by Geoffrey Sea
In a step that has confused onlookers, the Department of Energy on Tuesday issued notice that it may purchase all of the centrifuges that USEC has installed at the Piketon federal site.
The move is superficially bizarre. If DOE wants to shore up USEC's dying American Centrifuge Plant (ACP) fantasy, the last thing it should do is to openly propose renationalization, through a back door and at the eleventh hour. And make no mistake: If DOE does proceed to buy the centrifuges that are owned and licensed by USEC Inc and its subsidiaries, renationalization is the name of the game.
The sale would involve a host of legal and regulatory complications since the thirty-eight or forty centrifuges (both numbers have been floated) are all that USEC has to show for ACP. The alleged multi-billion-dollar project has been advertised as a commercial venture that will bring “four thousand jobs” to Ohio, as the politicians' mantra goes. It's on the basis of those paltry forty centrifuges that USEC sought a $2 billion federal loan guarantee, which DOE says it is still considering awarding.
But the real product of this business is contradiction. How can DOE be holding USEC's loan guarantee application “open for review,” with financial and technical merit being the lead criteria, at the same time that DOE proposes a buyout because the entire venture is on verge of collapse?
The former "American Centrifuge" site at the federal reservation near Piketon
Those same centrifuges are the ones that were involved in the calamitous crash event on June 11, 2011, during which one of the centrifuges breached, and all of the centrifuges were revealed as “hunks'o'junk,” in the words of one Piketon centrifuge worker. Indeed, USEC took a tax write-off on those centrifuges in January of this year, admitting to the IRS that they are worthless.
So right off the bat, a DOE offer to pay good U.S. Treasury money for the machines raises ten nasty questions:
- A whole host of federal statutes including the National Environmental Policy Act require that major federal undertakings -- such as the renationalization of a project like ACP -- be subject to a public process of study, posted proposals, public comment, and review of alternatives, a deliberative process that is time-consuming by design. What makes DOE think that it can circumvent any kind of public process and move from proposal to implementation in less than ten days, with a federal holiday intervening?
- Since USEC wrote-off the machines as a loss with the IRS, wouldn't a sudden high-priced sale to the government subject USEC to all sorts of unpleasant penalties from the IRS, thus removing the “bailout” value of the sale?
- The ACP and “Lead Cascade” construction and operating licenses issued by the Nuclear Regulatory Commission are held not by USEC Inc., but by its subsidiary American Centrifuge Inc., created in order to ensure accounting controls for the project. If the aim of the buyout is to salvage the commercial project, then all funds should be paid to American Centrifuge Inc., to ensure the funds are not diverted to other USEC corporate expenses. Otherwise the sale constitutes a simple buyout of USEC, removing USEC from the venture entirely. In that case, NRC would need to conduct hearings and a regulatory process on transfer of the construction and operating licenses – to whom?
- Since transfer of the NRC licenses is impossible in the time frame required (by May 31), a clear implication of the proposed purchase is that the commercial ACP venture is over – and USEC has been threatening to end that venture anyway from nearly the time it started. If DOE has been aware that the commercial ACP venture is over, why has DOE not formally terminated its loan guarantee review, since that review serves only to deceive potential investors? (I'll answer that one – termination of the loan guarantee review would subject all of the documentation, including technical and financial reviews, to inspection by Congress and to public release. We couldn't have that, could we?)
- If the commercial project is over, as has been implied by the National Nuclear Security Administration taking full control of the project and deploying rationales that it will maintain only non-disclosed “defense related” aspects of the project, then somebody ought to inform Congress that Congress need not bother with all that USEC bailout nonsense, since USEC won't be involved in the ongoing venture anyway. Whose job description covers that?
- If NNSA wants those machines for some mumbo-jumbo “national security”reason that's all hush-hush, why doesn't it just sit back and wait for USEC to go through the normal bankruptcy and liquidation process? At that point, under terms of the technology license, NNSA would get the centrifuges for free. Paying non-appropriated Treasury funds, or the equivalent in liability waivers, when the government could get those “assets” for free constitutes an extraordinary kind of corruption – it's a giveaway to USEC Inc. – and it violates a variety of federal laws including the Antideficiency Act and the Racketeer Influenced and Corrupt Organizations Act, both of which carry jail time as a penalty. Given that situation, who is actually going to sign the purchase papers for those centrifuges before June 1? (Please spell your name correctly and include all aliases.)
- By purchasing all of USEC's centrifuges on the down-low, through a rushed decision not subject to any congressional or regulatory oversight, DOE would be effecting a renationalization of USEC's principal mission as established by the USEC Privatization Act. That mission, and obligation, is to build an “advanced-technology” commercial uranium enrichment plant at the Piketon site. DOE, an executive agency that thinks itself something greater, would be repealing or negating an act of Congress, without so much as a howdy-do to the legislative branch of government. USEC would immediately be placed in violation of the Privatization Act, which, under various contracts and statutory provisions, would bring a lot of bills due – including long-deferred payment for USEC's technology licenses to date, and payment for the costs of decommissioning and cleanup of ACP at the Piketon site. How does DOE expect Congress will cotton to that? And how will that assist USEC in the short-run?
- And what about those decommissioning and cleanup costs? USEC has been non-productively occupying and radioactively contaminating buildings and other facilities at the Piketon site since the company's privatization in 1998. Those resources need to be restored and returned to the community for productive redevelopment. Who has the funds to do that – DOE or USEC?
- Most importantly, the racketeers behind the NNSA-USEC ACP hoax have continually and intentionally spread the false propaganda that their tinkering with forty defunct centrifuges at Piketon will magically produce “four thousand jobs” for southern Ohio, through a now-evaporated commercial-scale plant. Exactly which office at DOE is tasked with the deprogramming of Sherrod Brown and Rob Portman, so that the esteemed U.S. Senators stop lying to Ohio voters on the stump?
- Who at NNSA will even answer these and other questions from the public and interested parties? When will the public hearing take place? Or is Appalachian Ohio not qualified for that trapping of democracy?
Reporters for the Washington Post and USA Today have misunderstood the proposed centrifuge sale as a DOE attempt to save the ACP project or to save USEC.
It's not an attempt to save either one. USEC has become a tremendous liability to the clandestine NNSA counter-centrifuge R&D program that continues at Oak Ridge. With extortion demands issued periodically in the newspapers, multi-million dollar executive officer salaries, and its continual ludicrous commercial pretense, USEC now needs to be exed from the NNSA R&D picture. USEC may be good to operate the Paducah dinosaur and the Megatons to Megawatts program for another year, but nothing else. From the DOE-NNSA perspective, USEC must be saved from bankruptcy court, but not let off its leash.
The announcement of a possible centrifuge purchase by the government is a slap-dash attempt to avoid the tremendous embarrassment of document disclosure that would come with a court-supervised bankruptcy proceeding and formal termination of the USEC loan guarantee review. NNSA says it wants to preserve the “Intellectual Property” locked-up in those centrifuges, but in this case, “intellectual property” is an Intel-Ops codeword for information intensely embarrassing to the government.
What would become immediately clear if the end of the American Centrifuge Plant becomes an open process is that various parties knew it was an empty-shell all along, with no more commercial prospect than a Fukushima candy brand.
Which is not to say that the unindicted co-conspirators know what they are doing. They can't even get their stories straight, and right now they are in one helluva mess. The centrifuge sale trial balloon reveals that the smart boy calling the shots at NNSA doesn't know his ACP from his elbow.