Moniz visit puts spotlight on controversial uranium company

By Hannah Hess | 03/01/2016 07:08 AM EST

The Department of Energy’s relationship with uranium enrichment company USEC Inc. will be under the microscope this week, when Secretary Ernest Moniz visits Capitol Hill to defend the agency’s budget request.

The Department of Energy’s relationship with uranium enrichment company USEC Inc. will be under the microscope this week, when Secretary Ernest Moniz visits Capitol Hill to defend the agency’s budget request.

Nicknamed the "United States Earmark Corporation" by critics in Congress, USEC has engaged in hundreds of millions of dollars’ worth of financial transactions with DOE since it was privatized in 1998, including funding for the $5 billion American Centrifuge Plant (ACP) project in Piketon, Ohio.

The facility laid off 60 employees this week as Centrus Energy Corp., USEC’s successor following bankruptcy, demobilized. Centrus started winding down operations last year after the Obama administration cut its contract.


Republicans who represent the job-hungry area have blasted President Obama for walking away from that project. Rep. Brad Wenstrup (R-Ohio) accused the president of "nuclear negligence" when he shunned funding for the facility in his fiscal 2017 proposal for the second year in a row.

But bigger questions loom about a new proposal for covering the cleanup costs associated with DOE’s Cold War-era uranium enrichment program.

DOE has for years bartered stockpiles of excess government-owned uranium in exchange for cleanup at the nearby Portsmouth Gaseous Diffusion Plant and the down-blending of highly enriched uranium in Erwin, Tenn., but lawmakers who represent uranium-rich states say the barters hurt mining efforts (Greenwire, April 22, 2015).

Moniz will be pitching a new plan to appropriators that would continue the controversial transfers while making cleanup funding mandatory. USEC grabbed attention on Capitol Hill last year when it picked former DOE Deputy Secretary Daniel Poneman as its next president and CEO. During a budget day briefing earlier this month, Moniz promised a serious discussion with lawmakers "in terms of really coming to grips with" how DOE uses the USEC funds.

‘Our duty’

A proposed 10 percent boost in funds for cleanup at Portsmouth has won support from Ohio’s congressional delegation. The facility, which began operating in 1954, went offline in 2001. For the next decade, DOE contracted with USEC to maintain the plant and prepare it for future decontamination and decommissioning.

"The cleanup project in Portsmouth is an important component to economic development in Southeast Ohio and ACP is critical for our national and energy security," Sen. Rob Portman (R-Ohio) said in a statement. "We will still need the Administration to ensure full funding is delivered for cleanup at Portsmouth, but proposing these resources for Portsmouth is a positive step forward."

Underscoring the importance of the project, Portman invited the president of the United Steelworkers local that represents workers in Piketon to the State of the Union address in January.

"It’s our duty," Sen. Sherrod Brown (D-Ohio) told E&E Daily of the proposed $322 million funding.

"I mean, the U.S. Department of Energy and Department of Defense contaminated the ground. It’s the poorest part of Ohio. The jobs are good-paid union jobs. The faster we get the cleanup, the better for public health and the better for the economy of that area, so I will look at all kinds of places to find the money to do this," he said.

Since 1992, the Uranium Enrichment Decontamination and Decommissioning Fund has covered cleanup. But Obama’s final budget request proposes a different funding method. The plan calls for authorizing $674 million of the $1.6 billion left in the USEC Fund, a dormant account that federal auditors have recommended permanently rescinding.

According to the Government Accountability Office, Congress authorized the USEC Fund for two purposes: cleanup associated with disposing of depleted uranium at the plant in Ohio and another in Paducah, Ky.; and expenses related to USEC’s privatization (E&E Daily, April 15, 2015). GAO determined both those purposes have been fulfilled.

But it’s up to Congress to authorize new purposes.

"We are still reviewing the Department of Energy’s proposed budget to clean up Piketon," Wenstrup said in a statement. "It is critical we keep this clean-up on track, and the Administration needs to cooperate with Congress to ensure full funding, particularly since any delay only adds to the overall cost for taxpayers."

Rep. Ed Whitfield (R-Ky.) expressed satisfaction with the $272 million DOE has requested for Paducah. Whitfield, one of the top Republicans on the House Energy and Commerce Committee, fought to prolong the life of the Paducah plant until it was shuttered in 2013 (Greenwire, May 15, 2013).

"We’ve had some really good levels of funding for cleanup at Paducah for a number of years now, and it is something that’s vitally important, because [at] those sites it’s going to take many years to complete the cleanup," Whitfield said.

"It’s always difficult to find the money," he added. "U.S. Enrichment Corp. basically is gone anyway."

Appropriators want flexibility

Not all the lawmakers who represent former uranium enrichment sites are on board with DOE’s plan.

The Obama administration’s budget proposal includes $391 million for environmental cleanup in Tennessee. Moniz mentioned on the day the budget surfaced that the demolition project at Oak Ridge is "finishing up."

Sen. Lamar Alexander (R-Tenn.), who holds the gavel on the Appropriations panel that sets DOE’s budget, secured $468 million for the project this year. But he is leery of making spending mandatory.

"The decontamination and decommissioning program should continue to be a discretionary program so that Congress can exercise oversight of this program. The appropriate authorizing committees should have an opportunity to consider the president’s proposal, and I look forward to reviewing their recommendations," Alexander said.

His counterpart in the House, Energy and Water Development Appropriations Subcommittee Chairman Mike Simpson (R-Idaho), said the White House’s proposal could negatively affect the way the Congressional Budget Office calculates cost.

"That would make it more difficult for us, because of the scoring," Simpson said. "How that’s going to work out in the end, we don’t know that yet, but it will be a question that we ask of the secretary."

The spending bill approved by House appropriators in fiscal 2016 would have rescinded all money in the USEC Fund. But that language was not in the year-end spending deal that cleared both chambers. Simpson said the final language was about giving DOE the option to restart ACP, a sensitive subject for the Ohio delegation.

"What we did is give the department flexibility to either continue the project or not continue the project, depending on what the department wanted to do," Simpson said. "We pretty much knew they wanted to close it down.

"Some people said it wasn’t a smart thing to do," he added. "Obviously if you’re from that region, there’s jobs involved … so we kind of left that decision up to the department."

Industry opposition

According to budget documents, the Obama administration’s USEC legislation will also revive a multibillion-dollar decommissioning and decontamination tax to fund cleanup long term.

The Nuclear Energy Institute announced that the industry "categorically rejects" the proposal, which Obama has requested eight times.

"Industry recognizes that the federal government is under significant budget pressures but reinstating unjustified taxes on utility consumers while the government has failed to meet its own obligation is outrageously unfair," said Alex Flint, NEI’s senior vice president of governmental affairs.

The mining industry is also likely to oppose DOE’s proposed uranium releases. Two industry allies in Congress, Sen. John Barrasso (R-Wyo.) and Rep. Cynthia Lummis (R-Wyo.), have introduced legislation that would require DOE to follow a rulemaking-like process for proposed uranium releases (E&E Daily, May 22, 2015).

Sen. Ed Markey (D-Mass.), who has long pushed for reduced spending on nuclear weapons and has been critical of DOE efforts to prop up Centrus, is co-sponsoring the measure. Markey said he had not yet reviewed that portion of DOE’s budget but backed efforts to devote USEC money to cleanup.

"Sounds good to me," he told E&E Daily.