.

Broke and Broker

So let's total up the recent government bailout packages for private company USEC Inc. Not counting the billions of dollars dumped on USEC in gifts of uranium, transferred assets, no-bid contracts, and various federal subsidies attending its privatization, USEC was offered a $45 million payment for "technology development" in 2009 (not all of it paid), along with a no-bid cleanup contract for up to $200 million. In its 2011 third-quarter 10-Q statement filed with the SEC, USEC also acknowledged receiving an additional $50 million from DOE for unspecified and previously unanticipated contract services. USEC is requesting $150 million in uranium, immediately, to fund a "Research, Development and Demonstration" project that it had previously committed to complete on its own, for a hypothetical plant that has no chance of ever opening for business. On top of that, DOE and USEC are asking for another $150 million from 2012 congressional appropriations, at a time when federal funding is suspected of being kinda tight.

That's a recent total of up to $595 million, none of it to be repaid. A pretty good percentage on turn-down of a $2 billion loan! The modus operandi, as the potentates of Grand Fenwick would appreciate, is to continually demand a federal loan guarantee, and insure through belligerence that you get rejected!

All this for a company that produces shockingly little. Half or more of the enriched uranium fuel that USEC provides to utility customers comes from old Soviet nuclear warheads, with the uranium downblended to reactor-grade at Russian facilities. USEC only acts as a broker for that uranium, a service it used to provide at substantial profit as a sweetheart concession from the U.S. government, until the Russians threatened to withdraw from the treaty arrangement if USEC's profits weren't radically cut. The deal terminates entirely in 2013.

A declining share of USEC's uranium product is enriched at the government-owned gaseous diffusion plant at Paducah, Kentucky, which consumes an enormous amount of electricity, for which USEC cannot afford to keep paying. Paducah is scheduled to close next May, a deadline that Steven Chu has defended in verbal engagement with Kentucky's Senator, Mitch McConnell.

Meanwhile, all the uranium bartered to bail USEC out of its difficulties has dramatically distorted the uranium market, constituting a form of dumping, artificially lowering the price of uranium. This has had negative feedback effects on USEC earnings, mired deep in negative territory throughout 2011. The barter has also worsened unemployment among American uranium miners, outweighing any jobs maintained on the USEC payroll. Only 8% of the uranium fuel used in U.S. nuclear reactors is currently mined in the United States, due largely to USEC's dependence on raided U.S. stockpiles and Russian supply.

Since USEC will have access to no enrichment facility as soon as May, and since its new plant remains a pipe dream with cracked pipes, it is generally expected that USEC, which inherited a uranium supply monopoly, will soon be nothing more than a uranium broker, entirely an office operation. The billions of federal dollars spent on USEC bailouts will have netted a few extended cubicle jobs in beltway Maryland.

The USEC Hustle

The hustle for a new USEC bailout aims at staving off a pre-election bankruptcy (stock price down 78% in 2011), though the FOIA documents reveal a deeper problem: DOE staff acting like naive facilitators for an insider corporation judged too rigged to fail.

A 2009 memo by DOE Public Affairs director Dan Leistikow demonstrates that DOE was well-aware that USEC was inflating if not fabricating jobs numbers associated with the proposed "American Centrifuge Plant." Despite that awareness, DOE allowed USEC to continue using the "4,000 Ohio jobs" sales pitch uncorrected, even while USEC has attacked DOE for denying a loan guarantee. The baseless 4,000 number is still the one commonly cited by the news media today, on the assumption that DOE would have long ago corrected it, if it weren't true.

After the loan guarantee denial decision was finalized on July 27, 2009, the "rollout" process for announcement of that decision was turned over to Administration operatives—principally Joseph Aldy and Daniel Poneman--who did not work in the Loan Programs Office and had not been part of the due-diligence review. Aldy did not even work for DOE and had only a few months experience in government. Aldy and Poneman shuttled drafts of DOE's rollout statement between them, in stages removing harsh explanations for the denial decision, and replacing them with booster comments about USEC's shining future. This undercut the denial decision, making it seem irrational, while forestalling realistic planning for project failure in Ohio.

