Energy Dept Spends 20% Of Stimulus Dollars On Nuclear Waste

Date : 10/04/2010 @ 3:35PM
Source : Dow Jones News
Stock : Fluor Corp. (FLR)
Quote : 61.1  0.67 (1.11%) @ 3:01PM

Energy Dept Spends 20% Of Stimulus Dollars On Nuclear Waste

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President Barack Obama vowed to use stimulus spending to help grow a new clean energy economy, but the U.S. Energy Department spent a large chunk of stimulus money to clean up a radioactive mess from the Cold War.

The Energy Department allocated $6 billion, nearly 20% of its stimulus budget, to clean and decontaminate nuclear waste sites across the country. Chief recipients are the Savannah River site in South Carolina and the Hanford site in Washington, which produced plutonium for the "Fat Man" nuclear bomb dropped on Nagasaki, Japan, in 1945.

The department allocated a total of $3.5 billion to the Savannah River and Hanford sites, according to an analysis by Dow Jones Newswires, and created or salvaged about 6,100 jobs as a result.

"We were looking at specific activities that would create jobs ... shovel-ready projects that were focused on decommissioning and decontamination," Ines Triay, the Energy Department's assistant secretary for environmental management, said in an interview with Dow Jones.

The size and scope of the Energy Department's spending have come into focus in recent days as government agencies finished committing funds under the 2009 American Recovery and Reinvestment Act. The deadline to do that was Sept. 30.

Given Obama's focus on a new clean-energy industry that provides long-term employment for U.S. workers, the nuclear waste projects suggest a departure from the president's goals.

The situation, however, is reflective of a larger challenge the administration has had to face. That is, projects that employ people quickly are often considered "low-hanging fruit" and can fail to set the stage for long-term economic growth.

"The Recovery Act "was trying to serve a lot of different masters and ended up doing none of it that well," said Steve Ellis, vice president of Taxpayers For Common Sense.

After decades of producing nuclear material, the Hanford and Savannah River sites are littered with large amounts of radioactive waste. Before the government started to clean the Hanford site in 1989, there were 70,000 drums of plutonium-contaminated waste and 2,300 tons of spent nuclear fuel deteriorating in leak-prone basins near a river, according to the Energy Department.

The government estimates it will take several more decades to clean up the sites and cost between $274 billion and $330 billion, according to a 2009 report to Congress.

The companies that have been hired to work at the Hanford and Savannah River sites, meanwhile, have emerged as the largest recipients of the Energy Department's stimulus dollars.

The department has awarded $1.36 billion to CH2M Hill Plateau Remediation Co. to work at Hanford and $1.4 billion to Savannah River Nuclear Solutions LLC, a partnership formed by Fluor Corp. (FLR), Honeywell International Inc. (HON) and Northrop Grumman Corp. (NOC).

Both CH2M Hill Plateau Remediation and Savannah River Nuclear Solutions have worked at these sites for the past few years, operating under government contracts.

Energy Department officials say they were able to employ people quickly by funneling money to established projects that were already up and running.

"We were provided with the funding and we were told to create jobs," said Geoff Tyree, a DOE spokesperson at the Hanford site. "It was meant to stimulate the economy now--not piecemeal over the next 10 years."

Once the stimulus dollars run out, however, the Energy Department will not be able to retain many of the 10,500 nuclear-waste cleanup jobs it created or saved under the Recovery Act. The work financed by stimulus money is slated for completion by September 2011.

"Once that funding ends, we'll have to let people go out of those jobs," said Jim Giusti, a DOE spokesman at the Savannah River site.

Energy Department officials say they're trying to absorb some of the workers into their full-time staff and are also training workers to work at commercial nuclear facilities, which could play a more prominent role in future energy generation.

-By Tennille Tracy, Dow Jones Newswires; 202-862-6619;


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