U.S. Representatives Michael Burgess (R-TX) and Edward Markey (D-MA) are sponsoring an amendment to strike the proposed $100 million bailout provision for an ambiguous "Research, Development, and Demonstration Project," as it appears in the 2013 Energy&Water appropriations bill. It is expected that amendments will be debated and voted on this evening, June 5, with a vote on the bill on the House floor tomorrow. Other amendments seek to strike the shady uranium transfers by which DOE has funded USEC through the back door.
UPDATE: The amendment barring the dumping of inventory uranium, a mechanism used to bail out USEC, is Lummis-Hinjosa. Cynthia Lummis is the Republican congresswoman from Wyoming. Ruben Hinjosa is a Democratic congressman from Texas.
Two "Dear Colleague" letters from Markey and Burgess follow:
SUPPORT THE BURGESS-MARKEY AMENDMENT
From: The Honorable Edward J. Markey
Sent By: email@example.com
JUNE 5, 2012
USEC: the United States Earmark Corporation
Here are some of the most compelling reasons why we should not be providing further subsidies to the United States Enrichment Corporation:
When the Treasury Department was asked whether it thought continued support for the company put the taxpayers at risk, it said that “extreme care should be taken in putting the taxpayer at risk or offering any exposure to the taxpayer.”
On May 15, the company was downgraded by Standard and Poor’s to a CCC+ rating and placed on a Creditwatch with negative implications. This means that the companies' bonds are considered to be junk bond and its stock is considered to carry substantial risk.
The Department of Energy is currently preparing to BUY up to forty of the company’s centrifuges for a reported $82 million dollars, bringing the FY 2012 total support for this failed centrifuge program to $126 million.
The $100 million earmark contained in the Energy and Water Appropriations Act exceeds the $86 million dollar market capitalization of the ENTIRE company.
USEC was recently warned that it was in danger of being de-listed by the New York Stock Exchange. Delisting would mean that the company’s stock would essentially be reduced to speculative "penny stock" status, reducing the market for the company’s shares.
USEC’s cash is subject to “full cash dominion” to its creditor, JP Morgan. This means that its cash is the property of JP Morgan, which uses it to pay outstanding loans and other obligations before the cash is made available for USEC to use for its operations.
The supporters of the USEC earmark say that our international treaty obligations require that “domestic” uranium enrichment technology be used to manufacture the nuclear fuel that will be used to produce tritium. But this is just not the case. When DOE analyzed several options for making fuel that would be used to obtain tritium, it actually found that using highly enriched uranium that it already has could be down-blended by Nuclear Fuel Services—the company that currently produces nuclear fuel for the U.S. Navy’s fleet of aircraft carriers and submarines—and that this would cost taxpayers HUNDREDS OF MILLIONS OF DOLLARS LESS than obtaining the services from the United States Enrichment Corporation. There is simply no reason to continue to bail out this company. There are other alternatives.
Support the BURGESS-MARKEY amendment, and end the taxpayer bailout of this failing company. This amendment is supported by Taxpayers for Common Sense Action, Competitive Enterprise Institute, Friends of the Earth, Nonproliferation Policy Education Center, Union of Concerned Scientists, National Taxpayers Union, and the Natural Resources Defense Council. For more information, please have your staff contact James Decker (Rep. Burgess, 5-7772) or Michal Freedhoff (Rep. Markey, 5-2836)
Michael C. Burgess Edward J. Markey
Strike the $100 Million Bailout to a Failing Company from the E&W Bill
From: The Honorable Michael C. Burgess
Sent By: James.Decker@mail.house.gov
STRIKE the $100 million bailout for the United States Enrichment Corporation
Support the Burgess-Markey amendment to the Energy &Water Appropriations bill
Congress privatized the United States Enrichment Corporation (USEC) with the expectation that the U.S. Government would no longer participate in the uranium enrichment business. Congress reasoned, and rightly so, that uranium enrichment should be a commercial activity in the United States. Thus, a commercial market was created for the enrichment of fuel grade uranium. However, USEC has never been able to compete without subsidies from the federal government. Despite the economic failures of this enrichment company - the business reported a net income loss of $540.7 million in 2011 alone and it is in danger of being de-listed from the New York Stock Exchange – taxpayers continue to be forced to bail it out.
The Department of Energy is currently preparing to spend $82 million to purchase USEC’s centrifuges, bringing the total support for this failed centrifuge program to $126 million in this year alone. And that doesn’t even include the hundreds of millions of dollars the Department of Energy has also provided in gifts of free uranium that the company can then enrich and re-sell.
Spending hundreds of millions of dollars on a company worth less than $90 million dollars is absurd enough. But this bill gives USEC ANOTHER $100 million by creating a new domestic uranium enrichment research, development, and demonstration (RD&D), for which only USEC is eligible.
Some claim that we need to continue to subsidize USEC because there is no other way the U.S. can obtain the tritium needed for our nuclear weapons arsenal, but this is false. There are other companies that could perform these services and not run afoul of international agreements. And when DOE analyzed several options for making tritium, it actually found that using highly enriched uranium it has already set aside would be down-blended by Nuclear Fuel Services, the company that currently produces nuclear fuel for the U.S. Navy’s fleet of aircraft carriers and submarines, would cost taxpayers HUNDREDS OF MILLIONS OF DOLLARS LESS than obtaining the services from USEC.
Support the BURGESS-MARKEY amendment, and end the taxpayer bailout of this failing company. This amendment issupported by Taxpayers for Common Sense Action, Competitive Enterprise Institute, Friends of the Earth, Nonproliferation Policy Education Center, Union of Concerned Scientists, National Taxpayers Union, and the Natural Resources Defense Council.
Please contact James Decker (Rep. Burgess 5-7772) or Michal Freedhoff (Rep. Markey 5-2836) with any questions.
Michael C. Burgess, M.D. Edward J. Markey