By Dan Yurman
The Department of Energy (DOE) last week (Apr. 3) announced a plan to boost U.S. artificial intelligence efforts and lower energy costs by co-locating data centers and new energy infrastructure at up to 16 DOE sites.
There are multiple problems with DOE’s plan.
The first is that complex and lengthy federal site selection and approval requirements will encounter a head-on collision with data centers needs which are driven by a paradigm of “need it built yesterday.”
Second, this ambitious milestone of having an AI data center operating on electricity from an SMR or micro reactor at a federal site by 2027 runs up against the reality that no SMR or micro reactor will be ready by that date.
This means any new data centers developed on federal sites will use the existing power grids and whatever generation plants support it. While NuScale is licensed for its 50 MWe SMR, none are under construction. None of the other SMR or micro reactor developers have yet submitted their designs for NRC review which means even breaking ground is unlikely to occur until the end of this decade.
Third, and most serious, is that the administration’s slash and burn approach to cutting federal staff seems not to be very far off from the axiom “off with the heads” regardless of whose head is axed.
AI Data Centers Need Speed but DOE Can’t Find the Gas Pedal.
With regard to locating AI data centers at DOE federal sites, it appears that the agency may be thinking, along with other federal agencies, that AI data centers are nationally significant critical infrastructure. DOE national lab sites, with their strict security measures, would offer a degree of protection not available at commercial sites.
An issue for locating these facilities as “tenants” at federal lab sites is that every one of them will require an environmental impact assessment and have to meet a raft of regulatory requirements that would not apply in a private sector industry setting. Clearing them will take lots of time, which data center developers do not have.
Data center investors, and the firms that build and operate them, have a “need it yesterday” mindset which given the explosive growth of AI as an industry, is also their reality. Dealing with the highly structured and risk averse decision processes that characterize DOE’s approach to program management, the only AI data centers that make sense for federal sites are those that support AI applications for defense and national security uses or defense industries.
Trump’s tariffs will likely impact supply chains for SMRs. Japan’s Mitsubishi, and South Korea’s Hyundai and Samsung are major suppliers of RPVs, steam systems, switchyard gear, etc. Prices for these products will go up impacting, eventually, once SMRs are built with them, the delivered price of electricity and process heat from SMRs. These are long term impacts.
DOGE Chainsaw Massacre of Staff Will Leave DOE Dumbfounded
A top-of-mind issue is that Elon Musk and his DOGE minions have shredded the workforce at DOE sending thousands of highly experienced program managers out the door without any consideration of future needs of the agency, or, for that matter, the national interest. As of April 4th, the Associated Press reports that DOE plans to fire 8,500 of the agency’s 17,500 employees or 49% of the workforce
The majority of the national labs operated by the Energy Department are run by contractors and would not, for now, be affected by layoff plans.
According to the AP report, Sen. Patty Murray of Washington and Rep. Marcy Kaptur of Ohio said gutting the department would raise energy costs for families and businesses, slow innovation and put national and global security at risk.
“It is extremely concerning that the department is reportedly considering firing the very experts tasked with maintaining a safe, secure and reliable nuclear weapons stockpile,” the two Democrats said in a joint statement to The Associated Press. “These dangerous cuts should not transpire. We call for this foolishness to be set aside.”
The administration has already put its worst foot forward with DOE. Last February DOGE laid off 500 hundred employees of NNSA who work directly on the management of nuclear weapons. When the bizarre error was discovered, the agency had to scramble to find the fired employees, who had scattered to the four winds, to get them to return to their duties. One of the national security risks of arbitrarily firing people with these skills is that the places where they can get new employment are other nations with nuclear weapons capabilities.
What it boils down to is that there are serious questions about whether DOE can carry out a program of any size or complexity with half of its brain lobotomized by arbitrary and capricious layoffs decided on by a billionaire who waves chainsaws on stage to reinforce the aggressive nature of his efforts to reduce the size and scope of the entire federal government.
At Twitter, now ‘X”, Musk slashed the workforce to smithereens. DOE isn’t a social media platform. It is an essential government function in charge of the nation’s energy security. There is no justification for laying off half the agency’s workforce except to fulfill the fevered ambitions of an unaccountable billionaire buddy left to his own devices by a president who without a care went golfing the day after tanking the stock markets, and the 401K accounts of tens of millions of Americans, with his reckless tariff policies.
If Musk and DOGE prevail in slashing DOE’s workforce in half, it is unlikely it will have the capacity to site AI data centers at federal labs, or do much of anything else. By the time the dust settles, all that will be left behind will be a secretary of energy, a contract specialist, and a security guard to patrol the long empty halls of the Forrestal Building.
Dan Yurman, a veteran observer and chronicler of the atomic energy story, is the editor and publisher of the Neutron Bytes blog.
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