Kenneth Fletcher
RW Monitor
4/11/2014

While a Department of Energy program supporting the American Centrifuge Project is set to come to an end next week, DOE is deciding how to reprogram National Nuclear Security Administration funds to keep the project alive. Last week, Secretary of Energy Ernest Moniz said the Oak Ridge National Laboratory will be taking over management of the project from USEC, but so far the time frame and funding source for the new program are unclear. “The bottom line is, one way or another, and obviously the Oak Ridge Office and Oak Ridge National Laboratory are going to be engaged in some point, but fundamentally we are committed,” Moniz told reporters following a Senate Appropriations Energy and Water Subcommittee hearing this week. “The technology passed all the milestones in the R&D program. We’ve got to preserve the technology, preserve the IP of course and figure out what’s our pathway to the national security needs that we need to meet.”

A DOE cost-share research, development and deployment program for American Centrifuge comes to an end on April 15 with no extension planned, and due to financial troubles USEC has said that it cannot continue to support the project on its own. About $9.5 million in appropriated funds for the project remain, which could continue funding the project at current levels for another month but haven’t yet been sent to the program. And an additional $56.65 million of reprogramming authority is contingent on completion of a cost-benefit analysis that has not yet been submitted to Congress. “We have transfer authority and we are looking to where we transfer it from. And that’s a very active discussion, shall we say,” Moniz said this week.

Program to Focus on Nat’l Security Needs

Given market conditions, USEC has said that near-term commercialization of the plant is impossible. The nearly two-year RD&D program wrapping up this month demonstrated the technology on a commercial scale by building and running the cascade of 120 centrifuges. But as a condition for support the project, the Department has the option to take over the intellectual property rights for the technology if USEC can’t commercialize it. Moniz has said that the Department will focus on developing a domestic enrichment capacity to be used to fulfill national security needs such as tritium production.

The transfer funding would likely come from the NNSA, Moniz said this week, noting that American Centrifuge has been funded in the past both through the Office of Nuclear Energy and the NNSA. “That’s been part of the problem, because it’s been schizophrenic between nuclear energy and NNSA. I would say at this stage, obviously USEC is not pursuing commercialization, for obvious reasons, nor is anyone else at the moment, so right now our focus is on tritium production for the weapons so logically it would be in NNSA,” he said.

No FY’15 Funding Requested

DOE hasn’t requested funding for American Centrifuge in FY’15, and with Congress set to mark up appropriations bills soon the Department likely would need to submit a budget amendment. If the transfer authority is stretched to last through FY’15, though, it would fund the program at a significantly reduced rate. Several different options exist for ACP moving ahead: Continuing to run the facility and adding several centrifuges per month, a warm standby where the existing cascade will keep running but no additional capacity will be added, or a cold shutdown where the machines are shut off. But last week Moniz stressed the need to “keep the 120 machines spinning.”     

The Department is considering building out the Ohio plant while managing it from Oak Ridge, where the manufacturing and R&D capabilities lie. USEC would likely enter into a contract to perform the work, but will not have the management responsibility. “Our current plan, and this is understood, is that the responsibility for managing it will novate to Oak Ridge, which is where the technology originates,” Moniz said last week at a House Appropriations Energy and Water Subcommittee hearing. “I think it is quite reasonable to speculate that of course the skilled workforce working on those machines would then have to be kept on one way or another—if I had to guess, through a subcontract, for example, with USEC.”

As American Centrifuge awaits funding, about 400 USEC and B&W employees remain in limbo after receiving 60 day layoff notices last month. That includes about 300 employees at the centrifuge manufacturing facility in Oak Ridge run by B&W and USEC. According to USEC spokesman Paul Jacobson, the WARN notices were sent out March 15. The federal law requires that an employer with a possible mass layoff or plant closure give workers 60 days of advance notice. In this case, the date would run through May 19. “The program has been funded intermittently for two years,” Jacobson said. “You just have this start-and-stop environment, which is stressful for everybody.”