Mr. Speaker, I rise today to continue to ask the question, where are the jobs?
Well, I can tell you where they're not. They're not in my district in southern Ohio because I just got an announcement on Monday night that really shocked me and made my blood boil. I found out that the Department of Energy was going to strip away thousands of jobs in my district.
Now, I just want to give you a little background. Ohio is one of those States that has high unemployment. We're the seventh highest in the Nation. But when you look at my district, what you see is I've got really high unemployment in my district. In fact, two of my counties, Pike and Adams, have over 15 percent unemployment. Scioto County has almost 13 percent unemployment. Much higher than the national average, even higher than our State average of 11.2 percent. So we really need jobs. We need them badly.
And what has occurred to me is that I think there must be a disconnect with the administration and the President. Let me go back and explain what's going on.
I have a facility in my district in Pike County, the county that has 15 1/2 percent unemployment, called the American Centrifuge Plant, and this represents a very early use of commercial--use of new technology that would significantly reduce emissions of air pollutants and greenhouse gasses.
The United States Enrichment Corporation, called USEC, is deploying American Centrifuge technology to provide the dependable, long-term, U.S.-owned and developed nuclear fuel production capability needed to support the country's nuclear power plants, nuclear submarines, and a robust nuclear deterrent.
Mr. Speaker, we have dozens of nuclear power plants in this country that all require nuclear fuel. And we have a Navy who, as I speak, is sailing in every ocean across the globe. And we have weapons of mass destruction that will become a useless deterrent without fresh tritium.
Without the American Centrifuge Plant, in 5 years' time, we will have no ability in the United States to enrich uranium to keep our lights on, our ships at sea, or a deterrent potential.
In 5 years, we will be forced to purchase uranium from foreign suppliers as we do with most of our oil. I don't want to depend on foreigners for this kind of product.
The American Centrifuge Plant holds great promise. Unfortunately, in order to meet this promise, USEC needed a loan guarantee from the Federal Government. Now, I want to repeat that. It needed a loan guarantee from the Federal Government. You see, USEC has already invested $1.5 billion and has offered another billion dollars of corporate support. It did this with the expectation that the Department of Energy would make available a $2 billion loan guarantee needed to finance the full-scale deployment of the American Centrifuge Plants.
Now, I want to refer to this chart here. Why were they so confident in that? Well, you see on September 2, 2008, when President Obama was running for election, he wrote a letter to our Governor, Ted Strickland. This is the full letter so you can see it. I'm not taking it out of context.
He said, Under my administration, energy programs that promote safe and environmentally sound technologies and are domestically produced, such as the enrichment facility in Ohio, will have my full support. I will work with the Department of Energy to help make loan guarantees available for this and other advanced energy programs that reduce carbon emissions and break the tie to high-cost and foreign-energy sources.
This is what this letter said.
So you understand that USEC was very, very confident that they were going to get that loan guarantee. But instead, on Monday night, the Department of Energy really pulled the rug out from all of us. I got a phone call asking me to call the White House, and I learned Monday night that the Department of Energy was going to withdraw its promise and they were actually asking USEC to withdraw its application and to try it again in 18 months.
I was actually told on the phone that if they did that, then the Department of Energy would give them $45 million, $30 million, and another $15 million if they would rescind this. And that kind of shocked me.
The next day it also shocked the folks at USEC because, you see, they had this letter that the President had given to our Governor, Ted Strickland, that said those loan guarantees would be given.
Mr. Speaker, the American Centrifuge Plant currently supports more than 5,700 jobs and will help create 2,300 more within a year of commencement of the loan-guarantee funding. That's 2,300 additional jobs to my district.
Now, because the Department of Energy has contradicted a promise that our President made in September of last year to our Governor and to those men and women in this area of the State, those jobs are in jeopardy. And I was on the phone with one of my constituents earlier today. Pink slips are being given out at the USEC plant.
The Department of Energy has told the media the reasons for their denial were threefold: the cost subsidy estimate, a new requirement for another $300 million of capital, and the questions of technology.
Well, the first question offered by the DOE is a little laughable. It turns out that the government isn't really backing these loans. Instead, the Department of Energy is charging a risk-of-failure fee to each of the folks that agrees to back the loans. These fees are pulled together to eliminate any risk to the taxpayers that actually have been given a loan guarantee.
They determined that the fee for this loan would be $800 million on a $2 billion loan. So USEC is supposed to come up with $800 million on a $2 billion loan. I don't know about you, but in my neck of the woods, we call that like loan sharking.
