US agencies look at excess uranium inventory

10 March 2017

The US Department of Energy (DOE) has asked for public comment on the effects of potential transfers of its excess uranium inventory on the country's uranium mining, conversion and enrichment industries. The DOE's request was issued the day after the US Government Accountability Office (GAO) raised issues related to excess uranium transfers over the past decade including questions on the DOE's assessment of market impact studies; the valuation of depleted uranium tails; and the legality of some transfers.

The DOE holds inventories of uranium in various forms that have been declared as excess and not needed for US national security missions. These include low-enriched uranium (LEU), highly-enriched uranium (HEU), depleted uranium - a by-product of the uranium enrichment process which is also known as tails - and natural uranium. In recent years the DOE has transferred some of this inventory in exchange for services: for the clean-up of the former Portsmouth gaseous diffusion uranium enrichment plant, and for the downblending of HEU to LEU. DOE currently transfers about 2100 tU per year for these two programs.

In May 2015, then-US Energy Secretary Ernest Moniz issued a determination that transfers of up to 2500 tU in 2015, and 2100 tU in subsequent years, would not have an adverse material impact on the domestic uranium mining, conversion, or enrichment industry.

The DOE is now in the process of considering a new determination covering the potential continued transfer of uranium for clean-up services at Portsmouth. The department last July issued a Request for Information (RFI), soliciting information about uranium markets and the domestic conversion and enrichment industries, and the potential effects of DOE transfers on them. It also commissioned an independent analysis of the potential effects of various levels of uranium transfers from Energy Resources International (ERI), published in January.

Since the close of the comment period on the RFI, the US Energy Secretary has determined the exchange of LEU for the downblending of HEU serves a national security purpose and therefore does not require a secretarial determination.

The DOE yesterday issued, via the US Federal Register, a summary of the information including responses to the RFI, which it will use in the decision-making process for its next determination. It includes comments from the Uranium Producers of America (UPA) organisation and nuclear fuel cycle companies. Interested persons have until 10 April to submit comments, data and further information.

DOE's base scenario sees transfers continuing at the current rate of 2100 tU per year until 2020 - at which point National Nuclear Security Administration (NNSA) "barters" for the downblending of HEU are assumed to end. The ERI looks at the impacts of this, and three other scenarios. It estimates that uranium spot market prices would be $3.5 per pound U3O8, or 8% lower, if inventory releases take place at the Base Scenario rate over the next 10 years.

The UPA in April 2016 called on the DOE to cease transfers of excess uranium from federal inventory until the uranium market recovers from its current oversupplied state, saying the DOE's inventory sales had a negative impact on the uranium market and the domestic uranium industry. In its latest Annual Report, issued on 1 March, the organisation reiterated its call, saying: "The liquidation of DOE stockpiles … has imparted great harm to the industry." It said such "forced sales" had "contributed greatly to the downward spiral in prices for uranium worldwide over the past several years".

GAO questions transfers

The US GAO this week issued testimony raising issues found in nine of its publications - five reports, three testimonies, and a legal opinion - on the DOE's excess uranium transfers from July 2006 to September 2015.

The GAO expressed concern about the steps taken by the DOE to assess the technical quality of market impact studies conducted in 2012 and 2013. It also queried DOE's failure to develop guidance on determining the value of depleted uranium tails, and questioned the legality of some transfers.

Depleted uranium tails had previously been considered a "waste" and treated as having no economic value, the GAO noted. It said the DOE had disagreed with a May 2014 recommendation to develop guidance for "consistently determining the value of depleted uranium tails when transferring them as an asset", a position DOE had reiterated in 2016. "However, since that time, DOE has continued to receive commercial interest in its tails, underscoring that tails can be viewed as an asset," it said. "GAO continues to believe having guidance that provides a consistent and transparent method for determining the value of tails is necessary to ensure that DOE is reasonably compensated for its material."

The GAO also said the DOE's uranium transfers had, in some cases, violated federal law as the DOE "likely did not have authority to transfer tails because of prohibitions imposed by the USEC Privatisation Act". GAO said legislation introduced in the 114th Congress would have authorised the DOE to transfer tails but had not been passed.

The GAO is an independent, nonpartisan agency that works for the US Congress and is responsible for investigating federal government expenditures.

"Over nearly a decade, GAO has made numerous recommendations to improve DOE's transfers of excess uranium. DOE has neither agreed nor disagreed on some recommendations and has disagreed with others. GAO will continue to monitor the DOE's implementation of these recommendations," it said.

Researched and written
by World Nuclear News