On Tuesday, US Republican Senators Dan Coats and Pat Toomey sent a letter to Department of Energy (DOE) Secretary Steven Chu requesting a "thorough review" of a recent loan request made by steel producer Severstal Dearborn in Michigan.
Last year, Coats and Toomey sent a letter to Inspector General Gregory H. Friedman requesting a formal review of DOE's issuance of a conditional loan commitment to Severstal for $730 million under the Advanced Technology Vehicle Manufacturing (ATVM) program.
Two months following the senators' request for a formal review, DOE decided against finalizing its previously announced conditional loan commitment to Severstal. Recently, Severstal applied again under the same loan program for $320 million to fund a portion of its project.
In the letter to Secretary Chu, the senators wrote:
"We strongly agree with your assertion that the government should not use taxpayer money to subsidize projects that companies can finance on their own. DOE's stated purpose for the loan program is to ‘accelerate the domestic commercial deployment of innovative and advanced energy technologies.' In the case of Advanced High Strength Steel (AHSS), abundant evidence shows that several US companies already manufacture comparable grades for which Severstal is seeking this loan award. These companies built their facilities using private funds. Thus, the market has demonstrated an ability to finance AHSS projects without taxpayer subsidies...we are confident that the facts will lead you to the same conclusion this time around."