The second reason for denying the guarantee is a new need to set aside an additional 300 million for contingencies. Well, I can think where you and I see that that is headed. After the risk premium is paid, apparently USEC still has to come up with more money to make the Department of Energy feel more comfortable about giving these loans.
But the last question, I think, is the most surprising, because the last reason is one where they say they have got technical questions, and this is the one that is the most absurd of all, because, quite frankly, this technology is out there. France is using it, England is using it. Would it surprise you to know, Mr. Speaker, that Iran is using it?
But what I found most disturbing is that the Department of Energy hired a technology expert, as required by law, and they went through the technology and wrote a long report, and in fact the guy ran back to give it to the Department of Energy on Tuesday. That was the day after the Department of Energy made their decision. They made that decision on Monday night. They made it without any regard for the report they were relying on for this very important project.
It is not just a project, Mr. Speaker, that continues to help the folks in my district. And it is important to me, because, Mr. Speaker, this is my district, and these are my folks and these are my friends. I have become friends with these people.
This is the part of my community that doesn't have a lot of job opportunities, and they welcomed this job opportunity. They embraced it. And I believe that the President believes in this project, as he stated on September 2, 2008. But I think there must be some sort of disconnect with the Department of Energy.
There is a chart here, and I would like to go through the chart a little bit again so we can clearly understand what is going on.
The issue: credit subsidy cost estimated by the DOE to be $800 million. Well, let me be a little clearer. The estimate was never provided in writing. The methods of calculation were never disclosed or explained. An $800 million subsidy cost is not reasonable. I think it is outrageous, given USEC's fully collateralized $1 billion parent guarantee, standard credit, and, yes, yield exposures of $24 million to $74 million based on credit ratings of C to BB-minus and assets recoveries of only 20 to 30 percent of the cost.
The DOE calculation clearly ignores the value of $1.5 billion invested by USEC to date and another billion of non-project collateral offered by USEC, consisting primarily of natural and enriched uranium inventories.
The second issue, an additional need for $300 million of additional capital. USEC offered a legally binding capital commitment, which DOE agreed met statutory and regulatory requirements.
USEC's fully collateralized $1 billion parent guarantee designed to permit loan to commerce while USEC raised additional equity while fully protecting the taxpayers. USEC's financial adviser stated that with the loan guarantee, $100 million to $150 million of capital could be raised in the public market. USEC has commenced discussions with strategic suppliers to obtain vendor financing for the balance.
And the final, the technical readiness of American Centrifuge Technology. The DOE LGPO concluded that ACT was not ready to move to commercial scale operations prior to receiving the independent engineer's written assessment. The independent engineer had only been working for 12 days when DOE acted. DOE was scheduled to review the classified independent engineer report on July 28, and the DOE representative traveled to Tennessee to do so, unaware of the LGPO's decision the night before.
American Centrifuge is based on technology which DOE initially developed in the 1970s and the 1980s and subsequently operated it for 10 years. USEC-approved centrifuges have been operating in the Lead Cascade for over 225,000 hours. The DOE has acknowledged that USEC met the milestone under the 2002 agreement between DOE and USEC, which requires obtaining satisfactory reliability and performance data from Lead Cascade operations, the last requirement to be met besides obtaining financing prior to commencing commercial plant construction and operations.
Mr. Speaker, I don't understand what is going on here, I don't think that this body understands what is going on here, and I am not even sure that the President even understands what is going on here with the Department of Energy.
But I am very confused. More than that, I am very outraged because I believe that we have to have energy independence, but we also have to have security for this Nation. Energy independence depends upon a variety of sources of energy, including nuclear power, but you have to have the stuff to make that nuclear power. In 5 years, we will no longer be the people that are producing the stuff that it takes to make that nuclear power. That is why this project is so important, not just for the 2,000 jobs that will be lost.
Mr. Space, can you join me here today? One of the other folks that is affected is my very good friend from a district right across from me, Zack Space.
Zack, I just laid out what has gone on with the Department of Energy. I have laid out the fact that our President promised that the Department of Energy would give out these loans to Governor Strickland on September 2. I have laid out what I think is a disconnect between the Department of Energy and our President, because I just truly believe the President wants to make good on this promise. I have laid out the impact it has to your community and my community in southern Ohio and also to our security across the Nation.
So, whatever you would like to add, I welcome you to the discussion.