DOE's statement underwent major revision after a tip-off allowed USEC to preempt DOE with the media, as USEC would do yet again with the second denial in October of 2011. According to a July 27, 2009, e-mail by Matt Rogers of DOE, USEC CEO John Welch delayed DOE's denial announcement: "[Welch] needs some time with his board to define the path forward and how they announce to the market." DOE thus timed its denial announcement to considerations of effects on USEC stock price. But Welch wasn't so concerned about stock price, he was stalling for time to get a jump with the media and Ohio politicians.

The Loan Programs Office asked USEC to withdraw its application on July 27, as the lack of evidence for qualification was painfully apparent. It stymied the DOE staff that USEC did not automatically comply, as any loan applicant would if told that the alternative to withdrawal was denial. But USEC played a shrewder game, using the crucial week of agreed postponement to marshal lobbying forces , including Ohio Democrats Governor Strickland and Senator Sherrod Brown, for an immediate compensatory aid package.

By the time USEC delivered its answer of a refusal to withdraw, the political operatives outside the loan office—Poneman, Aldy, and Triay—were ready to give USEC everything it wanted: a $245 million aid package plus an indefinite extension of the loan guarantee review, so the scam could be run all over again. Triay's August memo to Chu concretized the government capitulation. Not a peep of protest came from Chu.

And the scam was run all over again, in 2011, with a string of deadlines for DOE decision issued by the applicant USEC, a final demand for material compensation, a preemptive release to the media, and DOE's mimicry of the deal as USEC had described it, with a total take upped to $300 million in federal funds, half to be provided immediately through the uranium barter. The loan guarantee review has also been left open, to permit endless future iterations.

USEC re-framed both denial decisions as positive DOE commitments to move forward with the technology, when that was not at all the result of DOE technical and financial reviews. In both cases, perhaps for political reasons connected to that old Ohio electoral magic, DOE felt compelled to play to USEC's lead with the media. Don't try this at home with a mortgage lender: Preempting a home loan denial with a news release that alleges the bank's commitment to future approval is not guaranteed to bring positive results.

For U.S. Aid, Wage War on the U.S.

It's not that the Obama Administration "could not say no" to applicants, as has been the accusation. When the Administration did say no, in USEC's case, the message was massaged to sound like a yes, with hundreds of millions of dollars in compensatory payments attached.

Many have misread the Solyndra problem as one of the Obama Administration's commitment to "green energy," or a failure to foresee changes in energy markets. The Washington Post editorial board gets it right when it says "the Department of Energy's loan guarantee program is the real Solyndra scandal."

But the Uranium-Triay Affair reveals that the scandal reaches far beyond the Loan Programs Office. Twice, after that office accurately assessed USEC's commercial non-viability and refused to award the company a loan guarantee, the Deputy and Assistant Secretaries of Energy, with direct White House involvement, intervened to offer USEC huge compensatory packages which would never have to be repaid.

And to date, despite reports by watchdog agencies like the Government Accountability Office, the scandal has received virtually no attention by either the media, Congress, or law enforcement agencies.

GAO, it must be said, pulled its punch. It only accused DOE of violating the Miscellaneous Receipts Act, which sounds practically like a misdemeanor. More explicitly, DOE personnel violated the Antideficiency Act, aimed at protection of the U.S. Treasury, which forbids an official from diverting federal funds from one congressionally authorized purpose to another. That's exactly what Ines Triay and her companeros did. The Antideficiency Act carries penal sanctions, meaning jail time, a fact which I have reason to believe was brought to the attention of Ines Triay just prior to her July resignation.

Other laws were callously broken. Of lasting impact on the stakeholders at Piketon, budgets were blown and major cleanup decisions were made before any of the mandatory public participation processes could be implemented. And so this Appalachian community will likely be stuck with a massive 90-acre waste cell, placed to please the tenant who won't be around—USEC Inc.

When Solyndra requested a second loan guarantee to stave off bankruptcy, it was flatly denied. It seems they should have taken a page from The Mouse that Roared, waged war on the U.S. government, and made a set of extortionist demands. Then, like USEC, they might have gotten some material aid from the U.S. government, if not cold hard cash.

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