DOE denies USEC's loan guarantee; layoffs coming
The
Department of Energy has denied
USEC Inc.'s application for a $2 billion loan guarantee, and the company has started "demobilizing" the
American Centrifuge Project, which currently employs about 450 at its Oak Ridge manufacturing site.
"There will be layoffs," USEC spokeswoman Elizabeth Stuckle said this morning. However, the number and the timing of those layoffs has not been determined, she said..
"We will have more details later on. All those details we're still figuring out," Stuckle said.
USEC Chief Executive Officer John K.Welch, after learning that DOE would not grant the loan guarantee, made this statement today:
"We are shocked and disappointed by DOE's decision.
The American Centrifuge met the original intent of the loan guarantee program in that it
would have used an innovative, but proven, technology, reduced greenhouse gas emissions and created thousands of immediate jobs across the United States.
"Our application has been pending for a year, and we have addressed any concerns the department raised. Technically, we operated the American Centrifuge technology in a lead cascade for approximately 235,000 machine hours. Financially, we have invested $1.5 billion dollars in the project and offered $1 billion of additional corporate support.
It is unclear how DOE expects to find innovative technologies that assume zero risk, but the American Centrifuge clearly meets the energy security and climate change goals of the Obama administration."
The company has been pushing every button possible in recent months to save the multi-billion-dollar uranium-enrichment project under construction at Piketon, Ohio, and had threatened to start scaling down the work if DOE didn't proceed. Elected officials from Tennessee, including Gov. Phil Bredesen, U.S. Sen. Bob Corker, and U.S. Reps. Zach Wamp and Lincoln Davis, had gone to bat for USEC and urged Energy Secretary
Steven Chu to intervene and help back the program touted as a key part of the nation's nuclear renaissance.Interestingly, Chu is an
advocate for nuclear energy.
USEC's threats to shut down the centrifuge project apparently will now proceed, although Stuckle said the tech development program in Oak Ridge and Piketon would continue. Bob Eby heads that effort in Oak Ridge.
Welch said of the demobilization plan: "Instead of creating thousands of jobs across the country, we are faced with losing them. Instead of reducing our dependence on foreign sources of energy, we are now increasing it. President Obama promised to support the loan guarantee for the American Centrifuge Plant while he campaigned in Ohio. We are disappointed that campaign commitment has not been met."
Earlier this year, the U.S. Enrichment Corp. and Babcock & Wilcox Technical Services announced plans to form a joint venture known as American Centrifuge Manufacturing LLC, which became the lead organization in production of centrifuge machines for the new uranium-enrichment plant in Ohio.
USEC, a Maryland-based company, holds a 55-percent interest in the newly formed partnership that manages the manufacturing program that was supposed to produce about 11,000 machines eventually. Babcock & Wilcox hold sa 45 percent stake in the joint venture.
USEC said the total value of the joint venture's operations was expected to exceed $1 billion. Carl Durham is president of the joint venture.
Currently there are about 450 people working on the American Centrifuge Project in Oak Ridge, with about 250 belonging to USEC and about 200 of them with B&W.
Meanwhile, USEC stock is in a
nosedive.
Via
knoxnews.com
