Back in October, when I identified Shaw Group (NYSE: SGR) as a compelling nuclear option, I can't claim to have foreseen the near-term peril of investing in nuclear fuel enricher USEC (NYSE: USU). But I hope you dodged this fallout. A major project delay and cost overrun has seriously put the hurt on shares.

Before getting to the American Centrifuge Plant debacle, let's look at how USEC operates today.

Utility customers pass along uranium hexafluoride (UF6) that they've sourced from suppliers like Cameco (NYSE: CCJ) and ConverDyn, an affiliate of Honeywell (NYSE: HON). At USEC's Paducah, Ky., plant, the only enrichment facility operating in the United States, the firm separates lighter isotopes from heavier ones by means of an old process called gaseous diffusion. The process requires a tremendous amount of electricity, which accounts for 70% of the increasingly uneconomic Paducah facility's operating costs.

The end result of this process is a batch of low-enriched uranium, along with some nasty depleted uranium byproduct. USEC also purchases about half of its low-enriched uranium from dismantled Soviet-era warheads under the megatons to megawatts program. Russia has made clear its intent to raise prices in the fairly near future.

Given the power plays involved, it would behoove USEC to quickly shift toward a less energy-intensive, centrifuge-based enrichment technology, variants of which are already employed by just about everyone else in the world, save for Areva (OTC BB: ARVCF). Hence, the importance of the American Centrifuge Plant.

Contract work provided by Fluor (NYSE: FLR), McDermott (NYSE: MDR), and others is running behind schedule and over budget. With cost-reimbursement provisions in place, the suppliers do not exactly feel USEC's pain, but the firm is looking to renegotiate so that the subcontractors' interests are better aligned with its own. I don't mean to point a finger at either contractor -- labor tightness and material inflation is running amok across just about every industry that I cover for the Fool.

At the end of the day, USEC's shift to centrifuge technology will be painful, but it will happen. You hear about certain banks being too important to fail, and given its unique position in the American energy ecosystem, I would argue that the same holds true here. Whether that makes USEC a compelling buy at today's depressed prices, I'm not prepared to say, but it's certainly watch-list-worthy.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.