Government's Uranium Sought for Plant

Government's Uranium Sought for Plant

May 30 - The Columbus Dispatch, Ohio

Getting a government stockpile of at least $750 million worth of depleted uranium could help keep plans for a uranium-enrichment plant in southern Ohio on track, the company building the facility says.

But some key members of Congress seem skeptical about USEC Inc.'s pitch.

USEC says it soon will begin construction of a $2.3 billion plant in Piketon that employs new technology on the same site as a closed facility that for decades churned out the enriched uranium that fuels nuclear power plants.

A demonstration plant is slated to begin producing material with the centrifuge technology -- which uses less electricity than the gaseous diffusion method -- by about midsummer. The main plant is scheduled to start operating in 2009 and be finished by 2012, bringing with it about 400 jobs.

But USEC also acknowledges that financing could be a problem. The company operates a gaseous diffusion enrichment plant in Paducah, Ky., and says soaring electricity prices are hampering its finances.

That's where the proposed government handover of the stockpile of depleted uranium comes in, USEC says. The uranium "tails" are left over from initial processing over the decades but have enough material remaining to be worth recycling, especially when the price of enriched uranium is high.

USEC says the net value of those tails, after allowing for the cost of reprocessing them, is between $750 million and $1 billion.

But, "any added value realized by USEC would help offset higher...(electricity costs at the Paducah plant), allowing the company to be more successful in securing financing for the American Centrifuge Plant" in Piketon, USEC Chief Executive John K. Welch wrote in a May 23 letter to the Democratic and Republican heads of the House and Senate Energy Committees.

House Energy Committee Chairman John Dingell, D-Mich., indicated in a comment published this week by The New York Times that he thinks USEC's finances have been mismanaged and that the proposal to be given tails deserves "vigorous oversight" and would constitute a "bailout."

A USEC spokeswoman said the company denies Dingell's allegation of mismanagement.

But Dingell and the other House and Senate Energy Committee leaders have asked the U.S. Government Accountability Office to review the proposal. They place the value of the tails at up to $2 billion. They also want the GAO, which serves as Congress' investigative arm, to look into what should be done if USEC founders financially.

A Department of Energy spokesman said the agency that oversees the stockpile has not taken a position on the matter.

Not mentioned in the letter to the GAO is a proposed enrichment plant in New Mexico -- the home state of the senior Democrat and Republican on the Senate Energy Committee -- being undertaken by a consortium of European companies that some regard as a competitor to USEC.

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