One of the more inspired moments of Mitt Romney's still-developing presidential campaign was last week's decision to have the candidate deliver remarks slamming the Obama Administration's energy policies in front of the vacated campus of Solyndra, the Northern California solar firm that went bankrupt at the cost of about 1,000 jobs and $535 million in federal loan guarantees.
This line of attack gets to a couple of Obama's core weaknesses: the failure of alternative fuels to make any significant dent in the energy economy and the crony capitalism that is inherent in industrial policy. Yet the returns on this strategy haven't been universally positive.
Romney is now facing heightened scrutiny over a bankrupt solar firm that received government assistance during his tenure as governor of Massachusetts (though the details of the story -- the loan was approved before Romney was sworn in, the authorizing agency couldn't be controlled by the governor's office, and Romney later tried to defund the program -- pretty thoroughly acquit him). And the nominee's potential running mates are now coming under the microscope on similar issues.
That's bad news for Rob Portman, the junior senator from Ohio who's widely considered to be a short-lister for the number two spot on the Republican ticket. A recent story in The New Republic reports that Portman has his own government-subsidized energy fetish. And it's a doozy:
The project [Portman's] now backing for a loan guarantee is far from compelling. The American Centrifuge Project (ACP) is a uranium-enrichment facility in Piketon, Ohio seeking a $2 billion loan guarantee to commercialize its dicey technology. The Project has been more or less dormant for 25 years, but recently, the Maryland-based United States Enrichment Corporation (USEC) has been trying to resuscitate it. Portman, at public hearings, and through letters and private meetings with Steven Chu, has vigorously pressed its case. In December, he introduced a bill to keep ACP afloat with an extra $150 million, telling reporters he would do “everything in his power” to find the funding.
But the risks associated with ACP make Solyndra look like a great bet. For one, ACP’s technology is in no better shape than it was when DOE shut it down in 1985. In April, the Nuclear Regulatory Commission dinged the project for five violations, after a routine procedure went awry. And even when they work properly, the plant's uranium centrifuges don’t really work. They are, in fact “horribly inefficient and use large amounts of energy,” according to Matthew Bunn, an expert on the nuclear industry at Harvard’s Kennedy School. It doesn’t help matters that the company’s balance sheet is a mess. On May 15, Standard and Poor’s downgraded its credit rating to junk status, and its shares are trading at 72 cents, down from a high of $23.91 in 2007. This is why USEC so badly needs a loan guarantee: No one will invest in them without an assurance they will be paid back if the company goes bust. USEC now maintains that if it doesn’t receive its $150 million lifeline by June 15, it may have to shut down its troubled Ohio centrifuges for good.
I'll leave aside the technological issues, as I'm not qualified to pass judgment on them. But $2 billion in loan guarantees for a company that's struggling to keep its doors open? This seems like precisely the kind of project Romney would be ridiculing on the stump to reemphasize his management bona fides.
Of course, it should be noted that Portman (who I've always found to be a sharp and talented public servant) has a perfectly intelligible reason for casting his lot with USEC: these are Ohio jobs. But wasn't the rebuke of this whole "we'll suspend our principles within our constituencies" rationale one of the animating purposes of the Tea Party? Or is this kind of patronage such an inherent part of the system (Ron Paul chases earmarks, after all) that it shouldn't be held as a serious demerit against Portman?
I'll let the Ricocheteers decide. Are you less likely to be enthusiastic at the prospect of Portman on the ticket given this news?