Feds Gave Billions to Failing Energy Firm
November 25, 2013
A chronically failing nuclear energy company using a technique one-twentieth as efficient as its competitors' has wrangled billions of dollars in cash, materials and research from the Department of Energy (DOE), says the Washington Examiner.
The goal of the United States Enrichment Corp. (USEC) is to enrich uranium to produce fuel for nuclear power plants. But for the last 15 years, the company has relied on a World War II-era technique called gaseous diffusion.
Originally created as a federal agency, USEC was born in 1998 when President Clinton and the Republican-led 105th Congress privatized it in hopes that the new operation could spur technological innovations. Instead, USEC executives got a $325 million "emergency supplemental" appropriation only three months after the privatization, and saw hefty raises.
- At its inception, the government gave USEC laser technology that government researchers spent $2 billion developing and which USEC was supposed to give the final push to market.
- USEC spent only $100 million trying to advance it before abandoning it in 1999.
The company then turned to a 1980s technology that the government had also spent billions developing and tried to modernize it. DOE gave the firm exclusive rights to the technology in exchange for $100 million, which will only have to be repaid if a new plant, known as the American Centrifuge Project, is actually built.
- In 2002, company told the Energy Department it would have the centrifuge project open by 2009 at a cost of $1.5 billion.
- By 2012, however, after repeated delays and cost overruns, USEC had not even broken ground on the promised facility and said the earliest date it could open would be 2017.
Last month, USEC added new members to its board of directors at the behest of the holders of the $530 million bond due next year. Their backgrounds are in managing bankruptcies, the company announced.
But USEC was far from done with asking for federal money, and for at least the remainder of the year, DOE isn't done giving it.
Source: Luke Rosiak, "Feds Gave Billions to Energy Firm with No Business Model," Washington Examiner, November 7, 2013.
Browse more articles on Environment Issues