Obama's Fate, Ohio Jobs Could Hinge on Nuclear Facility

Obama's Fate, Ohio Jobs Could Hinge on Nuclear Facility

By Erin McPike - May 19, 2011

PIKETON, Ohio -- Set deep in the woods off a main highway in this economically depressed southern Ohio town are the makings of a major uranium enrichment facility that would feature the first-of-its-kind energy technology in the United States.

Green U.S. government signs warning against trespassers can be found at every turn along the winding road to the plant. Aides there joke to be careful where you step or else "security might shoot you." The officers tend to be prickly and are quick to ask visitors for identification.

It's not hard to understand why. The United States Enrichment Co., USEC, produces enriched uranium, which generates nuclear energy and therefore holds serious security concerns. But here in Ohio, the corporation has been waiting on a $2 billion loan guarantee from the federal government to move forward with plans to turn an old government-owned gaseous diffusion plant into the American Centrifuge Plant, which would house this new technology. That loan guarantee was postponed by the Obama administration in 2009 and is up for review again. At stake are 8,000 jobs nationwide -- and half of them would be in the key swing state of Ohio. (Piketon's unemployment rate last year stood much higher than the national average at a whopping 15 percent.)

As Obama prepares to seek re-election next year, this one issue in Ohio is staring him in the face, not least because he volunteered full-throated support for it when campaigning for president in 2008. The Buckeye State remains critical to his prospects for a second term, and Republican strategists believe that whatever Ohio wants when it comes to the energy issue -- and jobs -- Obama will have to give.

In a letter to then-Gov. Ted Strickland while he was campaigning in Ohio in the summer of 2008, then-Sen. Barack Obama wrote, "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." He continued, "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, foreign energy sources."

The delay in awarding that loan guarantee underscores what has become a bane to the administration: People need jobs; jobs cost money; money is hard to come by right now, especially as a major budget fight paralyzes Congress, making it tougher for the government to issue funds. Bureaucracy makes matters worse.

Credit officers at the Department of Energy and the Office of Management and Budget are examining the loan application, again, to determine its credit worthiness, but they are staring down a fast-approaching deadline this summer, at which point some of the private investors are free to pull out if there's no deal. Two of them are Toshiba and Babcock & Wilcox, which plowed $200 million into the project last year; if there's no loan guarantee from the government by June 30, they can withdraw from the undertaking. And that could spell disaster for the project and the community.

As Ohio Democratic Sen. Sherrod Brown put it in a recent interview, "We wanted to get this done last year since it's a lot of jobs."

His Republican colleague, Rob Portman, echoed this in a separate interview: "If they don't go ahead with the American Centrifuge Project, I understand pretty well what I think is going to happen, which is we're going to lose jobs. We'll lose probably 1,400 jobs" from work already under way at the facility.

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Erin McPike is a national political reporter for RealClearPolitics. She can be reached at Follow her on Twitter @ErinMcPike.

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